States escalate solar policy activity as federal incentives recede

State governments across the United States are intensifying regulatory and legislative efforts to reshape solar energy policy amid reductions in federal incentives. A newly released report by the NC Clean Energy Technology Center finds that 45 states, the District of Columbia and Puerto Rico undertook a total of 217 distributed solar policy actions during the third quarter of 2025. (NC Clean Energy Technology Center)

Comprehensive state-level momentum

The quarterly “50 States of Solar” executive summary shows that solar policy activity covered a wide range of issues including net-metering, interconnection, community solar programs, financial incentives and rate-structure changes. Of the 217 actions:

• 57 (26 %) addressed distributed generation (DG) compensation and net-metering policies.
  
• 43 (20 %) involved residential fixed-charges or minimum-bill increases.
  
• 40 (18 %) focused on community solar initiatives.
  
• Additional actions included interconnection rules (26), financial incentives (22), DG valuation studies (15), residential demand/solar charges (9), and third-party ownership changes (5).
  States with the most recorded activity included Connecticut, Colorado, Minnesota, New York, Arizona and California.
  

Emerging trends in solar policy

According to NCCETC analysts, three major trends dominated Q3 2025:

1. Utilities and regulators are increasingly transitioning from traditional net-metering to net-billing tariffs, with shorter netting intervals and altered crediting mechanisms. (NC Clean Energy Technology Center)
   
2. Growth in community solar programs, including design of supportive mechanisms for expanded deployment.
   
3. States responding proactively to the loss of federal incentives, revising interconnection rules, extending project deadlines and adjusting state programs to compensate.
   “After the federal government passed HR 1 … regulators are revising interconnection rules to help projects connect to the grid before the federal deadline for operating, implementing extensions and exceptions … and considering program expansions to ‘make up’ for the loss of the credits,” noted Rebekah de la Mora, senior policy analyst at NCCETC.
   

Noteworthy policy actions

The report highlights several specific state actions:

• In Nevada, the Public Utilities Commission approved mandatory demand charges for residential customers of Nevada Power and a 15-minute netting interval for Sierra Pacific Power.
  
• In Washington, PacifiCorp filed a proposal for a net-metering successor tariff, shifting to hourly netting and including an Equitable Access Credit for low-income customers.
  
• In West Virginia, the Public Service Commission approved instantaneous net-billing tariffs for Appalachian Power and Wheeling Power, effective March 2026; customers enrolling earlier will be grandfathered into existing net-metering.
  
• The Puerto Rico Energy Bureau opened a docket to design a pilot community solar program limited to 25 MW, with half reserved for low- and moderate-income customers.
  
• In Colorado Springs, Colorado Springs Utilities proposed new tariffs for net-metering customers, increasing fixed charges and reducing energy‐charge benefits.
  

Implications for the solar sector

This surge in state action underscores how solar growth is increasingly shaped by sub-federal policy environments as federal incentives wane. Developers, utilities and regulators now view state frameworks as essential to preserving the economics of rooftop and community solar.
 

Transitioning to shorter billing intervals and increased fixed charges may challenge the value proposition of rooftop solar if not carefully balanced. Meanwhile, expanded community solar and revised incentive programs may improve access, especially for low-income or underserved markets.

Looking ahead

With federal tax credit adjustments under HR 1 and its related guidance, states are responding rapidly. NCCETC suggests that the trajectory of U.S. distributed solar deployment will depend ever more on how state regulators, legislators and utilities navigate rate design, interconnection processes and incentive structures.
 

As the solar industry enters a new phase, these state-level policy shifts may set a blueprint for how distributed generation adapts in an environment of federal change.