The Washington Utilities and Transportation Commission ("UTC") earlier this month issued an order laying the legal groundwork for innovative financing of small renewable energy systems in the state. The UTC's ruling, which amends its small generation interconnection standards, RCW 480-108, addresses three questions of particular importance to the future of solar energy in the state. The order answers two of those questions in a manner that will ease the way for expansion of small solar systems but defers the third question.
The first and most important question addressed in the UTC order is whether third parties may own and operate net metering systems, which are small renewable systems located on the property of a utility customer that feed power back into the utility grid. The UTC order concludes that third-party ownership is permissible under Washington's net metering statute. This determination is critical because it opens the door for innovative financing arrangements in which a private company owns and operates rooftop solar systems on behalf of utility customers. These arrangements allow rooftop solar systems to be constructed with little or no upfront cost to the consumer, thus overcoming a major barrier to expansion of distributed solar generation. Such innovative financing arrangements are often credited with allowing the rapid expansion of rooftop solar systems in other states, especially California. Increasingly, these arrangements are being used for other types of distributed generation, as well.