Sustainable, Multi-Segment Market Design for Distributed Solar Photovoltaics

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This report discusses the important differences between retail and wholesale PV markets and provides examples of policies that have been implemented in the United States in both of these markets.

Why the Report Is Important

There are two important and distinct markets for solar photovoltaic (PV) investment—a retail market and a wholesale market. In areas of the United States that are experiencing the most significant growth in PV investment, state and local policy makers have taken important differences between retail and wholesale markets into account in establishing policies that promote growth in both of these market segments. This multi-segment approach allows interrelated policies to function best in their designated roles, extending the benefits of PV to the widest possible range of participants.


Policies that support growth in U.S. PV markets are in many cases different than those that have been used to facilitate PV market development in other countries. While the United States has relied on retail market policies, such as net metering, some other countries have relied heavily on wholesale policies, such as feed-in tariffs (FITs), to facilitate investment in PV. This paper originated as an effort to examine whether U.S. net-metering policy has been evolving in the direction of wholesale policies, such as FITs, that have facilitated PV market growth outside of the United States. There has also been significant interest in developing wholesale policy options to expand market opportunities beyond retail, self-generation markets.

Solar America Board for Codes and Standards Recommendation

Although the details of policy design may vary within the policy categories discussed in this paper, there are three ingredients that appear essential to establishing robust retail and wholesale markets for PV systems at a state level.