Net metering rules are being rewritten state by state. Here's what to check before entering a community-solar market.

BC Hydro just overhauled its net-metering export credits, New Mexico greenlit a new phase of community solar, and Delaware accelerated its own program. Compensation design, not just eligibility, now decides whether a community-solar project pencils out.

The question behind every market-entry decision

BC Hydro recently overhauled its net-metering program, moving past simple export credits toward a more customized compensation design. In the same window, New Mexico greenlit Phase 2 of its community-solar program, and Delaware's governor announced accelerated community-solar project timelines. Three different jurisdictions, three different moves — and one shared question for any sponsor evaluating a new market: is this program actually structured to make a project economically viable, not just legally permitted.

The eligibility checklist

Most sponsors start their market evaluation with the obvious inputs: program capacity caps, subscriber eligibility rules, and interconnection requirements. These are necessary to confirm. They are not sufficient to confirm a project's economics.

The compensation structure, program by program

Net-metering and community-solar compensation rules are becoming more customized, and more consequential to project economics, than they were even a few years ago. "Check the interconnection rules" is no longer a sufficient diligence standard on its own — sponsors also need to check the compensation structure program by program. BC Hydro's move away from simple export credits is a clear example of a jurisdiction actively redesigning how distributed generation gets paid, not just how it gets permitted, and that kind of redesign can change a project's revenue model even after it is already operating.

Five checks before entering a new market

01 — Confirm current program capacity and allocation status. Is the program open, oversubscribed, or in a new phase, as with New Mexico's recently greenlit Phase 2.

02 — Get the specific compensation mechanism in writing. An export-credit rate, an avoided-cost rate, or another structure entirely — not a general program description.

03 — Check whether the compensation structure is under active regulatory review. As in BC Hydro's case, a redesign in progress could change project economics mid-life, well after a project is already generating revenue under the old rules.

04 — Confirm subscriber acquisition and program administration requirements. These are specific to each state or utility and can materially affect timeline and cost.

05 — Model project economics against the actual current compensation structure. Not a prior year's assumption that may no longer reflect how the program pays out.

Signs the market isn't ready

Treat a market-entry decision as premature if the compensation mechanism has only been described in general terms rather than confirmed in writing, or if the project model relies on a compensation rate that predates a known or pending program redesign. If nobody on the team can name today's specific export-credit or avoided-cost rate, the diligence is not finished.

The market-entry decision that holds up

A well-prepared market entry has the current compensation mechanism confirmed in writing, an understanding of whether that mechanism is under active regulatory review, and a project model built against today's actual rules rather than an assumption carried over from a prior year.

Where to start

Before committing capital to a specific state's community-solar program, get the current compensation mechanism and program capacity status in writing. Surge's community solar work includes this kind of program-by-program diligence as a standard part of market evaluation.