Community Power Scorecard Methodology

The Community Power Scorecard from the Institute for Local Self-Reliance (ILSR) surveys a suite of state policies that help or hinder local clean energy action.

Scoring Framework

2026 Community Power Scorecard Maximum Score

The 20 policies evaluated in the 2026 scorecard are worth a combined maximum of 110 points.

Policy Weights

Each policy is weighted based based on the following:

• Does the policy support the development of distributed energy generation?
• Does the policy support local ownership of clean energy?
• Does the policy empower communities to pursue their own goals?
• Is the policy designed for the equitable transition to clean energy?
• Does the policy diminish the market power and abuses of monopoly utilities?
• Does the policy reduce bills for consumers?
• Does the impact of the policy depend on the strength of other state and local policies?

States receive negative points when having a policy is worse than not having a policy.

Letter Grading Scale

The letter grading scale for the Community Power Scorecard is:

A (90 – 100%)
B (70 – 89%)
C (50 – 69%)
D (30 – 49%)
F (0 – 29%)

Policy Descriptions and Scoring Rubrics

All policies for the 2026 Community Power Scorecard were researched between May 1 and August 31 2026.

Net Metering

Determines how solar customers are paid for the energy their panels generate and how much money they save on their electric bills.
Maximum points: 10 

Through net energy metering (NEM), a customer can “net” the difference between the electricity they generate in a month and the electricity they use in a month and either pay or be credited for the difference at a predetermined rate. Net metering rules determine whether going solar is worth the investment, and if so, what size of solar installation the individual or business might install. Net metering rules are usually set by state lawmakers, but may be changed by regulators.

The ILSR scoring rubric for net metering evaluates state policies according to the following 5 categories:

1. Definition of “net energy metering” in the state (30% of grade)

This component judges how strong the net energy metering rules defined by a state legislature or public utility commission (PUC) are. It evaluates how states treat excess generated power that is not used by the solar panel owners. This information can be found in state net metering laws and/or final PUC rulings regarding a state’s net metering program.

Nearly every state has rules that define how solar owners should be compensated for their energy. The best state policies require all excess generation –– energy produced that exceeds the demand of the home or businesses –– to be credited in kilowatt hours and applied to the next bill, which is called full retail-rate net metering or 1-to-1 net metering.

Some states without full retail-rate net metering have designed smart policies that compensate system owners with close to retail rates. Most often, those policies reduce compensation for solar energy by the amount of the final retail price of electricity that goes to fund low-income programs and other social benefits. States call these fractions of the retail price “non-bypassable charges.”

Lesser policies pay a significantly reduced rate for monthly, daily, or even real-time excess generation.

Percentage point breakdown for “Definition of net metering”:

• 30%: Guaranteed full retail-rate net metering as kWh credits on the customer’s bill
• 24%: Full-retail kWh credits minus volumetric non-bypassable charges (or similar)
• 18%: Retail-rate credit for monthly offset, but feed-in tariff (FiT) for net excess generation (NEG)
• 12%: FiT for all generation (such as under a buy-all, sell-all scheme), or FiT for real-time or daily NEG
• 0%: No credit for generation

2. Who is covered in practice (20% of grade)

This category awards higher grades to states that require all utilities to adhere to net metering rules.

Many states require only investor-owned utilities (IOUs) to follow their net metering rules, while others have specific rules for each utility. Importantly, there are some states where the rules only apply to IOUs, but co-ops and other utilities make up the difference by providing good rules of their own. This information can be found in state net metering laws and/or final PUC rulings regarding a state’s net metering program.

Percentage point breakdown for “Who is covered in practice”:

• 20%: All or nearly all utilities covered
• 16%: IOUs only
• 12%: Fewer than all IOUs in the state, but greater than 35% of population covered
• 8%: 10-35% of state population covered
• 0%: No net metering rules

3. Rollover policy (20% of grade)

States vary widely in how they treat excess generation during certain time periods. The best state policies allow continuous rollover of kWh credits forever, or at least pay a “true-up” settlement once per year at or near full retail rates. Other decent policies pay a yearly true-up at “avoided cost” rates they would have paid for wholesale power. The worst state policies pay no credit at all for excess generation, or require system owners to forfeit excess generation credits at the end of each month — essentially limiting system size to only what is capable of meeting a homeowner’s need during the sunniest month of the year. This information can be found in state net metering laws and/or final PUC rulings regarding a state’s net metering program.

Percentage point breakdown for “Rollover policy”:

• 20%: Continuous rollover of credits, OR net excess generation (NEG) paid out annually at or near retail rate
• 16%: Annual payout at avoided cost or some other rate
• 12%: Utility reclaims credits after 1 year OR pays avoided cost for monthly NEG
• 8%: Utility reclaims credits after each month OR pays avoided cost or another rate for daily NEG
• 0%: No net metering

4. Non-bypassable charges (20% of grade)

This category assesses the average value of non-bypassable charges for the major utilities covered by the net metering policy in a given state. These charges include the monthly fixed customer charge (if it cannot be offset by a solar owner’s exported energy), as well as any per-kWh charges that cannot be offset by exported solar.

To judge states based on a level playing field, our analysis considers the total percentage of an average residential customer’s electric bill that cannot be offset by exported solar energy. In general, we analyze the investor-owned utility companies in each state and calculate their average non-bypassable charges based on current rate schedules. In states where large IOUs do not cover the majority of residents (such as Nebraska, Tennessee and Texas), we add the largest regional, municipal, or co-op utilities to the analysis.

ILSR uses this worksheet to calculate the % of a rooftop solar customer’s average monthly bill that cannot be offset by solar generation. The lower the percentage, the better the policy.

For example, in 2026, the average monthly fixed charge in California was $19.69 per month, and solar customers also incurred about $1.75 per month in per-kWh non-bypassable charges, for a total of $21.44. That represents 9.87% of the state’s $217.26 average monthly residential bill; earning California a score of 12%.

Percentage point breakdown for “Non-bypassable charges”:

• 20%: All of a customer’s electric charges may be offset by solar generation
• 16%: Non-bypassable charges represent less than 7% of the average monthly bill
• 12%: Greater than or equal to 7% but less than 14% of the average monthly bill
• 8%: Greater than or equal to 14% but less than 20% of the average monthly bill
• 0%: Greater than or equal to 20% of the average monthly bill

5. Time-of-use requirements and how they affect the value of generated solar energy (10% of grade)

State policy regarding time-of-use (TOU) requirements can be a good thing for rooftop solar owners, but only if the tariff is thoughtfully crafted to allow solar owners to opt in and be rewarded (or at least not punished) for exporting energy during peak periods. States where time of use is a requirement, but payments are based on avoided costs that don’t consider important benefits of distributed solar energy, earn a zero on this scoring component. This information can be found in state net metering laws and/or final PUC rulings regarding a state’s NEM program.

Percentage point breakdown for “Time-of-use requirements”:

• 10%: Participation in TOU billing is optional for solar owners, and participants earn extra compensation for exported energy during all peak periods.
• 8%: Participation in TOU billing is required for solar owners, but participants earn extra compensation for exported energy during all peak periods.
• 6%: Participation in TOU billing is required for solar owners, but daytime rates are not significantly below the retail rates on flat-rate plans, and/or participants earn a simple kWh credit or flat payment based on the retail rate for all exported energy.
• 4%: No TOU billing available for solar owners, or optional time-of-use rules offer a sub-retail payment for net exports.
• 0: Participation in TOU is required for solar owners and/or payment for all exported energy is based on avoided costs.

Third Party Ownership

Helps homeowners to avoid the upfront cost of going solar by allowing a rooftop solar installer to own the equipment and share the financial benefits through a lease or power purchase agreement.
Maximum points: 6 

Though it has fewer benefits than full ownership, third party ownership increases access to solar by removing the upfront installation cost and maintenance costs for an individual or business. The host provides a site for the solar panels and either leases them from the third party through a monthly payment or purchases the electricity they generate per kilowatt-hour. To allow a power purchase agreement (PPA), it must be stated that a PPA is a different service than buying power from a utility, the power source must be located on-site, and the third party solar owner does need to be regulated in the same way a utility is regulated. The Community Power Scorecard evaluates how states treat third-party ownership vis-a-vis their regulated investor-owned utilities. Third party ownership must be enabled by state legislators.

Interconnection

Helps get energy projects like rooftop solar connected to the grid quickly by setting clear standards and timelines for utilities and installers to follow.
Maximum points: 8 

The Public Utility Regulatory Policies Act (PURPA) gives independent power producers the right to compete in the power generation market. However, with private monopolies controlling the distribution grid, it is necessary to set rules for interconnection that promote transparency, fairness, and efficiency. Interconnection rules are set by state legislators or regulators. ILSR scores are based on IREC’s Freeing the Grid interconnection grades.

Hosting Capacity Analysis

Requires utilities to share information about available grid capacity. This information helps independent power producers choose the best locations for new energy projects.
Maximum points: 3 

Though some utilities run a hosting capacity analysis voluntarily, requiring utilities to publish one ensures that independent power producers can make the best decisions for where to try installing a project. A hosting capacity map discloses localized grid conditions, including how much generating capacity that section of the grid can still handle, the voltage of the line, and the existing generation on that part of the grid. Rules for hosting capacity analysis are set by regulators, often as part of grid modernization.

Community Solar

Expands solar access by allowing customers to subscribe to a portion of a nearby solar project and save on their electric bills.
Maximum points: 13 

Community solar provides a way for people without the financial means for solar on their rooftops and people who don’t own suitable rooftops to reap the benefits of renewable energy. Part of a community solar policy is allowing virtual net metering, which is to allow many individuals to be credited for the generation of a single solar installation. Community solar programs are usually established by state lawmakers, but may be created by regulators.

Community Choice Energy

Allows cities to choose their own energy sources on behalf of all residential and small commercial customers, rather than relying on their utility’s choices.
Maximum points: 6 

A community choice energy law gives local governments the opportunity to aggregate together and form a community choice entity. The entity then assumes responsibility for energy procurement, while the incumbent utility still owns the distribution system and bills customers on behalf of the entity. Because the community choice entity is a nonprofit organization, it can provide cleaner energy at lower prices. It also does not have the same perverse incentives as for-profit utilities to restrict local energy generation. Community choice must be enabled by state legislators and adopted by local elected officials.

Franchise Authority

Allows cities to negotiate their own franchise contracts and fees with electric and gas utilities.
Maximum points: 4 

Utilities must sign franchise agreements with cities in order to use the public right-of-way for power lines and pipelines. As part of these contracts, a city may be able to collect a franchise fee on utility customer bills and use this revenue as it chooses. Franchise expiration provides an opportunity for a city to negotiate for clean energy commitments. State legislatures gran municipal franchise authority.

ILSR’s franchise data is accurate to the best of our ability, but may have errors resulting from several factors: 1) depending on the default authority that states grant to cities (see: home rule), franchise authority may or may not be expressly mentioned in statute; 2) in a key database of local franchise agreements (published by NREL), some local survey respondents alleged the existence of franchise agreements (though without a link to a verifiable reference) in states whose policies prohibit them; 3) cities have also historically entered into franchise contracts with telecommunications providers, and statute can be ambiguous about the difference between these franchises and energy utility franchises; 4) franchise authority may vary between types of energy utilities, e.g. gas and electric; 5) some cities have historically been granted franchise authority, but this authority has subsequently passed to the state with no renewal schedule. Please email us with evidence of any necessary corrections.

Solar Permitting

Lowers costs and barriers to installing rooftop solar by simplifying local permitting processes.
Maximum points: 8 

As part of the solar installation process, most installers must acquire permits from a local government, to ensure installations are safe and comply with local laws. But inconsistent and resource-intensive permitting processes increase solar prices and make it harder for people to go solar. This also poses a barrier to clean energy goals and grid reliability needs. State lawmakers can streamline the permitting process to reduce those barriers and increase access to locally-produced and owned clean energy.

ILSR modifies the rubric in the Frontier Group’s Solar Permitting Scorecard to evaluate states’ efforts to reduce the costs and delays associated with solar permitting and inspection requirements. Specifically, ILSR has modified the Solar Permitting Scorecard rubric to remove third party ownership (TPO) scores, since ILSR’s Community Power Scorecard addresses TPO in a stand-alone section. The grades ILSR assigns to states for solar permitting may therefore be slightly different from the grades that Frontier Group has assigned.

Note: Frontier Group gives higher scores for standardization of state building codes, even though some states (e.g. Massachusetts) have stretch codes that allow cities to set high standards for building energy use.

Virtual Power Plants and Distributed Energy Resource Aggregation

Pays the owners of solar panels, batteries, smart thermostats, and other distributed energy resources to help the grid at key moments.
Maximum points: 8 

Virtual Power Plant enabling legislation requires utilities to implement distributed power plant programs to enable the coordinated operation of aggregations of behind-the-meter distributed energy resources for peak load reduction and other grid services. VPPs help lower energy costs for everyone by reducing the need to use or even build expensive peaker plants and associated transmission infrastructure.

Plug-In Solar

Allows consumers to use small solar panels that plug into a standard electrical outlet to save money on their electric bills.
Maximum points: 8 

Balcony solar enabling legislation allows users to reduce their electricity bills by utilizing power generated on site by small-scale portable solar panels. This reduces their reliance on utility-distributed power as well as grid demand, saving all ratepayers money by avoiding the need for costly grid upgrades. State legislators can pass balcony solar enabling legislation.

Gas Ban Preemption

Prevents communities from making their own decisions on building electrification by prohibiting cities from passing gas bans.
Maximum points: 0 

A gas ban preemption law forces cities to continue their dependence on fossil gas. Gas bans have been preempted by state legislators in several states.

Restructured Generation Market

Prohibits investor-owned distribution and transmission utilities from also owning generation assets, due to conflicts of interest.
Maximum points: 4 

Investor-owned utilities have a fiduciary duty to their shareholders to secure the most financial return — which they typically earn from investing in new grid infrastructure or power plants. The more money these utilities spend, the more return for their shareholders. Thus, when utilities develop plans to meet grid needs, it is inextricable from their own financial interest. States can only address this inherent conflict of interest by separating the planning function from building function, such as by restructuring utilities so that they cannot both make and profit from resource planning options. Legislators and utility commissions can both govern generation market restructuring, but a durable prohibition requires legislative action.

Disallow Construction Work in Progress

Prevents utilities from charging customers for construction costs before a power plant is operational.
Maximum points: 4 

If utilities can recover construction costs from customers while a project is underway, it encourages utilities to make riskier investment decisions. For example, in Georgia, customers were on the hook to pay in advance when the world’s most expensive power plant went seven years and $20 billion dollars over budget. In some states, rules only permit construction work in progress (CWIP) for specific types of projects (in Missouri, for example, the state legislature passed a carve out for new gas plant construction in 2025.) State lawmakers and regulators may write laws and rules to determine whether a utility can include construction work in progress in their rate base.

ILSR does not give partial credit to states that disallow CWIP for some types of energy or transmission projects, but allow it for others. The state must disallow in-progress rate recovery of all energy infrastructure construction.

Inclusive Utility Investment

Helps customers make energy upgrades with no upfront costs. Also known as inclusive financing, tariff on-bill financing, or Pay As You Save®.
Maximum points: 5 

Inclusive utility investment (IUI) helps utility customers with projects that will pay for themselves over time, including insulation, HVAC work, and even rooftop solar panels. The utility pays upfront for any cost-effective upgrades and then recovers its investment through part of the savings the customer receives on their energy bill. Anyone paying a utility bill is eligible to participate, thus avoiding the barriers of credit worthiness, debt aversion, and housing tenure. More information about IUI can be found at this EPA website. State lawmakers and regulators may write laws and rules to determine whether and how a utility must offer an IUI program.

Disconnection Prevention

Protects customers from losing electricity service for nonpayment.
Maximum points: 7 

Many states implemented moratoriums on utility disconnection in 2020 — but electricity is an essential service at all times, not just during an economic crisis or public health emergency. Research from the Center for Biological Diversity and Energy and Policy Institute found that just one percent of shareholder dividends for a dozen companies could have prevented 86 percent of the power shut offs between 2020 and 2022. State lawmakers and regulators create disconnection protections.

States can earn a maximum of 7 points (6 points for prohibiting all utility disconnections, plus 1 additional point for disclosing arrearage data), OR states can earn up to 5 points for any combination of criteria in the second schema, plus 1 additional point for disclosing arrearage data.

Intervenor Compensation

Helps consumer advocates and community groups participate in the state utility regulatory commission proceedings that determine electricity rates and other policies.
Maximum points: 4 

Regulatory proceedings have a high barrier to entry: meetings take place during the work day, participants must provide expert testimony, and proceedings typically use specific legal and technical language. Compensating intervenors, especially those representing consumers and highly impacted communities, helps to level the playing field and present more viewpoints to decision makers. State legislatures can create programs for intervenor compensation, which are then administered by regulators.

Disallow Lobbying Cost Recovery

Prohibits utilities from charging their customers for the company’s lobbying costs, campaign contributions, and other expenses.
Maximum points: 4 

Utilities try to influence state legislators and regulators to implement the rules they want — rules that often run counter to the interests of customers. It is unfair, for example, for a utility to use customer dollars to advocate for rate hikes, since consumers should not be paying for political influence activities that run counter to their interests. State lawmakers and/or regulators determine whether utilities can recover the cost of political influence activities from consumers through their rate base.

Disallow Trade Association Dues Cost Recovery

Reduces the risk of utility customers paying for utility trade association activities that contradict consumer interests.
Maximum points: 4 

Trade associations are organizations that may engage in political influence activities, including setting policy positions for utilities, lobbying for these policies, and doing public outreach campaigns. State lawmakers and/or regulators dictate the extent to which utilities can recover the cost of their trade association dues from their rate base.

Disallow Charitable Contribution Cost Recovery

Prohibits utilities from charging their customers for contributions to nonprofits.
Maximum points: 4 

Utilities use charitable contributions to boost their public image, but also to influence policies and regulations. Beneficiary organizations may be expected to speak out on the utility’s behalf, or at the least, not speak out against the utility. Statutes determine whether utilities can recover the cost of charitable contributions from their rate base.

Right of First Refusal

Allows utilities to claim new regional transmission projects without having to compete against (sometimes cheaper) bids from independent companies.
Maximum points: 0 

By controlling long-distance electricity transmission, utilities can prevent competitors from installing new power plants and overcharge customers. To counteract these anti-competitive behaviors, the Federal Energy Regulatory Commission eliminated the right of first refusal from regional transmission planning in 2011, but some state legislatures have re-granted it.

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