Solar energy is playing a bigger role on California\u2019s grid than ever and its continued growth is crucial to the state accelerating efforts to meet energy and environmental goals. The state is aiming for a 33 percent renewables portfolio standard by 2020, with a higher unspecified level beyond then. Gov. Jerry Brown has set a state goal of seeing 12,000 MW of distributed generation capacity installed by 2020. Solar systems figure prominently in this goal. However, California\u2019s lofty aims for solar come as public incentives that have long supported the technology are waning, giving rise to clouds of policy uncertainty. For instance: \u2022\tIncentives under the popular California Solar Initiative end completely after 2016. \u201cThat program has been declining over time and is expected to be depleted,\u201d said Michael Barker, NPD Solarbuzz senior analyst. \u2022\tAt the federal level, the 30 percent investment tax credit goes to just 10 percent after 2016. \u201cThe investment tax credit and renewable portfolio stand as the closest thing to a renewable energy policy in the U.S. that does anything to help on climate change,\u201d said John Cheney, Silverado Power chief executive officer. \u2022\tAlso at the federal level the Commerce Department this December is due to finalize anti-dumping tariffs against Chinese photovoltaic panel makers, who control anywhere from 40 to 80 percent of the world market, depending upon the niche. Those tariffs could raise the price of panels by an average of 14 percent, though they could tack up to about 50 percent onto the price of some panels. Small projects are unlikely to be dramatically affected by the tariffs, but they do have the ability to affect the viability of big projects, according to James Tong, Clean Power Finance vice president for strategy and government affairs. \u201cOverall, anything that raises the price for solar will impact the industry in a negative way,\u201d he said. On top of this, in California the Public Utilities Commission is redesigning electric rates and presumably will discard the current net metering arrangement for future residential and small business utility customers who install small rooftop systems. (Customers who install systems before the rate restructuring takes effect will be grandfathered in under today\u2019s net metering tariff.) All of this raises the question of whether these policies need to be continued in some form to reach ever-higher levels of renewable power in California. To find out, I checked in with the solar industry and what I found is as heartening as it is surprising. I found an industry that has matured and can continue to grow rapidly though it is still disadvantaged under current public policies\u2014even in California. The key to growth is the industry\u2019s own effort to continue to drive down costs by improving panels and developing quicker installation methods that involve new mounting and racking systems and lower cost inverters. Such improvements have driven down the installed cost of distributed solar in California between 2008 and the end of 2013 from an average of $10.64\/watt to $5.50\/watt on homes, according to the commission. Another key to success has been the industry\u2019s efforts to develop financing programs similar to those used in other businesses. In the distributed solar market segment these include turnkey leasing, power purchase agreements, and Property Assessed Clean Energy loan programs. Solar executives also credit renewable portfolio standards in California and other states for the industry\u2019s rapid growth. Expansion of these policies could propel clean solar energy even further. Still, industry executives note that some public policy changes can help advance the state\u2019s clean energy goals, including: \u2022\tStreamlining permitting for installing distributed systems; \u2022\tEasing interconnection requirements for both distributed and utility-scale systems; and \u2022\tExtending real estate investment trust tax treatment\u2014as is currently enjoyed under federal tax rules by oil and gas developers today\u2014to private equity solar project developers. Fortunately, there\u2019s already movement in two of these policy areas. Gov. Jerry Brown recently signed AB 2188 by Assemblymember Al Maratsuchi (D-Torrance), which requires local governments to streamline their permitting processes for small-scale rooftop solar systems. They are to be approved on a ministerial basis as long they comply with a checklist of standard requirements. Industry executives expect the bill will cut the cost of obtaining local permits by making permitting more clear cut and avoiding what too often is a time consuming back-and-forth process between solar installers and city and county halls. \u201cYour typical home solar energy system has become practically cookie-cutter,\u201d said Bernadette Del Chiaro, California Solar Energy Industries Association executive director. \u201cWe\u2019re talking about the exact same product, design, and installation, yet many building departments require byzantine permits as if they are installing a nuclear power plant.\u201d The second area is the U.S. Treasury Department. It has proposed amending its real estate investment trust tax rules to allow private solar companies to enjoy the same advantages available to oil and gas developers. Under the changes, private solar developers would be able to avoid taxes by securitizing and selling interests in pools of solar assets. Another advantage is that the amendment would open up a new finance avenue for the companies. In addition to seeking financing from large investors and banks to build projects, they could sell shares in pooled projects directly to small investors. Turning to utility scale solar, still unaddressed is the problem of sailing through the doldrums of the grid interconnection process. Stiff upfront fees are required. Silverado Power\u2019s Cheney said even after paying the fees it can take up to two years to get an interconnection agreement in place through the California Independent System Operator. I n the interim, regulations can change and land for projects becomes subject to speculation, driving up costs. Interconnection is granted much more quickly in other nations, he said. Solar executives say that while interconnection studies and reviews are needed, there\u2019s much room for making them more transparent and speedy. Despite ongoing struggles, however, solar executives remain optimistic about the future\u2014both for distributed solar and utility scale projects. \u201cOverall, the picture is bullish on solar,\u201d concludes Tong of Clean Power Finance. \u201cIt will grow. The question is the rate.\u201d Accelerating the growth rate through 2020 likely will depend on continued state and local government efforts to eliminate needless paperwork and regulation, plus the federal government completing its initiative to treat private solar developers on an equal footing with oil and gas developers. Looking further down the road, Tong and other executives think that to fully capture the value of solar energy and other clean energy technologies, regulators ultimately will have to devise a new business model for the energy utility sector that opens it to more competition.