Association for Public Policy Analysis & Management

Policies are often adjusted in response to shifting contextual conditions, such as those relating to political priorities, problem orientations, and policy demand. Ideally, changes in policy design are pursued to maximize the potential for attaining policy outputs within altered contexts. Few studies to date, however, have collected empirical evidence to examine the link between policy design and policy output change. Relatedly unexplored are factors that may interfere with the link between changes in policy design and changes in policy outputs. This paper fills gaps in knowledge regarding both of these topics by responding to the following two research questions: (1) How do changes in policy design correspond to changes in policy outputs; and (2) What from the contexts of policymaking explains responsiveness in policy outputs to changes in policy design?

To respond to these research questions, we first examine changes in American states’ net metering policies between the years 2007-2016 relative to changes in related policy outputs over the same period. For change in policy design, we consider year to year adjustments in policy targets, policy instruments, and policy incentives. Within the context of net metering policies, targets reflect technologies that net metering customers can employ in their distributed energy generation; for example, wind, solar, geothermal technologies. Instruments reflect restrictions on the amount of distributed energy that can be generated by net metering customers. Incentives include rate of compensation for energy sold back to utilities by net metering customers, the allowance of rollover in credits earned for excess generation, and any disincentive to rollover credits. For change in policy outputs, we consider year to year changes in the number of net metering customers, energy sold back to the utilities, and total combined capacity of net meter generators. Once we determine relative policy design and policy output change across states and years, we examine political, social, and technological factors that explain variation among states in terms of the extent of policy design and policy output change.

Among our key findings is that certain types of policy design changes are more effective in encouraging change in policy outputs. We also find that political factors are most salient in tempering the relationship between policy design and policy output change. Ultimately, our research contributes theoretical insight on the relationship between policy design and policy output change as well as guidance for practitioners on contextual factors that encourage policy efficacy.