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State Solar Policy: 2008-09 Developments & Current Trends

State Solar Policy: 2008-09 Developments & Current Trends. Justin Barnes N.C. Solar Center N.C. State University NESEA: Building Energy March 12, 2009.

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State Solar Policy: 2008-09 Developments & Current Trends

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  1. State Solar Policy:2008-09 Developments & Current Trends Justin Barnes N.C. Solar Center N.C. State University NESEA: Building Energy March 12, 2009

  2. NESEA is a Registered Provider with The American Institute of Architects Continuing Education Systems. Credit earned on completion of this program will be reported to CES Records for AIA members. Certificates of Completion for non-AIA members will be mailed after the conference.This program is registered with the AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.

  3. Focus & Learning Objectives • Recent Federal Policy Changes & Implications • “Four Pillars” Updates - RPS, Net Metering, Interconnection, Incentives • Innovative Policy Mechanisms - Property tax financing, Community NM, Next Generation Funding, Solar Renewable Energy Certificates (SRECs).

  4. The DSIRE Project www.dsireusa.org Database of State Incentives for Renewables & Efficiency • Created in 1995 • Funded by U.S. DOE • Managed by NCSU; works closely with IREC • Project Scope: policies/programs that promote RE/EE • Breakdown of Data: ~1,950 total records~825 solar records~750 PV records

  5. The Solar Alliance:www.solar-alliance.org/model_policies

  6. Federal Update • Extended to 12/31/2016 • May be used to offset AMT • Extended to utilities Commercial Solar ITC (10/08) Commercial Solar ITC (02/09) • Grants in lieu of tax credit for COMMERCIAL TAXPAYERS. The grants are equivalent to 30% of the installed cost and are available through 2010.

  7. Federal Update (cont’d) Residential Solar Credit (10/08) • Extended to 12/31/2016 • $2,000 cap removed for PV (1/1/2009) • May be used to offset AMT Other Federal Incentives • Tax Credit Bonds: CREBs ($2.4 B) and QECBs ($3.2 B) • Bonus Depreciation: Extended through Dec. 31, 2009 (02/09) • Subsidized Energy Financing: 100% haircut repealed (02/09) • Manufacturing Tax Credit: 30% of investment, competitive, $2.3 B (02/09) • Residential Solar Credit: $2,000 cap on SHW removed (02/09)

  8. State Developments, 2008-09 • Rebates(new): CO (local), CT (PV), MA (PV), MN (SWH), NH, OH (residential PV & SHW reactivated), PA (coming soon??) • Tax credits (new/improved): GA (35%), KY (small), OR (limit doubled), PA (15%), VT (30%), PR (75%) • Property tax incentives: AZ, FL, MD, NC, NJ, NY • Finance: NJ (Loans/Contracts), MD (Contracts), CA (Berkeley First) • New RPS/RPG: OH, MI, MO, SD, UT • Revised RPS/RPG: D.C., IL, MA, MD, NH (minor) • Solar RPS: D.C., OH, MI, MA, MO • Net Metering(improved): AZ, CO, CT, D.C., FL, HI, IL, KY, LA, MA, MI, NY, OH, RI, UT, VT • Interconnection Standards(new/improved): CO, D.C., FL, IL, KYMD, MI, NC, NM, NY • Solar access(improved): CA, CO, FL, MD, VA

  9. State Financial Incentives for Solar • Direct Incentives Rebates (19/24) Grants (20/29) Production Incentives (3/3) • Tax Credits/Deductions/Exemptions (27/58) • Low-Interest Loans (27/31) • Sales Tax Exemptions (22/23) • Property Tax Incentives (30/40) • Industry Recruitment Incentives (13/19) (# of states / # of programs)

  10. www.dsireusa.org February 2009 State Financial Incentives for Solar

  11. Direct Incentives for PV, 1997 www.dsireusa.org 10-20% up to $75K 50% up to $10K Varies by project $2K - $10K $10K - $50K $60K - $1M

  12. State Rebates & PBIs for PV February 2009 ME: $2K max 15 - 54¢/kWh • 19 state rebate programs & PBIs* • 28 state grant programs(not shown on map) • 29 non-state PBIs (not shown on map) • 77 utility rebate programs(not shown on map) NH: $3/W $2-2.25/W VT: $1.75-3.50/W MA: $1-4.40/W NY: $2-5/W $1-2.25/W ≤35% CT: $2.50-4/W 50%, $3k max NJ: $1-1.75/W SRECs: ~$0.42/kWh $2.30-4.60/W 30% ≤$3.50/W DE: 50% ≤$3.25/W ≤50¢/kWh, 5 yrs. MD: $2.50/W $2-3/W $4/W * Includes RPS-inspired utility rebate programs in AZ, CO & NV

  13. Federal Policy Implications • Residential Cap Removal = State Incentive Reductions (NJ, NY, CO, CT, MA, MD?) • Consideration in other states • Over-subscription, boom/bust cycle is also a factor $4.00/W

  14. www.dsireusa.org February 2009 State Tax Credits for PV VT: 30% (C) 35% 15% $3/W (R) 50% (C) 25% (R) MA: 15% (R) 100% Deduct. (R) RI: 25% 25% (R) 10% (C) $500 (R) $1K (C) • Credits in 18 states + P.R. • Range: 10% - 75% • FL, IA, MD, OK have small PTCs (not shown on map) 35% 25% (R) 30% (Non-Corp.) ~2.7¢/kWh 10 yrs. (C) 10% (NR) 25% 35% 50% 10% Deduct. (C) 35% P.R.: 75% (R) Residential; (C) Commercial; (NR) Non-Residential

  15. Property Tax Incentives • Tax Credits: NYC, numerous counties in Maryland • Removal of subsidized energy financing “haircut”. • Innovative Financing: Berkeley First model

  16. State Regulatory Policies • Public Benefits Funds (16+DC & ME) • Renewables Standards/Goals (28+DC & 5 goals) • Net Metering (40 + D.C.) • Solar Access Laws/Easements (35) • Contractor Licensing (9) • Equipment Certification (3 + P.R.)

  17. Public Benefit Funds for Renewables www.dsireusa.org March 2008 MT: $750,000 in 2008 $8.3M from 1999-2009 ME: voluntary contributions $411,000 from 2002-2008 VT: $6.6M in 2008 $34M from 2004-2011 MN: $16M in 2008 $264M from 1999-2017* MA: $25M in 2008 $525M from 1998-2017* MI: $1.7M in 2008 $25M from 2001-2017* OR: $12M in 2008 $182M from 2001-2017** RI: $2.2M in 2008 $38M from 1997-2017* WI: $5.5M in 2008 $97M from 2001-2017* CT: $24M in 2008 $435M from 2000-2017* IL: $5.5M in 2008 $99M from 1998-2015 OH: $3.2M in 2008 $63M from 2001-2010 NY: $9.5M in 2008 $114M from 1999-2011 CA: $331M in 2008 $4,149M from 1998-2016 NJ: $102M in 2008 $637M from 2001-2012 PA: $950,000 in 2008 $63M from 1999-2010 DE: $3.5M in 2008 $49M from 1999-2017* D.C.: $400,000 in 2008 $5.1M from 2004-2017* * Denotes funds that do not have defined expiration dates and do not require future reauthorization or budgetary approval in order to continue operations. (These funds are not scheduled to expire in 2017.) 16 state funds + DC and ME $6.8B by 2017 (est.) ** The Oregon Energy Trust is scheduled to expire in 2025.

  18. Non-PBF Renewable Funds • AK Energy Authority: $100 M (FY 2009), appropriated, utility-based, end-use • IA Power Fund: $ 75 M through 2011, focused on R&D and commercialization • OH Air Quality Development Authority: $84 M through 2012, funded by state bonds • PA Energy Independence Fund: $650 M, broad based, funded by state bonds. • WI Energy Independence Fund: $150 M for grants and loans over 10 years.

  19. Regional Greenhouse Gas Initiative (RGGI) • 09/08: $38.6 M • 12/08: $106.5 M • 03/09: ?? ~ $500 M possible for remaining 2009 allowances.

  20. www.dsireusa.org Renewables PortfolioStandards, 1997 ME: 30% by 2000 MN: 425 MW by 2002 MA (under development) NV: 1% by 2009 IA: 105 MW by 1999 AZ: 1.1% by 2007

  21. DSIRE: www.dsireusa.org February 2009 Renewables PortfolioStandards ME: 30% by 2000 10% by 2017 - new RE MN: 25% by 2025 (Xcel: 30% by 2020) VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by 2017 *WA: 15% by 2020 • NH: 23.8% in 2025 ND: 10% by 2015 WI: requirement varies by utility; 10% by 2015 goal • MA: 15% by 2020+1% annual increase(Class I Renewables) MT: 15% by 2015 OR: 25% by 2025(large utilities) 5% - 10% by 2025 (smaller utilities) *MI: 10% + 1,100 MW by 2015 RI: 16% by 2020 SD: 10% by 2015 CT: 23% by 2020 • *NV: 20% by 2015 *UT: 20% by 2025 IA: 105 MW • NY: 24% by 2013 • OH: 25%** by 2025 • NJ: 22.5% by 2021 IL: 25% by 2025 CA: 20% by 2010 • CO: 20% by 2020(IOUs) *10% by 2020 (co-ops & large munis) • PA: 18%** by 2020 • MO: 15% by 2021 • MD: 20% by 2022 • NC: 12.5% by 2021(IOUs) 10% by 2018 (co-ops & munis) • AZ: 15% by 2025 • *DE: 20% by 2019 • DC: 20% by 2020 • NM: 20% by 2020(IOUs) • 10% by 2020 (co-ops) *VA: 12% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 28 states have an RPS; 5 states have an RE goal State RPS Solar hot water eligible • Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE • ** Includes separate tier of non-renewable “alternative” energy resources State Goal

  22. DSIRE: www.dsireusa.org February 2009 Solar/DG Provisions in RPS Policies LBNL Estimate: 7,656 MW in 2025 WA: double credit for DG NH: 0.3% solar electric by 2014 MI: triple credit for solar MA: TBD by MA DOER NV: 1% solar by 2015; 2.4 to 2.45 multiplier for PV NY: 0.1542% customer-sited by 2013 CO: 0.8% solar electric by 2020 NJ: 2.12% solar electric by 2021 OH: 0.5% solarby 2025 PA: 0.5% solar PV by 2020 UT: 2.4 multiplier for solar DE: 2.005% solar PV by 2019; triple credit for PV MO: 0.3% solar electric by 2021 MD: 2% solar electric in 2022 NC: 0.2% solarby 2018 DC: 0.4% solar by 2020; 1.1 multiplier for solar AZ: 4.5% DG by 2025 NM: 4% solar electric by 2020 0.6% DG by 2015 TX: double credit for non-wind(non-wind goal: 500 MW) State RPS with solar/DG provision State renewables goal with solar/DG provision Solar water heating counts towards solar set-aside DG: Distributed Generation

  23. Largest RPS Markets for Solar (2009): AZ, NJ, NV, and CO Source: LBNL Environmental Energy Technologies Division / Energy Analysis Department

  24. RECs and SRECs • Who owns them? How can you use them? - LBNL (04/06): 11 states address ownership (+ 2 pending at the time) - DSIRE (02/09): 23 states address ownership, of 12 “new” policies, 9 to customer-generator. • Bundled or Unbundled (e.g., CA) • Innovative Programs - Xcel solar rebates + SREC purchase, PSEG (NJ) Solar Loan, NJ SREC contracts, MD SREC contracts.

  25. Interconnection Standards • Technical issues include safety, power • quality, system impacts. Technical • issues largely resolved. • Policy issues include legal and • procedural considerations. State • approaches vary widely. • Best policies adopted by IL, NJ, PA, NM, MD.* IREC model: www.irecusa.org/index.php?id=87 * Freeing the Grid 2008: www.newenergychoices.org

  26. Net Metering • Allows customers to store any excess electricity generated, usually in the form of a kWh credit, on the grid for later use. • Available “statewide” in 39 states. State policies vary dramatically. • Best policies adopted by CO, MD, FL, NJ, OR.* IREC model: www.irecusa.org/index.php?id=88 * Freeing the Grid 2008: www.newenergychoices.org

  27. Net Metering (February 2007) www.dsireusa.org Only 5 States with 1 MW+ Net Metering NH: 25 MA: 60 RI: 25 * CT: 100 100 VT: 15/150 100 * * 50 100 * 40 * 25 30 * 10/400 20 * 25/100 * 25 * * 500 no limit * PA: 50/1,000/2,000 NJ: 2,000 DE: 25 MD: 500 DC: 100 VA: 10/500 * 40 * * 150 * * 25 2,000 10 25 * 1,000 15 * 20/100 * * 100 25/100 10 10/100 80,000 * 50 25/100 10 50 Net metering is available in 41 states + D.C. State-wide net metering for all utility types * State-wide net metering for certain utility types (e.g., IOUs only) Net metering offered by one or more individual utilities #s indicate system size limit (kW); in some cases limits are different for residential and commercial as shown

  28. Net Metering DSIRE: www.dsireusa.org February 2009 100 VT: 250 NH: 100 MA: 60/1,000/2,000* RI: 1,650/2,250/3,500* CT: 2,000* 100 * * 50 100 * 25/2,000 40 * 20 * 25/100 * 20 * NY: 25/500/2,000* PA: 50/3,000/5,000* NJ: 2,000* DE: 25/500/2,000* MD: 2,000 DC: 1,000 VA: 10/500*NC: 20/100* 25 * 500 25 No limit * 1,000 * * 2,000 40 25 10 * * 25/2,000 1,000 co-ops, munis: 10/25 100 30 * * * 80,000 100 25/300 20/100 No limit * 10/100 20 FL: 2,000* 100 LA: 25/300 (KIUC: 50) Net metering is available in 44 states + D.C. State-wide net metering for all utility types * State-wide net metering for certain utility types only (e.g., investor-owned utilities) Net metering offered voluntarily by one or more individual utilities Note: Numbers indicate individual system size limit in kilowatts (kW). Some states’ limits vary by customer type, technology and/or system application; this is the case when multiple numbers appear for one state. Other limits may also apply. For complete details, see www.dsireusa.org.

  29. Net Metering: Meter Aggregation/Community Net Metering • Aggregation: OR, WA, PA, ME, VT, RI • Community: NJ, CA, MA, VT • Proposed: VA, CO Could make participation more flexible and help achieve DG goals at a lower cost BUT community net metering poses numerous of policy questions for regulators (e.g., definition of community, program limitations).

  30. Solar Access Laws • 14 states limit or prohibit restrictions that neighborhood covenants and/or local ordinances may impose on the use of solar-energy systems. (Solar easements allow for the rights to existing solar access on the part of one property owner to be secured from another property owner whose property could be developed in such a way as to restrict the solar resource. Transferred with property title. Many other states allow these.)

  31. In Conclusion… State trends: Dominance of RPS Super-sized net metering Interest in FITs/PBIs Property Tax Vehicles State/Federal Interaction Room for Improvement: Incentives for non-taxpayers Utility rate structures REC-selling opportunities Market coordination Wild cards: Federal RPS? Credit markets? State budgets? Electricity rates? Technology breakthroughs?

  32. QUESTIONS?? This concludes The American Institute of Architects Continuing Education Systems Program Northeast Sustainable Energy Association

  33. Contact: Justin Barnes N.C. Solar Center N.C. State University justin_barnes@ncsu.edu www.dsireusa.org919.513.0792

  34. Solar-Specific Incentive Information Clickable U.S. Map for Quick Access to PV Incentives PV Incentive Summary Maps State-by-State Incentive Comparison Tables Tax Credits, Rebates, Solar Portfolio Standards, Net Metering PV Incentive Program Installation Data from IREC # of Installations, Incentive $ Expenditures, Capacity Installed Solar Policy Guide S lar P rtal Coming soon

  35. Excerpt from State PV Rebate Comparison Table D R A F T

  36. Most Aggressive RPSs, Required Solar as % of Sales California goal of 3,000 MW equals ~ 1.5% Source: LBNL Environmental Energy Technologies Division / Energy Analysis Department

  37. Solar Capacity Resulting from RPS Solar Policies • 2005 Outlook ~ 1,000 MW • 2006 Outlook ~ 2,700 MW • 2007 Outlook ~ 6,000 MW • 2008 Outlook ~ 7,550 MW Largest markets: • NJ (1500 MW) • MD (1500 MW) • AZ (1000-1500 MW) • PA (850 MW)

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