Which Policies Will Push Renewables Forward This Year?

Each year, DSIRE (Database of State Incentives for Renewables and Efficiency) names the most important US renewable energy policies for the year.

They say: 2011 gave us plenty of the three-steps-forward-and-two-steps-back dance that characterizes U.S. renewable energy policy (were we expecting anything else?).

1603 Treasury Grants and the Oregon Business Energy Tax Credit (BETC) departed but there are new important policies like the California RAM, the Rhode Island FIT, and the Vermont Energy Act of 2011.

The wildly successful 30% grant in lieu of a tax credit (1603 Grants) on the federal level are gone, along with the 100% first-year bonus depreciation, but the industry will continue to benefit from the tax credit (all industries except solar expire at the end of 2012) and the residential renewable energy tax credit through the end of 2016, as well as a 50% first-year bonus depreciation through 2012.

California: RPS Gets Steroid Injection and Authorizes Renewables Auctions
 
As of April 2011, California’s Renewable Portfolio Standard (RPS) stands at 33% by 2020. The RPS was established in 2009 via Executive Order, but now it’s law. The law not only increased the percentage of renewables required, it also extends it to publicly-owned municipal utilities.

The state’s investor-owned utilities had to complete their first auctions by November 15, 2011 under California’s Renewable Auction Mechanism (RAM). Each utility is required to hold two auctions a year where developers who have up to 20 MW of eligible projects can bid for contracts.

Rhode Island: Establishes Feed-In Tariff (FiT)

In June, Rhode Island passed legislation (HB 6104) establishing a feed-in tariff for distributed renewable energy generators up to 5 MW in capacity and utilities must enter into contracts for a minimum of 40 MW of capacity by the end of 2014.

Solar and wind systems will receive $0.1335 – $0.3335 per kWh, depending on system size and type, for 15 years. Each utility must conduct one enrollment period in 2011 and at least three in subsequent years, and National Grid opened one in December.

Vermont: Enacts Energy Act

The Vermont Energy Act of 2011 (H.B. 56), calls for 90% of the state’s energy to come from renewables by 2050. The plan includes a feed-in tariff and emphasizes efficiency – and its sole nuclear plant will be retired.

The state is streamlining permits for small solar PV systems up to 5 kW and it raised systems that qualify for net metering from 250 kW to 500 kW, increased the aggregate capacity limit from 2% to 4% of a utility’s peak demand and improved group net metering.

Further, utilities have to offer additional credits of $0.20/kWh minus the highest residential rate to solar net metering customers. This could result in an additional $0.01/kWh – $0.06/kWh for net-metered solar, depending on a utility’s residential rate.

As part of Connecticut’s energy policy overhaul (SB 1243), utilities are required to enter into 15-year contracts for renewables up to 2 MW.

Washington DC enacted legislation that expands its solar carve-out more than six-fold, from 0.4% to 2.50% by 2023. It also defines "in-District" geographic limits and a 5 MW capacity limit for solar.

Florida’s sizable utility rebate programs for solar water heating and PV opened and closed repeatedly, often at single-day intervals. The state made partial amends for past mistakes (to the
tune of roughly $0.55 on the dollar) by allocating funding to clear the queue of its woefully oversubscribed (and since terminated) rebate program.

Illinois overturned a gubernatorial veto and enacted SB 1652, which adds a distributed generation requirement to the state’s RPS. 1% of the state’s RPS now must be fulfilled using distributed generation systems of 2 MW or less by June 1, 2015. On the
negative side, other provisions in the bill will cast a cloud over net
metering, even though it raises qualifying systems to 2MW.

Legislation (HB 3672) eliminated Oregon’s Business Energy Tax Credit (BETC), which was enacted in 1979 and had expanded significantly over the past 10 years. The law also creates an energy conservation tax credit, a tax credit auction program and a grant program that will be funded by revenue from the auctions. The renewable manufacturing tax credit remains until its
scheduled sunset in 2014.

We would also add Colorado’s passage of The Fair Permit Act (HB 1199), which lowers permitting fees for solar.

Standardizing local permitting rose to the forefront last year as a key way to lower the cost of solar.  Standardized local permits would bring the cost of solar to grid parity for 50% of American homes by 2013.

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