Current Trends and Challenges in Analyzing Renewable-Energy Policy

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Current Trends and Challenges in Analyzing
Renewable-Energy Policy
A Report from DSIRE

• Rusty Haynes Sue Gouchoe
• N.C. Solar Center
• N.C. State University
• NREL Strategic Energy Analysis Seminar
• December 11, 2008

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The DSIRE Project
Database of State Incentives for Renewables
Efficiency

• Established in 1995
• Funded by U.S. DOE
• Managed by NCSU partners with IREC
• Project Scope policies programs that promote
  RE/EE
• Breakdown of data 1,900 total records1,060
  RE records

• www.dsireusa.org

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DSIRE Unique Visitors (Monthly, 2005-08)
2006
2005
2008
2007
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www.dsireusa.org December 2008
State Financial Incentives for Renewables
of states
of incentives
Rebate Programs 18 39
Production Incentives 7 7
Corporate Tax Incentives 20 26
Personal Tax Incentives 17 25
Grant Programs 19 ( DC) 34
Industry Recruitment/Support 16 20
Loan Programs 28 40
Property Tax Incentives 33 52
Sales Tax Incentives 23 26
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State Rebates for Renewables
www.dsireusa.org December 2008
ME PV 2,000 SWH 35 Wind TBD
VT PV 3.50/W SWH per BTU Wind 4.50/W
MN PV 2.25/W SWH 30/sq. ft.
OR PV 2.25/W SWH 35 Wind 4.50/W
MA PV 5.50/W Wind 4.75/W Hydro 6.50/W
WI PV, SWH 30 Wind, Bio 25
CT PV 6/W
WY PV 3k
NV PV 4.60/W Wind 3/W Hydro 2.50/W
NY PV 5/W Wind 150k
IL PV, SWH 30
NJ PV 4.10/W /or SRECs Wind varies Bio
3/W
CA PV 3.25/W or 50/kWh SWH 20/sq.
ft. Wind 2.50/W
CO PV 4.50/W
DE PV, SWH, Wind 50
AZ 3/W (RE)
MD PV 2.50/W SWH 30 Wind 2.50/W
FL PV 4/W SWH 500
Includes RPS-inspired utility rebate programs
in AZ, CO NV
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Financial Incentives Best Practices

• Strong, multi-year incentive, declining over time
• Stable funding source
• Easy application process
• Cost-effective quality-assurance mechanism
• Qualified installers
• Partnerships with banks, installers, NGOs
• Utility cooperation (esp. interconnection)
• Public non-profit sector eligibility
• Program flexibility
• Track program usage details share data
• Education outreach component

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www.dsireusa.org December 2008
State Regulatory Policies
Public Benefits Funds 16 ( DC, ME)
RPS Policies 28 ( DC 5 goals)
Solar/DG Carve-Outs 14 ( DC)
Net Metering 41 ( DC)
Interconnection Standards 35 ( DC)
Solar/Wind Access Laws 34
GP Purchasing Policies 10
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Public Benefit Funds for Renewables
www.dsireusa.org


March 2008
VT 6.6M in 2008 34M from 2004-2011
MT 750,000 in 2008 8.3M from 1999-2009
ME voluntary contributions 411,000 from
2002-2008
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
NY 9.5M in 2008 114M from 1999-2011
OH 3.2M in 2008 63M from 2001-2010
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 6.8B by 2017 (est.)
The Oregon Energy Trust is scheduled to expire
in 2025.
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DSIRE www.dsireusa.org


December 2008
Renewables Portfolio Standards
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 by 2017
WA 15 by 2020

• NH 23.8 in 2025

WI requirement varies by utility 10 by 2015
goal
ND 10 by 2015

• 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

IA 105 MW

• NY 24 by 2013

UT 20 by 2025

• OH 25 by 2025

• NJ 22.5 by 2021

IL 25 by 2025

• CO 20 by 2020 (IOUs)
• 10 by 2020 (co-ops large munis)

• PA 18 by 2020

CA 20 by 2010

• 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
TX 5,880 MW by 2015
State RPS
HI 20 by 2020
State Goal

• Minimum solar or customer-sited RE requirement
• Increased credit for solar or customer-sited RE
• Includes separate tier of non-renewable
  alternative energy resources

Solar water heating eligible
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Renewables Portfolio Standards, 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
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DSIRE www.dsireusa.org December
2008
Solar/DG Provisions in RPS Policies
7,550 MW by 2025 (LBNL est.), excluding MA MO
WA double credit for DG
NH 0.3 solar electric by 2014
MA TBD by MA DOER
MI triple credit for solar
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
PA 0.5 solar PV by 2020
OH 0.5 solarby 2025
DE 2.005 solar PV by 2019 triple credit for PV
UT 2.4 multiplier for solar
MO 0.3 solar electric by 2021
MD 2 solar electric in 2022
DC 0.4 solar by 2020 1.1 multiplier
for solar
NC 0.2 solarby 2018
AZ 4.5 DG by 2025
NM 4 solar electric by 2020 0.6 DG by 2015
State RPS with solar/DG provision
TX double credit for non-wind(non-wind goal
500 MW)
State renewables goal with solar/DG provision
Solar water heating counts towards solar
set-aside
It is unclear if solar water heating is
eligible for OHs solar carve-out.
DG Distributed Generation
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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, NM, MD,
  MA, OR, PA, CA.

Freeing the Grid 2008 www.newenergychoices.or
g
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Net Metering

• Allows customers to store any excess electricity
  generated, in the form of a kWh credit, on the
  grid for later use.
• Available statewide in 41 states. State
  policies vary widely.
• Best policies adopted by CO, MD, FL, NJ, OR, PA,
  CA, CT.

Freeing the Grid 2008 www.newenergychoices.or
g
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Net Metering
DSIRE www.dsireusa.org

December 2008
NH 100 MA 60/1,000/2,000 RI
1,650/2,250/3,500 CT 2,000
100
VT 250
100


100
50

40
25/2,000


20

25/100

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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 10/500NC 20/100

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OH no limit

500
25

1,000


2,000
25
40
10


25/2,000
1,000
100
co-ops, munis 10/25
30



80,000
100
25/300
20/100

AZ no limit
10/100

50
25/300
FL 2,000
100
(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.
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The Solar Alliance www.solar-alliance.org/mode
l_policies
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Average Residential Retail Rates, 2007
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In Conclusion

• Room for Improvement
• Incentives for non-taxpayers
• Utility rate structures
• REC-selling opportunities
• Market coordination
• Federal policy
• Clarify 3rd-party sales

• State Policy Trends
• Dominance of RPS
• Super-sized net metering
• Regional markets
• Rebates programs in flux
• Next-generation RE funds
• PPA model (solar)

Wild cards New federal policies? Credit
markets? State budgets? Electricity rates?
Technology breakthroughs?
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(intermission)
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DSIRE New Policy Projects

• DSIRE SOLAR
• A portal on the DSIRE site for solar-specific
  policy information
• Quantitative Policy Databases for NREL Analysis
  Projects
• Financial incentives for solar and wind
• State RPS policies

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Solar Portal

• DSIRE SOLAR Features
• Clickable U.S. Map for Quick Access to Solar
  Incentives
• Solar Policy Guide
• Detailed explanation of the solar policies
  covered by DSIRE
• Solar Policy Summary Maps
• Financial Incentives, Net Metering, Solar in RPS
  Policies
• Solar Policy Comparison Tables
• Tax Credits, Rebates, Solar Portfolio Standards,
  Net Metering

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DRAFT of new DSIRE Web Design
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DSIRE Solar Policy Guide

• Provides a description and context for the 20
  policy options in DSIRE.
• Distills and documents solar policy status and
  trends
• Supplemented by policy summary maps and tables
• Links to specific programs on DSIRE for examples,
  legislation, contacts.
• Organized by policy topic (tax credits, rebates,
  net metering, solar access, etc.)
• For each policy Description, Status Trends,
  Examples, Resources
• Updated periodically to reflect new policies,
  trends, examples, and resources.

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State Tax Credits Deductions for Renewables
D.C.
Puerto Rico
State offers only Personal Tax Incentives
State offers only Corporate Tax Incentives
State offers Personal Corporate Tax Incentives
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Solar Water Heating Incentives
January 2007
ME 25
VT 1.75-3.50 per 100 Btu/day
U
0.60/kWh 1st-yr. savings (R)
500 (R)
15
U
U
WI 25
35 (C)
MA 15
U
25 (R)
100 Deduction (R)
OR 1,000 (Res.) 35 (Com.)
U
RI 25 (R)
U
DE 50
IL 30
U
U
OH 3 per 100 Btu/day
MD 20
U
San Diego CSI Pilot Rebate
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TN 40
25 (R)
30 (R)
10 (C)
25
U
FL 500 (Res.) 5,000 (Com.)
U
U
35
U
Tax Credit (R) residential, (C) commercial
U
X
amt. or
Utility/Regional Incentives
State Rebate
Sales Tax Exemption
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DSIRE www.dsireusa.org
December 2008
Solar/DG Provisions in RPS Policies
WA double credit for DG
NH 0.3 solar electric by 2014
MA TBD by MA DOER
MI triple credit for solar
NY 0.1542 customer-sited by 2013
NV 1 solar by 2015 2.4 to 2.45 multiplier for
PV
NJ 2.12 solar electric by 2021
CO 0.8 solar electric by 2020
PA 0.5 solar PV by 2020
OH 0.5 solar by 2025
DE 2.005 solar PV by 2019 triple credit for
PV
UT 2.4 multiplier for solar
MO 0.3 solar electric by 2021
MD 2 solar electric in 2022
DC 0.4 solar by 2020 1.1
multiplier for solar
AZ 4.5 DG by 2025
NC 0.2 solar by 2018
NM 4 solar electric by 2020 0.6 DG by 2015
State RPS with solar/DG provision
TX double credit for non-wind(non-wind goal
500 MW)
State goal with solar/DG provision
Solar water heating counts towards solar
set-aside
DG Distributed Generation
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State Rebate Comparison Tables Policy Elements
Eligibility
Incentive Amount
Maximum Incentive
REC Ownership
Eligible System Size
Funding Source
Program Budget
Expiration Date
Project Pre-approval
Equipment
Warranty
Design/Installation
Installer Qualification
Inspections/Monitoring
Incentive Expenditures
of Installations
Installed Capacity
Cumulative Incentive Expenditures
Cumulative of Installations
Cumulative Installed Capacity
Incentive Overview
Mechanisms to Ensure System Performance
Expenditure and Installation Data
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State PV Rebate Comparison Table - Excerpt
State Program Name Eligible Recipients Incentive Amount Maximum Incentive REC Ownership
California California Solar Initiative All customers of investor-owned and publicly owned California utilities Varies by sector and system size Varies by sector and administering utility Remains with project owner
California CEC - New Solar Homes Partnership Home builders Varies. There are separate levels for new custom homes and homes in small developments, homes that are a part of large developments, individual units of low-income housing, and common areas of low-income housing developments. Incentives are adjusted based on expected performance, and will decline over time based on the total installed capacity. Not stated Remains with system owner
Connecticut CCEF - On-Site Renewable DG Program Non-residential customers of United Illuminating Company or Connecticut Light Power For for-profit owners 4.50/W for first 100 kW, 3.50 for next 100 kW. Not-for-profit system owners 4.75/W for first 100 kW, 4.25/W for next 100 kW. Additional 0.25/W premium for buildings that meet LEED Silver certification. CCEF also compensates system owners based on the estimated present value of the system's RECs. 850,000 (plus, potentially, 0.02/kWh for projects installed in southwestern CT by 6/30/08). RECs transfer to CCEF for systems 50 kW-PTC and larger. CCEF compensates system owners based on estimated present value of the system's RECs over 15 yrs.
Connecticut CCEF - Solar PV Rebate Program Non-Commercial customers of United Illuminating Company or Connecticut Light Power. (Homes limited to four family residences.) Residential 5/W (PTC rating) for first 5 kW 4.30/W (PTC) for next 5 kW, adjusted based on expected performance Gov't/Non-profit 5/W (PTC rating), adjusted based on expected performance Residential 46,500 Gov't/Non-profit 50,000 Incentives will be subject to a maximum of the customers average annual or expected electric usage Remains with project owner
Delaware Green Energy Program Incentives All customers of Delmarva, Delaware EC and customers of participating municipal utilities 50 of installed cost PV system cost may not be in excess of 12/W Delmarva Residential 31,500 Commercial 250,000 / Co-ops and Munis Residential 15,000 Commercial 30,000 Remains with project owner
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Quantitative Financial Incentive Database

• Detailed technology- and sector-specific
  quantitative data associated with government,
  utility, and private financial incentive programs
  for
• PV
• Solar Water Heating
• Solar Space Heating
• CSP
• Wind
• Incentive Types Covered
• Rebates Grants
• PBIs FITs
• Tax Credits Deductions
• 220 data fields gt200 incentive programs

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Quantitative Incentive Database - Excerpt
State Incentive Type Program Name PV Res. Rebate /kW PV Com. Rebate /kW PV Non-P/Govt Rebate /kW PV Rating Basis (AC/DC/PTC) PV Cost Res. Max. PV Cost Com. Max. PV Cost Non-P/Govt Max. PV Res. Rebate Min. Size (kW)
Arizona Utility Rebate Program TEP - Renewable Energy Credit Purchase Program 3,000 2,500 2,500 DC 60 60 60 1.2
Arizona Utility Rebate Program Trico Electric Cooperative - SunWatts Incentive Program 4,000 4,000 4,000 DC 50 50 50  
Arizona Utility Rebate Program UES - Renewable Energy Credit Purchase Program 3,000 2,500 2,500 DC 60 60 60 1.2
California Utility Rebate Program Alameda Power Telecom - Solar Photovoltaics Rebates Program 2,800 2,800 2,800 AC        
California Utility Rebate Program Anaheim Public Utilities - PV Buydown Program 4,000 2,800 2,800 AC 50 50 50  
California Utility Rebate Program Azusa Light Water - Solar Partnership Program 4,000 4,000 4,000 AC 50 50 50 1
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Quantitative RPS Database

• Detailed renewable energy generation requirements
  by resource class and by supplier category
• Start year, overall RE required in start year (,
  MW, MWh)
• Target year, overall RE required in target year
  (, MW, MWh)
• state load covered by RPS policy
• required for each resource tier, set-asides
• New renewables date
• renewables that may be derived from existing
  renewables
• Multipliers for favored resources/technologies
• Annual ramp rate
• Monetary penalties for each resource tier
• 85 data fields 29 state RPS mandates

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Quantitative RPS Database - Excerpt
State Primary State Load Covered 1 Start Date 1 Total RPS Starting 1 Total RPS Starting MW 1 Total RPS Target 1 Total RPS Target MW 1 Target Date 1 Duration (Years) 1 Total RPS Ramp Rate (Incremental ) 1 Total RPS Ramp Rate (MW) 1 Penalty (/MWh) New RE Date (mm/dd/yyyy) Existing RE Allowed () 1 Tier 1 Start Date 1 Tier 1 Starting RPS ()
Arizona 58.8 1/1/2006 1.25   15   12/31/2025 9999 0.724       0With the exception of incremental generation from existing hydorelectric facilities, generation from existing renewable energy facilties are not eligible. 1/1/2006 1.250
Colorado 58.7 1/1/2007 3.00   20   12/31/2020 9999 1.308     100 1/1/2007 2.880
Hawaii 100.0 1/1/2010 10.00   20   12/31/2020 9999 1.000       100    
Illinois 46.0 5/31/2007 2.00   25   6/1/2025 9999 1.353       100 5/31/2007 1.500
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Quantitative Data Challenges

• Incentives
• Rapidly changing incentive programs
• Many different, increasingly complex types of
  incentive structures
• Variations and bonus incentives for different
  applications
• Multiple options for taking a given incentive
  rebate vs. PBI
• State incentives available only to customers of
  certain utilities
• RPS
• load covered by RPS policy exemptions,
  obligated entities
• Different New date for different resources
• Combinations of , MW, and MWh standards
• Multiple multipliers

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Contact
Rusty Haynes N.C. Solar Center N.C. State
University rusty_haynes_at_ncsu.edu 919.513.0445
Sue Gouchoe N.C. Solar Center N.C. State
University susan_gouchoe_at_ncsu.edu 919.513.3078