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Current Trends and Challenges in Analyzing Renewable-Energy Policy
Rusty Haynes & Sue GouchoeN.C. Solar Center
N.C. State University
NREL Strategic Energy Analysis SeminarDecember 11, 2008
A Report from DSIRE
The DSIRE Project
www.dsireusa.org
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 records~1,060 RE records
DSIRE Unique Visitors (Monthly, 2005-08)
0
50,000
100,000
150,000
200,000
250,000
2006
2005
2008
2007
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
State Financial Incentives for Renewables
www.dsireusa.org December 2008
# of states # of incentives
State Rebates for Renewables*
DE: PV, SWH, Wind: ≤ 50%
FL: PV: $4/W
SWH: ≤$500
CT: PV: ≤$6/W
MA: PV: ≤ $5.50/W
Wind: ≤$4.75/W
Hydro: ≤$6.50/W
MD: PV: $2.50/W
SWH: 30%
Wind: $2.50/W
MN: PV: ≤$2.25/W
SWH: $30/sq. ft.
WY: PV: $3k
CA: PV: ≤$3.25/W or 50¢/kWh
SWH: $20/sq. ft.
Wind: $2.50/W
IL: PV, SWH: 30%
www.dsireusa.org December 2008
AZ: ≤$3/W (RE)
CO: PV: ≤$4.50/W
NV: PV: ≤$4.60/W
Wind: ≤$3/W
Hydro: $2.50/W
* Includes RPS-inspired utility rebate programs in AZ, CO & NV
WI: PV, SWH: ≤30% Wind, Bio: ≤25%
ME: PV: $2,000
SWH: ≤35%
Wind: TBD
VT: PV: ≤$3.50/W
SWH: per BTU
Wind: ≤$4.50/W
NY: PV: ≤$5/W
Wind: ≤$150k
OR: PV: ≤$2.25/W
SWH: ≤ 35%
Wind: ≤ $4.50/W
NJ: PV: ≤$4.10/W &/or SRECs
Wind: varies
Bio: ≤ $3/W
• 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
Financial Incentives: Best Practices
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
State Regulatory Policies
www.dsireusa.org December 2008
Public Benefit Funds for Renewableswww.dsireusa.org
March 2008
16 state funds + DC$6.8B by 2017 (est.)
RI: $2.2M in 2008$38M from 1997-2017*
MA: $25M in 2008$525M from 1998-2017*
NJ: $102M in 2008$637M from 2001-2012
DE: $3.5M in 2008$49M from 1999-2017*
CT: $24M in 2008$435M from 2000-2017*
VT: $6.6M in 2008$34M from 2004-2011
PA: $950,000 in 2008$63M from 1999-2010
IL: $5.5M in 2008$99M from 1998-2015
NY: $9.5M in 2008$114M from 1999-2011
WI: $5.5M in 2008$97M from 2001-2017*
MN: $16M in 2008$264M from 1999-2017*
MT: $750,000 in 2008$8.3M from 1999-2009
OH: $3.2M in 2008$63M from 2001-2010
MI: $1.7M in 2008 $25M from 2001-2017*
ME: voluntary contributions$411,000 from 2002-2008
OR: $12M in 2008 $182M from 2001-2017**
CA: $331M in 2008 $4,149M from 1998-2016
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.)
** The Oregon Energy Trust is scheduled to expire in 2025.
Renewables Portfolio Standards
State Goal
☼ PA: 18%** by 2020
☼ NJ: 22.5% by 2021
CT: 23% by 2020
WI: requirement varies by utility; 10% by 2015 goal
IA: 105 MW
MN: 25% by 2025(Xcel: 30% by 2020)
TX: 5,880 MW by 2015
☼ AZ: 15% by 2025
CA: 20% by 2010
☼ *NV: 20% by 2015
ME: 30% by 200010% by 2017 - new RE
State RPS
☼ Minimum solar or customer-sited RE requirement* Increased credit for solar or customer-sited RE
**Includes separate tier of non-renewable “alternative” energy resources
HI: 20% by 2020
RI: 16% by 2020
☼ CO: 20% by 2020 (IOUs)
*10% by 2020 (co-ops & large munis)
☼ DC: 20% by 2020
DSIRE: www.dsireusa.org December 2008
☼ NY: 24% by 2013
MT: 15% by 2015
IL: 25% by 2025
VT: (1) RE meets any increase in retail sales by
2012; (2) 20% by 2017
Solar water heating eligible
*WA: 15% by 2020
☼ MD: 20% by 2022
☼ NH: 23.8% in 2025
OR: 25% by 2025 (large utilities)5% - 10% by 2025 (smaller utilities)
*VA: 12% by 2022
☼ *DE: 20% by 2019
☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops)
☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)
ND: 10% by 2015
SD: 10% by 2015
*UT: 20% by 2025 ☼ OH: 25%** by 2025
*MI: 10% + 1,100 MW by 2015
☼ MA: 15% by 2020 +1% annual increase
(Class I Renewables)
☼ MO: 15% by 2021
MA (under development)
AZ: 1.1% by 2007
NV: 1% by 2009
ME: 30% by 2000
IA: 105 MW by 1999
MN: 425 MW by 2002
Renewables Portfolio Standards, 1997
Solar/DG Provisions in RPS Policies
NM: 4% solar electric by 20200.6% DG by 2015
AZ: 4.5% DG by 2025
NV: 1% solar by 2015;2.4 to 2.45 multiplier for PV
MD: 2% solar electric in 2022
CO: 0.8% solar electric by 2020
DC: 0.4% solar by 2020; 1.1 multiplier for solar
NY: 0.1542% customer-sited by 2013
DE: 2.005% solar PV by 2019;triple credit for PV
Solar water heating counts towards solar set-aside
DSIRE: www.dsireusa.org December 2008
WA: double credit for DG
DG: Distributed Generation
NH: 0.3% solar electric by 2014
NJ: 2.12% solar electric by 2021
PA: 0.5% solar PV by 2020
NC: 0.2% solarby 2018
OH*: 0.5% solarby 2025
* It is unclear if solar water heating is eligible for OH’s solar carve-out.
MA: TBD by MA DOERMI: triple credit for solar
MO: 0.3% solar electric by 2021
State RPS with solar/DG provision
State renewables goal with solar/DG provision
TX: double credit for non-wind(non-wind goal: 500 MW)
UT: 2.4 multiplierfor solar
~7,550 MW by 2025 (LBNL est.), excluding MA & MO
Interconnection Standards
* Freeing the Grid 2008: www.newenergychoices.org
• 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.*
• 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.*
Net Metering
* Freeing the Grid 2008: www.newenergychoices.org
Net Metering
State-wide net metering for certain utility types only (e.g., investor-owned utilities) Net metering offered voluntarily by one or more individual utilities
Net metering is available in
44 states + D.C.
NH: 100MA: 60/1,000/2,000*RI: 1,650/2,250/3,500*CT: 2,000*
100
DSIRE: www.dsireusa.org December 2008
80,000
100
100
1,000
50
100
4020
2,0001,000
10/100
25OH: no limit
25/300
25/300
500
VT: 250
NY: 25/500/2,000*PA: 50/3,000/5,000*NJ: 2,000*DE: 25/500/2,000*MD: 2,000DC: 1,000VA: 10/500*NC: 20/100*
30
10
10050
State-wide net metering for all utility types
* *
*
**
*
*
**
*
**
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.
25
100
25/2,000
* 25/100
*
40*
*
FL: 2,000*
*
25/2,000
(KIUC: 50)
co-ops, munis: 10/25
25
20/100
*20
AZ: no limit
*
The Solar Alliance: www.solar-alliance.org/model_policies
Average Residential Retail Rates, 2007
In Conclusion…State Policy Trends:• Dominance of RPS• Super-sized net metering• Regional markets• Rebates programs in flux• Next-generation RE funds• PPA model (solar)
Room for Improvement:
• Incentives for non-taxpayers
• Utility rate structures
• REC-selling opportunities
• Market coordination
• Federal policy
• Clarify 3rd-party sales
Wild cards: New federal policies? Credit markets? State budgets? Electricity rates?
Technology breakthroughs?
(intermission)
DSIRE: New Policy Projects
1. “DSIRE SOLAR”
A portal on the DSIRE site for solar-specific policy information
2. Quantitative Policy Databases for NREL Analysis Projects
Financial incentives for solar and wind
State RPS policies
Solar PortalDSIRE 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
DRAFT of new DSIRE Web Design
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.
State Tax Credits & Deductions for Renewables
State offers Personal & Corporate Tax Incentives
State offers only Personal Tax Incentives
State offers only Corporate Tax Incentives
Puerto Rico
D.C.
Solar Water Heating Incentives
Utility/Regional IncentivesUX%Tax Credit: (R) residential, (C) commercial State Rebate$ amt. or %
January 2007
DE: 50%
FL: $500 (Res.) $5,000 (Com.)
VT: $1.75-$3.50 per 100 Btu/day
MD: 20%
WI: ~25%
San Diego CSI Pilot Rebate
OR: ~$1,000 (Res.) ~ 35% (Com.)
IL: 30%
35%30% (R)
35% (C)
$0.60/kWh 1st-yr. savings (R)
10% (C)25% (R)
25% (R) MA: 15%
RI: 25% (R)
$500 (R) 15%
35%
U
U
U
100% Deduction (R)
U
UU
U
U
UU
U
TN: 40%
ME: 25%
25%
U
OH: $3 per 100 Btu/day
Sales Tax Exemption
U
Solar/DG Provisions in RPS Policies
NM: 4% solar electric by 20200.6% DG by 2015
AZ: 4.5% DG by 2025
NV: 1% solar by 2015;2.4 to 2.45 multiplier for PV
MD: 2% solar electric in 2022
CO: 0.8% solar electric by 2020
DC: 0.4% solar by 2020; 1.1 multiplier for solar
NY: 0.1542% customer-sited by 2013
DE: 2.005% solar PV by 2019;triple credit for PV
Solar water heating counts towards solar set-aside
WA: double credit for DG
DG: Distributed Generation
NH: 0.3% solar electric by 2014
NJ: 2.12% solar electric by 2021
PA: 0.5% solar PV by 2020
NC: 0.2% solar by 2018
OH*: 0.5% solar by 2025
MA: TBD by MA DOERMI: triple credit for solar
MO: 0.3% solar electric by 2021
State RPS with solar/DG provisionTX: double credit for non-wind(non-wind goal: 500 MW)
UT: 2.4 multiplierfor solar
State goal with solar/DG provision
DSIRE: www.dsireusa.org December 2008
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
State Rebate Comparison Tables: Policy Elements
State PV Rebate Comparison Table - ExcerptState 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
Quantitative Financial Incentive Database
Detailed technology- and sector-specific quantitative data associated with government, utility, and private financial incentive programs for:o PVo Solar Water Heating o Solar Space Heating o CSP o Wind
Incentive Types Covered o Rebates & Grants o PBIs & FITs o Tax Credits & Deductions
~220 data fields; >200 incentive programs
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
ProgramTEP - 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%
ArizonaUtility Rebate
ProgramUES - Renewable Energy Credit Purchase Program $3,000 $2,500 $2,500 DC 60% 60% 60% 1.2
CaliforniaUtility Rebate
Program
Alameda Power & Telecom - Solar Photovoltaics
Rebates Program $2,800 $2,800 $2,800 AC
CaliforniaUtility Rebate
ProgramAnaheim Public Utilities -
PV Buydown Program $4,000 $2,800 $2,800 AC 50% 50% 50%
CaliforniaUtility Rebate
ProgramAzusa Light & Water - Solar
Partnership Program $4,000 $4,000 $4,000 AC 50% 50% 50% 1
Quantitative Incentive Database - Excerpt
Quantitative RPS Database
Detailed renewable energy generation requirements by resource class and by supplier categoryo Start year, overall RE required in start year (%, MW, MWh)o Target year, overall RE required in target year (%, MW,
MWh)o % state load covered by RPS policy o % required for each resource tier, set-asideso “New” renewables dateo % renewables that may be derived from existing renewableso Multipliers for favored resources/technologieso Annual ramp rateo Monetary penalties for each resource tier
~85 data fields; 29 state RPS mandates
State
Primary: % State
Load Covered
1° Start Date
1° Total RPS
Starting %
1° Total RPS
Starting MW
1° Total RPS
Target %
1° Total RPS
Target MW
1° Target Date
1° Duratio
n (Years)
1° Total RPS
Ramp Rate
(Incremental %)
1° Total RPS
Ramp Rate
(MW)
1° Penalty
($/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%
0%With 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%
Quantitative RPS Database - Excerpt
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
Rusty HaynesN.C. Solar Center
N.C. State [email protected]
919.513.0445
Contact:
Sue GouchoeN.C. Solar Center
N.C. State [email protected]
919.513.3078
