Rebates & Tariffs


Novato and Sonoma-based SolarCraft, a solar industry leader, announced in light of the recent budget evaluations and the continued success of the California Solar Initiative (CSI) program, PG&E is within weeks of reaching the incentive budget cap in the non-residential sector of the CSI program.

It’s critical to file commercial reservations immediately if interested in solar in 2011 and SolarCraft can help you get your rebate reserved right away. With current state economics it’s unclear when the program will get further funding. Since the reservation for a Solar rebate is good for one year, SolarCraft can facilitate getting your reservation, so you can still receive the rebate on a 2011 solar project.

Once PG&E has exhausted the non-residential CSI funds (with paid, confirmed, and under review projects and the assumptions made to the incentive budget), PG&E will start to create an application waitlist, and notify and place those applications in the queue until there are funds available.

PLEASE NOTE: This does not affect PG&E’s CSI residential sector at this time as there are sufficient funds to date.

SolarCraft is one of the most experienced solar energy contractors in California. For more than 26 years this certified Green Business has been providing Solar Thermal and Solar Electric services including consultation, design, installation, monitoring and maintenance. SolarCraft is a full-service solar contractor, employing licensed and certified solar installers who are experts in their field. Since 1984 SolarCraft has installed more than 4,500 solar energy systems in California saving customers more than $7 million annually and eliminating the production of more than 28,000 tons of greenhouse gases every year.

Source: 7thspace

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In a striking illustration that support for feed-in tariffs comes from both the right and the left, both Republicans and Democrats, the Hoover Institution will recommend that the US “evaluate” the renewable energy policy.

The recommendation, one of many, is contained in a new book titled “Conversations about Energy: How the Experts See America’s Energy Choices,” scheduled for release in November.

The 168-page book is the result of a two-day conference on energy policy organized by George P. Schultz, Secretary of State during the Reagan Administration.

The Hoover Institution on War, Revolution and Peace is the premier conservative think tank in the US. Its influence on conservative and libertarian thought is felt worldwide. The institute, located on the campus of Stanford University in Palo Alto, California, includes several high-profile members of previous administrations, such as Condoleeza Rice, Secretary of State during the George W. Bush administration.

Margaret Thatcher is an honorary fellow.

The Institute’s recommendation follows a conference discussion on the national security benefits of distributed generation, led by James Woolsey, director of the CIA during the Clinton administration.

Woolsey, a former visiting fellow at the Hoover Institution, has become an outspoken proponent of distributed generation and electric vehicles. He currently serves on the Institute’s Schultz-Stephenson Task Force on Energy Policy and has held senior posts in both Republican and Democratic administrations.

While the specific recommendation is tepid by international standards; the fact that it was made by a conservative think tank should come as no surprise.

Modern feed-in tariffs were first introduced in Germany in 1991 by the conservative government of Helmut Kohl at the request of a fellow member of the CDU’s conservative Bavarian sister party, the CSU.

Feed-in tariffs were later adopted by Germany’s social democrats, the SPD, and the Green Party.

Today all parties support Germany’s feed-in tariff program, including the current conservative government, led again by the CDU-CSU, in coalition with the libertarian party, the FDP.

The slim book is not yet available but will ship November 12, 2010. The Institute summarizes the purpose of the conference and the book thusly:

“Over the past forty years, our energy policies have left us in a place that is dangerous to our economy, our national security, and our climate. But we still have a chance to get it right. In Conversations About Energy, members of the Hoover Energy Task Force offer ideas and recommendations that might improve the performance of the United States in responding to the energy challenge.”

Source: Alliance for Renewable Energy.

The solar rebate in California’s PG&E utility district just dropped yet another step to just $350 per kilowatt installed – 35 cents per watt – dooming new solar homeowners to higher costs today than those who got in while the combination of high CSI incentives (and solar-glut panel prices) cut the cost of doing the right thing.

The California Solar Initiative or CSI rebates are administered through the big three electric utilities in the state. The PG&E rebate initially started at $2, 500 per kilowatt installed, so for example, building a 3 kilowatt system got $7,500 off a few years ago. Now that same 3 KW system will get only $1,050 off.

Technically, all three California utilities that participate in the CSI program are still in Step 7, which provides a rebate of $650 for each KW installed, but in Northern California’s PG&E territory, there are more systems halfway through the approval process than there are approvals left.

PG&E has already put word out to the solar industry that they need to start quoting based on Step 8 rebate levels, because of this. There are still 4.61 MW of solar systems to be approved before the next step down is triggered, but 6.41 MW of systems are already under review. Even for many people who have not yet got their permit, their rebates will be at the lower Step 8 level of just $350 per KW.

The basis for the California Solar Initiative step down to level 8 incentives is that solar is now mass-market-ready. As someone who works in solar, I disagree.

Most people have had no knowledge that rebates exist. For incentives to work, people must know about them. The average homeowner is only just beginning to hear that there are incentives.

In the 1950′s the whole country watched Walter Cronkite, and saw the same advertising. All the news and advertising was percolated uniformly through society. Now, we are a nation of ignoramuses. Clever ads tell us more and more about the subjects that we previously showed interest in. And that’s just if we don’t block online ads altogether!

Now news actually percolates much MORE slowly in a post-advertising media environment. Advertising online is now completely personalized to the interest of the reader. If you are interested in Britney and Lindsay, you’ll see handbag ads (or may be rehab ads) and you”ll know more about these things.

How sad that just as the news of the PG&E rebate has begun to percolate to the mass market, it is yanked away. Only when Britney gets her CSI rebate will California be ready for a mass market in solar PV.

Source: Clean Technica.

In a big win for Vermont’s nascent feed-in tariff program, the state’s Public Service Board (PSB) ruled today that they see no conflict between the state’s program and the federal government.

A challenge by Vermont’s Department of Public Service (DPS) had jeopardized several megawatts of solar PV projects that were awaiting financing and threatened to derail Vermont’s precedent-setting program.

DPS is a part of the executive branch of Vermont’s government that is led by Republican Governor Jim Douglas. Though Governor Douglas opposed Vermont’s feed-in tariff program, he let the policy become law without his signature.

The state agency argued that a recent FERC decision ruling that a California program had violated Federal law “could potentially affect” Vermont’s program as well, and that the Vermont “Standard Offer Program” should be suspended.

The PSB, Vermont’s highest regulatory authority, ruled that it will not seek clarification from the Federal Energy Regulatory Commission (FERC), thus ending the debate for the Green Mountain state.

Jennifer Gleason, an attorney with the Environmental Law Alliance, said she was “thrilled to see that the Public Service Board found that “no party has demonstrated that [Vermont’s] standard-offer program violates federal law.” Gleason has been active in the feed-in tariff campaign in the US and has been besieged with requests for assistance since FERC’s ruling on California’s so-called feed-in tariff.

In North America, the term “standard offer” is used interchangeably with the more commonly used expression “feed-in tariffs”. To further confuse matters, Vermont’s feed-in tariffs are part of the state’s Sustainably Priced Energy Development Program, dubbed SPEED.

Defense of Vermont’s SPEED program was led by Renewable Energy Vermont (REV). The advocacy group successfully argued that the PSB has no authority to rule whether the program violates Federal law. REV further argued that FERC’s California decision had little “legal significance” beyond that specific case. REV also noted that FERC has ruled previously that it will not void contracts that were not challenged during the state’s rate-setting process. No contracts have been challenged in Vermont.

The PSB, the regulatory authority, ruled that no challenger, including DPS, had “demonstrated that the standard offer program is invalid”. Under Vermont law, the PSB has the “obligation to implement statutes passed by the legislature,” it said, and, thus, it was their duty to do so if the law is valid.

Some challengers suggested that the PSB suspend the program while it seeks clarification from FERC. The PSB ruled definitively saying that to seek clarification from FERC; the PSB would be making a determination that the program is invalid. The program is valid, says the PSB, therefore there’s no need to seek clarification.

Vermont’s SPEED program is the most sophisticated in the US. Tariffs are differentiated by technology and, for wind energy, also by size. Though Vemont’s feed-in tariff program pales in comparison to that in Ontario, Canada, it has rejuvenated the renewable energy industry in Vermont.

REV led the campaign for feed-in tariffs in Vermont and recently held its largest annual conference ever. As evidence of the organization’s growing political clout, Vermont’s two US Senators were in attendance.

While the PSB’s decision will not end the debate about Federal pre-emption of feed-in tariffs in the US, it clearly sends a signal to other states that they can set feed-in tariff policy that avoids overt conflicts with the Federal government.

Source: Alliance for Renewable Energy.

It’s no surprise that California dominates the renewable/solar energy market, thanks to a plethora of programs and incentives that aim to reduce the state’s dependence on fossil-fuel and other pollutive forms of energy by 33 percent by 2020.

California, which currently has 402 megawatts (MW) of solar energy installed, and another 443 MW pending, has been a clean energy leader since the beginning. Now, Wells Fargo & Company, is offering a special promotion that makes going solar even more affordable for Southern California homeowners.

A complete skeptic when it comes to “green” corporate behavior – which usually involves accruing greenbacks rather than dispensing them to benefit the environment, I found myself surprised and a more than a abashed by the fact that Wells Fargo’s move doesn’t appear to benefit the company at all (though correct me if I’m wrong).

Working through three California-based solar companies – Acro Energy, REC Solar and Verengo Solar – the giant banking firm, which got its foothold during the California Gold Rush, plans to offer $1,000 in incentives to every SoCal homeowner who takes out a home equity line of credit of $15,000 or more to install a solar energy system. The incentive also applies in Colorado through Dec. 31 of this year.

It is, as Wells Fargo Environmental Affairs Director Mary Wenzel noted, one of the many ways that the community-based financial giant can help customers and help save the environment.

Putting its money where its mouth is, Wells Fargo has also provided more than $2 billion in tax-equity financing to support renewable energy projects, which total about 4,100 MW, including solar photovoltaic systems at 10 banking locations in Denver. This, at a time when the Solar Energy Industries Association, or SEIA, is predicting a drying up of tax equity financing that will effectively kill a burgeoning solar energy marketplace.

Tax equity is where financial institutions like Wells Fargo step in to help small solar developers with few resources and no “tax appetite” (i.e., tax burden) take immediate advantage of the Investment Tax Credit (ITC) provision in the 2009 American Recovery and Reinvestment Act, or ARRA, which provides renewable energy tax credits as a tax refund.

Unfortunately, getting these refunds moves at the typical glacial pace of most government programs, so ARRA also offers a cash grant in lieu of the ITC. But this expires in at the end of December, 2010, leaving a lot of small solar developers and solar projects out on a limb, financially speaking.

In Newsweek Magazine’s initial Green Rankings issue (2009), Wells Fargo ranked first among U.S. banks and insurance companies, and 13th overall, as one of the “greenest” corporations in America – a ranking that had nothing to do with the firm’s financial health, though that looks pretty solid, too, in spite of a persistent recession. No cause for schadenfreude there.

Source: Solar Calfinder.

According to Bill Campbell of Equilibrium Capital Group at a recent meeting of the Oregon Energy Forum, most forms of energy are generated with large capital investments, and sold to consumers who buy only what they need, when they need it. This financial structure is quite common, from stored energy delivered as gasoline or AA batteries, to real-time energy delivered over the electric or natural gas grids. Investors are accustomed to making large, safe, long term investments in energy. Consumers are accustomed to making small purchases, which in aggregate support hundreds of billions of dollars in transactions.

A Feed-In-Tariff (FIT) fits this business model very well. For instance, a business can make a large capital investment in solar PV (photovoltaic) equipment, sell electricity on a long term (e.g. 20 year) contract at a guaranteed price to a utility, and pay individual building owners regular royalty fees for the use of their rooftops. In short, a FIT provides a very bankable investment in PV. In the present economic downturn, a business that sends building owners monthly checks, is likely to find more clients than a business that charges building owners for new PV systems—even PV systems with partial subsidies and tax credits.

In comparison, a program that provides first-cost incentives plus net metering is incongruent with the conventional energy business model. In many cases, the investment decisions are made by individual building owners who have minimal investment capital on hand. If large investors enter the market, they often receive low electricity prices.

FITs are popular in Europe to promote renewable energy, and are gaining traction in the US. In Florida, the Gainesville Regional Utilities (GRU) recently switched a renewable energy program, from “Incentive plus Net Metering” to FIT. The 2 programs are comparable, in terms of the net present value per kWh of the cost over the program lifetime. This comparison is important, because some Americans dismiss successful European FIT programs as too expensive.

In the GRU service territory, 365 KW of new solar capacity was installed or committed in the final eighteen months of the “Incentive plus Net Metering” program – versus 8 MW in the first eighteen months of the FIT. That’s more than twenty times the investment, jobs, energy, carbon reduction, and community value in the same span of time – at essentially the same net present value cost per kWh to the utility.

With an energy efficiency power purchase agreement (eePPAtm) or related “pay for delivery” transactions, the FIT financial model can be applied to energy efficiency, in addition to renewable energy. The Gainesville experience suggests that government bodies and utilities can grow their local clean energy economies much faster, by investing in FIT energy programs.

Source: Pike Research.

If there is a central theme to the Renewable Energy Finance Forums generally, it’s pragmatism. You can listen to every word from the presenters — as well as from each the other participants as they network on breaks between the marathon sessions — and trust me: there isn’t so much as a breath of idealism. The show isn’t about what should happen, it’s about what will happen.

I had lunch the other day with an incredibly bright guy, a very practical physicist whose business characterizes materials for companies in solar, wind, and electric transportation — as well as dozens of other industries. I immediately saw that he was lukewarm on renewable energy. “I’m here to drum up business, but I’m reluctant to be connected with an industry that relies on subsidies,” he sneered.

When I pointed out that oil and gas get 12 times the subsidies that clean energy receives, he looked down at his arugula sheepishly and replied quietly,” Well, I guess what I meant to say is ‘subsidies that might go away.’”

Those few words encapsulate the root of the clean energy problem. Not only are the subsidies for fossil fuels enormous, they are taken for granted; they’re so well entrenched that they’re completely invisible. Contrast that to the mountain that is made out of the relatively small tax credits and government grants under TARP and ARPA-E to stimulate development of clean energy.

I have to hand it to these oil companies for the deftness with which they’ve soaked us for everything we’re worth. The checks that we taxpayers write to them every day go completely unnoticed. These people have taken larceny and elevated to the plain of art. The lesson here is clear and simple: we must not underestimate the skill of the people we’re playing against.

Source: Solar Feeds.

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