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In just over a week, the state of Florida’s solar rebate program is going to die. June 30th will be the day of execution, barring some eleventh-hour miracle. Small solar businesses are already feeling the pressure, with projects rapidly falling to the wayside and contractors looking north to states like Georgia and South Carolina that maintain a better political environment for solar power.

Mourning the death of Florida solar rebates

Florida’s Solar Energy System Incentives program was enacted in 2006. It offers a generous $4 per watt rebate for home solar power, up to $20,000 for photovoltaic (PV) systems. That means a 5,000-watt (5 kW) system, costing approximately $40,000, would receive a healthy dose of subsidies between its state rebate and the federal tax credit. The latter credits 30 percent of initial costs — roughly $12,000 in this example — and the state rebate would pay the maximum $20,000, meaning that 80 percent of a 5-kW solar system would be subsidized.

That has made for easy sales by Florida solar contractors, evidenced by the fact that funding for the rebate program doesn’t last long, even with the help of Recovery Act money. But the expiration of Florida’s solar rebates will have a very damaging effect on business. Even the smallest systems eligible for the rebate – 2 kW – garnered an $8,000 state rebate at an overall cost of $15,000.

Admittedly, these rebates are disproportionately high. This is because the program was developed in 2006 and PV prices dropped considerably since then. Solar business owners in Florida understand that, but are disappointed by the total erasure of state solar rebates, preferring, according to one contractor, a slash of the credit to $2-per-watt to keep with the drop in PV prices. Unfortunately its a tight budget year for all states, including Florida, and a prospective rebate-renewal bill died in committee at the state legislature.

Solar incentive programs still available:

• There is a ratepayer-funded $24.5 million pool of cash that utilities use to fund energy conservation initiatives.
• The Energy Efficiency and Conservation Block Grant allows municipalities to apply for grants to fund solar and other energy efficiency initiatives.
• Florida law also allows local-level PACE financing programs that fund clean energy projects through individual property tax hikes.
• JEA (formerly Jacksonville Electric Authority) offers small rebates for energy efficient new homes and up to $800 for solar hot water systems.

But none of that will make up for the loss of state rebates, which at this point will likely bring Florida’s solar industry to a screeching halt. In some states, utilities pick up the slack, but those states typically have renewable portfolio standards requiring utilities to obtain a certain percentage of renewable power. In Florida, only JEA has such a program. So, until some RPS or new rebate legislation is passed, solar power, along with the jobs and clean energy that comes with it, is on hold in the Sunshine State.

Source: Florida Times-Union (via iStockAnalyst)
Photo Credit: Wallpapers for You & Top News

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Following the example led by New Jersey and a few other states, the California Public Utilities Commission (CPUC) has approved the trading of renewable energy credits. The move could make owners of small photovoltaic arrays hundreds of dollars per year. The market approved by the CPUC will not be as generous as New Jersey’s, but will provide another avenue for solar home and business owners to annually recoup at least a small portion of the cost of their system.

Renewable energy credits, or RECs, are certificates that designate a certain amount of renewable electricity generated. 29 states have mandatory renewable portfolio standards requiring utilities to create a set percentage of their electricity from renewable sources by a specific year in time. These RPSs create a demand for RECs, which those utilities can purchase to offset fossil fuel generation and contribute to their renewable goals.

RECs are sold in 1,000 kilowatt-hour (1 megawatt-hour) blocks. According to Sunpluggers, the average 5-kW solar system in California produces about 7,000 kWh of solar electricity each year. That should be good for about seven renewable energy credits. But there is a temporary $50 cap on RECs purchased by the state’s three investor-owned utilities. So even if a solar homeowner sent all their solar electricity into the electric grid, they would stand to make only $350 per year.

It is important to understand that RECs must be used by another party; the generating home or business cannot use that energy itself. So in reality, only excess solar energy created would count towards RECs. That number can be significant given that solar systems produce all of their energy during hours of peak demand, and may produce well in excess of energy consumed, depending on consumption by the residence in question. But I would be surprised if any California home made more than one or two hundred bucks, although the $50 cap is only in place through 2011 and only applies to the three investor-owned utilities.

I’ve talked to a few homeowners in Oregon that have sold RECs, typically through Northwest Solar Cooperative, a regional collective that pools residential solar power into RECs on behalf of a group of homeowners. Those individual homeowners made roughly $30 in a year (although this was only a couple homeowners and in no way a significant sampling). According to the NW Solar Coop website, prices for RECs range on average from 2-10 cents per kWh.

In New Jersey, prices for a 1-MWh REC have reached as high $600, according to Sunpluggers. So it may be interesting to see what happens when the California cap expires in 2011. RECs also make figuring the end-costs and/or savings of home solar power systems more complicated for homeowners researching the idea, as REC markets are individual markets with their own rules and regulations.

Whether RECs pan out for owners of small systems remains to be seen, but they do open a new window for converting that solar energy into cash, especially given the decades of clean energy that solar power provides.

Sources: Sunpluggers & Wikipedia

Photo Credit: Sustainablog

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Four democratic senators have introduced an initiative urging the Obama administration to suspend a U.S. Treasury grant program formed under the Recovery Act. The program enables renewable energy producers to receive grants in lieu of Investment Tax Credit payments, essentially providing valuable financing up-front rather than over a number of tax years. That program has spawned a revival in investments for clean energy projects in the wake of the worst economic crisis since the Great Depression, and is widely lauded by RE industry members.

However, senators Charles Schumer (D-N.Y.), Bob Casey (D-Penn.), Sherrod Brown (D-Ohio) and Jon Tester (D-Mont.) are concerned that components for these projects are coming from foreign companies. In other words, they believe funds intended to boost the U.S. economy should be doing just that, not bolstering economies overseas. I absolutely agree with the notion that U.S. dollars should not be spent overseas, but the problem goes deeper than a Recovery Act grant program and ends with one gaping hole in American clean energy policy: a national renewable electricity standard (RES).

The grants-in-lieu-of-credits program has been wildly successful, and its removal could be detrimental to green energy investing and deployment, as recently argued by wind industry representatives before Congress. The Recovery Act stipulates that all stimulus funding must be spent within the United States, and industry executives argue that it is…to the highest possible degree. The problem is that key components of a wind or solar installation may not be available in this country.

Now that manufacturing credits are in place, that sector of the RE industry is picking up. Those same wind power industrialists noted that several new manufacturing plants have opened up in the last year, but that the U.S. still does not have a complete supply chain in place. They also posit that had a national RES been in place at the time of the Recovery Act’s passage, even more manufacturing jobs would have been created. I agree. Foreign and domestic investors still see energy policy in the U.S. as unstable; and rightly so. Anyone with even a marginal interest in national politics can see how unstable, inefficient and unproductive Congress has been on every front over the last few years.

We need some sort of national policy for — which would act as a national statement on — renewable energy. There are a lot of pleasant pieces, mostly found within the Recovery Act, but the glue that holds everything together is missing, resulting in a fractured and frenetic political environment in which legislation succumbs to the will of one belligerent senator or corporate lobby. Even loud-mouthed pundits and talk show hosts seem to have more power than elected officials.

The best way to quiet this storm, to move forward rather than stumble and swear, is to enact that national policy. I’ve argued before for increasing import tariffs long sacrificed to free trade and corporate globalization. A national feed-in tariff the likes of which propelled Germany to the front of the global solar stage would be another vital step. But these and other steps, including grants and tax credits, will only be as strong as the renewable electricity standard backing them. Our lack of any unifying RES is stunting the U.S. renewable energy industry. We’re grasping at straws instead of bailing hay.

One need only look at states with aggressive RES to see their effectiveness. Arizona enacted its first RES in 2006 and (if sudden turbulence within that state subsides) will be home to the first American manufacturing plant of Chinese solar giant Suntech Power Holdings. Oregon instituted both an RPS and state-level manufacturing tax credits and is now home to German giant SolarWorld’s North American headquarters that includes a 550-megawatt manufacturing facility. California needs no introduction.

To really advance renewable power, we must have a national RES. I’d prefer it were accompanied by a national FIT and a strong carbon tax, but the standard is step-one in bringing everybody in line. It will give foreign investors the confidence to invest in power plants on U.S. soil. Nobody wants to pay the oft-exorbitant shipping costs involved in overseas transport, but investors don’t like risk — something the Recovery Act grant program has helped diminish, a decrease that a national RES would all but guarantee.

Another benefit of national RE policy would be the actual and permanent creation of all these high-quality green jobs so proudly touted in renewable rhetoric. We must bring manufacturing to our shores. Grants have and are bringing some, a reason why repealing that program is not the solution, but an RES would bring more. Too many jobs in renewable energy (i.e. power plant construction) are temporary.

We often hear how this or that incentive will add so many thousands of green jobs per year, leading us to believe that employment will steadily rise by 3,000 each year. Hooray! But in reality, most of those jobs are temporary and the same 3,000 workers who manned new jobs one year will man the same “new” jobs the next year. Solar and wind power plants require relatively little maintenance or manpower for operation. A sizable power plant might require only a dozen or two permanent employees.

So where in the world is our national RES?

It’s in Germany, Spain, France and – gulp – China. Along with our jobs and prosperity and clean energy economy. The world is on the cusp of truly transitioning into a 21st-century energy economy, one dominated by wind and solar and geothermal rather than coal and gas and oil. Right now, the United States is stuck on the edge, bickering amongst ourselves while the rest of the world passes us by.

As Leonard Cohen once famously rhymed about America, “It’s there they’ve got the range and the machinery for change.” Well, let’s get those machines (and our congresspersons) fired up. Let’s have our national renewable electricity standard and be a positive leader and force for change at home and abroad.

Sincerely, D. Harding

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Last week, Big Solar exercised some of its growing clout by killing an anti-solar bill in the Arizona legislature. Here’s what happened:  state Republican senator Debbie Lasko introduced a bill that would have gutted Arizona’s renewable portfolio standard as we know it. Thankfully, a threat by Chinese solar giant Suntech Power Holdings to withdraw plans to put its first U.S. manufacturing plant in Arizona rallied enough pressure to remove the bill from the floor. It was of great relief to solar proponents in the state, but unfortunately, Lasko’s H.B. 2701 was not the only threat to Arizona’s fledgling solar industry.

Republican Representative Carl Seel has introduced a bill that makes Lesko’s look tame in comparison. His legislation would remove the right of the Arizona Corporate Commission – the state board that regulates utilities – to mandate renewable energy standards at all. Arizona passed their RES in 2006, requiring power providers to get 15 percent of their energy from renewable resources by 2025, including a certain percentage from solar photovoltaics.

The Goldwater Institute, a very conservative thinktank named after infamous conservative Barry Goldwater, tried to sue the state, claiming that it was unconstitutional to force any such mandates or regulations on private utilities (unless, it seems, those regulations or incentives promote nuclear, coal or natural gas power plants). Goldwater Institute lost that lawsuit, but has responded by facilitating Representative Seel’s H.B. 2381 that would render the Arizona Supreme Court’s decision moot.

Furthermore, Arizona’s republican governor, who reportedly helped kill Lesko’s bill after industry pressure mounted, also killed a regional cap-and-trade program that Arizona pioneered to put a price on carbon-emitting energy sources.

The recent wave of attacks on solar power in Arizona is troubling for a state that has some of the best solar potential in the world. There are states where one could argue that solar power is not the best renewable option, like the windy Dakotas or the geothermal-laden Northwest, but Arizona is practically made of sunshine. Why any group or lawmaker would want to kill solar power in that state is beyond this writer.

But H.B. 2701 had 51 co-sponsors, and green-leaning governor Janet Napolitano is gone. While Suntech Power Holdings and the industry managed to kill Debbie Lesko’s anti-solar bill, a huge victory among recent attacks, and may very well succeed in killing Carl Seel’s anti-RPS bill, the fact that such contention exists in Arizona may scare off potential solar industry additions to the state. Several states are working to attract green tech industries and the market is highly competitive.

However the fate of Arizona’s solar industry is decided, it will likely be decided soon, as Suntech’s potential industry followers are unlikely to wait around for long while California, Oregon, Michigan, Colorado and other states wait with open arms and less uncertainty.

Photo Credit: Interesting Energy Facts & CleanMPG

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