ILSR held a feed-in tariff conference on January 9, 2009, in Northfield MN. The event was attended by approximately 120 people – from regulators and legislators to renewable energy developers and activists. We learned how cities, counties, non-profits and more individuals can become owners of renewable energy projects. We saw how renewable energy can promote more economic development and discovered how developing renewable energy can be made more simple.
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About John Farrell
John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More
There’s a renewable energy policy with a record of incredible success, so why aren’t we using it in America? This paper briefly explores the history of feed-in tariffs (FITs) in Europe – the rise and fall of this policy in Denmark and the rise and rise of FITs in Germany – and then outlines why it would be a much simpler, more cost-effective, and better economic driver for reaching America’s renewable energy goals. Continue reading
The federal tax credits for renewable energy have been a major barrier to widespread ownership of renewable energy. The production tax credit, for example, can only be taken against passive income, a type of income that very few of us actually earn. Accelerated depreciation or investment tax credits can be taken against ordinary income –slightly better – but again the credit provides more benefit the higher one’s tax bracket and the more tax liability one has. The overhead costs in aggregating sufficient tax equity to finance wind and solar projects have proven very high. Nevertheless, to date the industry has grown rapidly based on this inefficient and cumbersome arrangement.
Theeconomic downturn, however, has all but eliminated the ability of renewable energy projects to sell their tax credits. The result is that in mid-January, AWEA and SEIA joined an increasing call to move toward refundable tax credits.
Tax Reform and Community Based Renewable Energy By John Farrell, originally published in Renewable Energy World, February 5, 2009 The federal tax credits for renewable energy have been a major barrier to widespread ownership of renewable energy. The production tax credit, for example, can only be taken against passive income, a type of income that… Continue reading
Here find are rules related to taxation of wind energy projects. We highlight those that establish a fair revenue stream to local communities that are hosting renewable energy projects but not too high so that wind energy projects are not able to move forward. Key to the successful development of wind energy projects is the support of the local communities that surround the project and one way to do that is providing those communities with financial benefits. Continue reading
Funding commitments for low-income energy programs is a critical component of a sound energy policy. Typically, low-income energy programs are focused on helping families pay their energy bills. In many cases there is also a component of the program that targets energy-efficiency improvements for low-income households. Overall, funding for low income households held firm or modestly increased after electric restructuring in the 1990s, although in many cases the before and after comparison is misleading because utilities decreased their spending on low income households significantly between 1993 and 1998. Continue reading
Vermont, Oregon, Gainesville, FL, and the Canadian province of Ontario have recently adopted feed-in tariffs for renewable energy, allowing any prospective renewable energy producer will get a guaranteed connection to the grid, a long term contract to sell their power, and a fixed price sufficient to recover their costs plus a reasonable profit. We believe that feed-in tariffs could turbocharge state level renewable electricity standards, reduce costs, and spread the economic benefits across many more project owners.
Energy efficiency is a clearly demonstrated, cost-effective means to meet future electricity needs. States that implemented electric restructuring have set up policies to finance energy-efficiency improvements for residents and businesses. Regulated states have been moving toward policies that use to require a certain amount of expenditures on efficiency by utilities toward policies that require a certain amount of energy savings. Continue reading
In the era of electric restructuring customers were given the right to choose which company supplies them with their electricity. In order for consumers to make sound, smart choices about a power supplier they need to know how each electric provider’s power is generated and what impacts that power production has on the environment. Many states that have deregulated their electric power sector also mandated that power providers provide detailed information on the specifics of how their power is generated and transmitted. This is known as"electricity disclosure" or "environmental disclosure". Of the states that have enacted disclosure requirements, Illinois’ disclosure law is one of the best.
In the early 20th century electricity generation and transmission technologies supported the idea that "big is better." As a result, regulatory rules encouraged the construction of centralized power plants and long distribution lines. In the 1990s the technological dynamic was reversed. Small power plants located closer to the customer were become increasingly competitive. This has occurred at the same time as most states, many cities, and the U.S. Congress are rewriting the rules that govern our electricity system. These interconnection rules (i.e. codes, standards, regulations, statutes) will encourage electricity customers to also become electricity producers. Continue reading