A short slide deck providing a “101″ on Property Assessed Clean Energy (PACE) financing, a status update on the legal challenges, and some of the policy design issues we explored in our report on Municipal Financing Lessons Learned.
Viewing the policy tag archive Page 12 of 19
Updated 8/26/11 and 9/1/11
Many renewable energy advocates argue that the market for solar renewable energy credits (SRECs) is a more cost-effective tool for incentivizing solar power than a feed-in tariff (or CLEAN contract) set in a regulatory proceeding.
This chart illustrates the installed cost of solar in New Jersey from 2006 to 2011 (as reported by the National Renewable Energy Laboratory in Tracking the Sun III and converted to levelized cost) in green, the New Jersey SREC spot market price in red, and the German feed-in tariff price (constant exchange rate, adjusted for NJ solar insolation) for rooftop solar projects 30 kilowatts and smaller in blue. (Update 9/1: the previous chart showing solar cost in $ per Watt is here).
Does a “market-based” policy do a better job of matching the actual cost of solar?
This comes to mind: “one of these things is not like the other…”
Update 8/26: I should add that the German feed-in tariff is the only source of revenue for solar projects, whereas the SREC in New Jersey comes in addition to the federal 30% tax credit and accelerated depreciation (and net metering). Since the two federal incentives (and net metering values) have not changed, the fact that the SREC value is rising against the tide of falling solar prices is even more absurd.
One of my colleagues informed me recently that my work on feed-in tariffs was cited in a recent report by the Intergovernmental Panel on Climate Change (IPCC): the Special Report on Renewable Energy Sources and Climate Change Mitigation. I can’t say I’ve read the IPCC report, but it’s an honor to have my work noticed by such a distinguished organization.
In case you haven’t seen it, the report they cited is one I published in 2009 called Feed-in Tariffs in America: Driving the Economy with Renewable Energy Policy that Works. Click through for the executive summary or to download the report.
Israel dealt with a similar debate, whether to adopt the Feed-in-Tariff method or the bidding method to promote the generation of renewable energy into the grid. While the electricity Authority (the equivalent body in Israel for NERSA) supported the REFIT process and the Ministry of National Infrastructures (the equivalent to the Department of Energy) and the Ministry of Finance preferred the Bidding process. Israel decided to publish REFIT in 2008, while issuing few tenders in the bidding process.
While the bidding based projects are not making big progress the REFIT based projects generate 100 MW of small systems today, an approved accumulated capacity of 150 MW that will be implemented soon. Quota of 300 MW for medium size plants was published, projects with the accumulated capacity of 200MW where given licenses and other are awaiting approval â out of 1.3 GW of proposals.
Tenders in the bidding process published in 2008 and no one was awarded the contract yet. There is only one participant in each one of in two tenders for CSP plants (100MW each). There is also a tender for a PV plant (30MW) but bidders didn’t submit their final proposals yet.
Advantages of the REFIT process over the bidding process:
1. Promotion of entrepreneurship and job creation: The Bidding process limits the game to few big players and excludes the small ones. The REFIT process allows to small and medium companies to participate. Israel developed an entire new renewable energy industry with close to a 100 active companies.
2. Efficiency: In bidding process the government becomes very involved and often intervenes in engineering and technological issues that is not capable to deal with. That creates delays and complications in the process.
3. Meeting the targets: Publishing tenders takes a lot of time, often much more than expected. That can result in not meeting the schedule targets. There is also a fear that companies that will lose the tenders will appeal to court and create more delays.
4. Simple rules of the game: the REFIT process puts together very simple rules that make it more transparent and easy to deal with.
5. The disadvantage of the REFIT process is that prices set at the beginning of the process do not reflect reduction in costs for the developers in the future. The solution is to publish quotas and a gradually decreasing REFIT.
All countries in Europe have decided to adopt the REFIT method. Israel found it as the most efficient way to promote renewable energy.
Dr. Ilan Suliman, former Vice chairman of the Israeli Electricity Authority has helped in putting these points together.
I received this information via email, but it’s also available here.
Thanks to innovative energy policy, residents of Ontario can invest in local solar power projects by buying SolarShare bonds. The $1,000 bond provides a 5% annual return over five years and the money is invested in solar power projects across the province (as the chart below shows, this beats a savings account with 0.8% interest or even a 5-year U.S. treasury, with 0.91% interest). Continue reading
Find out why and how ILSR has been helping communities maximize the value of their local energy resources for nearly 40 years: ILSR’s Remarkable Energy Self-Reliant States and Communities program View more presentations from John Farrell Continue reading
Back in April 2011, ILSR Senior Researcher John Farrell gave this presentation on the potential for solar power in Minnesota to a group of solar businesses and advocates. Solar in Minnesota: Great Potential View more presentations from John Farrell. Continue reading
A serialized version of our new report, Democratizing the Electricity System, Part 5 of 5. Click here for: Part 1 (The Electric System: Inflection Point) Part 2 (The Economics of Distributed Generation) Part 3 (The Political and Technical Advantages of Distributed Generation) Part 4 (Regulatory Roadblocks to Democratizing the Electricity System) Download the report. The… Continue reading
Energy policy matters, a lot. The Germans have a comprehensive feed-in tariff, providing CLEAN contracts to anyone who wants to go solar (or wind, or biogas, etc). The U.S. has a hodge-podge of utility, state and federal tax-based incentives. What does that mean?
Much cheaper German solar. In fact, it’s like having your favorite craft or microbrew beer at a price that beats Budweiser. From a study of U.S. solar prices reported in Renewables International:
Perhaps most surprisingly, the study found that the planned arrays larger than one megawatt have an average installed price of $4.50 per watt, with only a third of the systems in the pipeline coming in at prices below four dollars per watt. As Renewables International reported in January, the installed system price of photovoltaics in the US was easily 60 percent above the level in Germany in 2010 for equivalent system sizes (arrays smaller than 100 kilowatts).
Here’s a chart illustrating that cost differential, with the German prices updated for the 2nd quarter of 2011.
If the German solar prices are wunderbar, that makes the U.S. “furchtbar.”