With the adoption of smart policies, the revolution in our transportation sector can generate an equally profound revolution in our electricity sector. Continue reading
Mercury is a neurotoxin that accumulates in the food chain and can damage the brain, spinal cord, kidneys and liver. It has been linked to attention deficit disorder in children, and is particularly hazardous to developing fetuses and young children. Poison control centers and emergency rooms took 18,000 calls in 1998 because of broken mercury fever thermometers. Continue reading
Recognizing the benefits that small-scale and locally-owned wind projects can have, in 2005 Minnesota lawmakers enacted legislation requiring all of the state’s electric utilities to establish Community Based Energy Development (C-BED) tariffs. The key aspect of the C-BED tariff is higher payments in the first 10 years of a power purchase contract. The only other state to enact such a law as of 2009 is Nebraska. Continue reading
In the era of electric deregulation customers in some states now have the ability to choose their electric supplier. But early indications are that the vast majority of consumers will choose not to choose. Who, then, should be their default supplier? In most states the incumbent utility has been given this huge pot of customers – California,Massachusetts and Ohio have decided that it should be the town or city who is responsible for serving these customers. Continue reading
Emissions reduction efforts to address the issue of climate change focus on two primary greenhouse gases: CO2 and methane. CO2 is released when fossil fuels – oil, coal and natural gas – are burned to power our cars, produce electricity or heat our buildings. Methane is emitted in urban areas when garbage and waste products decompose, primarily in landfills. Local and state governments can play a key role because they directly influence and control many of the activities that produce these emissions. Decisions about land use and development, investments in public transit, energy-efficient building codes, waste reduction and recycling programs all affect local air quality and living standards as well as the global climate. Continue reading
In January, I plotted the size of state solar markets against their average installed cost and found surprisingly little correlation. When Lawrence Berkeley Labs put out their 2011 version of Tracking the Sun (IV), it was possible to update the chart, which I did in two stages. The first chart simply overlays the 2010 average… Continue reading
You’re a city manager hoping to cut electricity costs at sewage treatment plant, a school administrator looking to power schools with solar, or a state park official needing an off-grid solar array for a remote ranger station.
But unlike any private home or business, you can’t get 50% off using the federal tax incentives for solar (a 30% tax credit and ~20% from accelerated depreciation). That’s because the federal government’s energy policies all use the tax code, and your organization is tax exempt.
What about a public-private partnership? The private entity puts up some money and gets the tax benefits, and the public entity only has to pay half. It can work, if you’re lucky, although a good portion of those tax benefits (half, in recent years) pass through to that private entity for their return on investment, not changing the price of your solar array.
But the legal niceties also matter. One common option is a lease, where the public entity leases the solar panels from the private one. One big problem: the IRS doesn’t allow the private entity to collect the 30% tax credit if they lease to a public entity.
The cash grant program in lieu of the tax credit allowed leasing, but it expires in December. Furthermore, it disallowed depreciation of the solar array, equivalent to 20% off.
Another clever arrangement is a power purchase agreement (PPA), where the third-party owns the solar array and simply sells the power to the school or city. The third-party can claim both the tax credit and depreciation, but if you live in a state with a regulated utility market (and no retail competition), your utility might slap you with a lawsuit for violating their right to exclusive retail service.
The following chart illustrates the financial challenge for public entities created by using the tax code to support solar.
Even with a lot of legal creativity, the public sector is often stymied in accessing both federal solar incentives. The result is that private sector solar projects always get a lower cost of solar, because the public sector can only access federal incentives through (costly) partnerships with third parties.
Using the tax code for solar (instead of cash grants, production-based incentives, or CLEAN Contracts) is bad for the solar business, bad for taxpayers and bad for ratepayers. It’s time to change course, and let the public sector go solar, too.
This is a presentation given to the Minnesota Renewable Energy Society in October 2011. With costs dropping rapidly and value rising, solar can make enormous contributions to Minnesota’s electricity system and economy. That’s the spirit of this presentation ILSR Senior Researcher John Farrell gave last week to the Minnesota Renewable Energy Society on the potential… Continue reading
The low risk and transparency of CLEAN Contract Programs can provide states with more solar at a lower cost than solar renewable energy certificate (SREC) programs, says a new report released last week. Produced by the Institute for Local Self-Reliance (ILSR), CLEAN v. SREC: Finding the More Cost-Effective Solar Policy finds that an otherwise identical… Continue reading
At least 32 states can get 25% or more of their electricity from wind power within their own borders. This map is updated from our 2010 report and namesake, Energy Self-Reliant States. Click here for a larger version.
The only updated figure is Maryland, due to a new report on its offshore wind potential.
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