Friday, July 27, 2012

Renewable Energy Law News - Week of July 23

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Christie signs bill to boost solar

New Jersey Gov. Christie and the state's environmental groups have landed on common ground _ a highly unusual occurrence.

That's because [on Monday] Christie signed a bill that would encourage the growth of the solar industry in the state.

New Jersey already is a leader. It is second in the nation in solar installations. So far, more than 775 megawatts of solar has been installed in the state, enough to power about 130,000 homes. (Or, as the environmental groups note, more than the amount of energy produced by Oyster Creek Nuclear Plant, which they have pushed to have shuttered.)

But solar advocates, such as Rhone Resch, president and CEO of the Solar Energy Industries Association, have contended that the growth of the solar industry was threatened because of uncertainty in the Solar Renewal Energy Credits market.

The cost of most project factors in the value of these credits, which are sold as electricity is generated, as part of the pay-off of the system. Like many states, New Jersey has a Renewable Energy Portfolio Standard, which requires that utilities either produce a certain amount of power from solar or that they buy it through the SRECs. Even a homeowner with a small system could get SRECs and sell them to help pay off the system.

In the early days of SRECs, the value was high. But now it has dropped. System owners aren't the only ones suffering. Those who are contemplating installing solar don't have the financial incentive they might need.

The Christie administration worked with the SEIA to come up with the new law, which accellerates the state's Renewable Energy Portfolio Standard, leading to more demand for SRECS.

Renewable energy: U.K. Onshore wind subsidy to be cut by 10%

The United Kingdom - The subsidy for onshore wind energy generation is to be cut by 10%, the government has announced.

The Treasury is thought to have favoured a larger cut of up to 25%.

It is one of a number of cuts which the Department for Energy and Climate Change said should encourage up to £25bn in new investment in energy generation between 2013 and 2017.

The measures should also reduce the impact on household energy bills, it said, saving £5-£6 a year on average.

Under the current arrangements £44 of the average household bill would go towards renewables in 2013-14, rising to £50 in 2016-17.

Under the new subsidy levels, that will be £6 less in 2013-4, £5 less in 2014-5, but will be £1 higher in 2015-6 and £3 higher in 2016-7.

Energy firms pass on the cost of investing in new cleaner generation to consumers, and MPs on the Commons Energy and Climate Change Committee warned earlier this month that cutting subsidies too fast could increase bills.

Moving Solar Beyond 1603 – There Are Alternatives

The 1603 Federal Grant Program is dead. Fine, so let's all move on because PV solar is here to stay and will be a critical component of our economic growth and environmental health.

The 1603 Grant allowed for the monetization of the 30% ITC (investment tax credit), encouraging relatively simple and efficient third party finance models. The models allowed for the transfer of the up-front capital costs to an entity with greater access to capital, a lower cost of capital, or greater ability to utilize tax specific incentives and has been critical to commercial and industrial (C&I) customers adopting solar technology. The expiration of 1603 Grant at the end of 2011 has left these customers with little to no way to monetize the ITC, all but bringing this segment of the market to a standstill as developers and customers search for alternative financing structures that must now include a more complex tax equity component.

Without a new approach the C&I market will be left to self-funding. This will make solar available to the few profitable and brave companies or institutions (those able to monetize the tax benefits) that are willing to take on the challenge of financing, managing and maintaining their own systems over 20 plus years. As history has shown there are relatively few willing participants in this market structure and the sales cycle is long and uncertain.

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