Legal Framework for Solar Energy
PREPARED BY LEROY PADDOCK AND DAVID GRINLINTON
WITH THE ASSISTANCE OF STACY BURTON, ALISON BRUENJES,
GEOFFREY HEAVEN, AND SARAH ZUBAIR
Prepared by the George Washington University Law School Environmental Law Program
under a research grant from The George Washington University Solar Institute
1
Table of Contents
I.
INTRODUCTION ................................................................................................................................. 3
II.
KEY ISSUES .......................................................................................................................................10
A.
FEED-IN TARIFFS ..............................................................................................................................10
i. Background ...................................................................................................................................10
ii. Structure.......................................................................................................................................11
iii. Use in other countries .................................................................................................................16
a.
b.
c.
d.
Germany.................................................................................................................................................. 16
Spain ....................................................................................................................................................... 22
Australia .................................................................................................................................................. 29
Ontario, Canada ...................................................................................................................................... 32
v.
B.
Feed-in Tariff Conclusions ...........................................................................................................50
RENEWABLE PORTFOLIO STANDARDS...............................................................................................52
i. Structure ........................................................................................................................................52
ii. Use Outside of the US ..................................................................................................................54
a.
Japan ....................................................................................................................................................... 54
iii. Use in the United States ................................................................................................................56
iv. Pending Federal Legislation .......................................................................................................56
v.
C.
Issues ...................................................................................................................................................... 57
Third-Party Providers ............................................................................................................................. 60
E. LAND USE............................................................................................................................................67
i. Utility scale facilities ....................................................................................................................68
ii. Smaller facilities ............................................................................................................................72
iii. Solar Access Laws ........................................................................................................................75
F. GOVERNMENT PROCUREMENT ..........................................................................................................75
III.
FINDINGS .........................................................................................................................................78
APPENDIX A: Five Country Report: Legal and Policy Framework for Solar Energy in Germany, Spain, Japan,
China and Australia........................................................................................................................................... 1
APPENDIX B: DSIRE Summary: Stateincentives for Solar Energy ....................................................................79
APPENDIX C: Federal Legislative Framework: Rapid Deployment of Solar Technologies ................................133
APPENDIX D: State Conisderation of Third-Party Providers as a Public Utility .............................................153
APPENDIX E: Resources ............................................................................................................................158
APPENDIX F: Graphics .............................................................................................................................159
2
Legal Framework for Solar Energy
Report
12.24.09
I.
Summary
The legal framework has a major impact on the viability of solar enegy generation
facilities of all sizes. Among the critical legal questions related to solar energy
deployment are the value feed-in tariffs and the ability of states in the United States to
pass such tariffs, the role that renewable energy portfolios play in supporting solar energy
capacity, whether third-party solar energy providers should be regulated as public
utilities, the nature of the steps that can be taken to expedite transmission line siting, the
affect land use and zoning regulations may have on solar facility deployment and the
value of government procurement provisions in increasing solar energy production.
Our study resulted in the following findings:
a) The experience in Germany and in several other countries demonstrates that a feed-in
tariff with a solar set-aside will result in the addition of more solar generation
capacity if the rates are based on the cost of production and a reasonable return on
investment.
b) The division of authority in setting electric rates in the United States with the Federal
government having authority to set retail rates and the state governments having
authority to set retail rates significantly complicates the adoption of feed-in tariffs in
the United States.
c) While states have some limited paths to adopt feed-in tariffs under existing Federal
law, widespread use of this approach to encourage renewable energy generation likely
relies on clarification of FERC precedents and new administrative decisions or
rulemakings by FERC or on the passage of new Federal legislation.
3
d) The design of feed-in tariffs is important. Designs that encourage smaller scale
(1MW to 20MW) commercial facilities may allow the facilities to be located in areas
where they can connect to the existing grid and therefore not be slowed by the need to
site new transmission lines.
e) The German and especially the Spanish feed-in tariffs have encouraged the
construction of large solar facilities by not placing size limits on individual facilities.
f) Tariffs that set different rates for types of renewable technology are needed to assure
investment in solar PV.
g) Feed-in tariffs must be carefully constructed to assure a proper balance between
promoting emerging technology and increasing user costs to unacceptable levels.
h) States and local governments in the United States are beginning to enact feed-in
tariffs despite uncertainty about their authority to do so.
i)
State feed-in tariffs could encourage significant growth in solar generation capacity
but state-by-state tariffs are likely to result in higher overall consumer costs since at
least some of the capacity will be in states with restricted sunlight and therefore less
efficient production.
j) A national feed-in tariff would allow increased concentration of solar generating
capacity in higher efficiency locations (assuming sufficient transmission capacity can
be built) but this type of legislation may not be supported by states since it could be
considered as a nationalization of a traditional state function—setting retail energy
rates.
4
k) The basic concept underlying targeted solar feed-in tariffs is to ―prime the pump‖ for
wider adoption of solar facilities. Additional research could help build a better
understanding of whether this concept is working as expected.
l) Renewable Portfolio Standards tend to support lower cost forms of renewables unless
the portfolio standard is technology specific or the renewable standard is high enough
that it cannot easily be met without including solar PV in the mix of renewables.
RPSs that exceed 30 percent are seen by some in the solar industry as being high
enough to promote wider use of solar PV.
m) The design of RPSs is important. Some RPSs only require contracts to be signed
rather than the source to be in operation and demonstrate its performance before
obtaining credit for the project. This can result in speculation and unrealistically low
prices in RPS bids that later fail because they are not economical.
n) RPSs have now been in place for a few years but it is not yet clear whether the
standards will be effectively enforced. If the standards are not enforced they will not
drive increased deployment of renewable energy facilities.
o) Several states have considered the issue of whether third-party power providers
should be treated as public utilities. Because of the regulatory costs associated with
public utility status, third-party providers may find that it is uneconomical to operate
if they are subject to regulation as public utilities. State decisions to date have found
third-party providers are not public utilities under applicable state law. However, the
issue continues to surface.
5
p) Transmission will be a significant limiting factor for utility-scale solar PV over the
next few years. Distributed siting of smaller utility scale PV facilities may allow
interconnection without the need for new transmission capacity.
q) Siting of new transmission capacity can be expedited by:
i. using early and inclusive stakeholder engagement processes,
ii. ensuring that there are local benefits associated with the construction of new
transmission lines,
iii. conducting early review of potential corridors for impacts on endangered and
threatened species and development of strategic mitigation plans that could be
used to address potential impacts on endangered and threatened species along
transmission corridors,
iv. collaborating with public land managers to help identify the most acceptable
corridors across public lands,
v. encouraging the use of environmental review procedures such as
programmatic environmental impact statements and categorical exclusions for
low impact facilities that can streamline the EIS process in cases where the
environmental impact likely is not significant.1
r) Because utility-scale PV facilities will need a significant amount of land, clarifying
zoning restrictions related to the use of solar PV is important. The Ontario
agriculture restrictions on the siting of solar PV on the most productive agricultural
land might be a good model. However, many locations in the United States do not
have detailed agricultural zoning. A model zoning ordinance that addresses solar PV
1
Irma Russell, Streamlining NEPA to Combat Global Climate Change: Heresy or Necessity?, 39 Envtl. L.
No. 4, available at http://www.elawreview.org/elaw/394/streamlining_nepa_to_combat_gl.html.
6
use on agricultural land, in commercial and industrial zoned areas, and on
brownfields sites could encourage local governments to adopt new laws that would
create more certainty for facility operators.
s) Small scale solar PV may be restricted in many states by local zoning requirements
and by restrictive covenants. Model state legislation that precludes local governments
from overly restricting household and small commercial PV and voids restrictive
covenants that prohibit household scale PV units could facilitate deployment of small
scale solar PV.
t) Government actions under the new Sustainability Executive Order may help stimulate
the use of solar PV. Implementation of the Executive Order might create new
incentives for government agencies to use solar PV as a way of meet their energy and
climate targets.
7
II.
Introduction
Because solar photovoltaic (PV) technology is not yet price competitive in the
marketplace with conventional sources of electric power generation, the legal framework
associated with solar energy production is particularly important to the deployment of
solar power facilities. Laws can provide direct subsidies for research and development of
solar technology to help lower the cost of the technology. They can create tax incentives
that assist in closing the gap between conventional and solar generation including sales
tax exclusions or rebates, property tax reductions, accelerated depreciation, investment
tax credits, and others. Legislation can recognize the value of avoiding externalities
through mechanisms such as renewable energy certificates (RECs) and carbon offsets, as
well as through emissions trading mechanisms (cap and trade) that set limits on
greenhouse gas emissions associated with conventional power production. Laws can
require electric utilities to derive a certain percentage of their energy supply from
renewable energy thereby supporting solar power generation (although lower cost
renewable energy sources may out-compete solar photovoltaic under renewable energy
portfolio standards that do not include specific solar ―carve outs‖). The legal framework
also can provide solar energy with preferential treatment in government procurement
systems. Finally, legislation can permit utility commissions to establish preferential rates
for various types of renewable generation, allowing solar energy facilities to directly
compete in the marketplace with other technologies.
The mix of legal tools used to close the gap between conventional power generation and
solar PV is very important. Some tools are better suited to support small-scale
8
development while others favor larger, utility-scale investments. Some tools may favor a
national strategy related to issues such as energy security and climate mitigation, while
others better accommodate state or regional energy goals that favor energy sources
available in the area. The mix of legal tools has a direct impact on who bears the extra
cost associated with solar energy generation. Feed-in tariffs place the cost with
ratepayers creating additional incentives for efficiency, while tax incentives spread the
cost more widely but do not create price signals that encourage efficiency. Further, tools
can be combined to reach a price point that supports construction of new solar facilities.
For example, third party solar providers succeed when the combination of electricity
prices, tax credits that can be claimed by the provider and the value of renewable energy
credits available to the provider allow the provider to make a profit.
Environmental review, species protection and permitting requirement, among others,
have a significant impact on how quickly new facilities can be sited and the operating
conditions that may be imposed on new transmission lines and new solar generation
facilities. Laws including zoning ordinances may limit where solar facilities can be sited
and restrictive covenants may ban the use of solar technologies in certain setting.
However, laws also can preclude the enactment of local ordinances and enforcement of
restrictive covenants that hinder the wider use of solar generation technologies.
This paper explores much of the legal framework described above. It does not discuss
the tax incentives because another research paper funded by the GW Solar Institute will
focus on these issues.
9
III.
Key Issues
A.
Feed-In Tariffs
i.
Background
Feed-in tariffs (FITs)2 are increasingly recognized as a successful public policy strategy
for increasing the penetration of solar PV into the energy marketplace.3 The specific
design of FITs has important implications in providing the certainty developers and
financers of solar PV projects need, to determining the mix of PV technologies that are
likely to be deployed, and in encouraging PV development in various locations in the
country. For example, FITs that limit the subsidy to relatively small PV installations may
promote more widely distributed facilities that may be able to be connected to the grid
without the expense of developing building new transmission lines and other
infrastructure. FITs that provide eligibility to larger facilities may favor central station
generation since the costs of energy from these larger facilities historically has been
lower on a marginal basis. A national FIT is likely to encourage PV development in
areas with more consistent sunlight if a uniform price is established, whereas state FITs
are likely to encourage more diffuse siting of PV facilities even if the facilities in some of
these states are not as efficient due to differences in solar intensity.
2
Feed-in tariffs can be calculated in a variety of ways. This section of the paper focuses on payments
based on levelized renewable energy project costs where the payment is based on the cost of renewable
energy generation plus a target rate of return. Some tariffs that are referred to as feed-in tariffs are based on
calculation of the utilities‘ avoided costs while others are fixed price incentives. See Toby Couture and
Karlynn Cory, State Clean Energy Policies Analysis (SCEPA) Project: An Analysis of Renewable Energy
Feed-In Tariffs in the United States 2 (National Renewable Energy Laboratory May 2009).
3
See International Energy Agency, Global Renewable Energies Database, Policies and Measures, available
at http://www.iea.org/textbase/pm/?mode=re&action=result.
10
Countries throughout the world have introduced FITs over the last decade, with
legislative activity accelerating in the last few years with 44 countries now having some
form of feed-in tariff.4
Use of FITs in the United States has lagged behind Europe and
countries in other parts of the world. A few cities—Gainesville, Florida and Sacramento,
California—have pioneered FITs in the United States. States have begun enacting FITs;
however, Federal Energy Regulatory Agency (FERC) decisions involving FITs raise the
potential that the Federal Power Act may preempt state feed-in tariffs.5 A provision of
the Waxman-Markey climate legislation attempts to clarify state authority to enact FITs,6
and stand-alone legislation proposed by Representative Inslee would establish a national
FIT.7
ii.
Structure
A feed-in tariff is a public policy approach to rate setting that is designed to support
wider use of energy supplied by technologies that are not otherwise market competitive
but have other benefits such as reduced environmental impacts. FIT legislation allows
(or requires) public utility commissions or electric utilities to set rates at a level high
enough (in cents per kilowatt hour) for a long enough period of time (typically 15 to 25
years) to attract alternative energy suppliers into the market.
4
See Miguel Mendonca & David Jacobs, Feed-in Tariffs Go Global: Policy in Practice, Renewable Energy
World Magazine (Sept. 17, 2009), available at
http://www.renewableenergyworld.com/rea//news/article/2009/09/feed-in-tariffs-go-global-policy-inpractice.
5
See generally California Attorney General‘s Response to ALJ‘s Request for Briefs Regarding Jurisdiction
to Set Prices for a Feed-In Tariff, June 25, 2009, available at
http://ag.ca.gov/globalwarming/pdf/feed_in_tariffs.pdf.
6
American Clean Energy and Security Act of 2009, H.R. 2454, 111th Cong. (2009).
7
See Renewable Energy Jobs and Security Act, H.R. 6401, 110th Cong. §210B (2008).
11
For example, solar PV supplied energy is currently from two to five times more
expensive than energy generated from conventional sources in most locations in the
United States, although the cost of solar PV is changing rather rapidly8 and is close to
achieving what is termed ―grid parity‖ (direct price competivtiveness with traditional
sources of generations) in Hawaii.9 As a result, all other factors being equal, solar PV
energy is presently not competitive in the market place in most regions of the United
States. A well-designed FIT identifies the cost differential between desired alternative
generation technologies and the current market rate for sources of electric power
generation and establishes a preferential rate (or tariff) that is sufficiently high to bridge
the gap between conventional and favored technology to attract investment in alternative
generation sources.
The additional cost of the alternative generation technology typically is passed on to
electricity ratepayers, although in Spain the additional cost is funded directly by the
8
Survey of Solar Electricity Prices, Solarbuzz, LLC (2009), available at
http://www.solarbuzz.com/SolarPrices.htm.
9
A recent report in CleanTechnica.com noted:
The average price of a 100kW system in San Diego, California costs $6.50/Watt DC. A
100kW system generates approximately 154,000 kWh per year and has an estimated
payback time of 7 years with government incentives and 13 years without incentives;
whereas in Boulder, Colorado the payback time with incentives is 7 years and 18 years
without incentives. The numbers vary significantly in Portland, Oregon. The payback is 4
years and 24 years, respectively. Honolulu, Hawaii shows the best return with 4 years
payback with government incentives and 7 years payback without incentives.
The above data shows that Hawaii is closest to grid parity given the combination of high
electricity prices and excellent solar insolation. At the moment, none of these markets are
offering an acceptable payback time to solar electric system owners without the help
from government incentives.
Angiolo Laviziano, Beyond Subsidized Solar Power: The Path to Grid Parity, CleanTechnica, May 12,
2009, http://cleantechnica.com/2009/05/12/beyond-subsidized-solar-power-the-path-to-grid-parity/.
12
government. The general design objective of FITs is to attract enough investment in the
alternative generation technology to stimulate wider adoption of the technology over time
through economies of scale, increased efficiency of the technology, better understanding
of the advantages of the technology and other lessons learned from actual deployment.
This objective is typically balanced against concerns about subsidizing so much
investment in the technology that consumer prices (or the cost to the government)
significantly increase. As a result, FITs usually have a specific megawatt cap. For
example, the Gainesville, Florida FIT is capped at 4 megawatts through 2015.10 The
tariff, which guarantees a rate of $.32 per kilowatt for 20 years, quickly reached this
ceiling.11
FIT caps can present a challenge for energy developers since a project typically does not
qualify for FIT payments until it is constructed and ready for production. If the FIT cap
has been reached before the new facility comes on line, it may not qualify for FIT rates
making it uncompetitive in the market. FIT design approaches that have a more flexible
cap are generally more attractive to developers. These flexible designs include those that
set a maximum generation limit that, once reached, allows other facilities that come on
line within a set period of time to qualify for the FIT rates. Since solar PV can be
brought on line in many cases in a relatively short period of time, this flexibility
encourages additional development.12 For example, Italy‘s FIT sets a cap at 1,200MW
plus all plants commissioned within 14 months after the national cap has been reached (or
10
GRU FIT Administrative Guideline, Gainsville Regional Utilities (March 1, 2009), available at
http://www.gru.com/Pdf/futurePower/GRU FIT Administrative Guideline 7-22-09.pdf.
11
See GRU FIT Application Information page, available at
http://www.gru.com/OurCommunity/Environment/GreenEnergy/solar.jsp.
12
Interview with Robert Hemphill, President, AES Solar (September 7, 2009).
13
24 months for public authorities).13 To qualify for the Italian feed-in tariff, the energy
supplier must apply within 60 days after the facility is commissioned.14 Obviously, the
downside of the ―cap-plus‖ approach is that the total quantity of FIT energy is not limited
and therefore creates the possibility that more capacity will come on line than expected,
raising consumer prices.
Establishing the FIT rate is a critical element to the success of the approach. If the rate is
set too high, it will unnecessarily raise consumer rates since PV suppliers could have
been attracted at a lower tariff. If the rate is set too low, suppliers will not be
forthcoming and the policy will not achieve its objective. As a result, feed-in tariffs are
typically set through a detailed public process and are adjusted periodically. In addition,
tariffs frequently include rates that decline after the first year to reflect expected
technology innovation and lower construction and production costs. The Italian tariff
automatically declines from its 2008 rate by two percent each year in 2009 and 2010, and
the rate will be reassessed after 2010.15 The Spanish feed-in tariff, supported by
government subsidies rather than ratepayers, was set so high that it attracted far more
investment than expected in its first year markedly driving up the cost of the subsidies
created by the tariff to an estimated $26.4 billion.16 As a result, applications were
terminated and the government established a lower rate under a new legal structure.17
13
F. Tilli, A. Berni, A. Grassi and M. Pellegrino, The Feed in Tariff Scheme in the Italian Case: An
Attempt to Remove Barriers for PV Architechural Integration and for Increasing Building Energy
Efficiency 3 (2008), available at http://web.etaflorence.it/uploads/media/IsesTilli08_01.pdf.
14
Id.
15
Id. at 4.
16
See Paul Voosen, Spain's Solar Market Crash Offers a Cautionary Tale About Feed-In Tariffs, New
York Times, August 18, 2009, available at http://www.nytimes.com/gwire/2009/08/18/18greenwirespains-solar-market-crash-offers-a-cautionary-88308.html.
17
See infra Appendix A, p. 24.
14
This change resulted in very significant job loss in the solar industry in Spain and
significantly disrupted the solar panel market.18
In a study of FITs, the National Renewable Energy Laboratory (NREL) identified the
advantages of a feed-in tariff:
Well-designed FIT policies have several advantages over other RE
[renewable energy] policies such as upfront rebates, net metering, and
quota-based policies like renewable portfolio standards (RPS). First, a
growing body of evidence from Europe demonstrates that FIT policies
have on average fostered more rapid RE project development than these
other policy mechanisms. Additionally, they have been found to be more
cost-efficient in terms of the average cost-per-kWh paid for RE generation
than policies like RPSs that make use of competitive solicitations. This
suggests that their implementation could help secure the benefits of RE
development at lower cost to society, and to ratepayers.
Initial evidence suggests that there are two primary reasons FIT policies
are more cost-efficient than other policies. First, policies that make use of
competitive solicitations like RPSs involve a higher degree of risk for the
developer, putting upward pressure on the required returns. The reduction
of these investment-level risks under FIT policies can also help reduce
capital costs, ultimately reducing the cost of renewable electricity. Second,
projects vying under the competitive solicitation processes tend to be
financed by larger institutional or corporate investors who provide equity
as opposed to debt financing. Since equity is more expensive than debt,
leading to a higher weighted average cost of capital, further upward
pressure is placed on the levelized costs of energy.
Successful FIT policies are generally designed to allow for an adequate
recovery of project costs plus a reasonable rate of return, thereby
increasing investor security. Furthermore, by offering transparent payment
levels and uniform contract terms at the outset, FIT policies help create a
framework with low administrative and regulatory barriers for promting
RE deployment.19 (Citations omitted)
18
Voosen, supra note 16.
Toby Couture and Karlynn Cory, State Clean Energy Policies Analysis (SCEPA) Project: An Analysis of
Renewable Energy Feed-In Tariffs in the United States 3-4 (National Renewable Energy Laboratory 2009),
available at http://www.nrel.gov/docs/fy09osti/45551.pdf.
19
15
Among the challenges for FITs identified by NREL are that: FIT policies do not address
the barrier posed by high up-front costs of renewable energy (RE) systems, the policies
increase the near term cost of electricity, the policies require significant administrative
work to set a tariff that appropriately balances incentives for additional solar facilities
with the higher electricity costs that will result from the tariff, and FIT policies must be
periodically adjusted to take into account current market conditions.20
Based on the experience to date, several factors appear to be important in thinking about
the design of FITs. Among the key factors that can promote expanded use of solar
energy are FITs that:
are technology specific to ensure that solar PV does not have to compete
against other, lower cost renewable sources of generation
provide privileged access to the grid
assure a tariff that covers the cost of generation and provides a reasonable
rate of return
distributes the extra cost of the feed-in tariff in electricity prices but does
not raise rates dramatically
provide a guaranteed feed-in period
allow some some flexibility if there is a cap to assure that investments in
new facilities will qualify for the FIT if they are completed within a
reasonable time after the cap has been reached
use a careful administrative process to set tariffs that provides an adequate
but not excessive tariff.21
iii.
Use in other countries22
a. Germany
20
Id. at 5.
See presentations of Hans Josef Fell, Feed In Tariff for Renewable Energies and Karin Corfee, Feed In
Tariff Case Studies, Symposium, GW Solar Institute Kickoff (April 24, 2009), available at
http://solar.gwu.edu/Symposium.html.
22
A detailed study of the legal structure associated with solar energy in Germany, Spain, Japan, China and
Australia is appended to this report as Appendix A. Most of the information related to solar development
in countries outside of the United States is derived from that report.
21
16
Germany is clearly the world leader in grid-connected solar PV uptake, research and
development. Although it fell to second place behind Spain in terms of new installations
in 2008, it had a total of 5.4 GW of solar PV (over half the world‘s current capacity) at
the end of 2008.23 A major contributor to the success of solar PV development in
Germany has been its FIT law, which the German government initially introduced in
1990 to promote renewable energy generally, and later updated in 2004 to provide
enhanced fiscal encouragement for solar PV development.
Solar PV was brought under the Renewable Energy Sources Act (Erneuerbare-EnergienGesetz or ―EEG‖) of 2000 in July 2004.24 The Act provides for compensation rates for
electricity produced by solar PV, with tariffs ranging from 45.7c (Eurocents) for large
capacity open-space solar power plants to 57.4c for plants installed on a building and
with a capacity of less than 30 kWp (kilowatt peak, a measure of the peak output of a
photovoltaic system).25 For plants installed on buildings there was a 5c ―building surface
bonus‖ where the solar arrays were integrated into the building facade.26 To encourage
innovation and cost saving, the compensation levels for newly commissioned
installations are reduced by 5 percent per year beginning in 2005.27 From January 1,
2006 this degression rate was increased to 6.5 percent for open-space installations.28 The
tariff that applied to the installation on start-up is guaranteed for 20 years plus the year of
23
Renewable Energy Policy Network for the 21st Centurty (―Ren 21‖), Renewables Global Status Report –
2009 Update 8-9, 24, Tables R3 & R4 (2009) available at
http://www.ren21.net/globalstatusreport/g2009.asp.
24
Travis Bradford, Solar Revolution: The Economic Transformation of the Global Energy Industry 180
(MIT Press 2006).
25
See infra Appendix A, p. 6.
26
Id.
27
Id.
28
Id.
17
opening.29 The objective of the system is to ensure a modest long-term return of
profitability in the order of 5 to7% net for solar energy producers.30
The EEG 2000 was recently replaced by the EEG 2009 that came into force on January 1,
2009. The new Act maintains and refines the FIT provisions, and in relation to solar PV
energy simplifies the tariff scheme, while providing higher degression rates.31
The feed-in system allows two-way electricity traffic so that small-scale producers are
able to feed electricity to the grid when they have a surplus, and receive electricity from
the grid when they are in deficit, although there are limitations on this for large solar
energy producers where intermittency of supply might destabilize the grid.32 Grid
operators must allow, as a priority, connection to the grid of new installations generating
electricity from renewable sources.33 The installation operator meets the cost of this
where the connection point offered by the grid operator is the closest and most
convenient to the point of generation.34 If the grid operator assigns a less optimum
connection point, the grid operator pays the cost of connection.35 Grid operators are
obliged to receive any renewable electricity offered, in preference to non-renewable
29
Id. at 6-7.
See Erneuerbare-Energien-Gesetz [The Renewable Energy Sources Act], July 2007, at 4-8 [hereinafter
EEG], available http://www.bmu.de:English:publications:publ:40067.php; Electricity Policy in
Germany, 1974-2005, Bulletin of Science Technology Society, Vol 26, 2006, at 110-113; A.
Campoccia, L. Dusonchet, E. Telaretti, & G. Zizzo, Comparative Analysis of Different Supporting
Measures for the Production of Electrical Energy by Solar PV and Wind Systems: Four Representative
European Cases, Solar Energy, Volume 83, Issue 3, March 2009, at 290.
31
See infra Appendix A, p. 6.
32
See infra Appendix A, p. 7.
33
Id.
34
Id.
35
Id.
30
18
energy.36 Unless it is economically unreasonable, grid operators are also obliged to
―optimize, boost and expand‖ their grid systems if it is necessary to guarantee the
purchase, transmission and distribution of the electricity generated by renewable energy
technology.37 Grid operators then sell the electricity to transmission system operators for
the same price.38 Transmission system operators sell on to utilities that, in turn, deliver to
the consumers.39 Complex provisions provide for some measure of nationwide
equalization of costs for different transmission operators, and for electricity intensive
enterprises, to ensure they are not disadvantaged by the scheme relative to their
competitors.40
The EEG 2009 provides for solar energy tariffs of 31.94c per kWh for free-standing solar
energy installations, although tariffs for these installations are to be phased out from
January 1, 2015.41 For installations mounted on buildings, the tariffs range from 33.0c
per kWh for installations with output over 1MW; 39.58c per kWh for output between
100KW and 1MW; 40.91c per kWh for output between 30-100KW; and 43.01c per kWh
for the first 30KW of output.42 Degression rates for non-building mounted solar
installations are set at 10% in 2010, and 9% per annum from 2011 until the tariff is
terminated for such facilities in 2015.43 For building mounted installations with a
maximum capacity of 100 KW, the degression rate is 8% for 2010, and 9% per annum
from 2011; and for installations over 100KW, it is 10% for 2010, and 9% per annum
36
Id.
Id.
38
Id.
39
Id.
40
Id.
41
Id.
42
Id.
43
Id.
37
19
from 2011.44 For example, a solar energy installation coming on stream in 2012 and
operating at a capacity of 50KW will attract a feed-in tariff of 31.17c (calculated as 40.91
less 8% (2010 degression) = 37.64c, less 9% (2011 degression) = 34.25c, less 9% (2012
degression) = 31.17c).45 The degression is intended to both reflect the increasing
innovation and reduced production costs of solar energy technology, and provide a
positive incentive for aggressively improving such innovations and production processes.
Further encouragement is provided through a bonus of 1% when aggregated capacity of
installations registered with the Federal Network Agency within the previous 12 months
exceeds 1,500 MW (in the year to September 30, 2009); 1,700MW (2010); and 1,900
MW (2011).46 A 1 percent penalty is incurred where new installations fall below
1,000MW (in 2009); 1,100MW (in 2010); and 1,200MW (in 2011) 47
A further innovation is the provision for the establishment of a ―Clearing House‖ within
the federal Ministry for the Environment, Nature Conservation and Nuclear Safety, to
settle disputes and issues that may arise between installation operators, grid system
operators, transmission system operators and utility companies.48 Under s 61, EEG 2009,
the Federal Network Agency is also directed to assist the Ministry with monitoring and
evaluating the operation of the Act, and particularly the actions of the industry players
under the Energy Industry Act 2005 (Energiewirtschaftsgesetz or EnWG).
44
EEG § 20(8) (2009).
See infra, Appendix A, p. 7.
46
Id.
47
EEG § 20(2a) (2009).
48
EEG § 57, (2009).
45
20
Since the 2004 amendment to the EEG 2000 that provided greatly enhanced feed-in
tariffs to solar PV electricity production, PV electricity generation has increased from
557GWh in that year to 4,000GWh in 2008, with installed capacity increasing from
408MWp to 5,311MWp in the same period.49 The PV share of renewable energy used for
electricity production increased by 29% in the 2007/2008 year to 4 billion KWh (or
4.4%) of the 91.4 bn KWh produced by renewable energy.50
In terms of economic impacts, the cost of the feed-in tariff system to consumers with an
average electricity consumption of 1,700kWh, is calculated at only €1.5 a month (about
$US2.00 a month),51 and elsewhere as less than 4% of the average price of domestic
electricity.52 On the other side of the equation, in addition to the unquantifiable
environmental benefits of reducing GHGs, there are some quite specifically quantified
economic benefits.
Employment in the renewable energy sector is put at around 278,000 jobs in 2008, an
increase of 12% on the previous year, and 73% since 2004. The most growth was
experienced in the PV sector.53
49
See infra Appendix A, p. 14.
BMU, Development of Renewable Energies in Germany in 2008, Bundesministerium für Umwelt,
Naturschutz und Reaktorsicherheit [Federal Ministry for the Environment, Nature Conservation and
Nuclear Safety] [hereinafter BMU] April 2009, at 4, 6-8, 20-21, available at http://www.erneuerbareenergien.de/inhalt/43988/3860/.
51
Id. at 11.
52
Renewable Energy Sources Act (EEG) Progress Report 2007, BMU, December 2007, at 9, available at
http://www.bmu.de/english/renewable_energy/downloads/doc/40638.php.
53
Development of Renewable Energies in Germany in 2008, BMU, April 2009, at 13, available at.
http://www.ufop.de/downloads/Entwicklung_ee_2008_englisch.pdf.
50
21
Investment turnover (the combination of investments in technologuy deployment and
operating revenue) from renewable energy sources in 2008 was €13.12 billion euro, of
which PV comprised 47.3% (€6.2 billion), and operating turnover was €15.55 billion, of
which PV comprised 23% (€3.5 billion).54 These gave a total turnover of €28.67 billion
euro with photovolteics comprising 34% (or €9.75 billion euro).55 Approximately 60% of
these benefits are directly attributable to the EEG legislation.56
b. Spain
Spain was the top installer of solar PV capacity in 2008 adding 2.6 GW of solar PV
capacity.57 As a result of this accelerated development, Spain ranked in second place in
total solar PV installed capacity worldwide at the end of 2008. This represented a fivefold increase over 2007, which in turn had a five-fold increase over 2006.58 Spain is also
the world leader in concentrated solar (thermal) power (CSP) technology.
But this rapid expansion has not come without significant concerns about the design of
the Spanish FIT; a design that has led to a boom-bust cycle in solar PV in Spain. FIT
legislation in the 2007 Decree resulted in a 500% increase in solar electricity in both
2007 and in 2008, exceeding by approximately four times the expected solar PV
capacity.59 The government had set a cap for new solar facilities of 400 MWs by 2010
54
Id. at 22.
Development of Renewable Energies in Germany in 2008, BMU, April 2009, at 22, available at
http://www.erneuerbare-energien.de/inhalt/43988/3860/.
56
Renewable Energy Sources Act (EEG) Progress Report 2007, BMU, December 2007 at 8-9, available at
http://www.bmu.de/english/renewable_energy/downloads/doc/40638.php.
57
Id. at 8-9, 11, 24 (Tables R3 & R4).
58
See infra Appendix A, p. 30.
59
M. Roberts, Spain Ratifies New 500 MW Solar Subsidy Cap, Reuters, Sept. 26, 2008, available at
http://www.reuters.com/articlePrint?articleId=USTRE48P7JW20080926; G. Baratti, Spanish Solar Subsidy
55
22
but as of September 2007 new capacity had already reached 344 MWs.60 As a
consequence, the government suspended the program under the 2007 Decree causing
severe disruptions in the solar industry in the country and the loss of thousands of jobs.61
To avert another boom-bust cycle, the government in Royal Decree 1578/2008 lowered
tariff rates and set a new cap on eligible projects.62
The Spanish FIT was modeled on Germany, but with some significant differences.63 The
Real Decreto 2818/1998 introduced more detailed measures regarding fiscal,
administrative and corporate structures to promote renewable energy on January 1,
1999.64 The most important aspect of this measure was the introduction of a FIT that
extended advantages to solar PV electricity production. The measure imposed a
requirement for utilities to buy solar electricity at a premium rate of €0.40 per kWh for
systems of less than 5 kW, and at €0.20 per kWh for systems over 5 kW.65 The Real
Decreto 1663/2000 established the technical requirements for connection of PV systems
with a nominal power of less than 100 kVA, and a low voltage connection (less than 1
kV), to the distribution grid.66 This was an important step to facilitate a major increase in
grid-connected solar PV.
Seduces FPL, Scorches Consumers [Update 3], Bloomberg.com, May 8, 2009, available at
http://www.bloomberg.com/apps/news?pid=20601109&sid=aCGsB8hGkDIg.
60
See Ucilia Wang, Spain Kicks Off New Solar Feed-In Tariffs, Greentechsolar.com, Feb. 20, 2009,
http://www.greentechmedia.com/articles/read/spain-kicks-off-new-solar-feed-in-tariffs-5764/.
61
Id.
62
Id.
63
See infra Appendix A, p. 2.
64
See infra Appendix A, p. 20.
65
See infra Appendix A, p. 21.
66
V. Salas, E. Olias, M. Alonso & F. Chenlo, Overview of the Legislation of DC Injection in the Network
for Low Voltage Small Grid-Connected PV Systems in Spain and Other Countries, 12 Renewable and
Sustainable Energy Reviews 575, 577 (2008); Spain – Background Report on Regulatory Reform in the
Electricity Industry, OECD Country Studies – Spain, 1999, at 15-17.
23
These initial Decrees did not result in any major increase in solar PV development,
largely because of the focus on smaller installations and the sub-marginal financial
returns available for larger PV development.
In March of 2004, Royal Decree 436/200467 consolidated the previous feed-in tariff
schemes into a comprehensive system for renewable energy under the Electricity Act
1997.68 The 2004 legislation provided that a generator of renewable energy could choose
between selling the energy to a distributor on either a ―regulated tariff‖ basis, or on a
―market + premium‖ basis.69 The regulated tariff for solar was set at 575% of the
―average electricity tariff‖ (AET - also referred to as the ―reference‖ or ―benchmark‖
tariff) for PV installations of less than 100 kW, and 300% of the AET for PV installations
of more than 100 kW and all CSP installations.70 The AET was calculated according to a
statutory formula, and it was published for the following year through a Royal Decree.71
In 2004 the AET was set at €0.072 per kWh. In 2007, this resulted in a feed-in tariff of
approximately €0.44 per kWh for PV installations of less than 100 kW, and €0.23 per
kWh for PV installations larger than 100 kW and CSP installations.72 The tariff was
guaranteed for 25 years, reducing thereafter to 460% of the AET for the smaller
installations, and 240% for the larger developments, and CSP installations.73
67
English translation available at http://www.feed-in-cooperation.org/wDefault_7/wDefault_7/downloadfiles/documents/Nationaldocuments/Spain/rd436_2004_en.pdf?WSESSIONID=e38e4ef5bb00c615b2e1e207a58cf8ba.
68
Act 54/1997 On the Electric Power Sector (B.O.E. 1997) available at
http://www.cne.es/cne/doc/legislacion/NE004_05.pdf.
69
Spanish Renewable Energy Association, The New Payment Mechanism of RES-E in Spain – Introductory
report, May 2004, at 3-8.
70
See infra, Appendix A, p. 22.
71
Id.
72
Id.
73
Id.
24
This method applied only to PV installations of greater than 100 kW and CSP
installations, and provided for a market or negotiated price plus a premium of 250% of
the AET for the first 25 years, reducing to 200% thereafter.74 A further 10% incentive is
applied in certain circumstances for participating in the market.75
The measure also provided for revision of tariffs, premiums and incentives in 2006, and
every four years thereafter, or when the level of installed PV reached 150 MW and CSP
reached 200 MW. The measure was very successful in encouraging new solar PV and
CSP development, and by 2007 the targets for installed PV had been exceeded, so a new
Decree was prepared.
Royal Decree 661/2007 replaced the 2004 Decree, although operators of installations that
came into production before the new measure came into force continue to receive their
tariffs under the old measure.76 The 2007 Decree simplified the premium tariff system.
Instead of being calculated as a percentage of the AET, the premium tariff was expressed
as a fixed value paid on top of the market price of electricity. 77
74
The New Payment Mechanism of RES-E in Spain – Introductory Report, Spanish Renewable Energy
Association, May 2004, at 3-8, available at http://www.wind-works.org/FeedLaws/Spain/Report on the
new Spanish RES-E payment mechanism.pdf.
75
Id. See also R. Coenraads et al, Renewable Energy Country Profiles, ECOFYS, Netherlands, February
2008, at 142-143; V. Salas, A changing Spanish Perspective? – Grid issues and Promotion of BuildingIntegrated PV, Presentation at the 23rd European Photovoltaic Solar Energy Conference and Exhibition
(September 1-5, 2008), available at http://www.iea-pvps.org/workshops/0809valencia/presentations/.
76
Royal Decree 661/2007, Government of Spain, Agencia Estatal Boletín Oficial del Estado, available at
http://www.boe.es/aeboe/consultas/bases_datos/doc.php?coleccion=iberlex&id=2007/10556.
77
Renewable Policy Review – Spain, European Renewable Energy Council, 2009, at pp 6-7, available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review__09
_Final.pdf; R. Coenraads et al, Renewable Energy Country Profiles, ECOFYS, Netherlands, February
2008, at 142-143; V. Salas, A Changing Spanish Perspective? – Grid issues and Promotion of Building-
25
For 2007 the feed-in tariff rates were set at:
PV installations of less than 100 kWp – €0.44 for the first 25 years, and €0.352
thereafter;
PV installations between 100 kWp and 10 MWp – €0.418 for the first 25 years,
and €0.334 thereafter;
PV installations between 10 MWp and 50 MWp – €0.23 for the first 25 years,
and €0.184 thereafter; and
CSP installations – €0.269 for the first 25 years, and €0.215 thereafter.78
With CSP installations there was also the option of a market + premium, with the
premium set at €0.254. If this option were taken, there was also a ―cap and floor‖
mechanism, so that the total price paid was not allowed to rise above €0.344 resulting in
windfall profits, or fall below €0.254 leaving the owner with an insufficient return on the
investment.79 Low interest loans are also available for up to 80% of the average costs.
Commentators suggested that the new tariffs would double the returns for larger solar
power installations over 100 kWh.80
The tariffs were to be updated every year until 2012 on the basis of changes in the CPI. A
target of 371 MW was set for PV installations and 500 MW for CSP installations under
the scheme. When 85% of the capacity for each type of technology was achieved, a
Integrated PV, Presentation at the 23rd European Photovoltaic Solar Energy Conference and Exhibition
(September 1-5, 2008), available at http://www.iea-pvps.org/workshops/0809valencia/presentations/.
78
Id.
79
See infra Appendix A, p. 23; Reuters on New Spanish Feed Law 2007, WindWorks.org, May 28, 2007,
available at http://www.wind-works.org/FeedLaws/Spain/ReutersonNewSpanishFeedLaw2007.html.
80
See infra Appendix A, p. 23.
26
deadline would be fixed to close off new projects until new targets are set. 81 Dramatic
expansion of solar projects in Spain resulted from these new tariffs resulting in
suspension of the program and new legislation in 2008.
Royal Decree 1578/200882 deals with installations in a new way and substantially reduces
the fixed tariff levels. For roof and building integrated solar PV with a capacity of less
than 20 kWp, a tariff of €0.34 per kWh is provided, and for more than 20 kWp, the tariff
is €0.32 per kWh. For free-range/ground installations the €0.32 per kWh rate applies.
These tariffs will endure for 25 years, but unlike the 2004 and 2007 Decrees, no premium
rates are specified after 25 years.83 Importantly, any projects commenced under the
earlier Decree that were not completed and generating electricity by September 29, 2008
will lose the higher rates under the earlier measure.84
The cap on new installations for 2009 is set at 400 MW, with 133 MW allocated to freerange plants, and 267 MW for roof and building integrated plant. Ninety percent of that
latter capacity is targeted for installations of more than 20 kWp. A further 100 MW is
held in reserve for free-range plants to ease the industry‘s transition to the new regime.
81
Id.
Royal Decree 1578/2008, Government of Spain, Agencia Estatal Boletín Oficial del Estado, 2008,
available at http://www.boe.es/boe/dias/2008/09/27/pdfs/A39117-39125.pdf.
83
M. Roberts, Spain Ratifies New 500 MW Solar Subsidy Cap, Reuters, Sept. 26, 2008, available at
http://www.reuters.com/articlePrint?articleId=USTRE48P7JW20080926; Photovoltaic in Spain: The First
Round of Inscription for the New Feed-in Tariff is Open!, Renewable Energy Industry, Oct. 31, 2008,
available at http://www.renewable-energy-industry.com/business/pressreleases/newsdetail.php?changelong=En.GB&newid=2946.
84
Photovoltaic in Spain: The First Round of Inscription for the New Feed-in Tariff is Open!, Renewable
Energy Industry, Oct. 31, 2008, available at http://www.renewable-energy-industry.com/business/pressreleases/newsdetail.php?changelong=En.GB&newid=2946; Spain Special Report: Green with Energy, The
Lawyer, May 25, 2009, available at http://www.thelawyer.com/spain-special-report-green-withenergy/1000803.article.
82
27
For 2010 and 2011 the caps are to be 500 MW to give a total 1,500 MW for the three
years, with the intention of revisiting the feed-in tariff structure in 2012.85
In 2008, Spain was the clear world leader in solar PV installation with 2.6 GW of new
capacity – over half the global total in that year. Spain has also taken the dominant
position in CSP installation and R & D, commissioning the 50 MW Andosol 1 plant in
2008, and upwards of another 800 MW in the process of construction or advanced
planning for commissioning over the next 4 years.86 But this all came at a price—
significant disruption in the marketplace caused first by incentives that were too high
driving unsustainable levels of development and then suspension of the program because
of the high cost resulting from over development.
As with Germany, the ―feed-in‖ tariff system in Spain does not rely upon direct public
financial support. Rather, it creates incentives for private investment, and it provides
economic incentives for continued technology development to increase efficiency and
improvements in manufacturing and installation techniques to reduce costs.
Employment in the renewable energy sector which was estimated to be around 94,925
jobs by 2010, with 11,640 in the CSP industry, 9,186 in solar PV, and 4,632 in solar
85
Photovoltaic in Spain: The First Round of Inscription for the New Feed-in Tariff is Open!, Renewable
Energy Industry, Oct. 31, 2008, available at http://www.renewable-energy-industry.com/business/pressreleases/newsdetail.php?changelong=En.GB&newid=2946; M. Roberts, Spain Ratifies New 500 MW Solar
Subsidy Cap, Reuters, Sept. 26, 2008, available at
http://www.reuters.com/articlePrint?articleId=USTRE48P7JW20080926.
86
The State of Renewable Energies in Europe, Intelligent Energy – Europe Programme, 8th EurObserv‘ER
Report, 2008, at 72.
28
thermal heating,87 has declined as a result of changes in the legislation. Estimated
investment in Spain‘s renewable energy industry in the 2005-2010 period was €23.6
billion, of which €2.16 billion is in CSP, €2.4 billion in solar PV,88 but this figure is also
likely to be smaller based on the suspension of the 2007 tariffs and the changes in the
legislation.
c. Australia
In Australia, some States and the Australian Capital Territory have introduced, or are
about to introduce, state-level feed-in tariff schemes for solar PV installation. A national
feed-in tariff also is being considered.
1. The Australian Capital Territory
The Electricity Feed-in (Renewable Energy Premium) Act of 200889 provides a generous
gross feed-in tariff system. Participants who install solar PV systems, or other renewable
sources of less than 30 kWh capacity, will be paid a tariff at the rate of 3.88 times the
ordinary retail rate of electricity for all electricity fed into the grid, and with their own
usage separately metered. The tariff is payable from March 1, 2009 until June 30, 2010 is
set at 50.05c per kWh generated for systems up to 10kW. The tariff is set each year, but
is guaranteed for up to 20 years from commencement of generation.90 It is anticipated the
87
Summary: The Spanish Renewable Energy Plan 2005-2010, Ministry of Industry, Tourism and
Commerce, at 78, available at http://www.feed-in-cooperation.org/content/view/28/50/.
88
Id.; Summary: The Spanish Renewable Energy Plan 2005-2010 (in English), Ministry of Industry,
Tourism and Commerce, at 58, available at http://www.feed-in-cooperation.org/content/view/28/50/.
89
Electricity Feed-in (Renewable Energy Premium) Act of 2008, (March 1, 2009) available at
http://www.legislation.act.gov.au/a/2008-21/default.asp.
90
ACT Electricity Feed-in Tariff Scheme Fact Sheet, Department of the Environment, Climate Change,
Energy and Water [ACT], available at http://www.act.gov.au/ (follow ―Environment,‖ then
―Sustainability‖).
29
scheme may be extended to larger installations after June 2009.
2.
Victoria
The Energy Legislation Amendment Bill amending the Electricity Industry Act 2000 was
passed on 9 August 2007. The measure introduced a net metered feed-in tariff of $A0.60c
per kWh for electricity fed into the grid from solar PV generation installations of up to
3.2kW in size. The scheme is set to run for 15 years. Renewable generation installations
of up to 100 kWh capacity using biomass, hydro or wind receive only the retail price for
electricity fed into the grid.91
3.
South Australia
The Electricity (Feed-in Scheme-Solar Systems) Amendment Act 2008 came into force
July 1, 2008, and will expire in 20 years in 2028. It provides a net tariff of $A0.44c per
kWh fed into the grid from a solar PV system operated by an electricity consumer that
uses less than 160 MWh per annum.92
4.
Queensland
The state of Queensland has a very similar net feed-in tariff to the South Australian
system, called the ―Solar Bonus Scheme.‖ Consumers who use less than 100 MWh a
year, and who install or have a solar PV system will receive $A0.44 c per kWh fed into
91
Feed-in Tariffs, Government of Victoria, Department of Primary Industries, available at
http://www.dpi.vic.gov.au.
92
South Australia's Solar Feed-In Scheme, Government of South Australia, available at
http://www.climatechange.sa.gov.au/index.php?page=feed-in-scheme.
30
the grid. The amount is guaranteed until 2028, although it will be reviewed after 10 years
or when 8 MWh of solar systems are installed.93
5.
Western Australia, New South Wales, Tasmania and
Northern Territory
These States and the Northern territory have not yet implemented a feed-in tariff scheme,
although they have indicated their intention to do so, or investigate the system. Western
Australia appears to prefer a limited gross feed-in tariff structure paying a premium rate
of $A0.60c per kWh for solar PV electricity until the capital costs have been recovered at
which time it reverts back to a lower rate.94
New South Wales is considering a feed-in tariff scheme for small-scale, grid connected,
solar PV installations, and a taskforce is currently considering public submissions before
finalizing recommendations to the Government. It is uncertain whether the
recommendations will favor a gross or net metering scheme, although the latter is more
likely given the current net metering systems used by the main electric utilities.95
The Tasmanian Office of Energy Planning and Conservation is currently considering
feed-in tariffs for renewable energy producers, but as yet no concrete proposals have been
agreed. It is likely the preference will be for a net tariff arrangement for excess electricity
93
Solar Bonus Scheme, State of Queensland, Office of Clean Energy, available at
http://www.cleanenergy.qld.gov.au/solar_bonus_scheme.cfm.
94
Government of Western Australia, Sustainable Energy Development Office Homepage available at
http://www1.sedo.energy.wa.gov.au/pages/re_feed-in_tariff.asp.
95
For the current status of the proposals see New South Wales Government, Department of Water and
Energy Homepage, available at http://www.dwe.nsw.gov.au/energy/sustain_renew_fit.shtml.
31
fed into the grid from small scale solar and other renewable electricity installations.96
As yet the Northern Territory has not announced proposals for a preferential Territorywide feed-in tariff, although owners of PV installations can sell their power at near
market retail rates, (currently 15.52c per kWh).97 The town of Alice Springs became a
―Solar City‖ in May 2008 as part of the Australian Government‘s ―Solar Cities
Programme.‖ Along with a number of other solar energy and efficiency measures, owners
of grid-connected solar PV systems can sell their excess energy to the grid at $A0.45.76 c
per kWh capped at $A5.00 per day.98
d. Ontario, Canada
The Province of Ontario‘s feed-in tariff will go into effect on November 30, 2009. The
Ontario Power Authority asserts that the program is North America‘s first comprehensive
guaranteed pricing structure for renewable energy production.99 The Ontario program‘s
structure is somewhat different from other feed-in tariffs. Rather than qualifying for the
feed-in tariff after a project is ready for operation, the Ontario system allows solar
facilities up to three years to begin production after a contract has been signed. To
maximize the chances that a facility will actually be constructed, the producer must
provide a security payment at the time the contract is signed. Solar PV projects are
96
See Recent Developments, Tasmanian Government, Dept. of Infrastructure, Energy & Resources,
available at http://www.dier.tas.gov.au/energy/new_developments.
97
Going Solar - The Process of Installing a Photovoltaic (PV) System in Your Home, PowerWater, July 1,
2009, available at
http://www.powerwater.com.au/environment/renewable_energy/solar_buyback_program.
98
See Alice Solar City website, available at http://www.alicesolarcity.com.au.
99
See Feed-In Tariff, Program Preview, Version 1.1, Ontario Power Authority, Sept. 30, 2009, at 2,
available at
http://fit.powerauthority.on.ca/Storage/98/10719_FIT_Program_Overview_for_posting_Oct_1.pdf.
32
limited to 10 MW and are priced from $.44 to $.80 per KW with very small projects
drawing the top rate. Prices are guaranteed for 20 years. A price adder is available for
projects run by aboriginals (1.5 cents) or that are community-based (1.0 cents). The law
contains a domestic content requirement.100
iv. Feed-In Tariffs in the United States
a. Authority of States to Adopt Feed-In Tariffs
One of the key questions in the United States is whether states have the authority to enact
feed-in tariffs or whether the approach is preempted by the Federal Power Act (FPA). 101
This question is complicated by the history of utility regulation in the United States and
the nature of federal utility law. FERC under the FPA regulates wholesale sales of
electricity to ensure that the rates charged are ―reasonable and just.‖ States have some
authority under the Public Utility Regulatory Policies Act (PURPA)102 to require utilities
to purchase energy from qualified renewable energy facilities at rates that do not exceed
―avoided cost‖ that would otherwise be incurred in acquiring additional capacity. States
have authority to regulate retail rates for electricity. This complicated regulatory
structure makes it more difficult to establish feed-in tariffs in the United States in
comparison to countires where the national government has more direct authority over
utility price structures.
100
Id.
16 U.S.C. § 791a - 825r. (1935).
102
Public Utility Regulatory Policies Act of 1978, Pub. L. No. 95-617, 92 Stat. 3117 (codified as amended
in scattered sections of the U.S.C.).
101
33
Among the key questions that must be addressed are whether feed-in tariffs are
wholesale rates that are subject to federal rate setting or retail rates that fall under state
jurisdiction; whether the determination of how much a utility pays for power, as opposed
to the cost of power sold by a generator into the market, is a decision that can be made by
a state public utilities commission; and whether feed-in tariffs can be justified for certain
types of facilities based on a state determination of what constitutes ―avoided cost.‖
A study recently conducted by the National Renewable Energy Laboratory addressed
these questions.103 The study found that existing FERC precedents constrain the ability
of states to adopt feed-in tariffs.104 The NREL study identifies three paths that those
interested in supporting state feed-m tariffs can follow under current law, as well as the
option of seeking new clarifying federal legislation.105 Path one would require direct
state support (in the form of renewable energy credits, tax incentives or subsidies) to
make up the difference between the avoided cost price that a state could establish under
PURPA and the price needed to attract renwable energy providers.106 This path is, of
course, limited by the level of financial support states would be willing to provide to
renewable energy providers.
The second path would involve a state law establishing a tariff and then incorporating
that tariff into the utilities‘ rate base. This path would require FERC to ―clarify that state-
103
Scott Hempling, Carolyn Elefant, Karlynn Cory & Kevin Porter, Renewable Energy Prices in State-level
Feed-in Tariffs: Federal Constraints and Possible Solutions (National Renewable Energy Laboratory
2009), available at http://www.nrel.gov/docs/fy10osti/47408.pdf.
104
Id. at iv-v.
105
See Hempling et al., supra note 103, at v.
106
Id. at 46.
34
law utility obligations to purchase renewable energy from entities with QF [qualified
facility] status (20 MW or smaller) are not subject to the PURPA avoided cost cap or
subject to FPA [Federal Power Act] filing requirements.‖107 This path is not clearly open
to states unless FERC revisits existing precedent that a selling QF is bound by PURPA‘s
avoided cost cap even if the buyer‘s obligation arises under state law.108
The third path suggested by NREL would be for FERC to establish safe harbors or other
guidance that would indicate that state feed-in tariff rates are ―just and reasonable‖ under
the FPA.109 As NREL notes, FERC has not explored this option and therefore the path
would require FERC to open an administrative inquiry or rulemaking procedure.110
The NREL study concludes
Because of the multiple legal uncertainties…participants in this
policymaking area should consider discussing with FERC informal steps
to a rulemaking proceding…. A useful outcome to the process would be a
series of FERC pronouncements that:
(a) Clarify the law on PURPA preemption and FPA preemption in the
various feed-in tariff scenarios…;
(b) Create processes for establishing cost-based safe harbors for
various technologies, project sizes , and geographic areas, where
these safe harbors applied in both the PURPA and FPA context;
(c) Create a process by which sellers under feed-in tariffs could obtain
findings of no market power; and
(d) Evaluate the effects of these modifications after several years.111
107
Id.
Id. at viii.
109
Id.
110
Id.
111
Id. 46-47.
108
35
The follwing is a more in depth discussion of the complexities associated with state feedin tariffs. The Federal Power Act (FPA) and the Public Utility Holding Company Act
(PUHCA)112 established the basic regulatory structure for public utilities in 1938. Under
these acts, states regulate retail electric rates and intrastate utility activities while the
federal government regulates utility interstate activity and wholesale rates.113 This
regulatory framework remained essentially unchanged until the enactment in 1978 of the
Public Utility Regulatory Policy Act (PURPA). A Congressional Research Service
report explained one of the key purposes of PURPA as follows:
The original intent of §210 of PURPA was to encourage alternative
sources of electricity beyond traditional generation facilities, without these
facilities being subject to all existing federal and state utility regulations.
Perhaps the most far-reaching provision of PURPA encourages
cogeneration and small power production with so-called qualifying
facilities (QFs). QFs are not considered to be utilities, and are therefore
exempt from regulation under PUHCA and the FPA. To be considered a
QF, a cogenerator or small power producer must meet certain FERC rules
on fuel use, size, fuel efficiency, and reliability.
PURPA shifted the price basis for wholesale electricity from the seller's
cost to the purchaser's cost. PURPA indicates that QF power is to be
purchased at the "incremental cost" of alternative energy to the utility.
This rate, referred to as the avoided cost, is the likely costs for both energy
and facilities that would have been incurred by the purchasing utility if
that utility had to provide its own generating capacity. These rates are not
based on actual costs incurred in the production of electricity. The
determination of avoided costs has been the responsibility of the states,
and procedures to assign avoided costs have varied greatly between
states.114 (Citations omitted)
Although there are some exceptions, for most purposes a ―qualifying facility is either a
―small power production facility‖ or a co-generation facility. A small power production
112
15 U.S.C. § 79 et seq. (1935)
Amy Abel & Jon Shimabukuro, RS20146: Electricity Restructuring Bills: A Comparison of PURPA
Provisions (Congressional Research Service 1999), available at
http://ncseonline.org/nle/crsreports/energy/eng-50.cfm.
114
Id. at n. 102.
113
36
facility is ―a generating facility of 80 MW or less whose primary energy source is
renewable (hydro, wind or solar), biomass, waste, or geothermal resources.115 However,
the Energy policy Act of 2005 allowed utilities to seek an exemption from this
requirement under certain conditions for QFs that exceed 20MW in generating
capacity.116
―Avoided cost‖ is the incremental cost to an electric utility of electric energy or capacity
which, but for the purchase from the QF, such utility would generate itself or purchase
from another source.117 As the Congressional Research Service report noted, because
states are able to make the determination of what constitutes avoided cost, there is
significant variation from one state to another on this issue.
1. Wholesale versus retail rate regulation
It is absolutely clear that FERC has the authority to regulate wholesale electric rates and
that states have the authority to regulate retail electricity rates.118 The issue in an
increasingly complex electricity market is what constitutes a ―wholesale‖ sale versus a
―retail‖ sale. The Supreme Court in New York v. FERC sheds some light on this issue.
The case dealt with challenges to a FERC decision to regulate transmission rates in
unbundled sales of electricity. The court found that the restriction on FERC jurisdiction
related to retail sales did not apply to transmission since transmission in an
115
FERC: Industries – What is a Qualifying Facility? (FERC 2010), available at
http://www.ferc.gov/industries/electric/gen-info/qual-fac/what-is.asp.
116
16 U.S.C. § 824A-3(m)(1)(A)-(C) (2005); 18 C.F.R. § 292.309 (2006). See also Solarbuzz, supra note 8
for a discussion of the details related to the exemption and its potential impact on feed-in tariffs.
117
See 18 C.F.R. § 292.101(b)(6) (1995); see also FERC: Industries – What are the Benefits of QF Status?
(FERC 2010), http://www.ferc.gov/industries/electric/gen-info/qual-fac/benefits.asp.
118
New York v. FERC, 535 U.S. 1 (2002).
37
interconnected grid, is an inherently interstate activity.119 However, the Court found that
FERC acted reasonably in not asserting jurisdiction over unbundled sales of electricity
based on the idea that such sales look more like a retail transaction and that parceling out
jurisdiction over unbundled sales would be very difficult.120
The New York v. FERC decision points out that the world of electric energy sales is
complex in an unbundled and deregulated setting. In the context of FITs, a generator
who sells electricity to a traditional electric utility that then resells the electricity to its
customers would likely be engaged in a wholesale transaction. States in this
circumstance could only establish rates for qualifying facilities and those rates could not
exceed avoided costs. If, however, the generating facility sells directly at retail and uses
the transmission lines only as a conveyance to the customer, the transaction would likely
be a retail sale and subject to a state FIT.
2. Purchase versus sale
The case of Pike County Light and Power Company v. Pennsylvania Public Utility
Commission121 introduces an additional complexity into the FERC/state jurisdictional
question. Pike County challenged a reduction in allowable expenses that it had claimed
in a rate case. The Pennsylvania Public Utility Commission determined that a power
purchase from Pike‘s parent company, Orange & Rockland, was against the public
interest. Pike had argued, among other things, that the issue before the Commission
119
Id. at 23.
Id. at 28.
121
Pike County Light and Power Co. - Ele. Div. v. Penn. Pub. Util. Comm‘n, 465 A.2d 735 (1983).
120
38
involved wholesale rates and the Commission was therefore prempted from making the
determination. The Court found:
The FERC does not analyze Pike‘s cost of service data or purchased
power alternatives in making its determination. The FERC focuses on the
on Orange & Rockland to determine whether it is just and reasonable for
that company to charge a particular rate but makes no determination of
whether it is just and reasonable for Pike to incur such a rate as a expense.
The PUC, on the other hand, has no jurisdiction to analyze Orange &
Rockland‘s cost of service data and makes no determination as to the
reasonableness for Orange & Rockland to charge its rate. The PUC
focuses on Pike and its cost of service data to determine whether it is
reasonable for Pike to incur such costs in light of available alternatives.
So while the FERC determines whether it is it is against the public interest
for Orange & Rockland to charge a particular rate in light of its costs, the
PUC determines whether it is against the public interest for Pike to pay a
particular price in light of the alternatives. 122 (Emphasis added.)
The Pike case indicates that a state can determine whether it is in the public interest for a
public utility to purchase energy from particular sources.
One potential implication of the decision is that, since states have authority over purchase
decisions, they can specify through a FIT the rate at which such purchases can be made.
However, this may not be sufficient to authorize the transaction. Even though a state
may establish a purchase price, FERC may still require that the contract be submitted for
approval of the ―cost‖ of the purchase to review whether the transaction may result in a
rate that is not ―reasonable and just‖ under the FPA. 123
122
123
Id. at 274.
See Hempling et al., supra note 103, at 26-29.
39
3. What constitutes avoided cost
Avoided cost is a key concept under PURPA. States can require that utilities purchase
energy from renewable energy facilities if the cost of doing so does not exceed the cost a
purchasing utility otherwise would incur to generate capacity (or energy) itself or
purchase from another source. Exactly what constitutes avoided cost has, however, been
an issue of considerable dispute.
States have authority to adopt FIT legislation under FPA and PURPA for qualifying
facilities if the FIT does not exceed avoided cost. This issue has been central to the
debate over FIT legislation in California. In the mid-1990s, the California Public
Utilities Commission ordered several utilities to sign long-term, fixed-priced contracts
with qualifying facilities. Southern California Edison and other utilities argued that the
contract price exceeded avoided cost and asked FERC to void the order. In the Sothern
California Edison case,124 the Commission observed
Our decision today does not, for example, preclude the possibility that, in
setting an avoided cost rate, a state may account for environmental costs
of all fuel sources included in an all source determination of avoided cost.
Also, under state authority, a state may choose to require a utility to
construct generation capacity of a preferred technology or to purchase
power from the supplier of a particular type of resource.125
The Commission noted that under PURPA ―an avoided cost (incremental cost)
determination must permit QFs to participate in a non-discriminatory fashion and, at the
same time, assure the purchasing utility pays no more than the cost it otherwise would
124
Southern California Edison Co., 70 FERC 61,215 (1995), reconsideration denied, 71 FERC 61,269
(1995).
125
Id. at 61,676.
40
incur to generate capacity (or energy) itself ‗or purchase from another source’….‖126
The California Commission had, however, limited the competition for the contracts to
qualifying facilities. FERC found that this approach had excluded potential lower cost
sellers from the competition and resulted in prices that exceeded avoided cost. FERC
noted that California could have included environmental costs in its definition of avoided
costs had the state adopted uniform requirements that applied to all power generation
facilities and then allowed all such sources to participate in the avoided cost bidding
process.127 Thus, for example, it would appear to be permissible under the Southern
California Edison decision for California to adopt uniform regulation of CO2 emissions
standard for electric generation facilities that would raise the cost for coal and gas
generating facilities and then incorporate those higher prices in an avoided cost
determination.
The California Public Utility Commission has been considering a feed-in tariff and
recently sought comment about the scope of its authority to set rates. Southern California
Edison asserted in response that California‘s authority to establish a FIT is limited to a
rate that would reflect ―avoided cost,‖ citing Midwest Power Systems, Inc.128 and
Southern California Edison Co.129
The California Attorney General‘s Office argued in response that the state has significant
discretion in determining what constitutes avoided cost and that, among other things, a
126
Id. at 61,677.
Id.
128
Midwest Power Systems, Inc., 78 FERC 61,067 (1997).
129
Southern California Edison Co., 70 FERC 61,215 (1995).
127
41
state like California with a strong policy to address climate change can consider the cost
of obtaining renewable energy in calculating avoided cost.130 The Attorney General also
asserts that state renewable portfolio standards should be considered in the avoided cost
calculation. Thus, if a state has a 30 percent RPS, the Commission could (perhaps must)
assess avoided cost in light of the perhaps higher overall cost of generation given the RPS
requirement.131
FERC‘s initial Southern California Edison decision appeared to allow uniform costs such
as those associated with climate legislation and added costs related to state RPSs to be
included in an avoided cost calculation as long as the state requirements are uniform and
non-QF generators are not precluded from the avoided cost process. However, in a
subsequent proceeding, FERC clarified that the extent to which environmental
externalities can be considered in determining avoided costs is limited. The Commission
noted that states have a number of mechanisms to encourage the use of alternative
generation outside of the PURPA context such as direct requirements that utilities build
renewable generation and through tax provisions and subsidies.132 In addition, the
Commission noted that
we stated [in our February 23 decision] that ―our decision today does not,
for example, preclude the possibility that, in setting an avoided cost rate, a
state may account for environmental costs of all fuel sources included in
an all source determinationof avoided cost.‖ 70 FERC at p. 61,676. This
means that environmental costs, if they are real costs that would be
incurred by utilities, may be accounted for in a determination of avoided
cost rates. Under section 210(b) of PURPA, ―no rule…shall provide for a
rate which exceeds the incremental cost to the electric utility of alternative
130
Cal. Pub. Util. Comm‘n, Rulemaking 08-08-009, Cal. Attorney Gen.‘s Response to ALJ‘s Request for
Briefs Re. Jurisdiction to Set Prices for a Feed-In Tariff (June 25, 2009).
131
Id.
132
Southern California Edison Co., 71 FERC 61269, 62080 (1995).
42
electric energy.‖ (Emphasis added). Thus, in setting avoided cost rates, a
state may only account for costs which actually would be incurred by the
utilities. A state may, through state action, influence what costs are
incurred by the utility. Thus, accounting for environmental costs may be
seen as part of a state‘s approach to encouraging renewable generation.
For example, a state may impose a tax or other charge on all generation
produced by a particular fuel, and thus increase the costs which would be
incurred by utilities in building and operating plants that use that fuel.
Conversely, a state may also subsidize certain types of generation, for
instance wind, or other renewables, through, e.g., tax credits.
A state, however, may not set avoided cost rates or otherwise adjust the
bids of potential suppliers by imposing environmental adders or
subtractors that are not based on real costs that would be incurred by
utilities. Such practices would result in rates which exceed the
incremental cost to the electric utility and are prohibited by PURPA.133
One commentator noted that the result is that ―if a State wishes to encourage renewable
generation, FERC has indicated that it may do so through the tax code (or some other
broad policy measure), but it may not use a rate-setting mechanism that results in a rate
that is above avoided cost.‖134 Absent some clarification of, or change to the Southern
California Edison case, it will be difficult for states to justify feed-in tariffs that are set
high enough to attract solar energy providers absent some further action by FERC that
opens up the definition of ―avoided cost.‖
b. Federal Legislation
One solution to the state authority issue is national legislation to clarify the status of feedin tariffs. Section 102 of the Waxman-Markey climate legislation135 attempts to clarify
133
Id.
Michael J. Zucchet, Renewable Resource Electricity in the Changing Regulatory Environment (2002),
available at http://www.eia.doe.gov/cneaf/pubs_html/rea/feature2.html.
135
American Clean Energy and Security Act of 2009, H.R. 2454, 111th Cong. (2009).
134
43
that states may adopt feed-in tariffs. It would amend Section 210 of the Public Utility
Regulatory Policies Act of 1978 as follows
(o) Clarification of State Authority to Adopt Renewable Energy IncentivesNotwithstanding any other provision of this Act or the Federal Power Act, a State
legislature or regulatory authority may set the rates for a sale of electric energy by
a facility generating electric energy from renewable energy sources pursuant to a
State-approved production incentive program under which the facility voluntarily
sells electric energy. For purposes of this subsection, ―State-approved production
incentive program‖ means a requirement imposed pursuant to State law, or by a
State regulatory authority acting within its authority under State law, that an
electric utility purchase renewable energy (as defined in section 609 of this Act)
at a specified rate.136
The recent NREL study of feed-in tariffs notes that the language may not be sufficiently
precise to fully open the door to state feed-in tariffs.137 The study notes that the language
would clearly allow states to mandate rates above avoided cost but it does not make clear
whether states are thereby allowed to regulate wholesale rates without FERC approval.138
Legislation proposed by Representative Jay Inslee (D-Wash), referred to as ‗‗Renewable
Energy Jobs and Security Act,‘‘139 would, in contrast, establish a national feed-in tariff.
Among the major provisions of the bill are the following:


Section 201(b)(2)(B) The goal is to provide for the profit
able development of renewable energy facilities that use available
commercialized technologies and operate within regions that, on average,
experience the top 30th percentile of renewable energy resource potential in the
United States.
Section 202 of the Bill would add a new Section 210B to the Federal Power Act
that would provide that ―The rules shall require public utilities to offer to
purchase electric energy from renewable energy facilities in accordance with this
136
Id. at § 102(o).
See Hempling et al., supra note 103, at 41-42.
138
Id.
139
Renewable Energy Jobs and Security Act, H.R. 6401, 110th Cong. §210B (2008).
137
44


140
section at uniform national rates established pursuant to this section. Each such
public utility shall purchase electricity from renewable energy facilities on a
priority basis, and each transmitting utility (as defined in the Federal Power Act)
shall transmit such energy on a priority basis.‖ Section210B(a).
The proposed Section 210B would also provide that
―(2)…the rates paid for the purchase of electric energy from renewable energy
facilities under contracts entered into under this section shall be established on a
uniform national basis by the Commission by rule. Such rates shall be—
(A) fixed throughout the duration of a contract extending for a period of at
least 20 years;
(B) no less than the amount needed for development plus a reasonable profit,
with consideration to—
(i) the technology used,
(ii) the year the installation is placed into service; and
(iii) the size of the renewable energy facility.
(3) RATES OF RETURN.—Such rates shall be set to provide a nominal, post-tax
project internal rate of return of not less than 10 percent after re-post-tax project
internal rate of return of not less than 10 percent after recovery of all operating
and maintenance costs for projects sited in locations with favorable renewable
energy resource potential, consistent with the purposes of this subsection.
Section 210B(c)(2 and 3)
Section 203 of the Bill add a new Section 225 to the Federal Power Act that
would establish a cost sharing mechanism. It provides that ―Not later than 1 year
after the date of enactment of this Act, the Commission shall, in consultation with
State regulatory authorities and nonregulated utilities, design a regional cost
redistribution mechanism that shall consist of a nonbypassable system benefits
charge payable by every end-use consumer of an electric utility to the electric
utility. Revenue from such charge shall be transferred to a national renewable
energy corporation to be referred to as the ‗RenewCorps‘ to be established by
such utilities and approved by the Commission for purposes of this section. The
Commission shall design a system benefits charge, determine the amount of such
charge, and establish a cost distribution mechanism so as to achieve each of the
following:
(1) Full reimbursement to electric utilities and transmitting utilities for the
costs associated with network upgrades and interconnection (including
thecarrying costs of capital while awaiting reimbursement) carried out in
accordance with the standards under section 210A and section 113(b)(6)
of the Public Utility Regulatory Policies Act of 1978 and for the additional
costs of the power purchase requirements of section 210B and section
113(b)(7) of the Public Utility Regulatory Policies Act of 1978.
(2) Ensure that systems benefits charges are based on energy usage.
(3) Ensure that monthly charges shall apply to customers according to
projected program costs.140
Id.
45
A national feed-in tariff would give FERC unprecented authority to set retail electricity
rates and likely would be resisted by states. A national tariff would likely have a
significant effect on the location of solar facilities. Since solar PV will be far more
efficient and therefore less costly if the facilities are located in areas with abundant
sunlight, a national uniform tariff is likely to encourage facility siting in these areas,
assuming adequate transmission capacity. State feed-in tariffs, in contrast, by definition
are only available to facilities in a particular state. Should state feed-in tariffs with solar
targets proliferate, the number of solar facilities in lower sunlight states will expand but
at a higher cost because of limitations on available sunlight.
c. State and Local Feed-in Tariff Initiatives
Feed-in tariff laws have been slow coming to the United States, no doubt in part because
of the regulatory uncertainty associated with state authority in this area, but states are
increasingly considering this approach to encouraging alternative energy generation.
Vermont, California and Hawaii have enacted mandatory feed-in tariff legislation.
Washington State has a voluntary feed-in tariff that all but one utility has implemented.
Feed-in tariff legislation has been proposed in Illinois,141 Michigan,142 Minnesota143 and
Rhode Island.144
141
H.B. 5855, 96th Gen Assem. (Ill. 2008).
H.B. 5218, 94th Leg., Reg. Sess. (Mich. 2007).
143
H.F. 3537, Leg. Sess. 85 (Minn. 2008).
144
H. 7616, 2008 Leg. Sess. (R.I. 2008).
142
46
1. Vermont
In 2009, Vermont became the first state to adopt a feed-in tariff.145 The law provides
enhanced tariffs for projects up to 2.2 MW in size with the rate guaranteed for up to 25
years for solar projects. The cap for the feed-in tariff projects is a relatively small 50
MW. The Sustainably Priced Energy Enterprise Development (SPEED) program sets
rates based on technology type with wind up to 15kW priced at $0.20 per kWh and solar
generation priced at $0.30 per kWh. These rates can be administratively adjusted. The
Vermont Public Service Board will implement the program through standard contracts
offered on behalf of the state‘s utilities. The law does not deal with the question of FERC
versus state jurisdiction in rate setting.
2.
California
In September 2009 the California legislature adopted Senate Bill 32 that
authorizes feed-in tariffs for small scale renewable energy generation facilities.146
The legislation went into affect on January 1, 2010. The DSIRE database
describes the impact of the legislation as follows:
The California feed-in tariff allows eligible customer-generators to enter
into 10-, 15- or 20-year standard contracts with their utilities to sell the
electricity produced by small renewable energy systems -- up to 3
megawatts (MW) -- at time-differentiated market-based prices. The price
paid will be based on the CPUC‘s market price referent (MPR) table,
shown in CPUC Resolution E-4137. Time-of-use adjustments will be
applied by each utility and will reflect the increased value of the electricity
to the utility during peak periods and its lesser value during off-peak
periods. A special, higher-level rate is provided for solar electricity
generated between 8 a.m. and 6 p.m.
145
146
H. 446, Leg. Sess. 2009-2010 (Vt. 2009).
S.B. 32, 2007-2008 Sess. (2008).
47
All investor-owned utilities and publicly-owned utilities with 75,000 or more
customers must make a standard feed-in tariff available to their customers. As the
feed-in tariff is meant to help the utilities meet California's renewable portfolio
standard (RPS), all green attributes associated with the energy, including
renewable energy credits (RECs), transfer to the utility with the sale. Any
customer-generator who sells power to the utility under this tariff may not
participate in other state incentive programs. The tariffs will be available until the
combined statewide cumulative capacity of eligible generation installed equals
750 MW. Each utility will be responsible for a portion of that cumulative total
based on their proportionate sales. 147
3.
Hawaii
A recent decision by the Hawaii Public Utilities Commision (PUC) provides
guidelines for project size for a feed-in tariff but does not yet set tariff prices.
Compared to an alternative proposal by Hawaii Electric Company (HECO), the
state‘s largest provider of electricity, the PUC ‘s tariff framework allows for
larger systems.148 The HECO plan sought to cap systems at 100-kilowatts. The
PUC framework will allow projects up to five megawatts for Oahu, and up to 2.72
MWs for Maui and Hawaii Island. Developers will enter 20-year agreements,
147
California Feed in Tariff, Database of State Incentives for Renewables & Efficiency available at
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CA167F&re=1&ee=1.
148
See Decisions and Orders under Docket No. 2008-0273, Haw. Pub. Util. Comm‘n (2008), available at
http://hawaii.gov/dcca/dca/dno.
48
during which time they‘ll be guaranteed a specified price for the electricity
generated by their systems.149
4.
Michigan
Michigan has put into place an experimental feed-in tariff for solar. It‘s not large: out of a
program cap of 2,000 kW, Consumers Energy has set aside 500 kW for residential solar.
Still, that‘s enough for 100 moderately-sized 5 kW solar panel installations.
The tariff itself is rather high: for installations that go live this year, the rate will be
$0.65/kWh for twelve years. In 2010, the rate will drop to $0.525/kWh. For commercial
entities interested in solar within the state, the rate for the rest of 2009 is $0.45/kWh,
dropping to $0.375/kWh next year. Individual projects are limited to 150 kW under the
program.150
5. Oregon
In Oregon, new legislation ―directs the PUC [Public Utilities Commission] to develop a
pilot program to integrate 25 megawatts of small-scale solar energy into Oregon‘s
electricity mix using a feed-in tariff. The bill also requires 20 megawatts of large-scale
solar to be integrated into utility loads.‖151 The majority of the 25 megawatts must come
from small facilities. The legislation provides for incentive tariffs for 15 years.
149
Adam Sewell, Hawaii Feed-in Tariff Framework Set by PUC, GetSolar.com, Oct. 5, 2009, available at
http://www.getsolar.com/blog/hawaii-feed-in-tariff-set-by-puc/2458/.
150
Margaret Collins, Michigan Feed-in Tariff is Live, GetSolar.com, Sept. 18, 2009, available at
http://www.getsolar.com/blog/michigan-feed-in-tariff-is-live/2285/.
151
H.B. 3039, 75th Oregon Leg. Assem., Reg. Sess. (Or. 2009), available at http://www.afdpdx.org/REP/Legislation/HB_3039_A-engrossed.pdf.
49
Renewable energy certificates (RECs) are bundled with the electricity and transfer to the
utility for compliance with Oregon's renewable portfolio standard.152
6. Local Governments
Sacramento, California and Gainesville, Florida have adopted modest feed-in tariffs.
Sacramento‘s tariff supports projects of up to 5 MW with a 100 MW cap.153 The
Gainesville program parameters were discussed earlier.154
v.
Feed-in Tariff Conclusions
The experience in Germany and in several other countries demonstrates that a feed-in
tariff with a solar set-aside will result in the addition of more solar generation capacity if
the rates are based on the cost of production and a reasonable return on investment. A
key challenge is setting a rate and a generation ceiling that is high enough to attract
significant investment without increasing the cost to customers to an unacceptable level.
The basic concept underlying targeted solar feed-in tariffs is to ―prime the pump‖ for
wider adoption of solar facilities. Little evidence is available to date about whether feedin tariffs actually perform this function.
The design of feed-in tariffs can have a significant effect on the type and distribution of
solar facilities. The German and especially the Spanish feed-in tariffs have encouraged
152
H.B. 3039, 75th Leg. Assem., Reg. Sess. (Or. 2009).
See SMUD’s Feed-in Tariffs, Sacramento Municipal Utility District Homepage, available at
http://www.smud.org/en/community-environment/solar-renewables/Pages/feed-in-tariff.aspx.
154
GRU FIT Administrative Guideline, Gainsville Regional Utilities, March 1, 2009, available at
http://www.gru.com/Pdf/futurePower/GRU FIT Administrative Guideline 7-22-09.pdf.
153
50
the construction of large solar facilities by not placing size limits on individual facilities,
although the tariffs do set limits on the overall capacity that can qualify for the feed-in
tariff. This approach supports construction of central power stations. Early
experimentation with feed-in tariffs in the United States has often limited the tariff to
smaller facilities. This approach encourages distributed facilites. Since siting of
renewable energy facilities in many areas of the country remains limited by lack of
transmission capacity, feed-in tariffs that favor smaller facilities may drive siting to
locations where the existing transmission capacity can accommodate small new facilities.
Several states are considering feed-in tariffs. Although there is an argument that states
are preempted from enacting these tariffs, it appears that states may be able to adopt feedin tariffs if they involve retail sales or if the feed-in tariff is calculated on the basis of
avoided costs. Still, the ability of states to adopt feed-in tariffs would be significantly
enhanced by reconsideration of FERC precedents.
State feed-in tariffs could encourage significant growth in solar generation capacity but
state-by-state tariffs are likely to result in higher overall consumner costs since at least
some of the capacity will be in states with restricted sunlight and therefore less efficient
production. A national feed-in tariff would allow increased concentration of solar
generating capacity in higher efficiency locations (assuming sufficient transmission
capacity) but is likely to be resisted since it could be considered as a nationalization of a
traditional state function—setting retail energy rates.
51
B.
Renewable Portfolio Standards
i.
Structure
Renewable Portfolio Standards are typically government mandates that require public
utilities to derive a certain percentage of their electric supply portfolio from renewable
energy sources. What constitutes a renewable source varies from state to state but they
typically include wind, solar, biomass and hydropower facilities. Portfolio standards in
the United States vary widely, ranging from a low of 10 percent by 2015 for Michigan
and Wisconsin to a high of 40 percent for Hawaii by 2030.155 At least 16 states and the
District of Columbia have special ―carve outs‖ in their RPS for solar energy. 156 Portfolio
standards typically establish a target date several years in the future by which time the
standard must be met. RPSs do not guarantee additional renewable capacity. The
success of Portfolio Standards depends on the availability transmission infrastructure to
support renewable facilities and the available alternative energy resources in the state or
region.157 Success also depends upon whether the standards are consistently enforced158
and whether states have enacted complementary policies that support RPSs such as
resource allocations.159 Feed-in tariffs can complement RPSs by providing a guaranteed
rate of return for renewable energy facilities.
155
See Renewables Portfolio Standards, Database of State Incentives for Renewable Energy, available at
http://www.dsireusa.org/documents/summarymaps/RPS_map.ppt.
156
See Renewable Portfolio Provisions for Solar and Distributed Generation, FERC Market Oversight
(2009) available at http://www.ferc.gov/market-oversight/othr-mkts/renew/othr-rnw-rps-solar-DG.pdf.
157
David Hurlbut, State Clean Energy Practices: Renewable Portfolio Standards 4 (National Renewable
Energy Laboratory, July 2008)
158
Id. at 5.
159
Id. at 14.
52
RPSs do not automatically encourage the wider use of solar energy. A facility agnostic
RPS is likely to promote lower cost renewables such as wind. To encourage solar
generation an RPS may need to require a specific solar component.
RPSs have been one of the primary tools used in the United States to drive increased use
of renewable energy. See Appendix B for details on state RPSs. RPSs also figure
prominently as a way of stimulating renewable energy use in Japan and China .
53
ii. Use Outside of the US
a. Japan
Special Measures Law Concerning the Use of New Energy by Electric Utilities (Act No.
62 of June 7, 2002) came into force on April 1, 2003, requiring electricity suppliers to
include a certain proportion of ―new energy electricity‖ from renewable sources in their
supply mix. New energy can include wind power, thermal heat, small and medium scale
hydro (up to 1 MW capacity), biomass and solar PV generation.160 The obligation is on
an incremental scale starting from 7.32 billion kWh in 2003, rising to 12.2 billion kWh in
2010 (1.35% of national electricity consumption).161 As a result of a Report prepared for
the Ministry of Economy, Trade and Industry (METI) in March 2007,162 the target for
2014 has been set at 16 billion kWh.
The obligation can be met by a supplier generating the electricity itself; by purchasing
(and on selling) new energy electricity from another supplier; or by purchasing ―new
energy certificates‖ from another party. These certificates are issued upon generation of
new energy electricity or the purchase of certificates in the marketplace, in the same way
that emissions trading schemes work. To date it appears that all 39 electricity retailers
have met the requirements under the Act.163
160
See generally What’s RPS System in Japan?, METI, Agency for Natural Resources and Energy,
available at http://www.rps.go.jp/RPS/new-contents/top/toplink-english.html (English translation
unavailable).
161
Introduction of Renewable Portfolio Standard (RPS) Law – Japan, Ren21, International Action
Program, available at http://www.ren21.net/iap/commitment.asp?id=92.
162
Kenji Yamaji, Report prepared by the RPS Law Subcommittee of the New Energy Committee, Advisory
Committee for Natural Resources and Energy (March 2007).
163
See generally What’s RPS System in Japan?, METI, Agency for Natural Resources and Energy,
available at http://www.rps.go.jp/RPS/new-contents/top/toplink-english.html (English translation
unavailable); Green Power: Renewable Portfolio Standards 2007, IEA, Global Renewable Energy Policies
and Measures‖, available at http://www.iea.org/textbase/pm?mode=re&id=3591&action=detail.
54
A recent measure proposed by the March 2007 METI Report is that solar PV generation
be given a multiplier of 2x for the period 2011-2014 for the purposes of retailers meeting
their obligations. This will give further impetus for installation of solar PV generation.164
On February 24, 2009, the Japan Minister of Economy, Trade and Industry, Toshihiro
Nikai, announced that utilities would be required to double the price they pay to purchase
electricity from households and businesses with grid-connected solar installations.165
b. China
A number of national policies and measures are included in the 2007 Medium and Longterm Development Plan for Renewable Energy in China to achieve these targets,
including mandated market share (MMS) policies (similar to RPSs), government
investment and concession programs, policy support and guidance, and market
stimulation.166 Under the MMS policies, non-hydro renewable energy is required to reach
1% of total power generation by 2010, and over 3% by 2020. Power generators with selfowned installed capacity exceeding 5 GW are required to have a non-hydro renewable
capacity of 3% by 2010, and 8% by 2020.167
164
Green Power: Renewable Portfolio Standards 2007, IEA, Global Renewable Energy Policies and
Measures‖, available at http://www.iea.org/textbase/pm?mode=re&id=3591&action=detail; T. Kawabata,
Japanese Ministry of Economy, Trade & Industry, Presentation at the Apec Workshop on Renewable
Energy Grid Integration Systems: Japanese Policies Related to New and Renewable Energy & Grid
Integration (January 14, 2009), available at http://www.sandia.gov/regis/presentations/T_KawabataMETI.pdf.
165
T. Aritake, Japan Considers Doubling Price Utilities Pay to Buy Solar Power from Outside Sources, 32
Int‘l Env. Rep. 192 (April 4, 2009).
166
2007 Medium and Long-term Development Plan for Renewable Energy in China, National
Development and Reform Commission (September 2007), available at
http://www.chinaenvironmentallaw.com/wp-content/uploads/2008/04/medium-and-long-termdevelopment-plan-for-renewable-energy.pdf.
167
Id.
55
iii. Use in the United States
Twenty-nine states have mandatory RPSs. Qualifying renewable sources vary
significantly by state. Wind, solar, biomass, hydro and ocean energy are typically
included. Several states add energy efficiency to the list. One state includes advanced
nuclear generation. Some states include standards for specific technologies (referred to
as carve-outs). Twelve states have solar carve-outs in their RPSs, with Nevada having
the largest carve-out at 6% out of its total goal of 25% by 2025.168
One industry representative views high RPSs as an important driver of solar energy
deployment, however the RPSs must be set in the range of 30% plus to have a significant
impact on solar absent solar carve-outs.169 Research has indicated that RPSs do
encourage increased construction of wind energy facilities.170 The impact on solar
energy facility deployment is less obvious.171 States that have RPSs with solar carve-outs
have brought online 67 percent of U.S. solar energy. 172
iv.
Pending Federal Legislation
Section 610 of the American Clean Energy and Security Act of 2009173 would establish
an RPS of 20% after 2020, three-quarters of which must be derived from renewable
168
See Renewable & Alternative Energy Portfolio Standards Map, Pew Center on Global Climate Change
available at http://www.pewclimate.org/what_s_being_done/in_the_states/rps.cfm.
169
Interview with John Gaffney, First Solar.
170
See Adrienne Ohler, The Effects of Renewable Portfolio Standards on Renewable Energy Sources 28,
available at http://ageconsearch.umn.edu/bitstream/9869/1/sp07oh01.pdf.
171
Mark Sinclair, Mainstreaming Solar Electricity: Strategies for States to Build Local Markets 16,
available at http://www.cleanegroup.org/reports/CEG_mainstreaming-solar-electricity_apr2008.pdf.
172
Ryan Wiser, Renewables Portfolio Standards: An Opportunity for Expanded Solar Markets, available at
www.solaralliance.org/public_resources/wiser_state_solar_rps_2007.ppt.
173
American Clean Energy and Security Act of 2009, H.R. 2454, 111th Cong. (2009).
56
sources rather than energy efficiency.174 The standard starts at a relatively modest six
percent through 2013.175
v.
Issues
Commentators have identified several issues with RPS policies related to the deployment
of solar energy. If the RPS does not include elements, such as a requirement for longterm contracts, renewable energy providers may have difficulty in raising the capital
needed to finance projects. 176 Well-designed FITs provide guaranteed contract terms and
a stable investment environment that can lower the cost of financing.177 Under some
state RPSs laws, the requirements do not provide the same level of certainty resulting in
additional risk and higher financing costs.178
Poorly structured RPS statutes will be ineffective in encouraging solar energy use. For
example, some RPS laws only require signed contracts for an electric utility to receive
credit for the project in meeting its RPS requirement. This practice tends to encourage
low cost bids for renewable energy. Although the projects may count towards the
utilities‘ RPS requirements imposed on a utility, such projects but may not actually be
constructed because the bids were unrealistically low or because of delays related to
transmission capacity or other factors.179 AES Solar has cited at least one instance in
California where a major utility accepted a low-cost bid for solar energy as part of its
174
See Pew Center Summary of H.R. 2454, Pew Center for Global Climate Change (2009), available at
http://www.pewclimate.org/docUploads/waxman-markey-detailed-summary-july2009.pdf.
175
Id. at 4.
176
Karlynn Cory, Toby Couture & Claire Kreycik, Feed-in Tariff Policy: Design, Implementation and RPS
Policy Interactions, 10 National Renewable Energy Laboratory (March 2009).
177
Id.
178
Id.
179
Id.
57
RPS but the price proved uneconomical and the provider filed for bankruptcy.180 FITs, in
contrast, typically require facilities to be ready for production to qualify for the tariff.
Finally, in many cases, RPS policies favor lower cost renewables, such as wind and
biomass, because there is no special treatment for solar energy in the form of a solar
―carve-out, ‖ a multiplier for distributed generation such as that found under Japanese
law, or other mechanism. Utilities typically must justify their costs as reasonable to win
approval of State regulators for the inclusion of costs in the utility‘s rate base. Solar
energy that is significantly more expensive than other renewable energy sources may not
meet this test unless the state legislature has directed otherwise.181
Another set of issues that arise with state RPSs are constitutional questions that may arise
if a state attempts to restrict out of state or out of region generators from selling
renewable energy into the state. States use a variety of mechanisms including extra
credit for in-state facilities, customer-sited set asides, and renewable energy credits if a
state invests in in-state solar manufacturing to encourage state energy self-sufficiency and
to encourage the growth of local industries. In addition, states may use rebates, tax
credits and system benefit funds to favor in-state development.182
180
Interview with Robert Hemphill, President, AES Solar,(September 7, 2009).
Cory et al., supra note 178.
182
See Karlyn Cory, Rps Implementation Issues: Balancing Goals and Strategies 9, available at
http://www.cleanenergystates.org/JointProjects/RPS/Cory-NREL-5.20.08.pdf.
181
58
The commerce clause of the US Constitution is designed to ensure that individual states
do not erect barriers to free trade among the states.183 Thus, in a seminal commerce
clause case, the Supreme Court invalidated a New York law that prohibited the sale of
milk from Vermont because the price for the Vermont milk was below the minimum
price charged for New York produced milk.184 Juctice Cardozo in Baldwin v. G.A.F.
Sellig, Inc., observed, ―it is the established doctrine of this court that a state may not, in
any form or under any guise, directly burden the prosecution of interstate business."185
As one commentator noted, ―Cardozo did not deny states the right to prevent the sale of
products which fail to meet their health standards. However, he opposed the use of such
standards as a means of protecting local industry.‖186 States can favor their own
industries but they must do it through direct means such as subsidies rather than
indirectly by limiting access of out-of-state firms to in-state markets.
The result of this and other Supreme Court decisions is that states can not enact laws that
discriminate against commerce from other states absent a compelling state interest, such
as the protection of public health. NREL has noted a potential issue with RPSs arises
where those standards are seen as favoring in-state renewable energy facilities to the
detriment of out-of-state providers of renewable energy.
The dormant commerce clause thus raises questions as to the legality of
RPS rules that limit out-of-state eligibility. To date, no state RPS policies
have been challenged on the basis of the dormant commerce clause.
Clearly, however, state rules that require eligible facilities to be physically
located in-state or directly interconnected into the state are at risk. Less
183
U.S. Const. art. 1, § 8, cl. 3.
Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935).
185
Id. at 522 (citations omitted).
186
Id. See also Law Library - American Law and Legal Information, Notable Trials and Court Cases - 1918
to 1940, available at http://law.jrank.org/pages/13619/Baldwin-v-G-F-Seelig-Inc.html.
184
59
clearly at risk are rules that require power to be delivered to the state or
regional control area and rules that favor distributed or on-site
generation.187
One particular concern states have with renewables portfolios is what is known as
―leakage.‖ Leakage refers to loss of jobs or other economic benefits associated with the
construction and operation of renewable energy facilities. Efforts to retain these benefits
by specifying that renewable energy must be produced in-state or in-region are likely
problematic under the commerce clause.188
C.
Third-Party Providers
One significant approach for generating smaller scale solar energy is through financing
by companies (third-party providers) through power purchase agreements (PPAs). Under
a PPA, a third-party provider typically contracts with an energy user to install and operate
a solar energy facility at the energy user‘s facility. The third-party provider retains
ownership of the solar energy facilities and sells the energy generated from the on-site
facility to the energy user for a generation fee. The company also may receive any
applicable investment tax credits and renewable energy credits as part of the transaction.
The company may or may not sell back excess energy into the electric grid depending
upon state net metering laws, other applicable state laws and the organization‘s business
model. This is Sun Edison‘s business model.
187
K.S. Cory and B.G. Swezey, Renewable Portfolio Standards in the States: Balancing Goals and
Implementation Strategies 9, available at http://www.nrel.gov/docs/fy08osti/41409.pdf.
188
See Nathan Endrud, State Renewable Portfolio Standards: Their Continued Validity and Relevance in
Light of the Dormant Commerce Clause, the Supremecy Clause, and Possible
Federal Legislation, 45 Harv. J. Leg. 265-270 (2008). See also Constitutional Hurdles to Renewable
Energy, Energy Law 360, Feb. 18, 2009, available at
http://www.foley.com/publications/pub_detail.aspx?pubid=5730.
60
Increasingly, an issue has been raised in states about whether this business arrangement
triggers regulation of the third-party provider as a ―public utility.‖ If a third-party
provider is treated as a public utility, it would be subject to a broad range of state utility
regulations. Such treatment could make the PPA model unattractive because of the cost
and time associated with status as a public utility. This important issue is one that is
determined by the structure of state law. As a result, the question will have to be
resolved in each state where the issue is raised.
The argument raised by those who seek closer regulation of third-party providers is that
they are supplying energy in a manner similar to traditional electric utilities and should be
subject to the same regulatory regime to protect the public interest. The counter argument
by PPA providers is that they are primarily supplying electricity to a single customer and
are thus very different than typical electric utilities.
Several states have addressed this issue in proceedings before state public utility
commission. The following material highlights a few of these proceedings.
Colorado recently passed Senate Bill 51 that specifically provides that third-party
providers are not public utilities:
The supply of electricity or heat to a consumer of the electricity or heat from solar
generating equipment located on the site of the consumer's property, which
equipment is owned or operated by an entity other than the consumer, shall not
subject the owner or operator of the on-site solar generating equipment to
regulation as a public utility by the commission if the solar generating equipment
61
is sized to supply no more than one hundred twenty percent of the average annual
consumption of electricity by the consumer at that site.189
Proceedings before the Oregon and Nevada Public Utility Commissions have also
considered this question with both states determining third-party providers are not public
utilities under their laws. In its final order, the Nevada PUC ruled that ―An examination
of Nevada Revised Statute (―NRS‖) 704.020(2)(a) (definition of a public utility in
Nevada), and NRS 704.766 through 704.775 (the statutes providing for a net metering
program in Nevada), through the lens of the established rules of statutory interpretation
indicates that private entities who install, lease, sell, and/or maintain renewable energy
systems on the private property of customer-generators for the purpose of net metering,
are not public utilities pursuant to the laws of the state of Nevada. They are therefore not
subject to regulation by the Commission.‖190 An important point of the Nevada PUC
decision was recognizing that the solar systems in question do not serve the public but
rather a single-customer under a private contract.191 This is in contrast to a public utility
that exists to serve the public and will continue to serve the customer-generators
contracting with the providers of solar energy systems.192 For additional discussion of
state public utility determinations related to the status of third-party providers, see
Appendix D.
D. Transmission
189
Renewable Energy Financing Act of 2009 §10, S.B. 09-51, 67th Gen. Assem., Reg. Sess. (Co. 2009).
Investigation and Rulemaking to Adopt, Amend, or Repeal Regulations Pertaining to Chapters 703 and
704 of the Nevada Admin. Code, 2008 WL 5159179 (Nev. P.U.C. 2008).
191
Id.
192
A number of other states have addressed the third-party provider as a public utility issue.
190
62
Access to transmission is critical to wider use of solar PV. Smaller scale PV can often be
sited at locations that allow access to the grid through existing lines. However, utilityscale solar PV, especially systems located in areas with the highest solar potential, may
require construction of new transmission lines to reach major energy markets. The
construction of new transmission lines raises a number of issues, including cost (major
new transmission lines are very expensive), time (constructing new transmission lines can
take significantly more time than building a new energy generation facility), public
opposition, and government review processes (including federal and state environmental
impact review, permits for the use of public land and review of endangered species).
Transmission limitations, in fact, are a major barrier to the growth of renewable
energy. In the Northeast, for example, the states all have renewable portfolio standards
while they also participate in a regional greenhouse gas initiative. The dilemma there and
elsewhere is that the transmission line permitting process is tumultuous and impedes
those goals.193 As a result, transmission investment has declined in real terms — adjusted
for inflation — from 1975 to 1998.194 While there have been increases since 1998, the
Federal Energy Regulatory Commission (FERC) says that the level is still less than what
was invested in 1975. Over the same time period, however, the demand for electricity
has doubled. This increased demand has resulted in a significant decrease in transmission
capacity, requiring new lines to be built. Private entities have limited resources and the
pay off is often too distant. But, the transmission grid is aging and needs to be updated
and expanded so that it can meet the expected future demand. Doing so would give
193
Shalini P. Vajjhala, Anthony C. Paul, Richard Sweeney & Karen L. Palmer, Green Corridors: Linking
Interregional Transmission Expansion and Renewable Energy Policies, RFF Discussion Paper No. 08-06,
Resources for the Future (March 1 2008) available at http://ssrn.com/abstract=1350016.
194
Id.
63
utilities the access they need to clean generation while also helping to increase the
reliability of the grid.195
Transmission line siting can be very controversial. A majority of Americans oppose new
high-voltage transmission lines in their community. However, that opposition drops
precipitously to 17% if those lines are delivering renewable energy. Support for new
transmission lines leaps from just 46% to 83% when respondents are asked specifically
about high-voltage transmission lines delivering wind power. On the issue of who should
have authority to site a new transmission line in their community, Americans oppose
federal siting authority 57% to 43%. The apparent support for transmission line siting
appears to dissipate when specific transmission line corridors are proposed.
Because of the importance of additional transmission capacity in the United States for
supply, reliability and access to high-value renewable energy generation regions,
Congress provided the Federal government a role in transmission siting in the Energy
Policy Act of 2005. The Act provides for the designation of corridors on federal lands in
western states and the identification of national interest corridors across the country that
give federal regulators the ability to override state regulators if key projects are
delayed.196 Specifically, under certain circumstances, FERC now has the authority to
approve and issue sitting permits for new transmission lines in areas designated by DOE
as national Interest Electric Transmission Corridors (NIETC). This power, however, is
not unlimited. FERC only has authority to act under limited circumstances listed in the
act, including in cases where a state has ―withheld authority‖ for siting the line for more
195
Ken Silverstein, Cleaning the Transmission Process, EnergyBiz Insider (July 14, 2008), available at
http://www.energycentral.com/articles/energybizinsider/ebi_detail.cfm?id=529.
196
Vajjhala et al., supra note 195.
64
than one year.197 The U.S. Fourth Circuit Court of Appeals held in Piedmont
Environmental Council v. FERC that ―the continuous act of withholding approval does
not include the final administrative act [of a state] of denying a permit.‖198 Thus, while
FERC may be able to step in when states have not acted on a request for approval, FERC
can not override a state denial of a permit or other form of required approval. The
Energy Policy Act of 2005 also allows the Federal Energy Regulatory Commission to
provide increased financial incentives to entice investors to spend capital on transmission
projects, which have been considered risky because they can take years to come on
line.199
According to the Government Accountability Office (GAO), several companies have
introduced proposals to build new high-voltage direct-current (HVDC) transmission lines
since the passage of the Energy Policy Act of 2005.200 Some of these proposed lines
would follow active transportation rights-of-way, such as railroads, highways, and
pipelines. GAO has identified potential advantages and disadvantages to adding
transmission lines and using HVDC technology.201 GAO reports that adding
transmission lines offers potential advantages, including: (1) decreased congestion and
improved reliability of the electricity system by providing access to additional sources of
generation and additional paths for electricity, (2) lower costs for consumers at the end of
the line where electricity is received, (3) better utilization of existing power plants and
197
16 U.S.C. § 824p(1)(C)(i) (2005).
Piedmont Environmetnal Council v. FERC, 588 F.3d 304 (4th Cir. 2009).
199
Energy Policy Act of 2005, PL 109-58, 119 Stat. 727 § 368 (January 4, 2005) (codified at 42 U.S.C. §
15926).
200
Government Accountability Office, Transmission Lines: Issues Associated with High-Voltage DirectCurrent Transmission Lines along Transportation Rights of Way, GAO-08-347R (February 1, 2008),
available at http://www.gao.gov/new.items/d08347r.pdf.
201
Id.
198
65
more competitive local wholesale electricity markets, (4) facilitated development of new
electricity sources outside population centers, and (5) facilitated development of
renewable energy sources.202
Opponents typically raise a range of issues in opposing new transmission lines including
property devaluation, aesthetic impacts, the effects of electromagnetic fields, interference
with aerial spraying, and impacts on natural resources such as wetlands, endangered
species or parks. Because the siting of transmission lines requires legal reviews in the
form of environmental impact assessments and/or permits, these legal proceedings can
become the focal point for opponents of a transmission line.
In order to assure the timely siting of transmission lines that are needed to support large
solar energy developments, concerns of potential opponents have to be anticipated and
dealt with in a manner that reduces the likelihood of time-consuming and expensive legal
challenges that can arise late in the siting process.
There are several examples of pipeline and transmission siting processes that have been
designed to anticipate problems. In these cases, the developer has worked with citizens,
businesses, and citizen organizations to identify and resolve problems before they
become full-fledged conflicts. These success stories often involve early notice to
potentially affected stakeholders, providing information about the benefits of the project,
a process to regularly engage the stakeholders in conversations about the project,
willingness to address concerns about the project even if those changes in the project
202
Id.
66
would not be required by law or may be somewhat more expensive, flexibility to change
some design parameters or routes to meet public concerns, the ability to provide some
local benefits from the project (so that the citizens do not see themselves as sacrificing
for the benefit of a politically or financially powerful group located elsewhere), and
trying to reach consensus before a project is launched.203
E. Land Use
Land use issues are important to the deployment of solar PV for a number of reasons.
Most land use decisions are made by local governments, adding another level of
approvals that can slow or hinder deployment of solar technology.
Land use and zoning concerns occur at least at two levels. For utility-scale projects the
major barriers involve zoning restrictions that may prevent siting of facilities where there
is significant open space such as on agricultural land. For small scale solar projects, such
as residential and commerical installations, the major barriers arise from restrictive
covenants or local zoning ordinances that prohibit or significantly limit the installation or
use of solar equipment.
In the early 1980s, states began to enact laws that prohibited restrictive covenants that
ban solar equipment.204 A number of states have also prohibited local governments from
203
See, for example, http://www.westgov.org/wieb/electric/501trans/transmission%20line%20siting%20paper-wapa.PDF.
204
Ariz. Rev. Stat. Ann. § 33-439A (2007); Cal. Civ. Code § 714(a)-(b) (2007); Colo. Rev. Stat. § 38-30168(1)-(2) (2008); Fla. Stat. Ann. § 163.04(2) (2006); Haw. Rev. Stat. Ann. § 196-7(a) (2008); N.M. Stat.
Ann. § 3-18-32(B) (2009); N.C. Gen. Stat. § 22B-20(b), (d) (2007); Or. Rev. Stat. Ann. § 105.880(1)
(2003); Wis. Stat. Ann. § 236.292(2) (2009).
67
using zoning authority to restrict solar equipment.205 A few states have enacted
legislation that provides land owners with solar facilities with a ―right to sunlight‖ that
can be enforced against neighboring property owners.206
i. Utility-scale facilities
As the construction of utility-scale solar projects has increased, the question of whether
such projects can be located on agricultural land has come to the fore. Preservation of
prime agricultural land is a long-standing value in the country. This conflict between
renewable energy and agricultural land preservation is not a major issue for wind energy
since the small footprint for wind towers allows continued farming. However, the impact
of large-scale solar energy is much more dramatic since solar PV panels capable of
generating a MW of energy occupy between five and ten acres. Farm land is particularly
attractive to solar developers since it is ―disturbed land‖ that typically does not raise the
endangered species and habitat alteration issues that might occur when locating a solar
field on undisturbed land including land in desert areas.
A few countries have addressed the farmland preservation issue. The Province of Ontario
recognizes seven classes of agricultural land. In the new Green Energy and Green
Economy Act of 2009,207 the Province encourages expanded use of renewable energy
sources but bans the location of land-based solar energy facilities on the top two
categories of agricultural land and limits the development of solar energy facilities on
205
Cal. Gov't Code § 65850.5(a) (2009); Ind. Code Ann. § 36-7-2-8 (2006); N.M. Stat. Ann. § 3-18-32(A)
(2009); Wis. Stat. Ann. § 66.0401(1) (2003); Wyo. Stat. Ann. § 34-22-105(c) (2007).
206
N.M. Stat. Ann. §§ 47-3-1 to -5 (2009); Wyo. Stat. Ann. § 34-22-103.
207
Green Energy and Green Economy Act, 2009, S.O. ch.12 (Can.), available at
http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2145&detailPage=bills_detail_the_b.
68
category three agricultural land to those areas specially designated by the Ontario Power
Authority.208
Germany has acted to encourage renewable energy development is rural areas by
providing some relief from the country‘s strict limits on buildings and structures in rural
areas. Under the Federal Regional Planning Act (―Raumordnungsgesetz‖, ROG),
building in the ―undesignated outlying area‖ (rural and undeveloped areas) is tightly
controlled, although one of the exceptions is for developments ―intended for research,
development or use of wind or water-powered energy sources.‖209 Thus, with wind and
hydro proposals the onus is shifted to those opposing the development to show why it
should not go ahead, rather than the other way around for other non-preferred activities.
Solar energy developments do not have that statutory preference, so the proponent of a
solar proposal must discharge the onus of showing why such a development is justified in
a rural area.
Greece has enacted a special zoning framework that segments Greek territory into three
categories of land for the purposes of solar energy:
[H]igh-priority land, which includes barren plots of land and zones of medium or
low productivity, or spot areas that are invisible from highly visited spots, on
condition that interconnection with the network is feasible. The installation of
solar parks in such areas is subject to no restrictions;
Areas located on islands, where the use and exploitation of solar energy is
allowed mainly for small power plants - with the exception of Evia and Crete; and
Incompatible areas, including areas of special use, areas of complete
environmental protection, special protected areas such as Natura 2000, cores of
national forests, forests and high-productivity agricultural land plots and
archeological sites. According to the provisions of the special zoning framework,
208
209
See Ontario Power Authority, Feed-In Tariff, Program preview, Version 1.1, at 5 (Sept. 30, 2009).
Raumordnungsgesetz [Federal Regional Planning Act] § 35(1) at 6, 1997, available at
http://www.iuscomp.org/gla/.
69
the closest permitted distance between solar park installations and incompatible
areas needs to be defined during the environmental licensing process for such
projects.210
Special measures are required to ensure that visual obstruction is avoided, especially in
the case of the installation of photovoltaic parks in frequently visited sites.211
In the United States, zoning issues for large-scale solar energy facilities are just
beginning to emerge as more such facilities are developed. For example, in 2009 the
Michigan House of Representatives passed legislation by a vote of 105-3 that would
allow any renewable energy device on farm land that is receiving a tax break under
Michigan's Farmland Preservation Program as long as farming continues on that land.212
In the absence of new legislation, however, PV arrays are not permitted on agricultural
preserves even though the Michigan Department of Agriculture has authorized the siting
of wind turbines on farms in the Preservation Program.
New Jersey Governor-elect Chris Christie has proposed legislation that would designate
solar projects as a permitted use in agricultural areas. The plan would allow up to 20%
of Permanently Preserved Farmland to be used for solar panel installation.213
210
Sotirios Douklias, New Special Zoning Framework for Renewable Energy Source Projects (February 2,
2009), available at http://www.internationallawoffice.com/Newsletters/Detail.aspx?g=b78308f9-50254389-ab5d-52b0f35ecd6f.
211
Decision 49828, Government Gazette B 2464/03.12.2008 (2008).
212
H.B. 4887, 95th Reg. Sess. (Mich. 2009), available at
http://www.legislature.mi.gov/(S(bhkhih453xrbun55ns04be45))/mileg.aspx?page=getObject&objectName
=2009-HB-4887.
213
Energy as Industry, Chris Christie for Governor (2009), available at
http://www.christiefornj.com/images/energyasindustry.pdf.
70
In California, several large-scale solar projects have been proposed that would be located
on agricultural land. The proposed AV Solar Ranch provides a good example of the
reasons that agricultural land is preferred.
AV Solar Ranch One is proposed to consist of thousands of photovoltaic
panels - which convert sunlight into electricity - mounted on motorized
tracking units that point them at the sun as it moves across the sky….
The firm picked the spot after looking for a large parcel of land that was
flat, near power lines and in an area with plentiful sunshine… The firm
also wanted land that was previously disturbed, rather than virgin desert,
so there would be no endangered plants or animals living on it.
The property has been farmed since the 1940s and was last farmed in
2004…. During the Antelope Valley's late 1980s housing boom, the
acreage was proposed to be part of a 35,000-home master-plan community
called California Springs, but the plan stalled when the housing boom
collapsed in the early 1990s.
…
The project is allowed under the area's "heavy agriculture" zoning, but it
also requires a conditional use permit from the county's Regional Planning
Commission….214
The development of solar PV systems on agricultural land in California may be limited
by the California Land Conservation Act of 1965 (Williamson Act).215 The Act
authorizes cities and counties to establish agricultural preserves within which landowners
may elect to enter into contracts with minimum 10-year rolling terms that restrict land use
to agricultural and agricultural ―compatible‖ uses in exchange for preferential property
214
Charles F. Bostwick, Solar Plant Proposed for Farmland Site, Antelope Valley Press, May 11, 2009
(The A-2 Heavy Agriculture zone permits animal hospitals, dairies, dog kennels, livestock feed lots,
manure spreading, oil wells. See Los Angeles County Code, Title 22, Ch. 22.24; LA County Zoning
Ordinance Summary – Agricultural Zones, available at
http://planning.lacounty.gov/luz/summary/category/agricultural_zones/).
215
The Williamson Act -The California Land Conservation Act of 1965, Cal. Gov‘t Code § 51200-51297.4
(West 2009).
71
tax treatment.216 Approximately 17 percent of California‘s total acreage (or
approximately, 15,566,000 acres) is restricted by Williamson Act Contracts.217
ii. Smaller facilities
Zoning ordinances and restrictive covenants for subdivisions can limit the deployment of
small-scale solar PV systems. Restrictive covenants are legal obligations placed on
property and are typically contained in a deed that requires the property owner to do or
refrain from doing certain acts. In many cases, developers have viewed solar panels as
―eyesores‖ and included covenants in their deeds that prohibit solar panels.
States have increasingly enacted laws that limit the ability of local governments to ―zone
out‖ wind and solar energy facilities for any reason including aesthetic concerns.218 At
least 12 states219 have banned restrictive covenants that limit wind or solar energy
facilities.220 Questions have been raised about whether such bans may constitute a taking
and require compensation, although such challenges may face an uphill battle since the
public benefit of broader use of solar energy may be substantial in comparison to the
harm that an individual homeowner might suffer.221 Some states have gone further,
providing affirmative legal solar access rights, overturning the long-standing ―American
216
Cal. Gov‘t Code § 51238.1 (West 2009).
Making Room For Renewable Energy in California, Portfolio Media, Inc. (2008), available at
http://www.winston.com/siteFiles/Publications/4-30-09 - Energy Law360.pdf.
218
Cal. Gov't Code § 65850.5(a) (2009); Ind. Code Ann. § 36-7-2-8 (2006); N.M. Stat. Ann. § 3-18-32(A)
(2009); Wis. Stat. Ann. § 66.0401(1) (2003); Wyo. Stat. Ann. § 34-22-105(c) (2007).
219
See Ariz. Rev. Stat. Ann. § 33-439A (2007); Cal. Civ. Code § 714(a)-(b) (2007); Colo. Rev. Stat. § 3830-168(1)-(2) (2008); Fla. Stat. Ann. § 163.04(2) (2006); Haw. Rev. Stat. Ann. § 196-7(a) (2008); N.M.
Stat. Ann. § 3-18-32(B) (West 2009); N.C. Gen. Stat. § 22B-20(b), (d) (2007); Or. Rev. Stat. Ann. §
105.880(1) (2003); Wis. Stat. Ann. § 236.292(2) (2009).
220
See Sara C. Brown, Solar Rights, 89 B.U. L. Rev. 1217, 1232 (2009).
221
Id. at 1234 n. 66. Questions have also been raised about whether a retroactive ban on restrictive
covenants might violate the Constitution‘s contract clause.
217
72
Rule‖ that neighboring landowners are free to manage their property as they choose even
if it interferes with access to solar resources.222
Wisconsin provides a good example of a state law that limits local zoning authority
related to renewable energy. Section 66.0401(1) provides that no county, city, town, or
village may place any restriction, either directly or in effect, on the installation or use of a
solar energy system or a wind energy system unless the restriction satisfies one of the
following conditions:
(a) Serves to preserve or protect the public health or safety
(b) Does not significantly increase the cost of the system or significantly decrease its
efficiency
(c) Allows for an alternative system of comparable cost and efficiency.223
Similarly, California law provides
(a) The implementation of consistent statewide standards to achieve the
timely and cost-effective installation of solar energy systems is not a
municipal affair, as that term is used in Section 5 of Article XI of the
California Constitution, but is instead a matter of statewide concern. It is
the intent of the Legislature that local agencies not adopt ordinances that
create unreasonable barriers to the installation of solar energy systems,
including, but not limited to, design review for aesthetic purposes, and not
unreasonably restrict the ability of homeowners and agricultural and
business concerns to install solar energy systems. It is the policy of the
state to promote and encourage the use of solar energy systems and to
limit obstacles to their use. It is the intent of the Legislature that local
agencies comply not only with the language of this section, but also the
legislative intent to encourage the installation of solar energy systems by
removing obstacles to, and minimizing costs of, permitting for such
systems.
222
223
Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc., 114 So.2d 357 (Fla. Dist. Ct. App. 1959).
Wis. Stat. Ann. § 66.0401(1) (2009).
73
(b) A city or county shall administratively approve applications to install
solar energy systems through the issuance of a building permit or similar
nondiscretionary permit. Review of the application to install a solar energy
system shall be limited to the building official‘s review of whether it
meets all health and safety requirements of local, state, and federal law.
The requirements of local law shall be limited to those standards and
regulations necessary to ensure that the solar energy system will not have
a specific, adverse impact upon the public health or safety. However, if the
building official of the city or county has a good faith belief that the solar
energy system could have a specific, adverse impact upon the public
health and safety, the city or county may require the applicant to apply for
a use permit.224
California law invalidates restrictive covenants that limit the use of solar systems.
California Civil Code section 714 provides
(a) Any covenant, restriction, or condition contained in any deed, contract,
security instrument, or other instrument affecting the transfer or sale of, or
any interest in, real property that effectively prohibits or restricts the
installation or use of a solar energy system is void and unenforceable.
(b) This section does not apply to provisions that impose reasonable
restrictions on solar energy systems. However, it is the policy of the state
to promote and encourage the use of solar energy systems and to remove
obstacles thereto. Accordingly, reasonable restrictions on a solar energy
system are those restrictions that do not significantly increase the cost of
the system or significantly decrease its efficiency or specified
performance, or that allow for an alternative system of comparable cost,
efficiency, and energy conservation benefits.
(c) A city or county may not deny an application for a use permit to install
a solar energy system unless it makes written findings based upon
substantial evidence in the record that the proposed installation would
have a specific, adverse impact upon the public health or safety, and there
is no feasible method to satisfactorily mitigate or avoid the specific,
adverse impact. The findings shall include the basis for the rejection of
potential feasible alternatives of preventing the adverse impact.225
224
225
Cal. Gov't Code § 65850.5 (West 2009).
Cal. Civ. Code § 714 (West 2009).
74
iii. Solar Access Laws
Some states like New Mexico have adopted laws that give landowners who install solar
energy systems affirmative legal rights to continued access to solar energy. The New
Mexico law declares that ―the right to use the natural resource of solar energy is a
property right, the exercise of which is to be encouraged and regulated by the laws of this
state. Such property right shall be known as a solar right.‖226 The law allows a landowner
to officially record, after notice to other potentially affected landowners, an interest in
access to solar energy that precludes neighboring landowners from interfering with
access to sunlight.227
Several other states have enacted statutes that limit local zoning authority, abolish
restrictive covenants or provide special access rights for solar energy. References to
these statutes can be found in the state legislative summary contained in Appendix B.
F. Government Procurement
The federal government is the nation‘s largest energy user, spending $28.5 billion on
electricity and fuels in 2008.228 While previous Executive Orders have encouraged
increased use of renewable energy by federal agencies, President Obama‘s October 5,
2009, Executive Order provides a major opportunity to expand the role of solar PV in
226
N.M. Stat. § 47-3-4 (West 2009).
N.M. Stat. § 47-3-9 (West 2009).
228
See.http://cleantechnica.com/2010/01/31/largest-energy-consumer-in-the-nation-us-government-to-cutghg-emissions-by-28-by-2020-obama-orders/
227
75
supplying energy for federal facilities.229 While the order does not provide any specific
targets or carve-outs for solar PV, it does provide a clear opportunity for solar energy
providers to make the case that solar facilities should be preferred over traditional energy
sources not only because of their greenhouse gas reduction benefits, but also because of
the economic and social benefits of a domestic solar industry, as well as the contributions
the systems make to energy security.230 Specifically, the executive order notes ―In order
to create a clean energy economy that will increase our Nation‘s prosperity, promote
energy security, protect the interest of taxpayers, and safeguard the health of our
environment, the Federal government must lead by example.‖231 (Emphasis added).
Several provisions of the EO favor renewable energy generation including policies to:
a. Leverage agency acquisitions to foster markets for sustainable technologies
b. Prioritize actions based on full accounting of both economic and social
benefits and costs
c. Increase the agency use of renewable energy and implement renewable energy
generating projects on agency property
d. Reduce both direct and indirect greenhouse gas emissions associated with
Federal facilities. The Order focuses on direct greenhouse gas emissions from
sources owned or controlled by the Federal government (scope 1 emissions)
as well as indirect emissions resulting from the generation of electricity, heat
or steam purchased by the Federal government (scope 2 emissions). In
addition, the EO extends the obligation on agencies to consider reductions
229
Exec. Order No. 13514, 74 Fed. Reg. 52117 (October 8, 2009), available at
http://www.whitehouse.gov/assets/documents/2009fedleader_eo_rel.pdf.
230
Id.
231
Id.
76
from sources ―related to‖ agency activities such as vendor supply chains
(scope 3 emissions) within 240 days after the order goes into effect.
e. Pursue opportunities with vendors and contractors to address and incorporate
incentives to reduce greenhouse gas emissions including the possibility of
assisting in efforts to reduce scope 3 emissions
f. Beginning in 2020 and thereafter, ensure that all new Federal buildings that
enter the planning process are designed to achieve zero-net-energy use by
2030.232
The EO is sweeping in its scope and could lead to major inroads by solar PV in supplying
energy to the federal government.
Germany‘s procurement policies also favor renewable energy sources. The Integrated
Energy and Climate Programme provides for public procurement of energy-efficient
products and services in ―Action Plan # 24.‖233 Essentially this requires the most energy
efficient option to be taken in all federal tendering and contracting procedures. It is also
intended to further Article 5 of Directive 2006/32/EC on ―Energy End-Use Efficiency
and Energy Services.‖234 In the solar energy context, this Act will be particularly relevant
where there are federal projects involving electrical energy production, water heating and
heating where solar options are available and the most efficient taking into account ―life
of product‖ considerations.
232
Id.
Integrated Energy & Climate Programme, BMU (August 23, 2007), available at
http://www.bmu.de/files/pdfs/allgemein/application/pdf/hintergrund_meseberg_en.pdf.
234
Id. at 80-81.
233
77
IV.
Findings
A. The experience in Germany and in several other countries demonstrates that a
feed-in tariff with a solar set-aside will result in the addition of more solar
generation capacity if the rates are based on the cost of production and a
reasonable return on investment.
B. The division of authority in setting electric rates in the United States with the
Federal government having authority to set retail rates and the state governments
having authority to set retail rates significantly complicates the adoption of feedin tariffs in the United States.
C. While states have some limited paths to adopt feed-in tariffs under existing
Federal law, widespread use of this approach to encourage renewable energy
generation likely relies on clarification of FERC precedents and new
administrative decisions or rulemakings by FERC or on the passage of new
Federal legislation.
D. The design of feed-in tariffs is important. Designs that encourage smaller scale
(1MW to 20MW) commercial facilities may allow the facilities to be located in
areas where they can connect to the existing grid and therefore not be slowed by
the need to site new transmission lines.
E. The German and especially the Spanish feed-in tariffs have encouraged the
construction of large solar facilities by not placing size limits on individual
facilities.
F. Tariffs that set different rates for types of renewable technology are needed to
assure investment in solar PV.
78
G. Feed-in tariffs must be carefully constructed to assure a proper balance between
promoting emerging technology and increasing user costs to unacceptable levels.
H. States and local governments in the United States are beginning to enact feed-in
tariffs despite uncertainty about their authority to do so.
I. State feed-in tariffs could encourage significant growth in solar generation
capacity but state-by-state tariffs are likely to result in higher overall consumer
costs since at least some of the capacity will be in states with restricted sunlight
and therefore less efficient production.
J. A national feed-in tariff would allow increased concentration of solar generating
capacity in higher efficiency locations (assuming sufficient transmission capacity
can be built) but this type of legislation may not be supported by states since it
could be considered as a nationalization of a traditional state function—setting
retail energy rates.
K. The basic concept underlying targeted solar feed-in tariffs is to ―prime the pump‖
for wider adoption of solar facilities. Additional research could help build a better
understanding of whether this concept is working as expected.
L. Renewable Portfolio Standards tend to support lower cost forms of renewables
unless the portfolio standard is technology specific or unless the renewable
standard is high enough that it cannot easily be met without including solar PV in
the mix of renewables. RPSs that exceed 30 percent are seen by some in the solar
industry as being high enough to promote wider use of solar PV.
M. The design of RPSs is important. Some RPSs only require contracts to be signed
rather than the source to be in operation and demonstrate its performance before
79
obtaining credit for the project. This can result in speculation and unrealistically
low prices in RPS bids that later fail because they are not economical.
N. RPSs have now been in place for a few years but it is not yet clear whether the
standards will be effectively enforced. If the standards are not enforced they will
not drive increased deployment of renewable energy facilities.
O. Several states have considered the issue of whether third-party power providers
should be treated as public utilities. Because of the regulatory costs associated
with public utility status, third-party providers may find that it is uneconomical to
operate if they are subject to regulation as public utilities. State decisions to date
have found third-party providers are not public utilities under applicable state law.
However, the issue continues to surface.
P. Transmission will be a significant limiting factor for utility-scale solar PV over
the next few years. Distributed siting of smaller utility scale PV facilities may
allow interconnection without the need for new transmission capacity.
Q. Siting of new transmission capacity can be expedited by:
a. using early and inclusive stakeholder engagement processes,
b. ensuring that there are local benefits associated with the construction of new
transmission lines,
c. conducting early review of potential corridors for impacts on endangered and
threatened species and development of strategic mitigation plans that could be
used to address potential impacts on endangered and threatened species along
transmission corridors,
80
d. collaborating with public land managers to help identify the most acceptable
corridors across public lands,
e. encouraging the use of environmental review procedures such as
programmatic environmental impact statements and categorical exclusions for
low impact facilities that can streamline the EIS process in cases where the
environmental impact likely is not significant.235
R. Because utility-scale PV facilities will need a significant amount of land,
clarifying zoning restrictions related to the use of solar PV is important. The Ontario
agriculture restrictions on the siting of solar PV on the most productive agricultural
land might be a good model. However, many locations in the United States do not
have detailed agricultural zoning. A model zoning ordinance that addresses solar PV
use on agricultural land, in commercial and industrial zoned areas, and on
brownfields sites could encourage local governments to adopt new laws that would
create more certainty for facility operators.
S. Small scale solar PV may be restricted in many states by local zoning
requirements and by restrictive covenants. Model state legislation that precludes
local governments from overly restricting household and small commercial PV and
voids restrictive covenants that prohibit household scale PV units could facilitate
deployment of small scale solar PV.
T. Government actions under the new Sustainability Executive Order may help
stimulate the use of solar PV. Implementation of the Executive Order might create
235
Irma Russell, Streamlining NEPA to Combat Global Climate Change: Heresy or Necessity?, 39 Envtl.
L. No. 4, available at http://www.elawreview.org/elaw/394/streamlining_nepa_to_combat_gl.html.
81
new incentives for government agencies to use solar PV as a way of meet their energy
and climate targets.
82
Appendices
Appendix A
September 2009 – DRAFT REPORT*
5 Country Report: Legal and Policy Framework for
Solar Energy in Germany, Spain, Japan, China and Australia
David P Grinlinton
*Additions to be provided by May 2010 to reflect recent developments
Introduction
This chapter will examine the legal and policy framework associated with solar energy in
five leading countries where solar energy development and uptake has shown a strong
growth in recent years. There are, of course, difficulties with identifying five clear
―leaders‖ due to the different forms of solar energy being developed, the different legal,
constitutional, social and economic conditions that prevail in the various leading
jurisdictions, and the applicability of many of the legal and policy measures to the
political, social and economic conditions of the United States.
The approach taken was, first, to identify the top-ranking countries in terms of solar
photovoltaic (PV) installation with a secondary consideration of solar water and spaceheating rankings. These jurisdictions were then prioritized in terms of sustained and
increasing investment and uptake in recent years, and legal and policy innovation through
the application of the various incentive measures that have been applied. Matters of
political, geographic, demographic and legal similarities to the US were considered..
Finally, their economic, political and strategic importance to the US, and possibilities for
future cooperation and technology transfer were considered.
© The author retains copyright. No part of this publication may be copied, reproduced, stored or
transmitted in any form without the written permission of the author.
Associate Professor of Law, The University of Auckland, New Zealand. Currently Visiting Scholar,
The George Washington University Law School, Washington DC, USA. Email:
d.grinlinton@auckland.ac.nz
1
Germany is clearly the world leader in grid-connected solar PV uptake, research and
development. Although it fell to second place behind Spain in terms of new installations
in 2008, it had a total of 5.4 GW of solar PV (over half the world‘s current capacity) at
the end of 2008.236 It also ranks number three in the world in solar hot water and heating.
Although a civil law jurisdiction, Germany has a stable democratic federal political
structure not dissimilar to the US. A large measure of its success in solar PV development
has been the ―feed-in tariff‖ law first introduced in 1990 to promote renewable energy
generally, but providing enhanced fiscal encouragement for solar PV development from
2004.
Spain was the top installer of solar PV capacity in 2008 adding 2.6 GW of solar PV
capacity to put it into second position globally.237 This represented a five-fold increase
over 2007, which in turn had a five-fold increase over 2006. Spain is also the world
leader in concentrated solar (thermal) power (CSP) technology, and the dramatic
increases in both solar PV and CSP successes are due primarily to its feed-in tariff
legislation modeled on Germany, but with some significant differences. Spain has
demonstrated a rapidly increasing uptake of solar thermal water and space heating,
having introduced a building code that requires between 30% and 70% of solar water
heating to be installed in new and renovated buildings. While it has a different
constitutional structure than the US, and is a civil law legal system, Spain has many
geographical and climatic similarities to parts of the central and south-western US
conducive to large-scale solar energy development.
Japan was ranked number three in both total solar PV installed capacity (about 15%), and
in annual installation levels in 2008.238 This has been achieved mainly through smallerscale grid-connected roof-top installations in urban and built-up areas, supported by
central and local government with targeted subsidies, fiscal policies and other forms of
public investment. There is no feed-in tariff system, but there are renewable portfolio
standards (RPSs) which have driven much of the development. Japan is also number four
in the world for solar hot water with around 4% of global installed capacity.239 It is a
world leader in manufacturing and research and development for solar PV technology.
While Japan has a civil law legal system and a constitutional monarchy, it has a written
constitution and economic business models based largely on US precedents following
WWII.
China is included for its aggressive recent policies to increase solar PV uptake and its
position as the number one nation for solar hot water installed capacity by a factor of
550% over the next grouping.240 It has recently announced massive investment in
research and development in solar energy and a new solar subsidy program. In 2008 it
236
237
238
239
240
Renewable Energy Policy Network for the 21st century (―Ren 21‖), Renewables Global Status Report 2009 Update, at pp 8-9, 24 (Tables R3 and R4), available at
http://www.ren21.net/globalstatusreport/g2009.asp, viewed 17 September 2009.
Ibid at pp 8-9, 11 and 24 (Tables R3 and R4).
Ibid at pp 8-9 and 24, (Tables R3 and R4).
Ibid at p 25 (Table R5).
Ibid at pp 13 and 25 (Table R5).
2
overtook Japan as the top producer of PV cell technology.241 China has vast areas in the
central and western parts of the country conducive to solar energy development, and there
are many geographic similarities to parts of the US. As a communist nation there are
many political and cultural differences to the US. China is, however, strategically
important as a world power of rapidly growing economic and military strength. Energy
demand is being fueled largely by coal-fired generation with China now contributing
more to global GHG emissions than the US. It has made clear regulatory and policy
statements of its intention to meet the dual challenges of increasing energy demand and
GHG emissions through increased use of renewable energy.
Finally, Australia was selected as a country with a very similar constitutional, political
economic and cultural matrix to the US. It also has many similarities in terms of
geography and climate. Australia has very ambitious GHG emissions targets and RPSs
for renewable energy production. It has recently introduced a ―cap and trade‖ emissions
trading scheme, and is contemplating a national (federal level) feed-in tariff scheme.
Some States and the Australian Capital Territory have already introduced, or are about to
introduce, state-level feed-in tariff schemes for solar PV installation. While Australia
does not feature in the top five solar PV or solar heating nations, it has shown a rapid
increase in both forms of technology, and the Australian government has recently
announced a major A$4.5 billion funding program for clean energy, including A$1.5
billion for solar PV research and development, [including the building of the world‘s
largest (at 1 GW) solar PV station.242
Other countries that were considered for closer examination due to recent growth in solar
energy policies, and uptake, include Israel, the Netherlands, Italy, Brazil, South Korea,
South Africa, Portugal and India.
241
242
Ibid at pp 8, 9, 13 and 25 (Table R5).
Commonwealth of Australia, Attorney-General‘s Department, Budget Overview, at pp 14-15, Budget
2009-10, available at http://www.budget.gov.au/2009-10/, viewed 17 September 2009.
3
I.
Germany
A.
Introduction
Germany has a land area (excluding water) of 348,672 km2 , and has the second largest
population in Europe, estimated at 82,329,758 as of July 2009. Politically stable and
economically prosperous, it is a federal republic comprised of sixteen states (Länder).243
In 2007, Germany consumed 309 million tonnes oil equivalent (mtoe) of primary energy,
or about 3.8 tonnes per person. Of that figure, 112.5 mt was oil, 74.5 mtoe was gas, and
86 mtoe was coal.244 This represented a 5.6% decline over the 2006 primary energy
consumption, reflecting Germany‘s aggressive climate change and renewable energy
policies. Expressed in Petajoules, Germany‘s total final energy consumption (FEC) in
2008 was 8,828 PJ. Germany has one of the highest levels of renewable energy in the
OECD with 9.7% overall, comprising 14.8% for electricity generation, 7.7% for heat
supply, and 6.1% for fuel consumption. As a percentage of total primary energy
consumption (PEC), the figure is 7.1% (physical energy content), or 9.7% (substitution
method).245
By far the majority of Germany‘s renewable energy development has been in biomass
comprising 6.8% of the total FEC, followed by wind at 1.6%, hydropower at .9%, and
solar (both PV and thermal) at 0.35%. The contribution of solar PV to gross electricity
consumption was .6% in 2008, or 4.4% of the total renewable energy contribution to
electricity consumption.246 While this is small compared to wind (44.3%), hydro (22.9%)
and biomass (29%), the growth rate of solar PV has been dramatic, from 64 GWh in 2000
to 4,000 GWh in 2008. The PV capacity has been increasing at an average annual rate of
growth of 50% since 2004 following the enactment of the Renewable Energy Sources
Act 2000 (EEG 2000), now replaced with the Renewable Energy Sources Act 2009 (EEG
2009) (see B. 2. (a), below). Germany is the world leader in PV with over 50% of the
world‘s installed grid-connected capacity.247 It is also a leader in solar thermal heating,
research and development, and production of solar energy technology.248
B.
243
244
245
246
247
248
Energy law and policy in Germany
Figures from the CIA World Factbook, available at https://www.cia.gov/library/publications/the-worldfactbook/geos/gm.html, viewed 17 September 2009.
BP Statistical Review of World Energy, June 2009, at pp 40-41, available at http://www.bp.com,
viewed 17 September 2009.
Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (Bundesministerium für
Umwelt, Naturschutz und Reaktorsicherheit, or ―BMU‖), Development of Renewable Energies in
Germany in 2008, April 2009, at pp 3-4 and 18-19, available at http://www.erneuerbareenergien.de/inhalt/43988/3860/, viewed 21 May 2009.
Ibid at p 8.
Ren 21, Renewables Global Status Report - 2009 Update, at p 24 (Table R3), available at
http://www.ren21.net/globalstatusreport/g2009.asp, viewed 17 September 2009.
BMU, Renewable Energy Sources in Figures, June 2008, at p 11, available at http://www.erneuerbareenergien.de/inhalt/5996/42720/, viewed 21 May 2009.
4
1.
International and regional influences
Germany is a signatory to the 1992 Framework Convention on Climate Change
(―FCCC‖). Along with the fifteen then-members of the EU, Germany ratified the Kyoto
Protocol on 31 May 2002. Under the Protocol the EU undertakes to collectively reduce
GHG emissions to 8% below those of 1990.249 Germany very early undertook to reduce
its emissions to 21% below 1990 levels, a target that has now almost been met with
current reductions of 19%.250 Recently the EU made a firm commitment to reduce
emissions to 20% below 1990 levels by 2020, and 30% if other countries set similar
goals.251 Germany has followed with a new ‗Integrated Energy and Climate Programme‘
with a number of ambitious objectives. The program includes an offer to cut emissions by
2020 to a level 40% below that of 1990 on condition that the European Union will reduce
its emissions by 30%, and other countries will adopt similar targets.252
Within the EU, Germany is also bound by measures such as the Directive on the
Promotion of the Use of Energy from Renewable Sources which sets targets for Member
States so that the EU will achieve a 20% share of renewable energy by 2020 and a 10%
share specifically in the transport sector.253 The target for Germany is set at 18%
renewable energy by 2020.254 It also requires Member States to introduce domestic
regulation by 2015 for the inclusion of minimum levels of renewable energy in new and
renovated buildings.255
In terms of renewable energy, the government has also undertaken to increase the share
of renewables used in electricity production to 25-30%, and in heating, to 14% by
249
250
251
252
253
254
255
UNFCC, Kyoto Protocol Reference Manual, November 2008, Para 2.1 & Table II-1, available at
http://www.unfccc.int/resource/docs/publications/08_unfccc_kp_ref_manual.pdf, viewed 17 September
2009.
See Die Bundesregierung, Germany’s contribution to international energy and climate policy, at:
http://www.bundesregierung.de/Content/EN/StatischeSeiten/Schwerpunkte/Energie-derZukunft/deutschlands-beitrag-zur-internationalen-energie-und-klimapolitik.html, viewed 21 May 2009.
Ibid, and see European Council Act 7224/1/07, 2007, Arts 30-31 (30% objective), and Art 32 (20% firm
commitment). The Council also expressed the view that developed countries should aim to reduce
GHGs by 60-80% below 1990 levels by 2050: Art 30.
BMU, Report on implementation of the key elements of an integrated energy and climate programme
adopted in the closed meeting of the Cabinet on 23/24 August 2007 in Meseberg, 5 December 2007, p2,
at: http://www.bmu.de/files/pdfs/allgemein/application/pdf/gesamtbericht_iekp_en.pdf, viewed 17
September 2009.
DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILof 23 April
2009 on the promotion of the use of energy from renewable sources (13).
The final text of the Directive is available with background papers available at
http://ec.europa.eu/energy/renewables/index_en.htm, viewed 17 September 2009. Annex I contains the
individual targets for EU member states. Member states‘ targets are also available at
http://ec.europa.eu/energy/renewables/targets_en.htm, viewed 17 September 2009.
DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILof 23 April
2009 on the promotion of the use of energy from renewable sources (13). This measure replaced
Directive 2001/77/EC, which had specified a national target for Germany for 12.5% consumption of
renewable electricity by 2010.
5
2020.256 Biofuels are to increase to a 20% (by volume) share by 2020.257 Within these
ambitious policy and regulatory measures, renewable energy plays a very important part,
and solar energy is anticipated to be one of the fastest growing of these energy sources,
both for electricity generation and for heating.
2.
National law and regulation as it affects solar energy
(a)
Renewable Energy Sources Act 2009 (Erneuerbare-Energien-Gesetz or “EEG
2009”)
There are a number of measures that have been put in place in Germany which encourage
solar energy development, but the most significant has been the Renewable Energy
Sources Act 2009 and its predecessors which can be traced back to the Electricity Feed
Act (Stromeinspeisungsgesetz) introduced on 7 December 1990.258 This measure
obligated grid operators to provide free grid access to all electricity generators, and to
ensure that renewable energy operators would receive adequate profits through feed-in
tariffs. Electric utilities were required to buy the power at between 65 and 90% of the
average tariff for final customers, and the measure complemented existing subsidies for
wind and PV solar energy installation.259 While wind energy benefited greatly from this
initiative, solar did not due to the high costs of the technology. This measure was
replaced by the EEG 2000 from 1 April 2000.
This measure continued the feed-in tariff approach of its predecessor, but added
compensation rates for geothermal energy. Solar PV was part of the feed-in scheme under
the Hundred Thousand Roofs Programme (see 2. (d) 3. below), and on the expiration of
that scheme was brought under the EEG 2000 in July 2004.260 The measure provided
compensation rates for electricity produced by solar PV. The tariffs paid range from
45.7c (Eurocents) for large capacity open-space solar power plants to 57.4c for plants
installed on a building and with a capacity of less than 30 kWp. For plants installed on
buildings there was a 5c ―building surface bonus‖ where the solar arrays were integrated
into the building facade. To encourage innovation and cost saving, the compensation
levels for newly commissioned installations were reduced by 5% per year from 2005, and
from 1 January 2006 this degression rate was increased to 6.5% for open-space
installations. The tariff that applied to the installation on start-up was guaranteed for 20
256
BMU, The Integrated Energy and Climate Programme of the German Government, December 2007, at
p 4, available at http://www.bmu.de/english/climate/downloads/doc/40589.php, viewed 17 September
2009.
257
Ibid.
258
English translation of the EEG 2000 and commentary on the 2004 Amendment is in Ottinger, Richard
L., ed. ; Robinson, Nicholas A., ed. ; Tafur, Victor, ed., Compendium of sustainable energy laws,
IUCN, Academy of Environmental Law ; IUCN, Environmental Law Centre, 2005, pp 420-440.
259
See Lauber, V. & Mez, L., ―Renewable Electricity Policy in Germany, 1974-2005‖, Bulletin of Science
Technology Society, Vol 26, 2006, p 105, at 106-108.
260
Bradford, T., Solar Revolution: The Economic Transformation of the Global Energy Industry,
(Cambridge, MA, The MIT Press, 2006), p 180.
6
years plus the year of opening. The objective of the system is to ensure a modest longterm return of profitability in the order of 5-7% net for solar energy producers.261
The EEG 2000 was replaced by the EEG 2009 which came into force on 1 January 2009.
The new Act maintains and refines the feed-in tariff provisions, and in relation to solar
photovoltaic energy simplifies the tariff scheme, while providing higher degression rates.
The feed-in system allows two-way traffic of electricity so that small-scale producers are
able to feed electricity to the grid when they have a surplus, and to receive electricity
from the grid when they are in deficit, although there are limitations on this for large
solar energy producers where intermittency of supply might destabilize the grid. Grid
operators must allow, as a priority, connection to the grid of new installations generating
electricity from renewable sources. The installation operator meets the cost of this where
the connection point offered by the grid operator is the closest and most convenient to the
point of generation. If the grid operator assigns a less optimum connection point, the grid
operator pays the cost of connection.
Grid operators are obliged to receive any renewable electricity offered, in preference to
non-renewable energy. Unless it is economically unreasonable, grid operators are also
obliged to ―optimize, boost and expand‖ their grid systems if it is necessary to guarantee
the purchase, transmission and distribution of the electricity generated by renewable
energy technology. Grid operators then sell the electricity to transmission system
operators for the same price. Transmission system operators sell to utilities who deliver to
the consumers. Complex provisions provide for some measure of nationwide equalisation
of costs for different transmission operators, and for electricity intensive enterprises, to
ensure they are not disadvantaged by the scheme relative to their competitors.
The EEG 2009 provides for solar energy tariffs of 31.94c per kWh for free-standing solar
energy installations, although tariffs for these installations are to be phased out from 1
January 2015. For installations mounted on buildings, the tariffs range from 33.0c per
kWh for installations with output over 1MW; 39.58c per kWh for output between
100KW and 1MW; 40.91c per kWh for output between 30-100KW; and 43.01c per kWh
for the first 30KW of output. Degression rates for non-building mounted solar
installations are set at 10% in 2010, and 9% per annum from 2011 until the tariff is
terminated for such facilities in 2015. For building mounted installations with a
maximum capacity of 100 KW, the degression rate is 8% for 2010, and 9% per annum
from 2011; and for installations over 100KW, it is 10% for 2010, and 9% per annum
from 2011 (Section 20(8), EEG 2009). For example, a solar energy installation coming
on stream in 2012 and operating at a capacity of 50KW will attract a feed-in tariff of
261
See BMU, EEG– The Renewable Energy Sources Act, July 2007, at pp 4-8, at
http://www.bmu.de/english/publication/publ/40067.php, viewed 21 May 2009; Lauber, V. & Mez, L.,
―Renewable Electricity Policy in Germany, 1974-2005‖, Bulletin of Science Technology Society, Vol
26, 2006, p 105, at pp 110-113; Campoccia, A., Dusonchet, L., Telaretti, E., and Zizzo, G.,
―Comparative analysis of different supporting measures for the production of electrical energy by solar
PV and Wind systems: Four representative European cases‖, Solar Energy, Volume 83, Issue 3, March
2009, p 287 at 290.
7
31.17c (calculated as 40.91less 8% (2010 degression) = 37.64c, less 9% (2011
degression) = 34.25c, less 9% (2012 degression) = 31.17c). The degression is intended to
both reflect the increasing innovation and reduced production costs of solar energy
technology, and provide a positive incentive for aggressively improving such innovations
and production processes. Further encouragement is provided through a bonus of 1%
when aggregated capacity of installations registered with the Federal Network Agency
within the previous 12 months exceed 1,500 MW (in the year to 30 September 2009);
1,700MW (2010); and 1,900 MW (2011). A 1% penalty is incurred where new
installations fall below 1,000MW (in 2009); 1,100MW (in 2010); and 1,200MW (in
2011) (Section 20(2a), EEG 2009).
A further innovation is the provision for the establishment of a ―Clearing House‖ within
the federal Ministry for the Environment, Nature Conservation and Nuclear Safety, to
settle disputes and issue that may arise between installation operators, grid system
operators, transmission system operators and utility companies (Section 57, EEG 2009).
Under s 61, EEG 2009, the federal network Agency is also directed to assist the Ministry
with monitoring and evaluating the operation of the Act, and particularly the actions of
the industry players under the Energy Industry Act 2005 (Energiewirtschaftsgesetz EnWG").
(b)
Renewable Energies Heat Act 2008 (Erneuerbare-Energien-Warmegesetz or
“EEWG”):
This measure deals with improving the efficiency of heating of buildings. It sets a target
14% for the use of renewable energies in the heating sector by 2020 (Art 1(2)). The Act
contains three main elements to achieve this goal:262
1.
An obligation to use renewable energies in new buildings:
New buildings with an effective area of 50m2, with some narrow exceptions such as farm
buildings and temporary structures, must have a proportion of their heating requirements
met by renewable energy (Articles 3 & 4, EEWG). Older buildings may be subject to
similar obligations if required by a Länder The owner can choose which technology is
used, and different quantum requirements apply to different technologies. In the case of a
non-residential building, if solar energy is chosen it must meet 15% of the thermal energy
demand; if gaseous biomass, 30%; if liquid and solid biomass, 50%; and if geothermal
energy or ambient heat, 50% (Art 5).
Residential buildings are subject to lower requirements if using solar collectors. For
buildings with up to 2 dwellings a collector area of 4% of the floor area is required, and
for buildings with more than two dwellings, 3% of the floor area, although a Länder can
set down higher minimum areas (Annex, at I).
The measures chosen can be used in combination, but each element must comply
262
BMU, The Renewable Energies Heat Act in Brief, 2009, available at
http://www.bmu.de/english/renewable_energy/downloads/doc/42193.php, viewed 22 September 2009.
8
proportionally with the quantum requirements. So a combination of half solar and half
geothermal would require 7.5% of thermal energy demand to be met by solar, and 25%
by geothermal (Art 8). Exemptions are allowed in cases where compliance would result
in contravention of other legal obligations, where it is technically impossible, and where
compliance would lead to unreasonable hardship. Alternative efficiency measures, such
as the use of waste heat or improved energy saving measures, are provided for in the Act
(Art 7, Annex at IV-VI).
2.
Financial support:
The Act provides for direct financial support of up to €500 million per year from 20092012. This support is to be administered through an existing market incentive programme
which to 2008 had provided €827 million for improving the energy efficiency of
buildings. Examples of subsidies paid for solar thermal hot water installations in 2008
include €60 per square metre of collector surface, and if it is a combined water and
heating system, €105 per square metre. Higher bonuses are paid where old water heating
systems are replaced by solar thermal systems (€750), and bonuses can be combined,
such as installing a new water heating system along with, say, 10m2 of collectors for
heating support (€750 + €1050 = €1800).
3.
Heat grids
The Act facilitates the establishment and extension by local authorities of local ‗heat
grids‖, or the interconnection of heating systems at a public local or district level for the
purposes of climate protection and resource conservation (Art 16).
(c)
Other national law and policy initiatives
The German Cabinet, in a meeting in August 2007, adopted a number of measures
comprising 29 key elements and a legislative program of 14 Acts and ordinances. This
was followed by a further package of measures in mid-2008.
The program represents the most comprehensive statement of German policy and
legislative intent in the area of energy efficiency and climate change to date.263 In brief, it
doubles Germany‘s climate protection efforts from an already creditable 18% reduction
of GHG emissions from 1990 levels, to an intended 36% by 2020. It is an integrated
program involving both fixed targets for GHG reductions through reduced use of fossil
fuels, and increased use of renewable energy, particularly in the transport, heating, hot
water and electricity sectors. Greater energy efficiency in the design and performance of
buildings, plant and machinery, and the use of innovative technology, both on the energy
263
For a full report of the program, see BMU, Report on implementation of the key elements of an
integrated energy and climate programme adopted in the closed meeting of the Cabinet on 23/24
August 2007 in Meseberg, 5 December 2007, available at
http://www.bmu.de/english/climate/downloads/doc/41258.php, viewed 22 September 2009.
9
production and demand side, are encouraged through subsidies and targeted investment,
and economic measures such as the feed-in tariff under the EEG 2009.
The passage of the EEG 2009, and the EEWG 2009 (detailed above) were part of this
program. Other measures in the program relevant to solar energy include:264
Amendment to the EnWG on metering, allowing innovative methods including
demand related, time-variable tariffs with the aim of reducing energy costs for
consumers and improving feed-in arrangements. The amendment is also intended
to support expansion of the electricity grid to help ensure a stable grid operation
and smooth expansion of renewable energies in the long term;
Reform of the Energy Savings Ordinance 2001 (Energieeinsparverordnung, or
―EnEV‖) to increase energy efficiency in buildings with energy standards
tightened by an average 30% from 2009, and a further 30% from 2012;
Reduction of emission allowances by 30% from emissions from 2008 for older
fossil fuel power plants;
Allocation of €3.3 billion for integrated energy and climate change policy for the
2008 budget.
Estimates of benefits from these measures include a saving of 200 million tonnes of CO2
with 54 million tonnes coming from renewable energy, 31 million tonnes from increased
energy efficiency in buildings, and 25 million tonnes from increased efficiency in
electricity consumption.265
(d)
Other policy and financial incentives for solar energy development
1.
Renewable portfolio standards (―RPSs‖) & quotas
The policy measures for quantified use of renewable energy, and in particular biofuels,
have already been mentioned above. However, Germany has relied primarily upon the
level of feed-in tariffs under the EEG legislation to encourage the installation of different
types of renewable energy in different locations for optimum efficiency. For example, the
solar energy feed-in tariffs favor building mounted installations, rather than remote largescale open-field installations, as the former is more efficient in avoiding transmission
losses. Similarly, the wind energy tariffs now encourage large-scale offshore wind farm
developments which are seen to have many advantages over land-based developments.266
2.
264
265
266
The ―One Thousand Roofs Programme‖
BMU, The Integrated Energy and Climate Programme of the German Government, December 2007,
esp at pp 3-6, available at http://www.bmu.de/english/climate/downloads/doc/40589.php, viewed 22
September 2009.
Ibid, at pp 7-8.
BMU, Renewable Energy Sources Act (EEG) Progress Report 2007, at pp 13-15, available at
http://www.bmu.de/english/renewable_energy/downloads/doc/40638.php, viewed 22 September 2009;
BMU, EEG– The Renewable Energy Sources Act, July 2007, at p 8, at
http://www.bmu.de/english/publication/publ/40067.php, viewed 21 May 2009.
10
Early measures aimed at increasing the use of renewable energy included the ―One
Thousand Roofs programme‖ introduced in 1989 for solar PV installation. Between 1991
and 1995 applicants received 50-60% funding of the costs of new solar installations from
central government, and 10-20% from a Länder. This was a very successful programme
resulting in 2,250 roofs being equipped with solar installations equating to approximately
5 MW of capacity.267
3.
The ―Hundred Thousand Roofs Programme‖
Following the success of the One Thousand Roofs program, this measure provided lowor no-interest loans for photovoltaic installation, with a goal of 300MW installed
capacity. Adopted in 1999, the program accelerated following the enhanced guaranteed
feed-in rules under the EEG 2000. The cheap loans were interest free for 10 years,
available for up to 40% of the cost of the installation, and a €0.50 per kWh feed-in tariff
was guaranteed for 20 years.268 By 2003 over 350MW had been installed, at which point
the program was replaced by an enhanced feed-in tariff under the EEG 2000, and more
recently continued under the EEG 2009 (see 2. (a) above).
4.
Tax incentives
There appear to be no specific tax incentives for solar energy other than the normal
taxation regimes that apply to individual and corporate taxation. In Germany this includes
deductions for R & D, depreciation, losses, maintenance and operating costs.
In 1999 the government enacted the Law Introducing the Environmental Fiscal Reform
(Ökologische Steuerreform), or ―Eco-tax‖ law. This law provided for taxes to be
introduced progressively on the consumption of electricity, and for increasing taxes on
fuels (excepting nuclear and coal). Partial exemptions are available for combined heat
and electricity systems and natural gas power plants with high efficiency levels, and full
exemptions for electricity generated from renewable energy, including solar.269
267
268
269
Lauber, V. & Mez, L., ―Renewable Electricity Policy in Germany, 1974-2005‖, Bulletin of Science
Technology Society, Vol 26, 2006, p 105, at 106.
Bradford, T., Solar Revolution: The Economic Transformation of the Global Energy Industry,
(Cambridge, MA, The MIT Press, 2006), p 180.
Commentary on the Eco-tax legislation is in Ottinger, Richard L., ed. ; Robinson, Nicholas A., ed. ;
Tafur, Victor, ed., Compendium of sustainable energy laws, IUCN, Academy of Environmental Law ;
IUCN, Environmental Law Centre, 2005, pp 441-447. See also, Lauber, V. & Mez, L., ―Renewable
Electricity Policy in Germany, 1974-2005‖, Bulletin of Science Technology Society, Vol 26, 2006, p
105, at p 109; Ecologic (Knigge, M., and Görlach, B.), ―Effects of Germany‘s Ecological Tax Reforms
on the Environment, Employment and Technological Innovation - Summary of the Final Report of the
Project: ―Quantifizierung der Effekte der Ökologischen Steuerreform auf Umwelt, Beschäftigung und
Innovation‖ (Research Project commissioned by the German Federal Environmental Agency (UBA)),
August 2005, available at http://www.umweltbundesamt.de/uba-info-pressee/hintergrund/oekosteuer.pdf, viewed 22 September 2009; SEPCo Document Library, ―Energy
Efficiency Policy for Households in Germany‖, available at
http://www.ises.org/sepconew/Pages/EE_Policy_in_Germany/2.html, at 2.5, viewed 22 September
2009.
11
5.
Public funding & the ―Market Incentive Programme‖
From 1990-1998 the federal government contributed over €1 billion, and the Länders
over €850 million towards implementation of renewable energy projects. In the same
period over €3 billion was made available in reduced interest loans for renewable energy
installations.270
As mentioned above, the ―Market Incentive programme‖ since 1995 has provided
financial support, mainly for renewable energy for thermal heat supply. Funding for this
Programme has, since 1999 been partially offset through the ―Eco-tax‖ reforms. As at
2008, in excess of €827 million has been provided through this program.271
6.
Public/Private partnerships
There have been a number of public/private partnerships to expand photovoltaic
installations, but these are largely encouraged through the cost-competitive economics of
the feed-in tariff under the EEG on standard economic principles, rather than through any
particular encouragement of such initiatives.272 R & D initiatives (see ‗7‘ below) also
involve public/private partnerships. Recently the European Solar Thermal Industry
Federation (―ESTIF‖) published a comprehensive Action Plan for Europe incorporating
proposals for policy, regulation, marketing, financial incentives, demonstration projects
and R & D.273
7.
R&D
Publicly funded R & D has been provided from time to time both through grants under
the Market Incentive Programme (above), and other federal and Länder encouragement to
the industry. Most public R & D funding is channeled through the BMU and the Federal
Ministry for Education and Research (Bundesministerium für Bildung und Forschung or
―BMBF‖). In 2007 the BMU funded projects amounting to €41.7 million euros, and the
BMBF contributed €12.4 million. There is a proposal to make €360 million available
270
271
272
273
Lauber, V. & Mez, L., ―Renewable Electricity Policy in Germany, 1974-2005‖, Bulletin of Science
Technology Society, Vol 26, 2006, p 105, at p 108.
BMU. The Renewable Energies Heat Act in Brief, 2009, at para 17, available at
http://www.bmu.de/english/renewable_energy/downloads/doc/42193.php, viewed 22 September 2009.
See also Renewable Energy Action, Solar-thermal Energy Market Incentive Programme, 2004,
available at www.senternovem.nl/mmfiles/Solar-Thermal%20EnergyMarket%20Incentive%20Programme_tcm24-117019.pdf, viewed 22 September 2009.
See Detsky, M., ―The Global Light: An analysis of international and local developments in the solar
electric industry and their lessons for United States energy policy‖, Colo J. Int’l Envtl. L. & Pol’y Vol
301, 2003, 301 at 309-310; Lauber, V. & Mez, L., ―Renewable Electricity Policy in Germany, 19742005‖, Bulletin of Science Technology Society, Vol 26, 2006, p 105, at p 108.
ESTIF, Solar Thermal Action Plan for Europe, January 2007, available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/K4_RESH/Solar_Thermal_Action_Plan.pdf, viewed 22 September 2009.
12
through the BMBF from 2008 for a joint BMBF/Industry initiative for the development
of organic solar cell technology.274
In its 2007 Integrated Energy and Climate Programme, the German government decided
to launch new energy R & D initiatives (Action Plan # 25), including renewable energy,
to, inter alia, ―further strengthen the technological leadership of German companies in
global markets. ‖275 Specific R & D activities will include applied R&D and
demonstration projects in the fields of photovoltaics, … low temperature solar heat
collectors and solar heating‖ (from a pool of €400 million between 2008-2011), and
fundamental research including ―thin film photovoltaics and organic photovoltaics,
biomimetic solar hydrogen production, bioenergy conversion and advanced electricity
storage technologies‖ (from a pool of €200 million between 2008-2011). The lead agency
is the Federal Ministry of Economics (Trade and Industry) & Technology
(Bundesministerium für Wirtschaft und Technologie or ―BMWi‖), along with the BMU,
the BMBF, the Ministry of Food, Agriculture & Consumer Protection
(Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz or
―BMELV‖) and the Ministry of Transport, Building & Urban Afairs (Bundesministerium
für Verkehr, Bau und Stadtentwicklung or ―BMVBS‖). One declared intention is to form
strategic alliances with the academic and business communities.276
8.
Procurement policies
Also in the Integrated Energy and Climate Programme, policies for public procurement
of energy-efficient products and services is provided for in ―Action Plan # 24. ‖
Essentially this requires the most energy-efficient option to be taken in all federal
tendering and contracting procedures. It is also intended to further Article 5 of Directive
2006/32/EC on ―Energy End-Use Efficiency and Energy Services.‖277 In the solar energy
context, this will be particularly relevant where there are federal projects involving
electrical energy production, water heating and heating where solar options are available
and the most efficient taking into account ―life of product‖ considerations.
9.
Land use and zoning incentives
Land use and zoning regulation is mainly the province of the 16 Länders. However,
federal measures, such as the Energy Savings Ordinance 2001
(Energieeinsparverordnung or ―EnEV‖) which sets minimum energy efficiency standards
274
275
276
277
See Wissing, L., on behalf of the BMU for the IEA Co-operative Programme on Photovolteic Power
Systems, National Survey Report of PV Power Applications in Germany 2007, May 2008, at pp 8-10,
available at http://www.iea-pvps.org/countries/germany/index.htm, viewed 22 September 2009.
BMU, Report on implementation of the key elements of an integrated energy and climate programme
adopted in the closed meeting of the Cabinet on 23/24 August 2007 in Meseberg, 5 December 2007, at p
7, available at http://www.bmu.de/english/climate/downloads/doc/41258.php, viewed 22 September
2009.
Ibid, at pp 82-85.
Ibid, at pp 80-81.
13
in buildings, have the effect of increasing the market for solar energy technology.278 In
the Federal Building Code (Baugesetzbuch or ―BauGB‖), specific mention is made in
Section 1 ‗The Scope, Definition and Principles of Urban Land-Use Planning,‘ for Land
Use Plans to pay particular attention to ―the use of renewable energy sources [for] nature
protection and the preservation of the countryside [Landschaftspflege], in particular of
the ecological balance in nature, and … the climate‖ (Section 1 (5) 7.).279
The Länders also impose planning regulation within their jurisdictions, and it would seem
many local authorities and municipalities have been supportive of renewable energy
developments.280 For example, in Baden-Württemberg, a new renewable energy law281
requires all new buildings from 1 April 2008 to produce 20% of their water and space
heating requirements with renewable energy, and existing buildings to meet a 10%
requirement within 2 years.282 In 2008 the City of Vellmar imposed a condition on a new
development area that the project include installation of a solar thermal system.283 In
2009 the City of Stuttgart commenced a major assessment of the costs and benefits –
economically, socially and environmentally – of introducing a solar ordinance to mandate
increased use of solar energy.284
C.
The impact of legal and policy initiatives and incentives in the use of solar
energy
In less than a decade, Germany has become a world leader in solar energy, both in terms
of installed capacity and growth rates, and in terms of technology and innovation.
Without a doubt, the primary reason for this success has been the ―feed-in‖ tariff
provisions under the ―Hundred Thousand Roofs Programme‖ from 1999-2004, and the
successive EEG legislation.285 Commentators have hailed the system as being superior to
278
279
280
281
282
283
284
285
See BMU, The Integrated Energy and Climate Programme of the German Government, December
2007, available at http://www.bmu.de/english/climate/downloads/doc/40589.php, viewed 22 September
2009.
English translation available at http://www.iuscomp.org/gla/statutes/BauGB.htm, viewed 22 September
2009.
Lauber, V. & Mez, L., ―Renewable Electricity Policy in Germany, 1974-2005‖, Bulletin of Science
Technology Society, Vol 26, 2006, p 105, at p 108. See also the list of large scale solar parks in
Germany, available at http://en.wikipedia.org/wiki/Solar_power_in_Germany, viewed 22 September
2009. But see the comments of Hans-Josef Fell, the architect of Germany‘s EEG, in ―Feed-in Tariff for
Renewable Energies: An Effective Stimulus Package without New Public Borrowing‖, Research paper,
March 2009, at pp 25-26, available at http://www.boell.org/Pubs_read.cfm?read=193, viewed 22
September 2009.
Erneuerbare-Wärme-Gesetz Baden-Württemberg – Renewable Heat Law Baden-Württemberg 2008.
European Solar Thermal Industry Federation (―ProSTO‖), Renewable Heat Law Baden-Württemberg,
summary sheet available at www.solarordinances.eu/Portals/0/STO%20template_BW.pdf, viewed 22
September 2009.
See European Renewable Energy Council, Regulations for Solar Thermal, available at
http://www.erec.org/projects/finalised-projects/k4-res-h/key-issue-3/regulations-for-solar-thermal.html,
viewed 22 September 2009.
ProSTO, ―Stuttgart‘s Baseline Assessment for a Solar Ordinance‖, ProSTO Newsletter No 2, May 2009,
at pp 2-3, available at http://www.solarordinances.eu/, viewed 22 September 2009.
See, eg, BMU, EEG– The Renewable Energy Sources Act, July 2007, at pp 1-9, at
http://www.bmu.de/english/publication/publ/40067.php, viewed 21 May 2009; Bradford, T., Solar
14
subsidies, tendering models or quota arrangements as it does not rely upon public
financial support, creates incentives for private investment, and provides economic
encouragement for continued and increasing efficiency and technological innovation. 286
RPS‘s, quota systems and financial incentives have in fact played a very limited role in
the expansion of solar energy production in Germany.
Since the amendment in 2004 to the EEG 2000, which provided greatly enhanced feed-in
tariffs to solar PV electricity production, PV electricity generation has increased from
557GWh in that year to 4,000GWh in 2008, with installed capacity increasing from
408MWp to 5,311MWp in the same period. The PV share of renewable energy used for
electricity production increased by 29% in the 2007/2008 year to 4 bn KWh (or 4.4%) of
the 91.4 bn KWh produced by renewable energy.287
In terms of economic impacts, the cost of the feed-in tariff system to consumers with an
average electricity consumption of 1,700kWh, is calculated at only €1.5 a month (about
$US2.00 a month),288 and elsewhere as less than 4% of the average price of domestic
electricity.289 On the other side of the equation, in addition to the unquantifiable
environmental benefits of reducing GHGs, there are some quite specifically quantified
economic benefits.
Employment in the renewable energy sector is put at around 278,000 jobs in 2008, an
increase of 12% on the previous year, and 73% since 2004. The most growth was
experienced in the PV sector.290
Investment turnover from renewable energy sources in 2008 was €13.12 billion euro, of
which PV comprised 47.3% (€6.2 billion), and operating turnover was €15.55 billion, of
which PV comprised 23% (€3.5 billion). These gave a total turnover of €28.67 billion
286
287
288
289
290
Revolution: The Economic Transformation of the Global Energy Industry, (Cambridge, MA, The MIT
Press, 2006), p 180; Detsky, M., ―The Global Light: An analysis of international and local
developments in the solar electric industry and their lessons for United States energy policy‖, Colo J.
Int’l Envtl. L. & Pol’y Vol 301, 2003, 301 at 307-310; Lauber, V. & Mez, L., ―Renewable Electricity
Policy in Germany, 1974-2005‖, Bulletin of Science Technology Society, Vol 26, 2006, p 105, at p 116;
Stokes, B., ―What exactly is a feed-in tariff?‖, National Journal, 25 April 2009, pp 36-37.
See, e.g., Hans-Josef Fell, the architect of Germany‘s EEG, ―Feed-in Tariff for Renewable Energies: An
Effective Stimulus Package without New Public Borrowing‖, March 2009, at
http://www.boell.org/Pubs_read.cfm?read=193, viewed 22 September 2009; Lauber, V., ―Trading
certificate systems and feed-in tariffs: Expectations versus performance‖, in Lauber, V., (Ed), Switching
to renewable power, London, Earthscan, 2005, at pp 246-263.
BMU, Development of Renewable Energies in Germany in 2008, April 2009, at pp 4, 6-8 & 20-21,
available at http://www.erneuerbare-energien.de/inhalt/43988/3860/, viewed 21 May 2009.
Ibid at p 11.
BMU, Renewable Energy Sources Act (EEG) Progress Report 2007, at p 9, available at
http://www.bmu.de/english/renewable_energy/downloads/doc/40638.php, viewed 22 September 2009.
BMU, Development of Renewable Energies in Germany in 2008, April 2009, at p 13, available at
http://www.erneuerbare-energien.de/inhalt/43988/3860/, viewed 21 May 2009.
15
euro with photovolteics comprising 34% (or €9.75 billion euro).291 Approximately 60%
of these benefits are directly attributable to the EEG legislation.292
At a more general level, the argument is made that the combination of the 20 year feed-in
tariff guarantee, consequential large-scale financial investment in renewable
technologies, and the financial injection of targeted support funds through the Market
Incentive Programme (to be increased to 400-500 million euro per annum from 20092012), provides a large measure of economic stabilization in the renewables sector in
economically uncertain times.293
Germany is also one of the leaders in solar hot water and heating ranked at # 3 in the
world in 2008 in both investment and existing capacity.294 In 2008 solar thermal energy
generation increased by 10% from 3.7 billionn kWh in 2007 to 4.1 billion kWh in 2008.
An addition of 210,000 solar collectors brought the total for the country to 1,220,000
with a aggregate area of 11,000,000m2. This contributes 3.8% to Germany‘s renewables
share of heat supply. The successful growth of this form of solar energy is largely
attributed to the Market Incentive Programme (see above), although it is likely to
experience further growth under the new Renewables Energy Heat Act (EEWG) 2009
discussed above.295
D.
Legal and Policy Barriers to Solar technology
Germany appears to have few legal barriers to the development and implementation of
solar energy, both for photovoltaic and for solar thermal installations. As discussed
above, the legal and policy regime is very much focused on meeting very ambitious GHG
reductions by 2020 and beyond, and on introducing increasing levels of renewable energy
technology. There appear to be no specific tax policies that deter solar energy
development, rather the contrary, with solar energy exempt from the ―Eco-tax‖ (see 2(d)
4., above).
291
292
293
294
295
Ibid at p 22.
BMU, Renewable Energy Sources Act (EEG) Progress Report 2007, at pp 8-9, available at
http://www.bmu.de/english/renewable_energy/downloads/doc/40638.php, viewed 22 September 2009.
BMU, Development of Renewable Energies in Germany in 2008, April 2009, at p 14, available at
http://www.erneuerbare-energien.de/inhalt/43988/3860/, viewed 21 May 2009; Campoccia, A.,
Dusonchet, L., Telaretti, E., and Zizzo, G., ―Comparative analysis of different supporting measures for
the production of electrical energy by solar PV and Wind systems: Four representative European cases‖,
Solar Energy, Volume 83, Issue 3, March 2009, p 287 at 290; and Fell, Hans-Josef, ―Feed-in Tariff for
Renewable Energies: An Effective Stimulus Package without New Public Borrowing‖, March 2009,
especially at pp 1-3, 7-8, 12-14, 18-20 and 26-28, available at
http://www.boell.org/Pubs_read.cfm?read=193, viewed 22 September 2009.
Ren 21, Renewables Global Status Report - 2009 Update, at pp 9 and 25, available at
http://www.ren21.net/globalstatusreport/g2009.asp, viewed 22 September 2009; BMU, Development of
Renewable Energies in Germany in 2008, April 2009, at pp 9-10, available at http://www.erneuerbareenergien.de/inhalt/43988/3860/, viewed 21 May 2009.
BMU, Development of Renewable Energies in Germany in 2008, April 2009, at p 9, available at
http://www.erneuerbare-energien.de/inhalt/43988/3860/, viewed 21 May 2009.
16
1.
Land use planning
The main area where constraints have arisen, as may be expected, is in the process of
local planning policy and project approval. Some commentators have suggested that local
authorities and political interests have restricted development of renewable energy in
favour of the interests of established traditional power industries operating in their areas
by introducing restrictive planning controls, or opposing liberalization of such controls,
or by refusing planning consent in particular cases for specious reasons.296 There is little
evidence of such actions, but given the discretionary nature of planning consent there are
clearly opportunities for abuse. Limitations that may be expected for renewable energy
projects through the normal planning process include: emissions law for any water or
atmospheric effects (bioenergies); noise control (particularly wind energy); nature
conservation assessments (all energies that affect flora and fauna, including solar); and
visual amenity (all energy, including solar).
Solar energy is one of the lower impact technologies, with no emissions or noise control
issues. In urban areas solar installations can blend in with architecture producing little
visual impact. However, large-scale open field developments can have significant effects
on flora and fauna, and on visual amenity. One limitation is the strict laws that apply to
any building or structures in rural areas in Germany. Under the Federal Building Code
(―Baugesetzbuch‖, BauGB), building in the ―undesignated outlying area‖ (rural and
undeveloped areas) is tightly controlled, although one of the exceptions is for
developments ―intended for research, development or use of wind or water-powered
energy sources.‖297 Thus, with wind and hydro proposals, the onus is shifted to those
opposing the development to show why it should not go ahead, rather than the other way
around for other non-preferred activities. Solar energy developments do not have that
statutory preference, so the proponent of a solar proposal must discharge the onus of
showing why such a development is justified in a rural area.
2.
Subsidies that favour traditional energy sources
Despite its impressive record of developing renewable energy, as at the end of 2008
90.3% of total energy consumption in Germany came from non-renewable sources, such
as mineral oils (approximately 35%), coal (approximately 24%), natural gas
(approximately 22%) and nuclear (approximately 12%).298 While mineral oils and natural
gas do not receive subsidies, and are generally subject to the Eco-tax (see 2(d) 4., above),
296
297
298
See Lauber, V. and Mez, L., ―Renewable Electricity Policy in Germany, 1974-2005‖, Bulletin of
Science Technology Society, Vol 26, 2006, p 105, at p 112; Fell, Hans-Josef, ―Feed-in Tariff for
Renewable Energies: An Effective Stimulus Package without New Public Borrowing‖, March 2009, at
pp 25-26, available at http://www.boell.org/Pubs_read.cfm?read=193, viewed 22 September 2009.
Federal Building Code 1997 (―Baugesetzbuch‖), Section 35(1) 6., available at
http://www.iuscomp.org/gla/, viewed 22 September 2009.
BMU, Development of Renewable Energies in Germany in 2008, April 2009, at p 4, available at
http://www.erneuerbare-energien.de/inhalt/43988/3860/, viewed 21 May 2009; Federal Ministry of
Economics and Technology (BMWi), available in English at
http://www.bmwi.de/English/Navigation/root.html; and see also
http://en.wikipedia.org/wiki/Energy_in_Germany#cite_note-5, viewed 22 September 2009.
17
the coal energy industry has received significant subsidies since 1958 ranging from €0.6
billion in that year, to €7.5 million at its peak in 1989.299 From 1958 to 2007 it is
estimated Germany has spent the equivalent of €200 billion to support the coal
industry.300 In addition, nuclear and coal use are excluded from the German Eco-tax,
resulting in a further subsidization of those industries, although renewable energy does
enjoy the same exemptions.
Although the nuclear and coal industries are to be phased out by 2020 and 2018
respectively,301 the huge level of direct subsidy, particularly to the coal industry has
worked against the economic competitiveness of renewable energy, including solar.
Subsidies of up to €21.6 billion will continue to be paid for coal until 2018.302
E.
Summary
Germany is unquestionably the world leader in terms of grid-connected solar PV, and
among the top 3 countries for installed solar hot water and space heating. In terms of
investment and operating expenditure, 34% of its total renewable turnover of €28.7
billion was attributable to solar energy. This growth has had immense economic benefits
both in terms the solar manufacturing industries, and in terms of employment. It is clear
from most analyses that the single most important factor in driving this growth has been
the ―feed-in tariff‖ model that Germany has applied in some form since 1990. The most
significant elements of that model are the guaranteed grid access for renewable energy
suppliers and the prioritization within the grid of renewable energy over other available
energy; the generous levels of tariff for various types of energy with a guarantee of those
rates for 20 years; and the ambitious levels of GHG reductions and renewable energy
increases over the medium to long-term as part of a comprehensive and integrated energy
and climate programme.
299
300
301
302
See generally, Storchmann, K., The Rise and Fall of German Hard Coal Subsidies, Elsevier, 2004;
Federal Environmental Agency, Background Paper:Reduction of Coal Subsidies – the results of modelbased analysis, July 2003, available at http://www.gws-os.de/Downloads/ZIII6357-04eneugesamt.pdf,
viewed 22 September 2009.
Wayman, E., ―Goodbye German Coal‖, Geotimes, October 2007, available at
http://www.geotimes.org/oct07/article.html?id=nn_coal.html, viewed 22 September 2009.
Bradford, T., Solar Revolution: The Economic Transformation of the Global Energy Industry,
(Cambridge, MA, The MIT Press, 2006), p 180; BMU, ―New Atomic Energy Act enters into force‖,
Press Release 25 April 2002, available at http://www.bmu.info/english/nuclear_safety/pm/3612.php,
viewed 21 May 2009 (nuclear). But note the recent reversals on policy in Europe: Ward, J., ―What
Sweden‘s Nuclear About-Face Means for Germany‖, Der Spiegal, 6 February 2009, available at
http://www.spiegel.de/international/world/0,1518,605957,00.html, viewed 22 September 2009.
Wayman, E., ―Goodbye German Coal‖, Geotimes, October 2007, available at
http://www.geotimes.org/oct07/article.html?id=nn_coal.html, viewed 22 September 2009.
18
II.
Spain
A.
Introduction
Spain is about one and a half times the size of Germany with a land area (excluding
water) of 498,980 km². It has a population of 40,525,002 (est. July 2009) Spain is a
parliamentary monarchy comprising 17 autonomous communities and 2 autonomous
cities. Geographically it is a large dissected plateau surrounded by rugged hills with the
Pyrenees Mountains in the North. It has a temperate climate with clear sunny conditions
in the interior very conducive to solar energy development.303
In 2007, Spain consumed 149.2 million tonnes oil equivalent (mtoe) of primary energy,
or about 3.7 tonnes per person – a figure very similar to Germany. Of that, 78.8 mt was
oil, 31.6 mtoe was gas, 20.2 mtoe was coal and 12.5 mtoe was nuclear.304 This
represented a 2.1% increase over 2006 consumption. Renewable energy contributed
approximately 9% of gross energy consumption in 2007.305 As a share of electricity
generation, renewable energy comprised 20.2% in 2007, with gas accounting for 31.6%,
coal for 24.2%, nuclear for 17.7% and oil for 6.3%.306 Following two years of dramatic
increases in wind and solar energy installations, unofficial reports put the share of
renewables in overall electricity supply in January 2009 at 34.8%.307
The majority of Spain‘s renewable energy development has been in hydropower and
wind power, comprising 9.8% and 8.8% respectively of gross electricity consumption in
2007.308 The contribution of PV solar energy was around .2% in 2007, but has increased
dramatically from then to comprise approximately 1% of electricity consumption at the
end of 2008. The PV capacity has had an annual increase of approximately 500% in each
of the years 2007 and 2008.
303
304
305
306
307
308
Figures from the CIA World Factbook, available at https://www.cia.gov/library/publications/the-worldfactbook/geos/sp.html, viewed 24 September 2009.
BP Statistical Review of World Energy, June 2009, at pp 40-41, available at http://www.bp.com,
viewed 24 September 2009.
European Renewable Energy Council (EREC), Renewable Policy Review – Spain, 2009, at p 2
(referring to Spanish Ministry of Industry, Tourism and Trade figures), available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review_
_09_Final.pdf, viewed 24 September 2009. For 2006 figures, see European Commission, DirectorateGeneral for Energy and Transport, EU Energy and Transport in Figures: Statistical Pocketbook 2009,
2009, at p 37, available at http://ec.europa.eu/energy/publications/statistics/statistics_en.htm, viewed 24
September 2009.
EREC, Renewable Policy Review – Spain, 2009, at pp 2-3 (referring to Spanish Ministry of Industry,
Tourism and Trade figures), available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review_
_09_Final.pdf, viewed 24 September 2009.
Wikipedia, Renewable Energy in Spain (and references therein), available at
http://en.wikipedia.org/wiki/Renewable_energy_in_Spain#cite_note-0, viewed 24 September 2009.
EREC, Renewable Policy Review – Spain, 2009, at pp 2-3 (referring to Spanish Ministry of Industry,
Tourism and Trade figures), available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review_
_09_Final.pdf, viewed 24 September 2009.
19
Concentrated solar power (CSP) production is also an area of development with Spain
acknowledged as the European leader with a target of 500 MW by 2010 by a mixture of
solar thermal towers and cylindro-parabolic mirror concentrator technology.309 Solar
thermal water heating also grew strongly in 2007 and 2008, largely as a result of a new
building code (see below) requiring new buildings or reconstructions to have between 30
and 70% of their water heating met by solar thermal energy.310
B.
Energy law and policy in Spain
1.
International and regional influences
As with Germany, Spain is a signatory to the 1992 Framework Convention on Climate
Change (―FCCC‖). Along with the fifteen then-members of the EU, Germany ratified the
Kyoto Protocol on 31 May 2002. Under the Protocol the EU undertakes to collectively
reduce GHG emissions to 8% below those of 1990.311 Recently the EU made a firm
commitment to reduce emissions to 20% below 1990 levels by 2020, and 30% if other
countries set similar goals.312 Spain is allowed, under the EU burden sharing agreement,
to increase its GHG emissions relative to the 1990 base-year, by 15% by the first
commitment period 2008-2012.313 To date Spain is likely to fall short of this target with
2006 emissions 50% higher than 1990, although it is possible for Spain to reduce this to
around 20% above base-year by 2010, this being only 5% above its country target. This
could be achieved by adopting various ‗Kyoto mechanisms‘ such as financing emission
reduction projects in other countries, planting trees, and increasing renewable energy
power production.314
In terms of renewable energy, the Directive on the Promotion of the Use of Energy from
Renewable Sources requires Spain to increase its renewable energy by 20% from 1990
levels by 2020.315 Under its Plan de Energías Renovables 2005-2010 (PER 2005-2010),
309
310
311
312
313
314
315
Intelligent Energy – Europe Programme, The State of Renewable Energies in Europe, 8th EurObserv’ER
Report, (2008), pp 71-73, available at www.eurobserv-er.org/pdf/barobilan8.pdf, viewed 24 September
2009
Ibid, at pp 27 and 29.
United Nations Framework Convention on Climate Change, Kyoto Protocol Reference Manual,
November 2008, Para 2.1 and Table II-1, available at
http://www.unfccc.int/resource/docs/publications/08_unfccc_kp_ref_manual.pdf, viewed 24 September
2009.
Ibid, and see European Council Act 7224/1/07, 2007, Arts 30-31 (30% objective), and Art 32 (20% firm
commitment). The Council also expressed the view that developed countries should aim to reduce
GHGs by 60-80% below 1990 levels by 2050: Art 30.
European Council Decision 2002/358/EC, 25 April 2002, Annex II.
European Environment Agency, GHG trends and projections in Spain, 2008, available at
http://www.eea.europa.eu/themes/climate/ghg-country-profiles/tp-report-country-profiles/spaingreenhouse-gas-profile-summary-1990-2020.pdf, viewed 24 September 2008.
Directive 2009/28/EC of the European Parliament and of the Council, 23 April 2009, Annex I. The
final text of the Directive is available with background papers at
http://ec.europa.eu/energy/renewables/index_en.htm, viewed 24 September 2009.
20
Spain set itself a goal of 12.1% of total energy consumption, and 30.3% of electricity
generation, to be sourced from renewable energy by 2010.
2.
National law and regulation as it effects solar energy
Spain has introduced many reforms of the energy and electricity sector from the
early1980s.316 The current most significant measure for solar energy development has
been the ―feed-in‖ tariff regime under the Electric Power Act 1997, and the Royal
Decrees on renewable energy of 2004, 2007 and 2008.317 The PER 2005-2010, and its
predecessors, have set out RPSs for renewable energy, and the Technical Building Code
2006 introduced mandated levels for solar hot water heating in all buildings, and solar PV
panels in non-residential buildings.
(a)
Electric Power Act 54/1997318
When enacted this measure was primarily concerned with liberalizing the electricity
sector by creating an open wholesale market for electricity, introducing more choice to
electricity customers, and requiring separation of electricity suppliers into distinct
corporate entities for generation, distribution and retail supply. It is still in force, and the
―Special System‖ measures in Articles 27-31 create the framework for a feed-in tariff
regime for renewable energy.319 These measures include the right to connect to the grid,
the right to transfer power from the renewable source to the grid, and the right to be paid
a return supplemented by a premium set by the government to ensure reasonable profits
(see Art 30 as amended).
The Real Decreto 2818/1998, introduced from 1 January 1999, more detailed measures
regarding fiscal, administrative and corporate structures to promote renewable energy.
The most important aspect of this measure was the introduction of a feed-in tariff that
316
317
318
319
Salas, V., Olias, E., Alonso, M. and Chenlo, F., ―Overview of the legislation of DC injection in the
network for low voltage small grid-connected PV systems in Spain and other countries‖, 12 Renewable
and Sustainable Energy Reviews 575, 577 (February 2008). For a summary of reforms to 1999, see:
OECD, Country Studies: Spain – Background Report on Regulatory Reform in the Electricity Industry,
1999, available at http://www.oecd.org/dataoecd/2/59/2497385.pdf, especially at pp 15-17, and also pp
17-35, viewed 24 September 2009.
Real Decreto 436/2004, Real Decreto 661/2007 and Real Decreto 1578/2008.
English translation available at: [International Feed-In Cooperation (Cooperative website for regulation
provided by German BMU, Spanish Ministry of Industry, Tourism and Commerce, and Republic of
Slovenia Ministry of the Economy), at http://www.feed-incooperation.org/images/files/spanish%20electric%20power%20act%20english.pdf, viewed 2 June
2009.][Website down; alternatively, English translation available via Comision Nacional de Energia,
Spanish Power Act (Unofficial English Edition), 3d ed., 2005, available at
http://www.cne.es/cne/doc/legislacion/NE004_05.pdf, viewed 24 September 2009.]
OECD, Country Studies: Spain – Background Report on Regulatory Reform in the Electricity Industry,
1999, available at http://www.oecd.org/dataoecd/2/59/2497385.pdf, especially at pp 15-17, viewed 24
September 2009; European Renewable Energy Council, Renewable Energy Policy Review – Spain, May
2004, at pp 5-6, available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review_
_09_Final.pdf, viewed 24 September 2009; Salas, V., Olias, E., Alonso, M. & Chenlo, F., ―Overview of
the legislation of DC injection in the network for low voltage small grid-connected PV systems in Spain
and other countries‖, 12 Renewable and Sustainable Energy Reviews 575, 577 (February 2008).
21
extended increased advantages to solar PV electricity production. The measure imposed
a requirement for utilities to buy solar electricity at a premium rate of €0.40 per kWh for
systems of less than 5 kW, and at €0.20 per kWh for systems over 5 kW. The Real
Decreto 1663/2000 established the technical requirements for connection of PV systems
with a nominal power of less than 100 kVA, and a low voltage connection (less than 1
kV), to the distribution grid.320 This was an important step to facilitate a major increase in
grid-connected solar PV.
These measures did not result in any major increase in solar PV development, largely
because of the focus on smaller installations and the sub-marginal financial returns
available for larger PV development.
(b)
Royal Decree 436/2004 (12 March 2004)321
This measure consolidated the previous feed-in tariff schemes into a comprehensive
system for renewable energy under the Electricity Act 1997. It provided that a generator
of renewable energy could choose between selling the energy to a distributor on either a
―regulated tariff‖ basis, or on a ―market + premium‖ basis.322
Regulated tariff
The regulated tariff for solar was set at 575% of the ―average electricity tariff‖ (AET also referred to as the ―reference‖ or ―benchmark‖ tariff) for PV installations of less than
100 kW, and 300% of the AET for PV installations of more than 100 kW and all CSP
installations. The AET is calculated according to a statutory formula, and published for
the following year by way of Royal Decree. In 2004 the AET was set at €0.072 per kWh.
In 2007, this resulted in a feed-in tariff of approximately €0.44 per kWh for PV
installations of less than 100 kW, and €0.23 per kWh for PV installations larger than 100
kW and CSP installations. The tariff was guaranteed for 25 years, reducing thereafter to
460% of the AET for the smaller installations, and 240% for the larger developments and
CSP installations.
Market + premium tariff
320
321
322
Salas, V., Olias, E., Alonso, M. & Chenlo, F., ―Overview of the legislation of DC injection in the
network for low voltage small grid-connected PV systems in Spain and other countries‖, 12 Renewable
and Sustainable Energy Reviews 575, 577 (February 2008); OECD, Country Studies: Spain –
Background Report on Regulatory Reform in the Electricity Industry, 1999, available at
http://www.oecd.org/dataoecd/2/59/2497385.pdf, especially at pp 15-17, viewed 24 September 2009.
English translation available at: [International Feed-In Cooperation, at http://www.feed-incooperation.org/content/view/28/50/, viewed 2 June 2009][Website down; alternatively, English
translation available via World Future Council Policy Action on Climate Toolkit, available at
http://onlinepact.org/fileadmin/user_upload/PACT/Laws/Spain_436_2004_english.pdf, viewed 24
September 2009.]
Spanish Renewable Energy Association, The New Payment Mechanism of RES-E in Spain –
Introductory report, May 2004, available at http://www.windworks.org/FeedLaws/Spain/Report%20on%20the%20new%20Spanish%20RESE%20payment%20mechanism.pdf, at pp 3-8 (viewed 24 September 2009).
22
This method applied only to PV installations of greater than 100 kW, and CSP
installations, and provided for a market or negotiated price plus a premium of 250% of
the AET for the first 25 years, reducing to 200% thereafter. A further 10% incentive was
applied in certain circumstances for participating in the market.323
The measure also provided for revision of tariffs, premiums and incentives in 2006, and
every four years thereafter, or when the level of installed PV reached 150 MW and CSP
reached 200 MW. The measure was very successful in encouraging new solar PV and
CSP development, and by 2007 the targets for installed PV had been exceeded, so a new
Decree was prepared.
(c)
Royal Decree 661/2007 (25 May 2007)324
This measure replaced the 2004 Decree, although operators of installations that came into
production before the new measure came into force continue to receive their tariffs under
the old measure.325
The 2007 Decree simplified the premium tariff system. Instead of being calculated as a
percentage of the AET, the premium tariff was expressed as a fixed value, paid on top of
the market price of electricity.
For 2007 the feed-in tariff rates were set at:
PV installations of less than 100 kWp – €0.44 for the first 25 years, and €0.352
thereafter;
PV installations between 100 kWp and 10 MWp – €0.418 for the first 25 years,
and €0.334 thereafter;
PV installations between 10 MWp and 50 MWp – €0.23 for the first 25 years,
and €0.184 thereafter; and
CSP installations – €0.269 for the first 25 years, and €0.215 thereafter.
323
324
325
Ibid. See also Coenraads, R. et al, Renewable Energy Country Profiles, ECOFYS, Utrecht, Netherlands,
February 2008, available at http://www.res-progress.eu/index.php?action=documents&lang=NL, at pp
142-143, viewed 28 September 2009 ; Salas, V., ―A changing Spanish perspective? – Grid issues and
promotion of building-integrated PV‖, presentation given to 23rd European Photovoltaic Solar Energy
Conference and Exhibition, 1-5 September 2008, Valencia, Spain, at http://www.ieapvps.org/workshops/0809valencia/presentations/, viewed 2 June 2009.
Available at: Government of Spain, Agencia Estatal Boletín Oficial del Estado, at
http://www.boe.es/aeboe/consultas/bases_datos/doc.php?coleccion=iberlex&id=2007/10556, viewed 2
June 2009.
The following section relies primarily upon these references: European Renewable Energy Council
(EREC), Renewable Policy Review – Spain, 2009, at pp 6-7, at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review_
_09_Final.pdf, viewed 2 June 2009; Coenraads, R. et al, Renewable Energy Country Profiles, ECOFYS,
Netherlands, February 2008, at pp 142-144; Salas, V., ―A changing Spanish perspective? – Grid issues
and promotion of building-integrated PV‖, presentation given to 23rd European Photovoltaic Solar
Energy Conference and Exhibition, 1-5 September 2008, Valencia, Spain, available at http://www.ieapvps.org/workshops/0809valencia/presentations/, viewed 28 September 2009.
23
With CSP installations, there was also the option of a market + premium, with the
premium set at €0.254. If this option were taken, there was also a ―cap and floor‖
mechanism, so that the total price paid was not allowed to rise above €0.344 resulting in
windfall profits, or fall below €0.254 leaving the owner with an insufficient return on the
investment. Low interest loans were also available, with up to 80% of the average costs
able to be financed in this way.
Commentators suggested that the new tariffs would double the returns for larger solar
power installations over 100 kWh.326
The tariffs were to be updated every year until 2012 on the basis of changes in the CPI. A
target of 371 MW was set for PV installations and 500 MW for CSP installations under
the scheme. When 85% of the capacity for each type of technology was achieved, a
deadline would be fixed to close off new projects until new targets were set.
The feed-in tariff scheme under the 2004 and 2007 Decrees has been immensely
successful resulting in a 500% increase in solar electricity in both 2007 and in 2008. In
fact, the scheme has been so successful that solar PV installations by 2008 exceeded by
four times earlier targets set for 2010.327 As a consequence, no further projects are being
entertained under the 2007 Decree, and the Government introduced a new Royal Decree
1578/2008 with lower tariff rates, and a lower target for increases in solar PV capacity for
the following 3 years.
(d)
Royal Decree 1578/2008 (26 September 2008)328
This measure deals with different types of installations in a new way and substantially
reduces the fixed tariff levels. For roof and building integrated solar PV with a capacity
of less than 20 kWp, a tariff of €0.34 per kWh is provided, and for more than 20 kWh,
the tariff is €0.32 per kWh. For free-range/ground installations the €0.32 per kWh rate
applies. These tariffs will endure for 25 years, but unlike the 2004 and 2007 Decrees, no
premium rates are specified after 25 years.329 Importantly, any projects commenced
326
327
328
329
Reuters News Service, ―Reuters on New Spanish Feed Law 2007‖, 28 May 2007, available at
http://www.wind-works.org/FeedLaws/Spain/ReutersonNewSpanishFeedLaw2007.html.
Roberts, M., ―Spain ratifies new solar subsidy cap‖, Reuters, 26 September 2008, available at
http://www.reuters.com/articlePrint?articleId=USTRE48P7JW20080926, viewed 28 September 2009;
Baratti, G., ―Spanish Solar Subsidy Seduces FPL, Scorches Consumers (Update 3)‖, Bloomberg.com, 8
May 2009, available at http://www.bloomberg.com/apps/news?pid=20601109&sid=aCGsB8hGkDIg,
viewed 28 September 2009.
Available at: Government of Spain, Agencia Estatal Boletín Oficial del Estado, at
http://www.boe.es/boe/dias/2008/09/27/pdfs/A39117-39125.pdf, viewed 2 June 2009.
Roberts, M., ―Spain ratifies new solar subsidy cap‖, Reuters, 26 September 2008, available at
http://www.reuters.com/articlePrint?articleId=USTRE48P7JW20080926, viewed 28 September 2009;
Renewable Energy Industry, Photovoltaic in Spain: The First Round of Inscription for the New Feed-in
Tariff is Open!, 31 October 2008, available at http://www.renewable-energy-industry.com/pressreleases/press-releases_detail.php?changeLang=en_GB&newsid=2946, viewed 28 September 2009.
24
under the earlier Decree that were not completed and generating electricity by 29
September 2008 lost the higher rates under the earlier measure.330
The cap on new installations for 2009 is set at 400 MW, with 133 MW allocated to freerange plants, and 267 MW for roof and building integrated plant. Ninety percent of that
latter capacity is targeted for installations of more than 20 kWp. A further 100 MW is
held in reserve for free-range plants to ease the industry‘s transition to the new regime.
For 2010 and 2011 the caps are to be 500 MW to give a total 1,500 MW for the three
years, with the intention of revisiting the feed-in tariff structure in 2012.331
(e)
Plan de Energías Renovables (Renewable Energy Plan for 2005-2010) (PER
2005-2010) (August 2005)332
This is the current operative plan indicating goals of the Spanish government for
renewable energy as a share of total energy consumption, and as a share of gross
electricity consumption. The PER is prepared on a regular basis by a State agency – the
Institute for Diversification and Saving of Energy (IDAE – Instituto para la
Diversificacion y Ahorro de la Energia). The PER is not legally binding on participants
in the energy industry, but is intended to indicate specific goals to help the government‘s
achieve its broader energy polices and EU and international climate change obligations.
This PER replaced the PER for 2000-2010, as renewable energy targets were not being
met, largely due to a higher than expected growth in energy demand. It was also
necessary to incorporate the new EC requirements of Directive 2001/77/EC which
required, inter alia, a target for Spain of 29.4% of gross electricity consumption from
renewable sources by 2010, and Directive 2003/30/EC promoting the use of biofuels and
other renewable fuels for transport.
The PER sets the goal of 12.1% of primary energy and 30.3% of gross electricity
consumption to be met by renewable energy by 2010. The Plan sets out specific
contributions for the various sources of renewable energy. The target for solar PV was
330
331
332
Renewable Energy Industry, Photovoltaic in Spain: The First Round of Inscription for the New Feed-in
Tariff is Open!, 31 October 2008, available at http://www.renewable-energyindustry.com/business/press-releases/newsdetail.php?changelong=En.GB&newid=2946, viewed 28
September 2009; McLeod-Roberts, L., ―Spain Special Report: Green with Energy‖, The Lawyer, 25
May 2009, available at http://www.thelawyer.com/spain-special-report-green-withenergy/1000803.article, viewed 28 September 2009.
Renewable Energy Industry, Photovoltaic in Spain: The First Round of Inscription for the New Feed-in
Tariff is Open!, 31 October 2008, available at http://www.renewable-energyindustry.com/business/press-releases/newsdetail.php?changelong=En.GB&newid=2946, viewed 28
September 2009; Roberts, M., ―Spain ratifies new solar subsidy cap‖, Reuters, 26 September 2008,
available at http://www.reuters.com/articlePrint?articleId=USTRE48P7JW20080926, viewed 28
September 2009.
Ministry of Industry, Tourism and Commerce, Summary: The Spanish Renewable Energy Plan 20052010 (in English), at http://www.feed-in-cooperation.org/content/view/28/50/, viewed 2 June 2009.
25
exceeded in 2007, and CSP is well on the way to its target with currently completed and
planned installations. Solar thermal water and space heating is also growing quickly
following the new building code requirements (see below).333
A PER for the period 2011-2020 is currently being prepared.
(f)
Spanish Technical Building Code (Royal Decree 314/2006) (17 March 2006)334
This measure mandates a certain level of solar water heating in all new buildings, and in
all renovations, and a mandatory solar PV capacity in some commercial buildings. In this
respect, Spain was the first country to require solar PV capacity in new buildings, and
only the second country, after Israel, to require solar water heating in all new buildings.
335
The Code is implemented pursuant to the Building Ordinance Act 38/1999 which, in
Article 3, includes a general requirement for energy efficiency and thermal insulation.
The Code includes an obligation to provide between 30% and 70% of domestic hot water
heating with solar energy (Art 15.4, & Section ES 4). The precise percentage depends
upon a number of criteria, including where the building is located within particular
geographical zones, and how much hot water demand is anticipated. For example, in an
area with low insolation (zone I), and where water demand is less than 15,000 litres/day,
a 30% minimum general requirement is imposed, but a building in the same zone using
more than 20,000 litres/day has a 52% requirement. In areas of moderate insolation (zone
III), a level of 50% is required for water consumption of 50-5,000 litres/day, rising to
70% for useage over 9,000 litres/day. In the areas of highest insolation (zone V), the
maximum 70% requirement is imposed regardless of useage.336
In terms of solar PV capacity, the Code makes it mandatory to install solar PV in larger
non-residential buildings. The requirement applies to multi-store shopping centers with a
floor area greater than 3,000m2, office buildings greater than 4,000m2, supermarkets
333
334
335
336
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at pp 11 and 24 (Tables R3 and R4), viewed 28
September 2009. See also Intelligent Energy – Europe Programme, The State of Renewable Energies in
Europe, 8th EurObserv’ER Report, 2008, available at www.eurobserv-er.org/pdf/barobilan8.pdf, at pp
17-19 (solar PV), 26 and 29 (solar heating) and 71-72 (CSP).
For an English translation of the solar thermal sections of the code, see: ESTIF, The Spanish Technical
Building Code (Royal Decree 314/2006 of 17 March 2006), available at
http://www.estif.org/fileadmin/estif/content/policies/downloads/CTE_solar_thermal_sections_ENGLIS
H.pdf, viewed 28 September 2009.
Ren 21, Renewables Global Status Report – 2006 Update, available at
http://www.ren21.net/globalstatusreport/download/RE_GSR_2006_Update.pdf, at p 2, viewed 28
September 2009; EC, ETAP, Spain’s new Building Energy Standards place the Country among the
Leaders in Solar Energy in Europe, September 2006, available at
http://ec.europa.eu/environment/etap/pdfs/sept06_construction_norm_spain.pdf, viewed 28 September
2009; ESTIF, Spain Approves National Solar Thermal Obligation – Update, at
http://www.estif.org/262.0.html, viewed 28 September 2009.
ESTIF, The Spanish Technical Building Code (Royal Decree 314/2006 of 17 March 2006), available in
English at
http://www.estif.org/fileadmin/estif/content/policies/downloads/CTE_solar_thermal_sections_ENGLIS
H.pdf, Article 15.4 and ES 4, at pp 11 and 15-23, viewed 28 September 2009.
26
greater than 5,000m2, warehouses and pavilions greater than 10,000m2, hotels of more
than 100 rooms, and hospitals of more than 100 beds. The capacity of the PV installation
required depends upon the climatic zone, floor area, and type of use of the building
according to a complex formula, with a minimum installation of 6.25 kWp.337
These requirements became mandatory in October 2006, but their effect is not yet
apparent in statistics for 2007 as they apply only for new permit applications. This has
resulted in a 1 -2 year lag before the installations started to be included in new buildings.
The Code does not prevent local authorities and municipalities from imposing more
stringent requirements (see below).338
(g)
Local government regulation and the Barcelona Solar Energy Ordinance
A number of municipalities in Spain have introduced solar regulations, mostly to
encourage the increased use of solar thermal heating for water and buildings. The early
leader at this level was Barcelona, which in 2000 introduced the Barcelona Solar
Ordinance (full name translated – ―Barcelona Ordinance on Application of Solar
Thermal Energy Systems into the Buildings‖).339 The measure was a precurser to the
Spanish Technical Building Code (above), and by 2008 had been adopted in similar form
by 39 municipalities in Catalonia and 26 in the rest of Spain.340 The Ordinance, as
amended in 2006, requires that 60% of the hot water demand of all new buildings and
buildings undergoing refurbishment be met by solar energy.
(h)
Other policy and financial incentives for solar energy development
1.
Renewable portfolio standards (―RPSs‖) & quotas
The policy measures for quantified use of renewable energy found in the PER 2005-2010,
and the mandatory solar water heating in new buildings and renovations required under
337
338
339
340
See the explanation by Salas, V., ―A changing Spanish perspective? – Grid issues and promotion of
building-integrated PV‖, presentation given to 23rd European Photovoltaic Solar Energy Conference
and Exhibition, 1-5 September 2008, Valencia, Spain, available at http://www.ieapvps.org/workshops/0809valencia/presentations/, viewed 28 September 2009.
ESTIF, The Spanish Technical Building Code (Royal Decree 314/2006 of 17 March 2006), available in
English at
http://www.estif.org/fileadmin/estif/content/policies/downloads/CTE_solar_thermal_sections_ENGLIS
H.pdf, Article 15.4 and 15.5, viewed 28 September 2009.
See English explanation in: Barcelona Energy Agency, The Barcelona Solar Thermal Ordinance - A
local contribution to global sustainability, July 2006, available at
http://www.barcelonaenergia.cat/document/OST_new_explanation_eng.pdf, viewed 28 September
2009. For full text of the Ordinance, see
http://www.barcelonaenergia.cat/eng/documentation/document3.htm, viewed 2 June 2009.
C40 Cities, ―Barcelona's solar hot water ordinance‖, 2009, available at
http://www.c40cities.org/bestpractices/renewables/barcelona_solar.jsp, viewed 28 September 2009. See
also Schaefer, B., ―Case 16: Barcelona Solar Ordinance‖, Create Acceptance: Work Package 2 –
Historical and recent attitude of stakeholders, September 2006, available at
http://www.createacceptance.net/fileadmin/create-acceptance/user/docs/CASE_16.pdf, at pp 3-4,
viewed 28 September 2009.
27
the Technical Building Code 2006, have already been mentioned. As with Germany,
Spain has relied primarily on the feed-in tariff scheme under the Electric Power Act
54/1997, and the various Royal Decrees that have implemented it, to encourage the
installation of solar PV and CSP electricity.
2.
Tax incentives
In addition to normal corporate income tax regulation, Spain has a general tax rebate
scheme for environmental investments.341 The scheme allows a deduction from the final
tax bill of the value of investments in renewable energy equipment, including solar
thermal and PV plants, and for use in residential buildings. The level in 2006 was 10%,
and it was to be phased out by 2011.342 A recent announcement, however, indicates that
this will be increased to 20% for large companies, and 30% for small and medium-size
companies, the rebate will be extended to include investment in energy saving and
efficiency measures, and the duration of the rebates will extend beyond 2011.343
3.
Public funding & subsidies
The feed-in tariff scheme is a form of ―public funding‖ of renewable energy, as the extra
cost of the premiums paid for renewable energy by utilities is spread across the public as
consumers of electricity. Government estimates are that the total value of the premiums
for new renewable generating capacity under the PER 2005-2010 will be €4.9 billion, and
from 2010 annual premiums will be €1.8 billion. However, this represents an increase in
electricity prices of only 0.6% per year.344
There is little in the way of direct subsidies at the national level as the Government
expects the bulk (97.1%) of an estimated €23.6 billion of investment required to meet the
renewable energy targets in the PER to come from the private sector from direct funding
or debt. Public funding through direct grants, mostly for solar energy, will comprise only
2.9%, or €681 million.345
341
342
343
344
345
The Royal Decrees 283/2001 and 252/2003, updating the Spanish Corporations Tax Act (Impuesto
Sobre Sociedades).
Coenraads, R. et al, Renewable Energy Country Profiles, ECOFYS, Utrecht, Netherlands, February
2008, available at http://www.res-progress.eu/index.php?action=documents&lang=NL, at p 144,
viewed 28 September 2009.
EndsEurope, ―Spain to double green tax rebate for industry‖, 19 February 2009, at
http://www.endseurope.com/20708, viewed 2 June 2009. See also EC, ETAP, ―Policy News – Spanish
Tax Benefits for the Environmentally Minded‖, 1 June 2009, at
http://ec/europa.eu/environment/etap/inaction/policynews/392_en.html, viewed 2 June 2009.
Ministry of Industry, Tourism and Commerce, Summary: The Spanish Renewable Energy Plan 20052010 (in English), p 59, at http://www.feed-in-cooperation.org/content/view/28/50/, viewed 2 June
2009; Gil, J. and Lucas, H., ―Spain: New Plan for Renewable Energy‖, RenewableEnergyWorld.com,
11 November 2005, available at
http://www.renewableenergyworld.com/rea/news/article/2005/11/spain-new-plan-for-renewableenergy-39046, viewed 28 September 2009.
Ministry of Industry, Tourism and Commerce, Summary: The Spanish Renewable Energy Plan 20052010 (in English), pp 57-59, at http://www.feed-in-cooperation.org/content/view/28/50/, viewed 2 June
2009.
28
The Institute for Energy Diversification and Conservation (IDEA) is the government
agency with responsibility for promoting renewable programmes and has assisted a
number of regions such as Canarias, Aragon, Valencia and Murcia. 346
Other financial support by way of low-interest loans has been available for renewable
energy projects, including up to 100% of the cost of solar thermal heating facilities with a
capacity equal to or greater than 20 kW, and for solar hot water heating, there is an
investment subsidy of 37% of total financial investment.347
While there are many examples of local government and municipal funding for solar
energy developments, a detailed review is beyond the scope of this paper.348 In addition
to the Barcelona example discussed above, the autonomous region of Castile-La Mancha
is worth special mention. It has become the leading Spanish region for development and
promotion of renewable energy on a large scale. While most of the development to date
has been in wind energy, the area has great solar potential, and is home to the large 60
MW PV solar development at Olmedilla de Alarcon, Cuenca. In association with central
Government, it has also supported the establishment of a large R & D facility in its area
(see below). The region offers a 40% subsidy for solar PV and biomass installations for
self-consumption.349
4.
Public/Private partnerships
As mentioned, the Spanish government has relied primarily upon the economic forces
from the feed-in tariff scheme to expand solar energy development. There are few
public/private partnerships in installation and development at the national level, although
there are examples of close local government involvement with the private sector to
further develop solar energy in their areas. The autonomous region of Castile-La Mancha
has, with the central Government, invested over €1 billion in the industry. It assisted with
346
347
348
349
European Renewable Energy Council (EREC), Renewable Energy Policy Review – Spain, May 2004,
available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES_in_EU_and_CC/Spain.pdf, at p 7,
viewed 28 September 2009.
European Renewable Energy Council (EREC), Renewable Policy Review – Spain, 2009, available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review_
_09_Final.pdf, at p 8, viewed 28 September 2009; European Commission, Directorate General for
Energy and Transport, Spain – Renewable Energy Fact Sheet, 23 January 2008, available at
http://www.energy.eu/renewables/display.php?chart=factsheets/2008_res_sheet_spain_en.pdf, viewed
28 September 2009; Coenraads, R. et al, Renewable Energy Country Profiles, ECOFYS, Utrech,
Netherlands, February 2008, available at http://www.resprogress.eu/index.php?action=documents&lang=NL, at p 145, viewed 28 September 2009.
For further commentary on financial incentives, see Ministry of Industry, Tourism and Commerce,
Summary: The Spanish Renewable Energy Plan 2005-2010 (in English), pp 59-61, and Table at p 62, at
http://www.feed-in-cooperation.org/content/view/28/50/, viewed 2 June 2009.
Intelligent Energy – Europe Programme, The State of Renewable Energies in Europe, 8th EurObserv’ER
Report, 2008, available at http://www.eurobserv-er.org/pdf/barobilan8.pdf, at pp131-133.
29
the establishment of a Renewables Energy Regional Centre in Toledo, and the
Technological and Scientific Park of Castile-La Mancha in Albacete.350
5.
R&D
Most R & D on solar energy in Spain is conducted by the private sector, including such
firms such as Abengoa Solar, Acciona, Iberdrola Energías Renovables, and Sener, along
with international companies operating in Spain, such as BP Solar, and Schott Solar and
Rio Glass Solar.351
Publicly funded R & D is mainly through the support to universities and government
research institutes. Examples include the Institute of Solar Energy at the Technical
University of Madrid,352 the Plataforma Solar de Almería at the Center for Energy,
Environment and Technological Research,353 and the Instituto de Sistemas Fotovoltaicos
de Concentracíon (ISFOC) in Puertallano. ISFOC is a company established for R & D
with the assistance of the Castilla-La Mancha autonomous region and the Ministry of
Education and Science. It is a cooperative effort between the University of Castilla –La
Mancha and the Institute of Solar Energy of the University of Madrid. The research effort
is primarily focused on concentrated PV technology, and has established pilot and
research projects in cooperation with a number of solar energy companies. These include
Isofoton, Concentracion Solar La Mancha and Sol3G from Spain, Solfocus and Emcore
from the US, Concentrix from Germany and Arima Eco from Taiwan.354
6.
Procurement policies
There appears to be little in the way of specific central government procurement policies
for energy efficient products. However, the requirements for energy efficiency and
renewable energy in the regulation and policy already discussed, implicitly requires
central, regional and local government to prefer energy efficient and renewable
technologies in procurement decisions. The Saving and Energy Efficiency Strategy in
Spain 2004-2012, sets out preferences and provides for financial incentives for choices of
energy efficient and renewable technology, not only by government, but also by industry
and the private sector.355
350
Ibid.
Ibid at p. 133; Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at p16, viewed 28 September 2009.
352
See the Institute for Solar Energy website at http://www.ies.upm.es/index.php?id=348, viewed 28
September 2009.
353
See Ministry of Science and Innovation website at http://www.psa.es/webeng/instalaciones/index.html,
viewed 28 September 2009.
354
See the ISFOC website at http://www.isfoc.es/, viewed 28 September 2009.
355
Ministry of Industry, Tourism and Commerce, Saving and Energy Efficiency Strategy in Spain 20042012, July 2007, available at
http://ec.europa.eu/energy/demand/legislation/doc/neeap/es_neeap_en.pdf, viewed 28 September 2009.
351
30
As already mentioned, the Technical Building Code 2006 mandates the inclusion of 30%70% solar water heating for all new and renovated buildings, and for solar PV
installations for all commercial and government buildings over a certain size.
There is no specific national obligation to favor local manufactured content or local
enterprises. However, particularly in the CSP technology area, Spain is a world leader in
solar technology, and local suppliers provide a significant share of the installed
technology. Some Spanish regions require renewable energy developers to use
domestically made equipment, sometimes as a condition of consent where a government
permit is required. An example is Galicia where wind energy developments have been
required to use 70% or more of locally manufactured content. A similar requirement was
imposed in Navarra leading, it is claimed, to the development of 700 MW of locally
produced wind energy and the creation of 4,000 jobs in the region.356
7.
Land use and zoning incentives
Land use, zoning and environmental regulation is mainly the province of the 19
autonomous regions and cities, and the municipal authorities. Many regions and cities are
very supportive of renewable energy development, and have developed planning
processes and ordinances conducive to solar energy developments. The example of
Barcelona and Castila-La Mancha have already been discussed.
The Technical Building Code 2006 is an extremely powerful tool requiring mandatory
installation of solar water heating and solar PV in new and renovated buildings (see
above).357
C.
The impact of legal and policy initiatives and incentives in the use of solar
energy
While Spain has a long history of encouragement of renewable energy through regulation
and policy, it is only in the last 2-3 years that solar PV, CSP and thermal heating has
experienced rapid growth. In the case of solar PV and to a lesser extent, CSP technology,
this is almost solely attributed to the feed-in tariff regime, particularly under the Royal
Decrees of 2004, 2007 and 2008 (see above). In 2008 Spain was the clear world leader in
solar PV installation with 2.6 GW of new capacity – over half the global total in that
year. This was also a five-fold increase over 2007 levels, which were in turn a five-fold
increase over 2006. Spain has also taken the dominant position in CSP installation, and
356
357
Petta, S., ―Lessons from Europe on Clean Energy Manufacturing Policy That Works‖, Apollo Alliance,
19 May 2009, available at http://apolloalliance.org/feature-articles/lessons-from-europe-on-cleanenergy-manufacturing-policy-that-works/, viewed 28 September 2009.
Murcia City Council et al, ―New solar thermal ordinance in Murcia City (Southeastern Spain)‖, ProSTO
Newsletter No 2, May 2009, available at
http://www.solarordinances.eu/Portals/0/ProSTO_newsletter_2009-05_small.pdf, at pp 3-4, viewed 28
September 2009.
31
R & D, commissioning the 50 MW Andosol 1 plant in 2008, and upwards of another 800
MW in the process of construction or advanced planning for commissioning over the next
4 years.358
Solar thermal water and space heating is also experiencing a rapid increase, largely
attributable to the mandatory solar water heating and solar PV requirements for buildings
set out in the Technical Building Code 2006. At the end of 2007, solar thermal coverage
had reached 1.2 GW-thermal, about double the level in 2006.359 It is expected to maintain
a high level of growth as newly permitted developments are constructed and the solar
equipment comes on-line.
As with Germany, the ―feed-in‖ tariff system in Spain does not rely upon direct public
financial support. It creates incentives for private investment, and it provides economic
encouragement for continued technology development to increase efficiency and
improvements in manufacturing and installation techniques to reduce costs. While the
regime has been almost too successful, necessitating the Spanish government to rein in
the annual increase of solar PV to 500 MW over the next 3 years, the development of the
sector has been nothing short of spectacular, and has laid the foundations for a strong and
growing solar energy research, manufacturing and installation industry in Spain.
Subsidies and financial incentives have played a limited role in solar electricity
production in Spain, although are more significant in the development of solar water
heating.
Employment in the renewable energy sector is estimated to be around 94,925 jobs by
2010, with 11,640 in the CSP industry, 9,186 in solar PV, and 4,632 in solar thermal
heating.360 However, there are suggestions from some quarters that the loss of jobs
through the move to green energy may outweigh the creation of new jobs.361
Estimated investment in Spain‘s renewable energy industry in the 2005-2010 period is
€23.6 billion, of which €2.16 billion is in CSP, €2.4 billion in solar PV, and €2.7 billion
in solar thermal heating.362
358
359
360
361
362
Intelligent Energy – Europe Programme, The State of Renewable Energies in Europe, 8th EurObserv’ER
Report, 2008, available at http://www.eurobserv-er.org/pdf/barobilan8.pdf, at pp 71-72, viewed 28
September 2009.
European Renewable Energy Council (EREC), Renewable Policy Review – Spain, 2009, available at
http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/SPAIN_RES__Policy_review_
_09_Final.pdf, at p 2, viewed 28 September 2009.
Ministry of Industry, Tourism and Commerce, Summary: The Spanish Renewable Energy Plan 20052010 (in English), p 78, at http://www.feed-in-cooperation.org/content/view/28/50/, viewed 2 June
2009.
Blankley, T., ―Five million green jobs?‖, Washington Times, 27 May 2009, available at
http://www.washingtontimes.com/news/2009/may/27/five-million-green-jobs/, viewed 28 September
2009.
Ministry of Industry, Tourism and Commerce, Summary: The Spanish Renewable Energy Plan 20052010 (in English), p 58, at http://www.feed-in-cooperation.org/content/view/28/50/, viewed 2 June
2009.
32
D.
Legal and Policy Barriers to Solar technology
There appear to be few legal and policy barriers to solar energy development in Spain.
The political and public support and acceptability of solar energy is highly conducive to
widespread uptake at the demand end, and continued expansion of the manufacturing and
installation industry at the supply end. The GHG emission targets and renewable energy
targets that Spain has set are ambitious, and the legal and policy measures to meet these
targets appear to be strong, and are regularly updated to accommodate changing
circumstances.
1.
Land use planning
Planning and environmental effects are primarily the responsibility of the autonomous
regional governments and municipalities in Spain. As with any other major construction
and development undertakings, there are environmental, social and economic effects with
solar energy development that must be taken into account by the relevant consenting
authority. While there is some evidence in the literature of local opposition to large-scale
wind energy developments because of visual impact, there appears to be a relatively high
level of acceptability overall. In five of the autonomous regions, over half the electricity
demand was met by renewable electricity in 2006. In Castile, Leon, and Galicia, the
figure was around 70%. These figures will be even higher in 2009.363 This gives some
sense of the level to which renewable energy has become mainstream in these areas, and
suggests there are few planning barriers to well designed and managed developments.
2.
Fiscal measures that favour traditional energy sources
There are no significant tax or fiscal barriers for renewable energy. In fact, as already
mentioned, there are tax rebates, low-interest loans, and subsidies available to encourage
renewable including solar energy development.
Coal has been subsidized in Spain for electricity production, but in accordance with EU
requirements, these subsidies are being phased out. In any event, the ―subsidy‖ for solar
PV and CSP electricity under the ―feed-in‘ tariff scheme is paid at a level several times
higher than the average price of electricity and is not directly subject to market forces. As
the average price of electricity is in fact based on the average price from non-renewable
sources, including any subsidized coal power stations, any remaining subsidy for fossil
fuels is therefore largely irrelevant to decisions to invest in renewable energy.
At a more general level, there is a view in some quarters that the costs to the community
of the ―feed-in‖ tariff are too high, and the subsidization of solar production of solar
energy is economically unsound.364 This was a factor in the recent moves by the Spanish
363
364
Renewable Energy in Spain, Wikipedia, Table, available at
http://en.wikipedia.org/wiki/Renewable_energy_in_Spain, viewed 28 September 2009.
See, eg, comments in Baratti, G., ―Spanish Solar Subsidy Seduces FPL, Scorches Consumers (Update
3)‖, Bloomberg, 8 May 2009, available at
http://www.bloomberg.com/apps/news?pid=20601109&sid=aCGsB8hGkDIg, viewed 28 September
33
government to reduce the tariff levels under the feed-in scheme, and the renewable
energy targets for solar PV over the next three years.
E.
Summary
As with Germany, Spain is a world leader in grid-connected CSP and solar PV
technology and uptake. However its policies have not been as consistent as Germany, and
from 2004 – 2008 there have been three different systems of feed-in tariffs enacted. The
2004 Royal Decree was largely the result of an initial low uptake of solar PV. The more
generous Decrees of 2007 followed, and this led to a dramatic increase in solar PV and
CSP take-up that was felt not to be economically sustainable although it resulted in a
five-fold increase of solar PV as a share of electricity generation both in 2007 and 2008.
Solar now comprises around a 1% share of electricity consumption.
The Spanish Government responded with the 2008 Royal Decree which cut back on the
levels of feed-in tariff, and reduced the annual targets to an average of 500 MW of new
capacity from 2009-2012.
Despite these fluctuations in the policy and fiscal measures, the 2008 scheme appears to
be more balanced and affordable in the longer term, and should set the conditions for a
more steady and sustainable growth of solar PV and CSP in Spain.
The effects of the Technical Building Code 2006 are just beginning to be seen with
strongly increasing figures for solar thermal heating uptake, and along with the many
parallel and in some cases more stringent municipal measures for solar water and space
heating, should ensure Spain is a world leader in this area as well.
2009; and Blankley, T., ―Five million green jobs?‖, Washington Times, 27 May 2009, available at
http://www.washingtontimes.com/news/2009/may/27/five-million-green-jobs/, viewed 28 September
2009.
34
III.
Japan
A.
Introduction
Japan is slightly smaller than California with a land area (excluding water) of 364,485
km2. It is a mountainous heavily forested country with climatic conditions ranging from
cool temperate in the north to tropical in the South. Japan has an aging population
estimated at 127,078,679 (as at July 2009.365
A parliamentary government with a constitutional monarchy, the country is divided into
47 administrative divisions or ―Prefectures‖, which have considerable autonomy in land
use and environmental management. Central government ministries such as the Ministry
of Economy, Trade and Industry (METI) are very powerful and exert considerable
influence in energy and infrastructure development. There are strong urban
concentrations on the Southern and Eastern coast of the main island of Honshu on the
Tokyo – Osaka axis.
Japan consumed 515.8 million tonnes oil equivalent (mtoe) of primary energy in 2007
(about 4.07 tonnes per person), representing a 0.9% decline over 2006 consumption
levels. Of this, 229.3 mt was oil, 81.2 mtoe was gas, 125.3 mtoe was coal, and 63.1 mtoe
was nuclear. The remainder was mainly from biomass, hydro and other renewables.366
Japan‘s total energy supply in the fiscal year (FY) 2006 was 23,770 PJ.367 The fuel mix in
that year was: 45.6% from oil, 21.3% from coal & peat, 14.7% from natural gas, 15%
from nuclear, 1.4% from hydro, and 2% from other sources including .7% from
geothermal, solar and wind.368 In terms of electricity production, 65% was thermal (oil
and coal), 26.1% nuclear, 8.4% hydro, and less than 1% renewables.369 While renewables
are still a relatively small contributor to energy consumption, Japan is a world leader in
solar energy, ranking 3rd in the world for grid-connected solar PV (1,970 MW in 2008),
and 4th for solar hot water capacity (4.9 GW-thermal in 2007).370
Japan has recently announced a number of new policy initiatives on energy efficiency
with a particular emphasis on solar energy development. In a speech in June 2008, the
365
366
367
368
369
370
Figures from the CIA World Factbook, available at https://www.cia.gov/library/publications/the-worldfactbook/geos/ja.html, viewed 30 September 2009.
BP Statistical Review of World Energy, June 2009, available at http://www.bp.com, at pp 40-41.
Japan Ministry of Internal Affairs and Communications, Statistics Bureau, Statistical Handbook of
Japan 2009, 2009, available at http://www.stat.go.jp/english/data/handbook/pdf/c07cont.pdf, at Chapter
7 (Table 7.1), viewed 30 September 2009.
Organisation for Economic Co-operation and Development/International Energy Agency (OECD/IEA),
Share of total primary energy supply in 2006 – Japan, 2008, available at
http://www.iea.org/textbase/stats/pdf_graphs/JPTPESPI.pdf, viewed 30 September 2009.
Japan Ministry of Internal Affairs and Communications, Statistics Bureau, Statistical Handbook of
Japan 2009, 2009, at: http://www.stat.go.jp/english/data/handbook/c07cont.htm, Chapter 7 (Table 7.2),
viewed 30 September 2009.
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at pp 9, 24 and 25 (Tables R3 and R5), viewed 30
September 2009.
35
then Prime Minister Yasuo Fukuda announced a ―Low Carbon Society‖ policy, including
a long-term reduction of 60-80% of carbon emissions from 2005 levels, a mid-term
reduction of 14% by 2020, an increase to above 50% of ―zero-emission power supply‖
(including nuclear), a ten-fold increase in solar power generation by 2020, and massive
investment in R & D ($US30 million over then next 5 years).371
The current Prime Minister Taro Aso continued this theme in a speech on Japan‘s future
development strategy on 9 April 2009. Additions to his predecessor‘s aims included a
commitment to increase renewable energy to comprise 20% of total energy consumption
by 2020, a twenty-fold increase in solar power by 2020, a feed-in tariff scheme for
utilities to purchase solar power from households at twice the market price, the
installation of solar power units in 36,000 schools over the next 3 years, and a reduction
in the cost of solar power system by 50% in the next 3-5 years.372 In December METI
announced a goal for 70% of new homes to have solar power installed, and that $US145
million would be allocated for this purpose in the first 3 months of 2009.373 METI has
been very active in implementing these plans, and a number of these measures are now
the subject of ―action plans‖ and Cabinet decisions.
B.
Energy law and policy in Japan
1.
International and regional influences
Japan is a signatory to the 1992 Framework Convention on Climate Change (―FCCC‖)
and ratified the Kyoto Protocol on 4 June 2002. It has an obligation to reduce GHG
emissions by 6% from 1990 levels within the 2008-2012 first commitment period.374 It is
currently falling short of this target with emissions at 13.8% above 1990 levels.375
The Japanese government has introduced a number of measures to meet these
international objectives, and its own assessments of the critical need to reduce GHG
emissions and implement sustainability principles. These include legislation and
regulation on energy policy, efficient energy use, the targeted promotion of innovative
371
372
373
374
375
HE Mr Yasuo Fukuda, ―Japan as a Low-carbon Society‖, Speech at the Japan National Press Club, 9
June 2008, (English Translation), available at
http://www.kantei.go.jp/foreign/hukudaspeech/2008/06/09speech_e.html, viewed 30 September 2009.
HE Mr Taro Aso, ―Japan‘s Future Development Strategy and Growth Initiative Towards Doubling the
Size of Asia‘s Economy‖, Speech at the Japan National Press Club, 9 April 2009, (English Translation),
available at http://www.kantei.go.jp/foreign/asospeech/2009/04/09speech_e.html, viewed 30 September
2009.
See United Press International, ―Japan Renews Focus on Solar Power‖, 26 December 2008, available at
http://www.upi.com/Energy_Resources/2008/12/26/Japan_renews_focus_on_solar_power/UPI37681230300775/, viewed 30 September 2009.
UNFCC, Kyoto Protocol Reference Manual, November 2008, available at
http://www.unfccc.int/resource/docs/publications/08_unfccc_kp_ref_manual.pdf, at Para 2.1 and Table
II-1, viewed 30 September 2009.
Ministry of the Environment, Japan, National Greenhouse Gas Inventory Report, April 2009, available
at
http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/477
1.php, at p 1, viewed 30 September 2009.
36
energy technology including solar PV,376 and a renewable portfolio standard system. In
2008 more detailed implementation documents were released, including a comprehensive
Action Plan for Achieving a Low-Carbon Society and an Action Plan For Promoting The
Introduction of Solar Power Generation.
2.
National law and regulation as it affects solar energy
(a)
Basic Act on Energy Policy 2002 (Act No 71 of June 14, 2002)377
Japanese regulation generally proceeds on the basis of a general enactment setting out
broad purposes and intent, followed by more detailed measures including Cabinet Orders
and Action Plans. The Basic Act on Energy contains a general statement of purpose to
promote measures on energy supply and demand that balance the needs of social and
economic development with the impact on the environment (Art 1). It calls for more
diversification of energy supply and increased energy self-sufficiency (Art 2). Article 3
contains the core purpose, and states:
With regard to energy supply and demand, measures shall be promoted to
realize energy supply and demand that allow for the prevention of global
warming and the preservation of the local environment, as well as to contribute
to the formation of a recycling society by improving energy consumption
efficiency, by such measures as promoting the conversion to non-fossil-fuel
energy use such as solar and wind power and the efficient use of fossil fuels.
The Act requires the State, local government, business and citizens to promote these
goals, and requires the government to make legislative, fiscal and other arrangements,
including formulation of a Basic Energy Plan, to implement them (Arts 5-12). It also
calls for R & D, and international educational and research cooperation and
exchanges (Arts 13 & 14).
A Basic Energy Plan was promulgated in 2003, and sets out a number of specific
policies and initiatives for action. It specifies the basic principles governing energy
policy as:
1. Energy security;
2. Adaptability to the Environment; and
376
For a description of solar PV policy until 2006, and the ―Seventy Thousand Roofs‖ program, see
Bradford, T., Solar Revolution: The Economic Transformation of the Global Energy Industry,
(Cambridge, MA, The MIT Press, 2006), pp 177-179.
377
English translation available at AsianLii, Laws of Japan, at
http://www.asianlii.org/jp/legis/laws/baoep2002an71oj142002332/, viewed 30 September 2009.
37
3. Utilization of market mechanisms based on the careful consideration of these
points.
Matters in the Plan that are specifically relevant to solar energy, include:
the requirement for diversification of energy resources as part of the
―energy security‖ principle, and
the requirement for the promotion of energy efficiency and conservation
measures, and the increased use of non-fossil energy under the
―adaptability to the environment‖ principle.378
(b)
Act Concerning the Rational Use of Energy 1979 (Act No 49 of June 22,
1979; Final revision: Act No 50 of June 2, 2006)379
First enacted after the oil shortage of 1978, the law originally promoted the transition
from petroleum to natural gas and nuclear power. As amended in 1998, and later, the
focus shifted to promoting energy efficiency to tackle global warming.380
The measure is aimed at increasing the efficiency of use of energy in factories, buildings,
transport, and machinery and equipment. The Act also provides for a system of certified
building energy managers with responsibility for efficiency of energy use in large
factories and industrial activities. The measure was further explained and implemented
through the Fundamental Policies for Rational Use of Energy (Ordinance No 361, MITI)
adopted by Cabinet on 6 July 1993.381
Of particular interest are the provisions on building standards for thermal efficiency and
insulation.
(c )
378
379
380
381
Special Measures Law Concerning the Use of New Energy by Electric
Utilities (Act No 62 of June 7, 2002) (also called the Renewables Portfolio
Standard Law or “RPS Law”)
The Energy Conservation Centre, Japan (ECCJ), Japan Energy Conservation Handbook 2008, ECCJ,
Tokyo, December 2008, available at http://www.eccj.or.jp/databook/2008e/index.html, at p 6, viewed
30 September 2009.
English translation available at AsianLii, Laws of Japan, at
http://www.asianlii.org/jp/legis/laws/actruoe1979an49oj221979467/, viewed 30 September 2009.
See Morishima, A., ―Implementing the Kyoto Protocol beyond the WSSD at Johannesburg – The
Japanese Perspective‖, in Bradbrook, A. J. et al, eds., The Law of Energy for Sustainable Development,
New York, Cambridge University Press, 2005, p 295 at 298-299.
English translation of the Fundamental Policies for Rational Use of Energy is in Ottinger, R. L. et al,
eds., Compendium of sustainable energy laws, IUCN Academy of Environmental Law Research
Studies, 2005, pp 295-298.
38
This measure, which came into force on 1 April 2003, requires electricity suppliers to
include a certain proportion of ―new energy electricity‖ from renewable sources in their
supply mix. New energy can include wind power, thermal heat, small and medium scale
hydro (up to 1 MW capacity), biomass and solar PV generation.382 The obligation is on
an incremental scale starting from 7.32 billion kWh in 2003, rising to 12.2 billion kWh in
2010 (1.35% of national electricity consumption).383 As a result of a Report prepared for
METI in March 2007,384 the target for 2014 has been set at 16 billion kWh.
The obligation can be met by a supplier generating the electricity itself; by purchasing
(and on-selling) new energy electricity from another supplier; or by purchasing ―new
energy certificates‖ from another party. These certificates are issued upon generation of
new energy electricity or the purchase of certificates in the marketplace, in the same way
that emissions trading schemes work. To date it appears that 36 electricity retailers have
met the requirements under the Act.385
A recent measure proposed by the March 2007 METI Report is that solar PV generation
be given a multiplier of 2 x for the period 2011-2014 for the purposes of retailers meeting
their obligations. This will give further impetus for installation of solar PV generation.386
On 24 February 2009, the Japan Minister of Economy, Trade and Industry, Toshihiro
Nikai, announced that utilities would be required to double the price they pay to purchase
electricity from households and businesses with grid-connected solar installations.387
382
383
384
385
386
387
English translation unavailable. For a full explanation of the law, see METI, Agency for Natural
Resources and Energy, ―What‘s RPS System in Japan?‖, available at http://www.rps.go.jp/RPS/newcontents/top/toplink-english.html, viewed 30 September 2009.
Ren 21, ―Introduction of Renewable Portfolio Standard (RPS) Law – Japan‖, International Action
Programme, available at http://www.ren21.net/iap/commitment.asp?id=92, viewed 30 September 2009.
Report prepared by the RPS Law Subcommittee of the New Energy Committee, Advisory Committee
for Natural Resources and Energy (Chairman Professor Kenji Yamaji, University of Tokyo), March
2007.
METI, Agency for Natural Resources and Energy, ―What‘s RPS System in Japan?‖, available at
http://www.rps.go.jp/RPS/new-contents/top/toplink-english.html, viewed 30 September 2009;
International Energy Agency (IEA), ―Green Power: Renewable Portfolio Standards (RPS) – 2007
Japan‖, Global Renewable Energy Policies and Measures, available at
http://www.iea.org/textbase/pm?mode=re&id=3591&action=detail, viewed 30 September 2009.
IEA, ―Green Power: Renewable Portfolio Standards (RPS) – 2007 Japan‖, Global Renewable Energy
Policies and Measures, available at http://www.iea.org/textbase/pm?mode=re&id=3591&action=detail,
viewed 30 September 2009; Kawabata, T., ―Japanese Policies Related to New and Renewable Energy &
Grid Integration‖, Presentation given at the ‗Apec Workshop on Renewable Energy Grid Integration
Systems‘, Hawaii, on 14 January 2009, available at
http://www.sandia.gov/regis/presentations/T_Kawabata-METI.pdf, viewed 30 September 2009.
Aritake, T., ―Japan Considers Doubling Price Utilities Pay to Buy Solar Power from Outside Sources‖,
International Environment Reporter, Vol 32, 4 April 2009, 192.
39
(d)
Action Plan for Achieving a Low-Carbon Society (Cabinet Decision, July 29,
2008)388
Following on from Prime Minister Fukuda‘s speech in June 2008, a detailed Action Plan
for Achieving a Low-Carbon Society was introduced by Cabinet Decision on 29 July
2008. The Plan fleshed out most of the Prime Minister‘s proposals, including (of specific
relevance to solar energy):
long-term goal of reducing 60-80% of GHG emissions by 2050;
quantified targets for GHG emissions to be announced in 2009 (note, Prime
Minister Fukuda had indicated a 14% GHG target for 2020);
10-fold increase in renewable energy by 2020, and 40-fold increase by 2030
(note, Prime Minister Aso increased the 2020 target to ―20-fold‖ in a Speech on 9
April 2009, see above);
halve the price of solar generation within 3-5 years;
international support and cooperation for energy conservation and GHG
reduction;
$US30 billion to be invested in low carbon technology, including CCS;
raising the proportion of ―zero-emission‖ energy sources (which includes nuclear)
to over 50%;
promoting energy efficient buildings and housing, and ―200-year housing‖,
through grants, financing, taxation and budgetry measures;
promoting energy efficient appliances and cars;
introducing an emission trading pilot scheme;
investigating introducing tax incentives to curb GHGs from housing and
buildings, cars and appliances;
investigating feasibility of a global ―environment tax‖ to facilitate funding of
innovations and energy efficiency in developing countries;
reducing carbon emissions by increasing carbon sinks;
creating low-carbon cities and regions;
supporting NGO and community initiatives; and
encouraging changes to business styles and lifestyles.
(e)
Action Plan for Promoting the Introduction of Solar Power Generation (11
November 2008)389
This measure was jointly announced by METI, in conjunction with the Ministries of the
Environment, of Education, Culture, Sports, Science and Technology, and of Land,
388
389
Prime Minister of Japan and His Cabinet, Action Plan for Achieving a Low-Carbon Society, Cabinet
Decision, 29 July 2008, available at http://www.kantei.go.jp/foreign/policy/ondanka/index_e.html,
viewed 30 September 2009.
METI et al, Action Plan for Promoting the Introduction of Solar Power Generation, 11 November
2008, available at http://www.meti.go.jp/english/press/data/pdf/081111_ActionPlan.pdf, viewed 30
September 2009.
40
Infrastructure, Transport and Tourism. It is intended to be ancillary to the ―Low-Carbon‖
Action Plan detailed above, and has the specific goal of encouraging individuals, private
enterprise and municipal government to further the introduction of solar power. Specific
elements include:
on the supply side, promoting R & D to improve efficiency and lower costs of
solar power generation systems, improve business models, and expand the market
nationally and internationally;
on the demand side, promote growth in installation through subsidies and reduced
costs, introduce the concept of ―green certificates‖, and promote ―mega-solar‖
developments through partnerships between public/private initiatives;
increase education on solar through increased installations in schools and
universities;
create ―energy parks‖ to demonstrate new solar technology;
linking the RPS Law to long-term supply and demand forecasts to mandate
increased solar uptake; and
assisting with improving and consolidating solar industry infrastructure and longterm strategies.
METI, which has primary responsibility for these Plans, has been very active in
promoting the measures, educating business and communities, and following up with
announcements on specific aspects of the measures as they are implemented.390
A progress report was issued by METI on March 17, 2009,391 which inter alia indicated a
broader ―pan-government‖ cooperation including collaboration with the Ministries of
Health, Labour and Welfare, Agriculture, Forestry and Fisheries, and the Cabinet
Secretariat, and promotion of regional programs through local government. The intention
is to expand the installation of PV systems in a variety of settings, including residential,
railroads, toll-ways, educational facilities, public facilities, large-scale mega-plants, parks
etc. One important measure that is foreshadowed is the investigation of a new system to
buy electricity which may include a ―feed-in tariff‖ approach similar to that used in
Germany with great success.392
(f)
Local government and city measures
While a detailed analysis of measures taken by Prefectural and local government is
390
391
392
See, eg, the various actions taken by METI to hold seminars, conduct surveys and promote solar energy
in relation to new public/private partnerships to promote solar homes described in Japan for
Sustainability, ―Public-Private Partnership to Standardize Solar Homes, Promote Solar-Powered
Homes‖, 27 April 2009, available at http://www.japanfs.org/en/pages/028940.html, viewed 30
September 2009.
METI, Action Plan for Promoting the Introduction of Solar Power Generation (Progress Updates and
the Next Step), Press Release, 17 March 2009, available at
http://www.meti.go.jp/english/press/data/20090317_01.html, viewed 30 September 2009.
See Prime Minister of Japan and His Cabinet, Action Plan for Achieving a Low-Carbon Society, Cabinet
Decision, 29 July 2008, available at http://www.kantei.go.jp/foreign/policy/ondanka/index_e.html, at
pp 21-22, viewed 30 September 2009.
41
beyond the scope of this Report, more than 300 municipalities and local authorities in
Japan offer solar PV subsidies and other incentives for installing solar power and
heating.393 Particular cities have introduced specific initiatives, such as Tokyo‘s
requirement that property developers report to landowners on the possibilities and
viability of solar hot water installations for their buildings. Tokyo has also recently
introduced a system of allocation of ―green heat certificates‖ which will form the
currency for a municipal ―cap-and-trade‖ system that is to be introduced in 2010.394
(g)
Other policy and financial incentives for solar energy development
1.
Renewable portfolio standards (―RPSs‖) & quotas
The RPS Act has already been discussed above.
2.
Tax incentives
In addition to normal mechanisms for individual and corporate taxation, Japan has
recently proposed a number of tax measures to encourage solar development. These
include tax deductions or credits for measures to reduce GHG emissions from houses,
and commercial buildings.395 It was recently announced tax incentives would be
implemented in the 2009 FY for residential and commercial sectors.396 An environmental
tax on CO2 emissions is also under consideration, but there appears to be little political
will to implement such a measure.397
3.
The ―Seventy Thousand Roofs‖ program
Commencing in 1993, this program provided very generous incentives of up to 50% of
the costs of grid-connected PV systems. With appropriate financing consumers could
reduce the price of solar PV electricity to a level that was competitive with
conventionally generated electricity costs. This program alone contributed the most to the
rapid growth in solar PV in Japan from the mid-1990s until the scheme‘s expiration in
2005.398 During that period Japan‘s solar PV rose from around 20 MWp to 1422
393
394
395
396
397
398
Ikki, O. and Matsubara, K., National Survey Report of PV Power Applications in Japan 2007, 25 May
2008, available at http://www.iea-pvps.org/, at pp 6 and 42,viewed 30 September 2009.
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at p 21, viewed 30 September 2009
Prime Minister of Japan and His Cabinet, Action Plan for Achieving a Low-Carbon Society, Cabinet
Decision, 29 July 2008, available at http://www.kantei.go.jp/foreign/policy/ondanka/index_e.html, at
pp 23-24, viewed 30 September 2009.
Kawabata, T., ―Japanese Policies Related to New and Renewable Energy & Grid Integration‖,
Presentation given at the ‗Apec Workshop on Renewable Energy Grid Integration Systems‘, Hawaii, 14
January 2009, available at http://www.sandia.gov/regis/presentations/T_Kawabata-METI.pdf, viewed
30 September 2009.
Ikki, O. and Matsubara, K., National Survey Report of PV Power Applications in Japan 2007, 25 May
2008, available at http://www.iea-pvps.org/, at Para 4.2(c), viewed 30 September 2009.
Bradford, T., Solar Revolution: The Economic Transformation of the Global Energy Industry,
(Cambridge, MA, The MIT Press, 2006), pp 178-179.
42
MWp.399 One of the important effects of the program was the growth of the solar PV
manufacturing, integration and installation industries and the consequential reduction in
price of PV systems.400 The scheme was also accompanied by a high rate of government
and private investment in R & D, and provided the conditions for Japanese dominance,
until recently, in the solar cell manufacturing industry.401
The termination of the subsidy scheme in 2005 caused a flattening out of growth rates for
solar PV uptake in Japan, and is a factor that caused Japan in 2008 to slip back to third
place behind China and Germany in PV cell production.402 Nevertheless, many local
authorities and municipalities continued to provide similar subsidies after 2005, and
recently the Japanese Government, recognizing that the country was losing ground in
solar PV, has reinstated solar PV subsidies.
4.
Current public funding & subsidies
As part of the recent policy initiatives and Action Plans detailed above, Japan has
reinstituted a number of subsidization and financial support initiatives. From 13 January
2009, subsidies of $US700 per kWh for residential systems (approximately 10% of the
cost of a 3.5 kWh system), one third of the cost of commercial installations, and one half
of public sector installations will be available.403
The government has set aside $US90 million for the remainder of the 2008 FY, and
$US200 million for the 2009 FY for residential installations; and $US335 million for
remainder of the 2008 FY, and $US300 million for the 2009 FY for commercial and
public sector installations.404 To date uptake has been slower than expected, which may
be explained by the global economic crisis.405
5.
Public/Private partnerships
Japan has a long history of cooperation between government research bodies, universities
and the private sector, and this is also a feature in the Action Plans. Current incentives
399
400
401
402
403
404
405
Ikki, O. and Matsubara, K., National Survey Report of PV Power Applications in Japan 2007, 25 May
2008, available at http://www.iea-pvps.org/, at p 10, viewed 30 September 2009.
Ibid.
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at p. 15, viewed 30 September 2009
Ibid.
Reuters, ―Japan to bring back solar power subsidy for homes‖, 24 December 2008, available at
http://www.reuters.com/article/environmentNews/idUSTRE4BN1U820081224, viewed 30 September
2009; and see Asia-Pacific Economic Cooperation (APEC), Energy Working Group, Apec Workshop on
Renewable Energy Grid Integration Systems – Workshop Summary, March 2009, available at
www.sandia.gov/regis/REGIS-finalreport.pdf at pp 13-14, viewed 30 September 2009.
Kawabata, T., ―Japanese Policies Related to New and Renewable Energy & Grid Integration‖,
presentation given at the Apec Workshop on Renewable Energy Grid Integration Systems, Hawaii, on
14 January 2009, available at http://www.sandia.gov/regis/presentations/T_Kawabata-METI.pdf,
viewed 30 September 2009.
See, eg, Maeda, R., ―Japan solar subsidies lure fewer users than planned‖, Reuters UK, 8 April 2009,
available at http://uk.reuters.com/article/idUKTRE5375F820090408, viewed 30 September 2009.
43
include significant funding for public/private partnerships, demonstration projects,
seminars, giving advice and solar public relations drives.406 Many of these measures
involving demonstration and model projects are intimately related to R & D (below).407
6.
R&D
Solar energy R & D in Japan is driven by both the strong solar energy industry, and by
the Government through subsidies and public/private partnerships for large scale testing
and demonstration projects for solar energy.408 One of the distinguishing features in
Japan solar R & D, was the creation in 1980 by the Japanese government of the New
Energy and Industrial Technology Development Organisation (―NEDO‖). Initially
established as a response to the oil shocks of the 1970s, NEDO is a government funded
administrative agency for promoting R & D for oil-alternative energy technologies
including renewable energy and energy efficiency projects.409 NEDO has an annual
budget of approximately $US2.3 billion, and employs 1,000 personnel.410 It encourages
collaborative research between the public, private and academic sectors, and has driven
both national and international R & D projects. Of particular interest for the solar energy
sector are current projects on grid interconnection of solar PV, mass deployment
technology, clustered combinations of renewable energy technology, development of
advanced ultra-thin and organic thin-film solar cell technology, and development of
electric storage systems.411 Local governments and municipalities, and the private sector,
also contribute significant investment in solar R & D.412 The recent Low-Carbon and
Solar Action Plans (above) indicate much increased R & D spending on solar energy
development over the next few years.
7.
Procurement policies
Japan is a very nationalistic society, and with a strong indigenous solar energy industry
most procurement of solar energy technology occurs naturally from within the country.
The Government has undertaken to lead by example in its procurement policies for
vehicles, appliances, emissions countermeasures in buildings, energy efficient lighting
and solar power generation to achieve an average reduction in GHG emissions from
406
407
408
409
410
411
412
See, eg, Japan for Sustainability, ―Public-private partnership to standardize solar systems, promote
solar-powered homes‖, 27 April 2009, available at http://www.japanfs.org/en/pages/028940.html,
viewed 30 September 2009.
Ikki, O. and Matsubara, K., National Survey Report of PV Power Applications in Japan 2007, 25 May
2008, available at http://www.iea-pvps.org/, at p 10, viewed 30 September 2009..
For a full account of current R & D status in Japan, see ibid.
See the NEDO website (in English) available at http://www.nedo.go.jp/english/introducing/index.html,
viewed 30 September 2009.
APEC, Energy Working Group, Apec Workshop on Renewable Energy Grid Integration Systems –
Workshop Summary, March 2009, available at www.sandia.gov/regis/REGIS-finalreport.pdf, at pp 4-5
viewed 30 September 2009.
Ikki, O. and Matsubara, K., National Survey Report of PV Power Applications in Japan 2007, 25 May
2008, available at http://www.iea-pvps.org/, at pp 16-18, viewed 30 September 2009.
Ibid at p18 (public budgets) and pp 19-34 (industry production).
44
government activity by 8% over 2001 levels by 2012.413 General statements requiring
government agencies to procure goods that contribute to energy efficiency are found in
the Basic Act on Energy Policy 2002 (see above).414
8.
Land use, building code and zoning incentives
Planning regulation is largely the province of the Prefectures and municipalities in Japan
and an analysis of specific planning measures is beyond the scope of this paper.
However, the use of energy efficient materials and construction techniques in buildings is
mandated in the Act Concerning the Rational Use of Energy 1979 (above). Of particular
interest are the provisions requiring owners of building, builders and providers of
construction materials for buildings, to improve the standard of insulation of buildings,
and for government agencies and local bodies to establish building standards in relation
to thermal efficiency and insulation. The use of solar heating and water heating systems,
although not specifically included in this measure, would assist building owners to
achieve those goals.
C.
The impact of legal and policy initiatives and incentives in the use of solar
energy in Japan
It is clear that the strongest driver for the development of the solar power uptake and the
development of the solar industry in Japan between 1993 and 2005 were the subsidies
provided for homeowners, businesses and communities for installation of solar PV under
the Seventy Thousand Roofs‖ program. Generous funding has also been provided for the
industry for expansion of production and R & D, often in public/private partnerships
driven largely by the state research agency NEDO, and METI. The oil shocks of the
1970s, and Japans great reliance on imported sources of energy, including coal and oil,
contributed greatly to law and policy measures to increase energy efficiency and
transition to alternatives. As was recently observed in relation to the targeted approach of
the Japan government for solar subsidy and R & D initiatives:
Their success can be attributed to Japan‘s embrace of coordinated public
413
Prime Minister of Japan and His Cabinet, Action Plan for Achieving a Low-Carbon Society, Cabinet
Decision, 29 July 2008, available at http://www.kantei.go.jp/foreign/policy/ondanka/index_e.html, at
pp 21-22, viewed 30 September 2009.; METI, Action Plan for Promoting the Introduction of Solar
Power Generation, 11 November 2008, available at
http://www.meti.go.jp/english/press/data/pdf/081111_ActionPlan.pdf, at pp 2-4, viewed 30 September
2009, Ikki, O. and Matsubara, K., National Survey Report of PV Power Applications in Japan 2007, 25
May 2008, available at http://www.iea-pvps.org/, at p 42, viewed 30 September 2009.
414
See, eg, Art 5 (Responsibilities of the State) and Art 6 (Responsibilities of local public entities). English
translation available at AsianLii, Laws of Japan, at
http://www.asianlii.org/jp/legis/laws/baoep2002an71oj142002332/, viewed 30 September 2009.
45
investment in each stage of the solar technology innovation pipeline, including
not just funding for research and development, but also demonstration and
early-stage deployment efforts. These efforts to support the demonstration and
early-stage deployment of solar photovoltaics ensured a market for the
emerging technology; without these policies photovoltaics would have faltered
before reaching costs that were competitive with market electricity rates.415
The cessation of subsidies for homeowners for PV installation between 2005 and 2009
resulted in a distinct flattening of the growth rates for solar PV development, and Japan
losing its global leadership position in solar PV development, manufacture and export.416
The government recognized this in 2008, reinstituting subsidies for installation of solar
PV and much enhanced R & D funding. Policy initiatives including the Low-Carbon and
Solar Action Plans of 2008 are expected to assist Japan to re-emerge as the world leader
of solar PV.417
D.
Legal and Policy Barriers to Solar technology
There appear to be few legal or policy barriers to solar energy uptake except the vested
interests of the existing major power companies that rely heavily on coal and nuclear
generation. In Japan business and social connections at the highest levels of government
and the private sector have an immense impact on the direction of government policy and
regulation. For example, corporate giants such as Mitsubishi Industries have global
investments in coal mining operations, and any significant interference with the domestic
electricity generation market will have considerable effects on Japan‘s economy. On the
other hand, successive Prime ministers, and the very powerful government ministry
METI, are aggressively pursuing a low-carbon economy. One concern is that, in most
recent policy and the 2008 Low-Carbon Action Plan, both clean-coal technology R & D
investment, and the nuclear power option have been incorporated as central elements.
Continued support for these non-renewable forms of energy will reduce the impetus for
renewable energy uptake in the medium-term, although public perception and preference
is strongly in favor of improved energy efficiency and renewable clean alternatives.
Other barriers include:
no nation-wide gross feed-in tariff system as yet;
no tax concessions for energy efficiency and renewable energy systems; and
confusing and tardy Prefectural and municipal planning processes.
415
The Breakthrough Institute, ―Soaking up the sun: Solar power in Germany and Japan‖, in Arnold, Z. et
al, Case Studies in American Innovation – A new look at government involvement in technological
development, The Breakthrough Institute, April 2009, available at:
http://www.thebreakthrough.org/writing.shtml, , at p 25, viewed 30 September 2009.
416
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at p 15, viewed 30 September 2009.
417
European Photovolteic Industry Association (EPIA), Global Market Outlook for Photovoltaics until
2013, EPIA, Brussels, 2009, available at http://www.epia.org/, at p 8, viewed 30 September 2009.
46
1.
No gross feed-in tariff for solar power
Although there is as yet no feed-in tariff system as used in Germany, there has recently
been a move in that direction with the proposal to double tariffs payable by electricity
utilities for PV electricity delivered to the grid,418 and to investigate possible introduction
of a full gross feed-in tariff.419
2.
Lack of taxation incentivisation
Although there are some taxation concessions for investment in solar PV and thermal
power in Japan, they are mainly aimed at the manufacturing and export sectors. There are
deductions available to power utilities who incur costs and losses through accepting
renewable energy into their networks, but these are generally on the basis of normal
taxation rules. There have been recent suggestions of taxation incentives for the industry
and for generating renewable energy (see 2. (g) 3., above), but as yet these have not
eventuated.
3.
Land use planning
As mentioned above (2. (g) 7.) planning regulation is largely the province of local
government in Japan and is highly complex and the subject of complex hierarchies of
power between Prefectures, municipal authorities and cities. Larger cities such as Tokyo
usually design their own planning and development policies and land-use regulation with
relative autonomy, but in consultation with central government agencies such as METI
and the Ministry of the Environment. It would be fair to say that the level to which local
planning regulation may constrain solar PV and thermal development depends very much
on the support (or otherwise) that such developments have from central government
agencies such as METI.
E.
Conclusions
Japan is a world leader in terms of solar PV generation, and solar technology and
manufacturing. Unlike Germany, however, this growth has not been attributable to the
gross ―feed-in tariff‖ model. Japan appears to have been very successful in growing the
PV market and industry through its system of targeted price incentives, subsidies, loan
support, export and R & D encouragement. Along with stringent GHG emissions and
renewable energy RPS targets, it may be that the unique social, political, business and
economic conditions that prevail in Japan are better suited to this command and control
approach rather than a market-based approach.
418
419
Aritake, T., ―Japan Considers Doubling Price Utilities Pay to Buy Solar Power from Outside Sources‖,
International Environment Reporter, Vol 32, 4 April 2009, p 192.
See Prime Minister of Japan and His Cabinet, Action Plan for Achieving a Low-Carbon Society, Cabinet
Decision, 29 July 2008, available at http://www.kantei.go.jp/foreign/policy/ondanka/index_e.html, at
pp 21-22, viewed 30 September 2009.
47
IV.
China
A.
Introduction
China has a land area (excluding water) of 9,326,410 km2. Slightly smaller than the US, it
is mostly mountainous with high plateaus and deserts in the West, and plains and deltas
in the East. Climatic conditions range from tropical in the south to sub-arctic in the
North. China has optimal conditions for utilization of solar energy, particularly in the
West with high solar irradiance and low cloud cover.420
China is the most populous country in the world with an estimated 1,338,612,968 people
(as at July 2009), increasing at the rate of .655% pa (2009 estimate). It has an estimated
GDP (PPP) in 2008 of $6,000 (in 2008 $US), although it has a very high annual growth
rate of 9.8% (2008 est).421
A communist state since 1949, China has a civil law legal system based on Soviet and
continental civil legal principles. The country is divided into 23 provinces, 5 autonomous
regions, and 4 municipalities (Beijing, Shanghai, Chongqing and Tianjin). These
administrative regions have some land-use and planning authority, although China is very
much a centralized ―command and control‖ political environment with central
government agencies such as the National Development and Reform Commission
(NDRC), the Ministries of Construction, Environment and Finance all having important
roles in renewable energy development.
China consumed 1863 million tonnes oil equivalent of primary energy in 2007, or a
modest 1.39 tonnes per person when compared to OECD countries. This breaks down to
1311.4 mtoe of coal (70%), 368 mt of oil (20%), 109.3 mtoe of hydro (5.8%), 60.6 mtoe
of gas (3%), and 14.2 mtoe of nuclear (.7%). China‘s 2007 consumption represented a
7.7% increase over 2006 consumption levels, a high rate of increase that has been
consistent for several years.422 One projection suggests that the rapidly increasing
industrialization and energy use may result in China consuming 57% of current total
global energy consumption and 5.5 times its current energy consumption by 2050.423
China, in 2006, surpassed the US as the world‘s largest emitter of CO2 at 6.2 billion
tones pa.424
420
421
422
423
424
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at p 24.
Figures from the CIA Factbook, available at https://www.cia.gov/library/publications/the-worldfactbook/geos/ch.html, viewed 5 October 2009.
BP, BP Statistical Review of World Energy, June 2009, available at http://www.bp.com, at pp 40-41,
viewed 5 October 2009; Rosen, D.H. and Houser, T., China Energy – A Guide for the Perplexed,
China Balance Sheet, Center for Strategic and International Studies and the Peterson Institute for
International Economics, Washington DC, May 2007, at p 4.
Yande, Dai, ―China‘s Energy Demand Scenarios for 2020‖, China Development Forum, China’s
National Energy Strategy and Reform – Background Reports, Beijing, China, 15-17 November 2003.
Netherlands Environmental Assessment Agency, ―China now no. 1 in CO2 emissions; USA in second
position‖, available at
http://www.pbl.nl/en/dossiers/Climatechange/moreinfo/Chinanowno1inCO2emissionsUSAinsecondp
osition.html, viewed 5 October 2009.
48
In terms of renewables, reliable energy statistics for China are hard to come by, but it has
been asserted that in 2007 renewable energy accounted for less than 3% of total power
generation.425 It has been suggested that, at current rates of growth of consumption there
will be an ―energy gap‖ in electricity supply of some 6.4% in 2010, and 10.7% by 2020
and this gap will need to be filled by renewable energy.426
During 2008 China made some significant gains in renewable energy development,
doubling its wind capacity for the fifth year in a row earning it the number four position
worldwide, overtaking Japan to become the top producer of PV cells, and introducing a
new solar subsidy program.427 It also maintained its position as the world number one in
terms of solar hot water and heating, both in terms of cumulative capacity with 98 GWthermal (more than 5 times higher than the second place holder – the EU), and new
investment with a further 14 GW-thermal added in 2008.428
B.
Energy law and policy in China
1.
International and regional influences
China is a signatory to the 1992 Framework Convention on Climate Change (―FCCC‖)
and ratified the Kyoto Protocol on 30 August 2002. As a non-Annex I Party it has no
fixed obligation to reduce GHG emissions, although paradoxically it is now the world‘s
largest net emitter with a growth rate of 4% pa since 1994. This has to be put in the
context of China‘s vast population and dramatic increase in industrialization over the last
two decades. China asserts that when taken on a per-capita basis CO2 emissions are still
only 83% of the world average, and 33% of the OECD average.429
China has not yet undertaken to reduce GHG emissions to a specific level. However, it
has committed to a target of 20% reduction of energy consumption per unit of GDP by
2010, which it says, ―will consequently reduce CO2 emissions.‖430
In terms of renewable energy targets, it has committed to raising the share of renewable
energy in total primary energy consumption to 10% by 2010, and to 15% by 2020. 431
425
426
427
428
429
430
431
Baker & McKenzie et al, Renewable Energy Law in China – Issues Paper, RELaw Assist, June 2007,
available at http://www.bakernet.com/NR/rdonlyres/B06FB192-EF10-4304-B966FBDF1A076A8C/0/relaw_issues_paper_jun07.pdf, at p 7, viewed 5 October 2009.
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at p 7.
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at p 8, viewed 5 October 2009.
Ibid at pp 9 and 25 (Table R5).
NDRC, Peoples Republic of China, China’s National Climate Change Program (English translation),
June 2007, available at www.ccchina.gov.cn/WebSite/CCChina/UpFile/File188.pdf, at pp 6-7,
viewed 5 October 2009.
Ibid at p 26.
NDRC, People‘s Republic of China, Medium and Long-Term Development Plan for Renewable
Energy in China, (Abbreviated version, English Draft), September 2007, available at
http://www.chinaenvironmentallaw.com/wp-content/uploads/2008/04/medium-and-long-termdevelopment-plan-for-renewable-energy.pdf, at p 5, viewed 5 October 2009.
49
The regulatory regime governing renewable energy in China consists of a number of
laws, policy statements and programs. The most significant in the context of solar energy,
are: the Electricity Act 1995; the Energy Conservation Law 1997; the Prevention of Air
Pollution Law 1987 (revised 2000); and most directly relevant, the Renewable Energy
Law 2005. A number of administrative regulations and programs, policy guidance
documents and technical standards have been put in place to provide and manage the
detail of renewable energy law and government policy.432 These include the Provisional
Administrative Measures on Pricing and Cost Sharing for Renewable Energy Power
Generation 2006; and the Medium and Long-term Development Plan for Renewable
Energy in China 2007. In addition, a number of Provincial level regulations have been
implemented specifically for promoting solar energy. These various measures are
outlined below.
2.
National law and regulation as it affects solar energy
(a)
Electric Power Law 1995 (Order No 60, 28 December 1995)433
This measure contains general principles on the construction of electric power
infrastructure, and the production, supply and utilization of electric power.
Article 5 requires those involved in the industry to protect the environment, decrease the
discharge of harmful substances, and to prevent pollution. It contains a statement of state
support for the ―use of renewable and clean energy resources for electricity generation‖.
Article 10 requires that planning for electric power shall ―reflect the principles of
rational use of energy resources‖ and be ―conducive to environmental protection‖.
Article 48 specifically encourages solar energy, and other renewable alternative, to
increase the supply of electricity in rural areas.
(b)
Energy Conservation Law 1997 (Order No 90, 1 November 1997)434
This measure is directed mainly at the conservation of energy resources such as fossil
fuels and biological energy, although it also refers to ―all other resources from which
432
433
434
For a comprehensive list of some issued and forthcoming regulations, policy guidance documents and
technical standards to June 2007, see Baker & McKenzie et al, Renewable Energy Law in China –
Issues Paper, RELaw Assist, June 2007, available at
http://www.bakernet.com/NR/rdonlyres/B06FB192-EF10-4304-B966FBDF1A076A8C/0/relaw_issues_paper_jun07.pdf, at pp12-14, viewed 5 October 2009. See also Zh.
Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable and
Sustainable Energy Reviews 13 (2009) 439 at p 442.
English translation available at AsianLii, Laws of the People’s Republic of China, at
http://www.asianlii.org/cn/legis/cen/laws/eplotproc429/, viewed 5 October 2009.
English translation available at AsianLii, Laws of the People’s Republic of China, at
http://www.asianlii.org/cn/legis/cen/laws/eclotproc501/, viewed 5 October 2009.
50
useful energy is obtained‖ (Art 2). The Act calls for ―more efficient and rational
utilization of energy resources‖ (Art 3), and constitutes energy conservation as a ―longterm strategic policy in the nation‘s economic development‖ (Art 4).
As with the Electricity Act, Art 4 also enshrines official State encouragement of the
development and utilization of new energy resources and renewable energy (see also Art
38). The Act requires State and provincial government, and municipalities, to provide
funds for this purpose (Art 11).
(c)
Prevention and Control of Atmospheric Pollution Law 1987 (Revised by
Order no 32, 29 April 2000)435
This Act establishes the objective of reducing atmospheric pollution; provides for the
setting of air emissions standards through later regulation for regions, industries and
certain activities; and enforcing those standards with penalties such as fines or
imprisonment. In particular, the measure provides support for research and
implementation of measures for reduction and control of air pollution, and for
development and utilization of clean energy such as solar, wind and hydro (Art 9).
It also requires relevant State and local government departments to adopt measures to
improve energy diversity, to and promote the greater use of clean energy, although this is
primarily in the context of reducing coal emissions (Art 25).
(d)
Renewable Energy Law 2005 (“REA”) (Order No 33, 28 February 2005)436
This is the single most significant Act in respect of promoting solar and other renewable
energy in China and provides the foundation for a form of ―feed-in‖ tariff. It is more a
statement of policy and general objectives, and leaves the details to be set out in later
administrative regulations.
Article 1 provides the purpose of the measure is:
[T]o promote the exploitation of renewable energy, increase energy supply,
improve the energy structure, ensure energy safety, protect the environment,
and attain the sustainable development of the economy and society.
Article 4 provides that ―State gives first priority to the exploitation of renewable energy‖
and renewable energy targets are to be set to promote construction and development.
The Act provides for a nationwide middle and long-term plan for renewable energy
development, and this is to be mirrored by similar plans at the provincial and municipal
435
436
English translation available at AsianLii, Laws of the People’s Republic of China, at
http://www.asianlii.org/cn/legis/cen/laws/pacoapl527/, viewed 5 October 2009.
English translation available at AsianLii, Laws of the People’s Republic of China, at
http://www.asianlii.org/cn/legis/cen/laws/rel177/, viewed 5 October 2009.
51
levels (Arts 7-8). Pursuant to this, the Medium and Long-Term Development Plan for
Renewable Energy in China was released in September 2007 (see below).
Industry guidance and technical support for renewable electricity standards and R & D is
provided for along with a requirement that renewable energy be included in education
curricula (Arts 10-12).
There is a mandatory requirement that grid operators provide grid connection services
for, and purchase renewable energy from, producers who have obtained the necessary
authorizations and licenses (Arts 13-14).
Development of renewable energy in rural and remote areas is specifically encouraged,
and the Act requires provinces and local government to provide financial assistance (Arts
15, 18).
Solar energy and water heating are specifically encouraged in Article 17. State
construction authorities are tasked with establishing technical standards and economic
policies for solar energy development; property development entities are required to
accommodate solar energy systems in the design and construction of buildings; and
residents of existing buildings encouraged to retrofit such systems provided the building
quality and safety is not compromised.
Chapter 5 deals with pricing and lays down the principles that the price paid for
renewable energy should be set at a level that is ―beneficial to the development and
utilization of renewable energy‖ and should be ―economic and reasonable‖ (Art 19). The
difference between any higher cost paid for renewable energy, and the costs of grid
connection incurred by grid operators, can be retrieved from the selling price of
electricity to all consumers (Arts 20-23). The Act also provides for direct grants through
a renewable energy development fund to support R & D, surveys and assessments, and
construction of renewable energy projects in remote areas (Art 24), and for preferential
loans and tax benefits (Arts 25-26).
(e)
Medium and Long-term Development Plan for Renewable Energy in China
2007
The guiding principles of this measure are set out as:
1. To conscientiously implement the Renewable Energy Law;
2. To adopt renewable energy development as one of the key strategic measures to
achieve China‘s goals of establishing a resource-saving, environmentally friendly
society and realizing sustainable development;
3. To speed up the development and deployment of hydropower, wind power, solar
energy, and biomass energy;
4. To promote technical progress;
5. To increase market competitiveness; and
52
6. To continuously increase the share of renewable energy in China‘s overall energy
consumption mix.437
The Development Plan provides specific quantified targets for each of the renewable
energy types, including hydropower, biomass, bio-fuels, wind power, geothermal and
solar energy.
For solar power the Plan sets the targets of 300 MW total power by 2010, and 1.8 GW by
2020. This is broken down into:438
Remote rural solar PV: 150 MW by 2010; 300 MW by 2020;
Grid connected building integrated PV: 50 MW by 2010; 1 GW by 2020;
Large free standing PV: 20 MW by 2010; 200 MW by 2020;
Large free standing solar thermal: 50 MW by 2010; 200 MW by 2020;
PV applications in communications, meteorology, long-distance pipelines,
railways, highways etc: 30 MW by 2010; 100 MW by 2020.
Recent comments by Chinese energy researchers suggest that these levels are extremely
conservative, and the NDRC will shortly revise the overall targets upwards to a total of
10 GW or more by 2020.439
The Plan also covers solar thermal applications, including building-integrated solar
thermal systems and solar space and water heating. The target for solar water heaters is
an installed collector area of 150 million m2 by 2010, and, and 300 million m2 by 2020.440
Rural renewable energy is to be ramped up with a commitment to supply 1 million
households that have no electricity with small-scale hydro, and another 1 million with
small-scale off-grid solar PV power stations and wind-PV hybrid power stations. As a
general measure to improve the lives of rural people, a target of 30% of rural households
will be using renewable energy, including 40 million household biogas digesters, and 50
million m2 of solar water heater collector area by 2010, increasing to 80 million biogas
digesters and 100 million m2 of solar collectors by 2020.441
437
NDRC, People‘s Republic of China, Medium and Long-Term Development Plan for Renewable Energy
in China, (Abbreviated version, English Draft), September 2007, available at
http://www.chinaenvironmentallaw.com/wp-content/uploads/2008/04/medium-and-long-termdevelopment-plan-for-renewable-energy.pdf, at p 4, viewed 5 October 2009.
438
Ibid at pp 8-9 (para 4.4.1).
439
See Shen, R. and Wong, J., ―China solar set to be 5 times 2020 target‖, Reuters, 5 May 2009,
available at http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE5440ZU20090505, viewed
5 October 2009.
440
NDRC, People‘s Republic of China, Medium and Long-Term Development Plan for Renewable Energy
in China, (Abbreviated version, English Draft), September 2007, available at
http://www.chinaenvironmentallaw.com/wp-content/uploads/2008/04/medium-and-long-termdevelopment-plan-for-renewable-energy.pdf, at p 9 (para 4.4.2), viewed 5 October 2009.
441
Ibid at pp 9-10 (para 4.6).
53
A number of national policies and measures are included in the Plan to achieve these
targets, including:442
Mandated market share (MMS) policies (similar to RPSs), government
investment and concession programs, policy support and guidance, and market
stimulation. Under the MMS policies, non-hydro renewable energy is required to
reach 1% of total power generation by 2010, and over 3% by 2020. Power
generators with self-owned installed capacity exceeding 5 GW are required to
have a non-hydro renewable capacity of 3% by 2010, and 8% by 2020;
Improvement of the market environment through a number of measures, including
developing the electricity reticulation infrastructure, implementing bio-fuels
blended fuel supply, and establishing national standards, including construction
and engineering specifications for solar systems, in buildings;
Setting renewable power tariffs and cost-sharing policies. This is being
implemented through the Administrative Measures on Pricing and Cost-sharing
(see below);
Providing further central government funding through the establishment of a
renewable energy fund, and requiring local government to fund renewable energy
projects. Other incentives, such as preferential tax policies are provided for, both
for specific development and installation of renewable energy, for manufacturing
of renewable energy technology, and for R & D investment;
Accelerating technology improvement and domestic manufacturing through
targeted R & D, importation of overseas technology, and preferential procurement
policies with the aim of self-sufficiency in such technology by 2020.
(f)
Provisional Administrative Measures on Pricing and Cost Sharing for
Renewable Energy Power Generation 2006443
This measure attempts to clarify how the price of renewable energy will be fixed, and
how the costs for renewable energy will be covered through a general energy surcharge.
Of particular relevance to solar power generation is Article 9, which provides some
guidance, albeit vague, on price setting for grid-connected solar, wave and geothermal
generation. The State authorities are to set the price on ―the principle of reasonable costs
plus reasonable profits‖.
Article 12 restates in more detail than the REA the principle that the increased cost of
renewable power, operational and maintenance costs for state-subsidized central ‗standalone‘ renewable energy systems, and grid connection costs for renewable energy
projects are to be included in a ―renewable energy tariff surcharge‖ levied on end-users.
The yardstick for measuring the extra costs of renewable energy is the cost of energy
from coal-fired generating units. Articles 15 and 16 set out specific formulae for the
calculation of the surcharge, which is to be reviewed at least yearly (Art 18).
442
443
Ibid at pp 10-12 (Part 5).
NDRC, Peoples‘ Republic of China, Provisional Administrative Measures on Pricing and Cost
Sharing for Renewable Energy Power Generation, 4 January 2006, available at
http://www.cresp.org.cn/english/encontent.asp?id=248, viewed 5 October 2009.
54
(g)
Provincial and municipal measures
Throughout the central government legislative and administrative measures outlined
above, obligations are placed on the provinces, autonomous regions and municipalities to
contribute to the renewable energy effort in various ways. These include funding small
and large-scale development, developing technical standards and planning systems that
will facilitate renewable energy development, and ensuring the achievement of specific
targets within their areas for renewable energy generation as set out in the various
administrative measures and development plans.
Specific provincial and municipal measures and projects relating to solar energy
development include:444
Shanghai has issued a ―White Book‖ for energy policy, including a renewable
energy development plan;
Hainan and Shenzhen have issued regulations promoting the integration of solar hot
water into buildings;
Yunnan has issued certification requirements for installation of solar systems into
buildings;
Beijing has issue a regulation promoting solar energy systems in rural areas; and
Guangdong has promulgated measures for promoting solar energy development;
An example of a large-scale municipal-level solar energy project is the Beijing rural
lighting project. As part of a larger rural national construction program, this project is
designed to provide roadside lighting in rural areas. Twenty solar PV companies were
selected for the work, and by the end of 2006 had installed thirty thousand solar PV
lamps along roads, in villages and on special travel roads in the rural areas of Beijing
Municipality.445
Similar projects have been implemented in Shanghai, Nanjing, and Shenzhen. Other
provincial and municipal projects include a ―100,000 solar PV roof plan‖ in Shanghai
contributing 400 MWp by 2010; a ―solar PV promoting plan‖ for installing solar PV at
airports and landmark buildings in some cities in Jiangsu Province; and four major pilot
projects for desert PV stations in Gansu, Tibet, Sichuan and a fourth location to be
determined.446
(h)
444
445
446
Other policy and financial incentives for solar energy development
For a comprehensive list of some issued and forthcoming regulations, policy guidance documents and
technical standards to June 2007, see Baker & McKenzie et al, Renewable Energy Law in China –
Issues Paper, RELaw Assist, June 2007, available at
http://www.bakernet.com/NR/rdonlyres/B06FB192-EF10-4304-B966FBDF1A076A8C/0/relaw_issues_paper_jun07.pdf, at pp 14-16, viewed 5 October 2009
Ibid at pp 15-16.
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at pp 42-43.
55
1.
Renewable portfolio standards (―RPSs‖) & quotas
The MMS policies authorized under the Renewable Energy Act 2005 and implemented
under the Medium and Long-term Development Plan for Renewable Energy in China
2007 (see above) are a limited form of RPSs.
2.
Tax incentives
Preferential tax policies are provided for in the REA and under the Medium and Longterm Development Plan for Renewable Energy in China 2007. Generally, foreign
companies have certain tax benefits, including a two-year tax waiver, and a reduced 15%
business tax rate for enterprises operating in special economic, high-tech and
development zones. Other exemptions and reductions of 15-30% for up to 10 years are
available on application to the State tax authority. For the renewable energy industry tax
incentives are limited, but reductions on income tax to 15% are available specifically for
biogas and wind energy generation.447 Small hydro and wind energy has benefited from
VAT reductions of 50%. Import tax and VAT refunds are also available for imported
wind turbine and photovoltaic machinery, and other high-tech renewable technology.448
As yet, there appears to be no clear statement of any tax incentives that may be
introduced specifically for solar energy development and utilization.
3.
Public funding & subsidies
There is wide discretion to pay subsidies under the general authorizing legislation and
plans noted above, although it is difficult to find reliable and accurate information on the
levels and aggregate amounts paid in recent years. With a highly centralized economy,
and considerable renewable energy development being is conducted by state enterprises,
subsidization and grants are often invisible or not separately quantified.
In terms of solar energy, there have been subsidy programs in place for solar thermal
development for some time, although the success of this sector is due largely to the low
cost of solar hot water heaters which start at around $US200.449
447
448
449
Zh. Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable
and Sustainable Energy Reviews 13, 2009, 439 at p 443; National Renewable Energy Laboratory,
Renewable Energy Policy in China: Financial Incentives, April 2004, available at
http://www.nrel.gov/docs/fy04osti/36045.pdf, viewed 5 October, 2009; National Renewable Energy
Laboratory, Renewable energy Business Partnerships in China, April 2004, available at
http://www.nrel.gov/docs/fy04osti/35785.pdf, viewed 5 October 2009; Baker & McKenzie et al,
Renewable Energy Law in China – Issues Paper, RELaw Assist, June 2007, available at
http://www.bakernet.com/NR/rdonlyres/B06FB192-EF10-4304-B966FBDF1A076A8C/0/relaw_issues_paper_jun07.pdf, at pp 35-37, viewed 5 October 2009.
Ibid, and see, eg, Ministry of Finance, Peoples‘ Republic of China, Announcement on Adjustment of
Tax Incentive Policies for Imported Large Power Wind Turbine System Key Components and Raw
Materials, 24 April 2008, available at http://www.cresp.org.cn/english/encontent.asp?id=994, viewed
5 October 2009.
Graham-Harrison, E., ―Energy-Hungry China Warms to Solar Water Heaters‖, Reuters, 5 June 2006,
available at http://www.planetark.org/dailynewsstory.cfm?newsid=36636, viewed 5 October 2009.
56
Solar PV has benefited from consistent targeted subsidy assistance in China. For
example, from 1996-2000 the Chinese government subsidized the building of 10 solar PV
systems in Tibet to provide electricity for houses not connected to the grid. The ―Bright
Project‖ launched in 1997 distributed solar PV devices to local communities through pilot
projects in several remote provinces. From 2002 to 2004 the government subsidized the
―Township Electrification Program‖ by RMB 3 billion divided between central and
provincial government (two-thirds/one-third). This delivered power to 200,000
households in 700 villages. Provincial and local government subsidies include RMB
100-200 for herdsmen and farmers to install solar PV in places such as Tibet, Qinghai,
Inner Mongolia, and Xinjiang.450
In November 2008, the Chinese government announced an economic stimulus package of
$US586 billion, of which $US440 billion now appears earmarked for green energy,
including large scale wind farms, solar farms and rooftop panels. Although details are
unclear at the time of writing, it is likely a considerable proportion of this money will be
used for investment subsidies, government funded pilot projects and other financial and
taxation incentives.451
In March 2009 the Ministry of Science and Technology announced between $US1.5 and
3 billion of funding for new incentives and constructing demonstration projects for solar
PV generation.452 Also in March 2009, the Chinese government introduced specific
financial subsidies of RMB 20 ($US 2.94) per watt for solar-panel installations 50 kWp
or larger installed on buildings. This level of subsidy will cover around 50% of the cost
of buying and installing the panels, and this is expected to lead to considerable expansion
of larger-scale solar PV.453
Subsidies have recently been announced to cover the extra cost of renewable energy
compulsorily purchased by grid operators under the REA and the Provisional
Administrative Measures on Pricing and Cost Sharing for Renewable Energy Power
Generation 2006.454
450
451
452
453
454
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at p 42; Zh.
Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable and
Sustainable Energy Reviews 13, 2009, 439 at p 443.
Chan, Y., ―China ready to roll with $440bn green energy plan‖, BusinessGreen, 29 May 2009,
available at http://www.businessgreen.com/business-green/news/2243176/china-set-roll-440bn-green,
viewed 5 October 2009.
BusinessGreen.com staff, ―China powers up fresh investments for clean tech projects‖,
BusinessGreen, 30 March 2009, available at http://www.businessgreen.com/businessgreen/news/2239403/china-powers-fresh-investment, viewed 5 October 2009.
MOF, Peoples‘ Republic of China, Interim Measures on Financial Subsidies for Building Integrated
Solar PV Applications, 23 March 2009, available at
http://www.cresp.org.cn/english/encontent.asp?id=1060, viewed 5 October 2009; Kee Global
Advisors, ―China introduced a subsidy program for solar PV‖, 2 April 2009, available at
http://keeglobaladvisors.typepad.com/keeideas/2009/04/china-introduced-a-subsidy-program-forsolar-pv-.html, viewed 5 October 2009.
NDRC and State Electrical Regulation Commission, Peoples‘ Republic of China, Notice on Measures
for Renewable Electricity Surcharge Subsidies and Quota Trade System during the period from
October 2007 to June 2008, 11 November 2008, available at
http://www.cresp.org.cn/english/encontent.asp?id=1045, viewed 5 October 2009.
57
Subsidies are also provided by way of low-interest loans. For example, since 1987
approximately RMB 120 million annually has been available for low-interest loans (50%
reduction) for developing wind power, solar energy heating and marsh gas pools.455
Although not a direct ―subsidy‖, government investments through State agencies in R &
D, and the management, development, training, machinery and equipment certification,
and inspections systems by the State, also subsidize the costs of these activities for
industry.456
A renewable energy development project for China sponsored by the World Bank was
completed in mid-2008 having installed solar PV systems in over 400,000 households, or
11 MW in total, in northwestern provinces.457
4.
Public/Private partnerships
As a communist country, the Chinese government owns or controls a large proportion of
the countries industry and R & D institutions. Many of the government funded
cooperative efforts for developing and manufacturing solar energy products are therefore
not true ―public/private‖ partnerships. However, this state underwriting has resulted in a
number of large industrial enterprises coming into existence, and which now compete
globally. These companies include Suntech (now the largest global producer of PV
cells),458 Baoding Yingli Green Energy, Changzhou Trina Solar, Xinjiang New Energy,
and Sichuan Xinguang Silicon.459
The government has also encouraged overseas companies to participate in the industry,
often under technology transfer and assistance arrangements.
5.
R&D
As already noted, due to funding through government grants and through the government
ownership or control of many solar energy development and manufacturing entities, it is
difficult to quantify the amount of money invested in solar energy development. Much of
the public funding mentioned in the previous two sections has had a substantial R & D
component.
455
456
457
458
459
Zh. Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable
and Sustainable Energy Reviews 13, 2009, 439 at p 443.
National Renewable Energy Laboratory, Renewable Energy Policy in China: Financial Incentives,
April 2004, available at http://www.nrel.gov/docs/fy04osti/36045.pdf, viewed 5 October 2009.
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at p 22, viewed 5 October 2009.
Ibid at p 15.
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at p 42; Zh.
Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable and
Sustainable Energy Reviews 13, 2009, 439 at pp 443-444.
58
One of the older R & D support schemes the State Technical Problem Tackling Plan
(1982) that provided general R & D support for innovative industrial research in new
technology. The “863 Plan” since 1986 has provided R & D funding for high-tech
industries, including more recently solar PV technology, including equipment and
materials such as thin-film silicon solar cells. Since 1997 the “973 Plan” has supported R
& D into future technologies such as thin-film and dye-sensitive solar cells. The “Pillar
R & D Support Scheme” in 2006 and the current Commercialization Support Scheme
have supported commercialization and business R & D for the solar industry. 460
A number of pilot projects that have been funded by the national and provincial
governments also have a large R & D element.461
The REA (esp Art 12), and the Medium and Long-term Development Plan for Renewable
Energy in China 2007 (esp Part 5) (see above), include statements of commitment to
support R & D in the renewables sector. These measures also provided for the
establishment a renewable energy fund administered by the NDRC through which R & D
funding is to be channeled.
Recent announcements by the Chinese government indicate a major share of the $US586
billion stimulus funding announced in November 2008 will be used for renewable energy
development, of which a significant share will be on R & D.462
6.
Procurement policies
There are strong statements in both the REA and the Medium and Long-term
Development Plan for Renewable Energy in China 2007 encouraging technical and
building standards that mandate increased energy efficiency, and requiring government
and business to favor energy efficiency in their procurement of equipment, machinery
and buildings.
Even more than Japan, China supports indigenous industry with the long-term goal of
becoming self-sufficient in all areas, and growing its global export market. It has a strong
indigenous solar energy industry, which has the advantage of government funding and
subsidization, thus making the products very competitive in relation to imported
materials. Along with this natural economic driver for local procurement, there are also
statements of policy indicating preference for local procurement. For example, there is a
70% local content requirement for wind power projects, which is intended to encourage
the development of the indigenous wind turbine manufacturing industry. It appears to
have been successful in developing the local industry, but does not appear to have proved
460
461
462
Ibid.
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at pp 42-43; Zh.
Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable and
Sustainable Energy Reviews 13, 2009, 439 at pp 444-445.
Chan, Y., ―China ready to roll with $440bn green energy plan‖, BusinessGreen, 29 May 2009,
available at http://www.businessgreen.com/business-green/news/2243176/china-set-roll-440bn-green,
viewed 11 October 2009.
59
an obstacle to the entry into the market and growth of a number of major overseas
companies.463 There is, as yet, no formal equivalent for solar energy content.
7.
Land use, building code and zoning incentives
Under the principles of Chinese communism private property rights are not generally
allowed, so the process of approvals for energy projects are largely regulated through
central government and/or local authorities, depending upon the scale of the
development. Large-scale open-field PV would normally require environmental approval
by the State Environmental Protection Administration (SEPA), and also at the provincial
level. Smaller-scale projects would require approvals of provincial or municipal level
Environmental Protection Bureaus (EPBs). As renewable energy projects are given
―preferential‖ status in government legislation and policy, there would be few occasions
where approval would be withheld for sound proposals. However, even if a local or
municipal authority supported a project, the SEPA could prevent it if the proposal did not
comply with environmental requirements.464
The REA and the Medium and Long-term Development Plan for Renewable Energy in
China 2007 require increased energy efficiency standards for buildings, with the latter
requiring the Standardization Administration of China to:
…. take responsibility for developing national standards for solar systems in
buildings, and update the relevant construction standards, engineering
specifications, and management regulations of urban construction to create
good conditions for the development of solar systems in buildings” (Part 5(2)).
C.
The impact of legal and policy initiatives and incentives in the use of solar
energy in China.
Until recently, the strongest drivers for the development of the solar energy in China
appear not to have been legal or policy measures, but rather the subsidies and targeted
funding by government of both small and large-scale projects under general economic
medium- and long-term plans. On the supply side funding and other financial incentives
have been given to businesses, mostly state owned, to increase production of solar energy
equipment, and to erect pilot and demonstration projects for both energy supply and R &
D purposes. On the demand side, subsidies and other incentives have been used to
encourage businesses and householders and communities to install solar energy hot water
heating and PV panels. A large number of directly funded projects for street lighting and
provision of electricity in remote areas have also been possible through the centralized
―command and control‖ nature of the Chinese State.
463
464
Baker & McKenzie et al, Renewable Energy Law in China – Issues Paper, RELaw Assist, June 2007,
available at http://www.bakernet.com/NR/rdonlyres/B06FB192-EF10-4304-B966FBDF1A076A8C/0/relaw_issues_paper_jun07.pdf, at pp 39-41, viewed 11 October 2009.
Ibid at pp 67-69.
60
More recent legal measures, such as the REA, and its supporting Development Plan, and
other regulations, have introduced sophisticated and complex systems to increase
renewable energy uptake in China. These systems include:465
Renewable portfolio standards (or Mandated Market Share – ‗MMS‘)
targets for increases both in the overall share of renewable energy, and the
shares of various types of renewable energy;
Compulsory grid connection for renewable energy installations;
Feed-in tariffs and competitive tendering for subsidizing renewable energy
generation on the basis of ―reasonable costs and reasonable profits‖; and
Cost equalization nationwide between utilities and ultimately end-users
through a renewable energy tariff.
To date these measures have borne some fruit, but there are problems of implementation.
One group of commentators asserted in 2007 that, despite the number of PV gridconnected power systems that have been installed, ―in no case has a feed-in tariff,
calculated according to ‗reasonable costs plus reasonable profits‘, been implemented and
no power system has as yet been permitted by grid companies to connect to the grid. No
project has as yet been built by developers for commercial operation‖.466 These problems
are dealt with further below.
Despite these apparent shortcomings, China has been very successful, both in growing
the supply-side industries, and in increasing levels of both solar thermal heating and PV
power generation, although the latter still only represents a small fraction of electricity
consumption.
In 2008 China doubled its wind energy capacity for the fifth year in a row; more than
doubled its solar PV cell production to become the world leader ahead of Japan; installed
75% of global added capacity of solar hot water and heating to remain the world leader
with 70% of global installed capacity; added around $US15 billion in renewable energy
investment (not including the more recent announcements detailed above); and set very
ambitious renewable energy targets of up to an estimated 200GW of renewable energy by
2020.467
D.
465
466
467
Legal and Policy Barriers to Solar technology
Ibid at p 19.
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at pp 44-45.
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at pp 8, 13 - 14, 18, and 24-25, viewed 11 October
2009.
61
Some of the problems with the Chinese legal and policy systems have already been
mentioned. One recent article suggests the legislative and policy framework suffers from
the following disadvantages:468
Inconsistent and uncoordinated polices;
Inadequate encouragement from government, and insufficient subsidies;
Lack of innovative regional policies, and failure of agencies at the regional
and local levels to clearly formulate and promote the comparative
competitive advantages of renewable energy;
Incomplete and uncoordinated investment and financing systems; and
Inadequate R & D.
A number of suggestions have been made for dealing with the various perceived
shortcomings, including the need to:
improve policy coordination and effectiveness, particularly between central and
local government;
introduce more effective pricing policy, particularly with feed-in tariffs as an
economic mechanism to drive change;
implement and actively drive complementary measures such as RPS, green
certificates, and emissions trading;
streamline and simplify government approval processes, including central and
local government planning and environmental consenting processes;
implement and enforce technical standards, both for solar technology itself, and
for building energy efficiency, to improve the quality, and encourage the uptake,
of renewable energy technology;
develop clear and attractive financial and taxation incentives for greater
investment; and
improve the market investment and financing system to encourage secure longterm investment in solar energy development.469
E.
Conclusions
China is an industrial giant with the capacity to drive ambitious energy efficiency and
renewable energy measures through its strong command and control system. Given the
dramatic industrial and economic growth China is experiencing, and the consequent large
increase in energy demand, largely fuelled by inefficient and polluting coal-fired power
468
469
Zh. Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable
and Sustainable Energy Reviews 13, 2009, 439 at p 448.
Baker & McKenzie et al, Renewable Energy Law in China – Issues Paper, RELaw Assist, June 2007,
available at http://www.bakernet.com/NR/rdonlyres/B06FB192-EF10-4304-B966FBDF1A076A8C/0/relaw_issues_paper_jun07.pdf, at pp 50-52 and 70-72, viewed 11 October 2009;
Li Junfeng et al, China Solar PV Report 2007, China Environmental Science Press, at pp 45-50; Zh.
Pedong et al, ―Opportunities and challenges for renewable energy policy in China‖, Renewable and
Sustainable Energy Reviews 13, 2009, 439 at p 448.
62
stations, it is essential not only for China, but also for the world, that fundamental and
far-reaching reform in its energy consumption patterns must occur with urgency. China
appears to understand that necessity, and is taking robust steps in that direction.
The relevance of China as a model for other countries, particularly in the choice of
mechanisms and methods for implementing renewable energy and reducing GHG
emissions, is questionable. China is a unique country with almost 20% of the world‘s
people, has maintained the highest industrial growth rate over the last decade, and retains
a communist command and control political structure. While some of the measures taken,
such as the limited RPS (or MMS), the state managed renewable energy fund, and the
government funding of large-scale demonstration or pilot programs could be successfully
adopted in other countries; other measures such as targeted large scale subsidies to
favored corporations, and central government override of regional and local government
planning and land use regulation, may not be acceptable in a strongly democratic and
free-market environment such as the US.
63
V.
Australia
A.
Introduction
Australia is a large sparsely populated country with a land area (excluding water) of some
7,682,300 km2. Slightly smaller than the contiguous 48 states of the US it has similar
geographical and climatic features, including high solar irradiance and low cloud cover
conducive to solar energy utilisation.
The population is estimated at 21,262,641 (as at July 2009. Australia is a federal
parliamentary democracy comprising six states (New South Wales, Victoria, South
Australia, Queensland, Western Australia, Tasmania) and two federal territories
(Australian Capital Territory, Northern Territory).470
The States retain considerable autonomy in matters of land, resource development, and
environment. However, control of national matters such as taxation, interstate commerce,
and international relations, including environmental matters of national importance, are
the province of the Federal Government.471
Australia consumed 123.2 million tonnes oil equivalent of primary energy in 2007 (about
5.7 tonnes per person), representing a 1.6% decline over 2006 consumption. Of this, 41.7
mt was oil, 22.4 mtoe was gas, and 55.8 mtoe was coal. The remainder was primaril from
biomass and hydro with some contribution from other renewables.472
Domestic energy consumption in the 2006/2007 year was 5,770 PJ. The fuel mix in
domestic energy use was: 40% coal, 34% oil, 20% natural gas, and 5% renewables. The
mix of renewable energy was: 3.55% from biomass, .9% from hydro, .49% from wind
and solar, and .23% from biogass and liquids.473 Despite this relatively modest
contribution to energy consumption overall, renewable energy grew by 10% in the
2006/2007 year to almost 300 petajoules, with a rise in electricity production from
renewables of 6.4%.
The Australian Government recently announced major new policy initiatives in the area
of climate change and renewable energy, including ratifying the Kyoto Protocol in
December 2007, introducing a 20% target for renewable energy to be achieved by 2020,
and a commitment to reduce CO2 levels by 25% from 2000 levels by 2020, provided a
global consensus can be reached on stabilizing levels of CO2 equivalent in the
470
471
472
473
Figures from the CIA World Factbook, available at https://www.cia.gov/library/publications/the-worldfactbook/geos/as.html, viewed 11 October 2009.
See, eg, The Australian Constitution, Part V, section 51(i), (ii), (xx), (xxix).
BP Statistical Review of World Energy, June 2009, available at http://www.bp.com, at pp 40-41,
viewed 11 October 2009.
Australian Government, Australian Bureau for Agriculture and Resource Economics (―ABARE‖),
Australian Energy Statistics: Australian Energy Update 2008, available at
http://www.abareconomics.com/interactive/energyUPDATE08, viewed 11 October 2009. For the full
report, see ABARE, Energy in Australia 2009, April 2009, available at
www.abare.gov.au/publications_html/energy/energy_09/auEnergy09.pdf, viewed 11 October 2009.
64
atmosphere to 450 ppm.474 Massive new expenditure of $A4.5 billion (including existing
spending of $A1 billion) was announced for a ―Clean Energy Initiative‖ in the Australian
Budget 2009.475 The initiative comprises three main elements:476
1. $A2 billion (in addition to an existing $A400 million) for carbon capture and
storage (―CCS‖) projects, including carbon capture from coal fired power
stations;
2. $A1.5 billion to demonstrate large-scale solar technologies, including the
construction of the world‘s largest solar power station at 1 GW; and
3. $A465 million as seed funding for the establishment of an independent body
―Renewables Australia‖, to support renewable technology research and
development.
B.
Energy law and policy in Australia
1.
International and regional influences
Australia is a signatory to the 1992 Framework Convention on Climate Change
(―FCCC‖) but did not ratify the Kyoto Protocol until a new centre left Labor government
took office in December 2007. Under the Kyoto Protocol Australia must stabilise GHG
emissions at 108% of 1990 levels.477 It is on track to meet this target within the 20082012 commitment period.478
In December 2008 Australia undertook to reduce its emissions to between 5 – 15% below
2000 levels (4-14% below 1990 levels), with the lower 5% target constituting an
unconditional commitment, and the upper target conditional on a global consensus of
similar magnitude. A longer-term commitment of a 60% reduction from 2000 by 2050
was also confirmed. 479 These targets were recently ramped up to 25% below 2000 levels
474
475
476
477
478
479
The Hon. Kevin Rudd, Prime Minister of Australia, Climate Change and Water, available at
http://www.pm.gov.au/topics/climate.cfm, viewed 23 May 2009; Senator the Hon. Penny Wong,
Minister for Climate Change and Water, ―CPRS legislation introduced to Parliament‖, Media Release,
14 May 2009, available at http://www.environment.gov.au/minister/wong/2009/mr20090514.html,
viewed 11 October 2009.
Commonwealth of Australia, Attorney-General‘s Department, Budget 2009-10, 12 May 2009, available
at http://www.budget.gov.au/2009-10/, viewed 11 October 2009.
Commonwealth of Australia, Attorney-General‘s Department, Budget Overview, Budget 2009-10,
available at http://www.budget.gov.au/2009-10/, at pp 14-15, viewed 11 October 2009.
United Nations Framework Convention on Climate Change, Kyoto Protocol Reference Manual on
Accounting of Emissions and Assigned Amount, November 2008, available at
http://www.unfccc.int/resource/docs/publications/08_unfccc_kp_ref_manual.pdf, at Para 2.1 and Table
II-1, viewed 11 October 2009.
Australian Government, Australia’s Greenhouse Gas Emissions – Fact Sheet, December 2008,
available at www.climatechange.gov.au/whitepaper/factsheets/pubs/005-australias-greenhouse-gasemissions.pdf, viewed 11 October 2009.
Australian Government, White Paper: Carbon Pollution Reduction Scheme: Australia’s Low Pollution
Future, 15 December 2008, available at
http://www.climatechange.gov.au/whitepaper/summary/index.html, at Executive Summary, Table E.1,
viewed 11 October 2009.
65
by 2020 as noted above. These reductions are to be achieved primarily through a ―Carbon
Pollution Reduction Scheme‖ – essentially a ―cap and trade‖ emissions trading scheme,
and an aggressive programme to increase renewable energy production.
As part of its national strategy to meet these objectives, the government has also
introduced a ―Mandatory Renewable Energy Target‖ to increase the share of renewable
sources for electricity production to 45,000 GWh (20% of anticipated generation) by
2020.480 [Note: This legislation passed on August 20, 2009] There is also a solar energy
rebate scheme and a solar hot water rebate scheme in place in Australia, although the
former to be phased out by the end of June 2009 as a new ―solar credits‖ scheme is
implemented. These schemes are detailed below.
2.
National law and regulation as it effects solar energy
(a)
Carbon Pollution Reduction Scheme Bill 2009
At the time of writing (25 May 2009) this measure had not yet been enacted, although it
appears to enjoy multi-party support. Essentially it will introduce a ―cap and trade‖
emissions trading scheme to Australia. Due to commence in July 2010, the scheme
applies a market-based approach by creating a form of property right in carbon emissions
permits. Aggregate emissions will be capped and emitters of GHGs will have to acquire
sufficient permits to cover their annual emissions. Permits will be issued by the
government and initially some firms will receive an allocation. Permits will be tradeable,
and eventually the market is intended to operate feely with emitters buying the permits
they need at auction or on the secondary market with the price determined by market
forces. Initially the government will set a price cap for 5 years to ensure stability. With a
reducing cap the price of permits will increase, thus imposing a strong financial incentive
on emitters to reduce their emissions by more efficient energy use and transition to
renewable alternatives.481 This scheme will provide strong incentives for investment in
more renewable energy, however it is likely to encourage the use of the cheaper forms of
generation such as wind turbines, rather than more expensive alternatives such as solar
energy.
(b)
Renewable Energy (Electricity) Act 2000, and Renewable Energy
(Electricity) (Amendment) Bill 2008
1.
Mandatory Renewable Energy Target (MRET)
This Act established a national ―renewable portfolio standard‖ by imposing a MRET for
480
481
Australian Government, Department of Climate Change, ―Australia‘s Renewable Energy Target‖, 11
September 2009, available at http://www.climatechange.gov.au/renewabletarget/index.html, viewed 11
October 2009.
See Australian Government, White Paper: Carbon Pollution Reduction Scheme: Australia’s Low
Pollution Future, 15 December 2008, available at
http://www.climatechange.gov.au/whitepaper/report/pubs/pdf/V100eExecutiveSummary.pdf, at pp xxvxxxiii, viewed 11 October 2009.
66
the generation of 9,500 GWh of renewable energy by 2010. The Amendment Bill of 2008
provides for a five-fold increase of that figure to 45,000 GWh, or approximately 20% of
electricity, by 2020.482 It is portrayed as a transitional measure to ensure renewable
energy projects are implemented while the Carbon Pollution Reduction Scheme (above)
develops and matures. A statutory office – the Renewable Energy Regulator – has been
created, and this entity administers and enforces the MRET scheme.
The MRET works by requiring generators or electricity utilities to include a minimum
proportion of renewable energy in the total amount of electricity sold. If they fail to meet
that target there is a financial penalty – currently $A40 for each MWh shortfall of
renewable electricity.
2.
Renewable energy certificates (RECs)
Renewable energy certificates (RECs) are created through the generation of renewable
electricity at the rate of 1 REC for every MWh of renewable electricity produced by
electricity companies above a 1997 baseline. For new generation by owners of small
generation units (―SGUs‖) such as grid connected wind turbines, micro-hydro or solar PV
installations, RECs can be created via a complicated formula including the deemed
savings of energy produced from other sources over a period of up to 15 years, and
multiplied by a factor of between 1.185 and 1.622 depending on where they are located in
Australia. To be eligible as SGUs, solar PV systems must be less than 100 kWh rated,
and produce less than 250MWh a year; wind turbines no more than 10 kW or produce
less than 25 MWh a year; and micro-hydro less than 6.4 kWh and produce less than 25
MWh a year. If they exceed these levels they will be treated as ―power stations‖, and
although still entitled to RECs, will be in a less advantageous position under a separate
REC formula. RECs can be used and traded to meet individual MRET requirements.483
For small scale installations owners can sell their REC entitlement up-front to licensed
agents (often solar energy installation companies) to defray the cost of the initial
installation.
3.
―Solar credits‖ program to be introduced 2009
As part of the 2008 Amendment Bill, a new ―solar credits‖ scheme is to be introduced
from mid-2009 to provide incentives for homeowners and small operators to install
micro-generation units such as micro-hydro, wind turbines and rooftop solar arrays. In
addition to the REC‘s that are created at the rate of 1 REC for each 1 MWh the
installation will save by displacing other generation over a 15 year period, the scheme
applies a ―multiplier‖, or ―solar credit‖ to the first 1.5 kWh of generation capacity. From
482
483
Australian Government, Department of Climate Change, ―Australian Government‘s Renewable Energy
Target‖, 11 September 2009, available at www.climatechange.gov.au/renewabletarget/index.html,
viewed 11 October 2009.
See Australian Government, Department of Climate Change, Supporting Small Generation Systems
under the Renewable Energy Target (RET) Scheme, Fact Sheet, September 2009, available at
http://www.climatechange.gov.au/renewabletarget/documents/090911solar_credits-fs-web.pdf, viewed
11 October 2009.
67
2009 – 2012 the multiplier is 5, reducing to 4 from 2012-2013, 3 from 2013-2014, and
then 2 from 2014-2015, finally phasing out completely in mid-2015.484 The RECs created
with the multiplier may be worth $A6,500 - $9,000 in price reductions on a 1.5 kWh
solar PV installation depending upon which geographical zone the installation is in.485
The RECs can be cashed in through an agent (usually a solar energy installation
company) up front, or banked for future credit, or traded.
Solar energy water and space heating systems are also part of the MRET programme,
although not included in the multiplier solar credits scheme. A cash rebate of $A1600 is
also available for the installation of solar hot water systems or $A1000 for heat pump hot
water systems that replace electric storage hot water systems.486
A criticism of the RPS approach is that people will usually adopt the cheapest option in
sourcing renewable energy, and this will favour wind power at present. Also, as the bulk
of the return can be paid up-front in many cases, there is little ongoing incentive to
maximize their renewable energy output, although the system does have financial
penalties built into it. The success of the system will depend very much upon the
vigilence of enforcement and the increasing parity between the various renewable energy
alternatives. Unlike the feed-in tariff in Germany, which has a very generous gross tariff
guaranteed for 20 years, there is no strong built-in incentive to improve efficiency and
innovation in solar systems in the Australian RPS approach.
(c)
Renewable Energy (Electricity) Amendment (Feed-In Tariff) Bill 2008
This measure was introduced in July 2008 and was the subject of an inquiry by the Senate
Standing Committee on Environment, Communications and the Arts. The Committee
reported back in late 2008 with a very positive endorsement of the proposal which
mirrors closely the German gross feed-in tariff system.487
The Australian proposal was introduced by the Australian Greens Party, and has been
submerged in the recent Government measures including the CPRS and MRET measures
detailed above. However, there is still strong support for a gross feed-in tariff system to
be introduced at the federal level in Australia.488
484
485
486
487
488
For detail on entitlement and calculation of quantum of RECs for different types and locations of
installations, see Office of the Renewable Energy Regulator website, available at
http://www.orer.gov.au/sgu/index.html.
See Energy Matters website, available at http://www.energymatters.com.au/government-rebates/solarcredits-australia.php for a worked example.
Australian Government, Department of the Environment, Water, Heritage and the Arts, Solar Hot
Water Rebate, available at http://www.environment.gov.au/energyefficiency/solarhotwater/index.html,
viewed 11 October 2009.
Report of Environment, Communications and the Arts Committee, Senate Inquiry into feed-in tariff Bill
tabled, 10 November 2008, available at http://christine-milne.greensmps.org.au/content/speech/senateinquiry-feed-tariff-bill-tabled, viewed 11 October 2009.
As of 11 October 2009 a petition calling for a gross feed-in tariff system has gathered over 19,100
signatures. See http://www.feedintariff.com.au/index.php, viewed 11 October 2009. But see
http://www.energymatters.com.au/index.php?main_page=news_article&article_id=488.
68
(d)
Building Code of Australia
The regulation of public safety, health and amenity in buildings is constitutionally the
province of the States and territories. However, a uniform Building Code of Australia
(BCA) was agreed between the Commonwealth, State and Territory governments in
1990. In 1991 the Australian Building Codes Board (ABCB) was established to
administer ongoing updating and implementation of the BCA.489 The BCA has been
given the force of law as part of the building regulations of each State and Territory. 490
The BCA has contained minimum energy efficiency standards for buildings since 2003,
and has been progressively amended to include such measures for all building types. 491
(e)
State level measures
As mentioned, each State and Territory has responsibility for land use and planning
matters, and natural resource use within their jurisdictions. Therefore there are many
planning and building regulations that have relevance to solar energy. In particular,
building codes now contain energy efficiency requirements such as insulation, energy
efficiency design measures and the incorporation of alternative energy for heating and
powering homes and buildings. They are too numerous to include here and are relatively
standard. However, many States have introduced, or are contemplating introducing, a
form of feed-in tariff for renewable energy. These will be briefly reviewed:
1.
The Australian Capital Territory
The Electricity Feed-in (Renewable Energy Premium) Act 2008492 provides a generous
gross feed-in tariff system. Participants who install solar PV systems, or other renewable
sources of less than 30 kWh capacity, will be paid a tariff at the rate of 3.88 times the
ordinary retail rate of electricity for all electricity fed into the grid, and with their own
useage separately metered. The tariff payable from 1 March 2009 until 30 June 2010 is
set at 50.05 cents ($A) per kWh generated for systems up to 10kW, and 40.04 cents
(Australian) per kWh for systems between 10kW and 30kW. The tariff is set each year,
489
490
491
492
For full details of the BCA and ABCB, see the ABCB website, available at http://www.abcb.gov.au,
viewed 11 October 2009.
See, eg, Building Commission of Victoria, What You Need to Know about Victoria’s Building
Legislative System, August 2006, available at
http://www.buildingcommission.com.au/resources/documents/12780_BC_Legislation_System.pdf,
viewed 11 October 2009.
Australian Government, Department of the Environment, Water, Heritage and the Arts, Building Code
of Australia, available at
http://www.environment.gov.au/settlements/energyefficiency/buildings/code.html, viewed 11 October
2009.
See the full text of the Act as amended through 1 March 2009, available at
http://www.legislation.act.gov.au/a/2008-21/default.asp.
69
but is guaranteed for up to 20 years from commencement of generation.493 It is
anticipated the scheme may be extended to larger installations after June 2009.
2.
Victoria
The Energy Legislation Amendment Bill amending the Electricity Industry Act 2000 was
passed on 9 August 2007. The measure introduced a net metered feed-in tariff of $A0.60
per kWh for electricity fed into the grid from solar PV generation installations of up to
3.2kW in size. The size limit was increased to 5kW as of June 25, 2009.494 The scheme
is set to run for 15 years. Renewable generation installations of up to 100 kWh capacity
using biomass, hydro or wind receive only the retail price for electricity fed into the
grid.495
3.
South Australia
The Electricity (Feed-in Scheme-Solar Systems) Amendment Act 2008 came into force 1
July 2008, and will expire in 20 years in 2028. It provides a net tariff of $A0.44 per kWh
fed into the grid from a solar PV system operated by an electricity consumer that uses
less than 160 MWh per annum.496
4.
Queensland
The state of Queensland has a very similar net feed-in tariff to the South Australian
system, called the ―Solar Bonus Scheme‖. Consumers who use less than 100 MWh a
year, and who install or have a solar PV system will receive $A0.44 per kWh fed into the
grid. The amount is guaranteed until 2028, although it will be reviewed after 10 years or
when 8 MW of solar systems are installed.497
5.
Western Australia, New South Wales, Tasmania and Northern Territory
These States and the Northern territory have not yet implemented a feed-in tariff scheme,
although have indicated their intention to do so, or investigate the system.
Western Australia appears to prefer a limited gross feed-in tariff structure paying a
493
Australian Capital Territory, Department of the Environment, Climate Change, Energy and Water, ACT
Electricity Feed-in Tariff Scheme Fact Sheet, available at
http://www.environment.act.gov.au/__data/assets/pdf_file/0005/144608/FiTFactSheet.pdf, viewed 11
October 2009.
494
See press release at http://www.premier.vic.gov.au/minister-for-energy-resources/victorians-to-benefitfrom-the-fairest-and-best-solar-feed-in-tariff-scheme-in-australia.html.
495
Government of Victoria, Department of Primary Industries, Feed-in Tariffs, 24 September 2009,
available at
http://www.dpi.vic.gov.au/dpi/dpinenergy.nsf/LinkView/47D19C1C08345367CA25736A001FCDF786
6B51F390263BA1CA2572B2001634F9, viewed 11 October 2009.
496
Government of South Australia, South Australia's Solar Feed-In Scheme, available at
http://www.climatechange.sa.gov.au/index.php?page=feed-in-scheme, viewed 11 October 2009.
497
Queensland Government, Office of Clean Energy, Solar Bonus Scheme, 1 July 2009, available at
http://www.cleanenergy.qld.gov.au/solar_bonus_scheme.cfm, viewed 11 October 2009.
70
premium rate of $A0.60 per kWh for solar PV electricity until the capital costs have been
recovered at which time it reverts back to a lower rate.498
New South Wales is considering a feed-in tariff scheme for small scale, grid connected,
solar PV installations, and a taskforce is currently considering public submissions before
finalizing recommendations to the Government. It is uncertain whether the
recommendations will favor a gross or net metering scheme, although the latter is more
likely given the current net metering systems used by the main electric utilities.499
The Tasmanian Office of Energy Planning and Conservation is currently considering
feed-in tariffs for renewable energy producers, but as yet no concrete proposals have been
agreed. It is likely the preference will be for a net tariff arrangement for excess electricity
fed into the grid from small scale solar and other renewable electricity installations.500
As yet the Northern Territory has not announced proposals for a preferential Territorywide feed-in tariff, although owners of PV installations can sell their power at near
market retail rates (currently 18.31 cents ($A) per kWh).501 The town of Alice Springs
became a ―Solar City‖ in May 2008 as part of the Australian Government‘s ―Solar Cities
Programme‖. Along with a number of other solar energy and efficiency measures, owners
of grid-connected solar PV systems can sell their excess energy to the grid at $A0.49.92
per kWh capped at $A5.00 per day.502
(f)
Other policy and financial incentives for solar energy development
1.
Renewable portfolio standards (―RPSs‖) & quotas
The MRET scheme detailed above is a form of RPS setting a quantified quota for
renewable energy of 45,000 GWh by 2020.
2.
498
499
500
501
502
Tax incentives
[Government of Western Australia, Sustainable Energy Development Office, A Feed-in Tariff for
Renewable Energy Systems, available at http://www1.sedo.energy.wa.gov.au/pages/re_feedin_tariff.asp, viewed 25 May 2009.
For the current status of the proposals, see New South Wales Government, Department of Water and
Energy, Solar Bonus Scheme for NSW Announced, available at
www.dwe.nsw.gov.au/energy/sustain_renew_fit.shtml, viewed 11 October 2009.
See Tasmanian Government, Department of Infrastructure, Energy and Resources, Recent
developments, available at http://www.dier.tas.gov.au/energy/new_developments, viewed 11 October
2009.
As of 14 October 2009. See PowerWater, Going solar - The process of installing a photovoltaic (PV)
system in your home, available at
http://www.powerwater.com.au/environment/renewable_energy/solar_buyback_program, viewed 14
October 2009.
As of 1 July 2009. See Alice Solar City, Solar PV Systems, available at
http://www.alicesolarcity.com.au/residents/solarpv, viewed 14 October 2009.
71
Although suggestions have been made for tax incentives for the renewable energy area, 503
there appear to be no specific tax incentives currently available for solar energy
development other than the normal mechanisms for individual and corporate taxation.
These include deductions for depreciation, losses, maintenance and operating costs, and
R & D.
3.
Public funding & subsidies
Budget 2009 $A4.5 billion Clean Energy Initiative
The Australian Government announced a $A4.5 billion package for ―Clean Energy‖ in
the 2009 Budget. While over half of this appears destined for exploring ―clean coal‖ and
CCS technology, it includes $A1.5 billion specifically for solar power generation, and a
share of $465 million for R & D (see above).
Solar credits program
The MRET program with RECs outlined above provides a quasi-subsidy system for
installation of renewable energy generation, including PV solar. Prior to this system there
was an outright subsidy for $A8,000 for solar power installations on residential homes
and community use buildings504 other than schools which have their own programme (see
below). In May 2008, this was restricted to households with an income below $A100,000
before being replaced with the solar credits program under the MRET in 2009 (see
above).505
Solar hot water and heating rebate
Currently solar energy water and space heating systems that replace electric storage hot
water systems are subsidized with a cash rebate of $A1600. Installation of a solar heating
system will also entitle the owner to RECs under the MRET program detailed above. 506
Some States and cities offer additional rebates.507
Solar Cities programme
503
504
505
506
507
See, eg, Clean Energy Council of Australia, Re: Australia’s Future Tax System, Submission to the
Australian Treasury, 28 October 2008, available at
http://www.cleanenergycouncil.org.au/cec/policyadvocacy/Submissions/past/mainColumnParagraphs/0/
text_files/file1/Henry%20Tax%20Review%20Submission%2028Oct08.pdf, viewed 14 October 2009.
A useful description of the older $A8,000 subsidy in practice is at:
http://www.energymatters.com.au/renewable-energy/solar-power/grid-connected-systems/home-gridrebates.php, viewed 25 May 2009.
See Australian Government, Department of Climate Change, Supporting Small Generation Systems
under the Renewable Energy Target (RET) Scheme, Fact Sheet, September 2009, available at
http://www.climatechange.gov.au/renewabletarget/documents/090911solar_credits-fs-web.pdf, viewed
14 October 2009.
Australian Government, Department of the Environment, Water, Heritage and the Arts, Solar Hot
Water Rebate, available at http://www.environment.gov.au/energyefficiency/solarhotwater/index.html,
viewed 14 October 2009.
See, eg, the New South Wales rebate of $600-1200 for solar heating, depending upon size, described at
New South Wales Government, Department of Environment, Climate Change and Water, NSW hot
water system rebate, available at http://www.environment.nsw.gov.au/rebates/ccfhws.htm, viewed 14
October 2009; [the City of Brisbane offers a $400 rebate:
http://www.brisbane.qld.gov.au/BCC:CITY_SMART::PC_5017, viewed 25 May 2009.
72
The Australian government has made $A94 million available to assist seven cities to
invest heavily in solar power and heating technology and energy efficiency measures. 508
National solar schools programme
This programme offers grants of up to $50 000 to install solar and other renewable power
systems, solar hot water systems and other energy efficiency measures. According to the
Australian Department of the Environment, Water, Heritage and the Arts website, over
5,180 schools have registered for this programme.509
Renewable energy for remote power generation
Under this scheme the Australian government offers rebates for households,
communities, business, government and other organisations, in remote areas to install
renewable generation systems.
Rebates may be up to 50 per cent of the capital cost of renewable generation up to a
maximum of $200,000.510
4.
Public/Private partnerships
There is significant cooperation between research bodies, many associated with
government funded universities and research institutions such as the CSIRO, and the
private sector. For example the University of Melbourne is partnering with Monash
University, BP Solar, Merck, Blue Scope Steel and a number of other corporations for
research into organic ―plastic‖ PV cell technology. Origin Energy is taking new ―sliver
cell‖ PV technology developed at the Australian National University to the market. 511
The Budget 2009 announcements (above) also show an intention on the part of the
Government to engage with industry and business directly on renewable energy
initiatives.
5.
R&D
There is generous public funding of R & D in Australia, and this is often through
public/private partnerships (see above). Figures of public budgets for solar PV R & D in
2006, have been given as $A4.57 million from the federal government, and $A2.38
508
509
510
511
See Australian Government, Department of the Environment, Water, Heritage and the Arts, Australia’s
Solar Cities – History of the Solar Cities Program, available at
http://www.environment.gov.au/settlements/solarcities/history.html, viewed 14 October 2009.
As of 14 October 2009. See Australian Government, Department of Environment, Water, Heritage and
the Arts, National Solar Schools Program, available at
http://www.environment.gov.au/settlements/renewable/nationalsolarschools/index.html, viewed 14
October 2009.
Australian Government, Department of Environment, Water, Heritage and the Arts, Renewable Remote
Power Generation Program (RRPGP), available at
http://www.environment.gov.au/settlements/renewable/rrpgp/index.html, viewed 14 October 2009.
For a summary of current PV R & D in Australia see Watt, M., National Survey Report of PV Power
Applications in Australia 2006, International Energy Agency, May 2007, available at http://www.ieapvps.org/, pp 11-15, viewed 14 October 2009.
73
million from the States and Territories.512 As already detailed (above), the 2009 Budget
included $A465 million as seeding money for an independent body to be called
―Renewables Australia‖, to support solar R & D.
6.
Procurement policies
The strong levels of financial support for renewable energy, both through the
MRET/REC program, and through government grants and subsidies, constitutes a de
facto ―procurement policy‖ in regard to renewable energy. The Federal Commonwealth
Procurement Guidelines, issued under the Financial Management and Accountability Act
1997 (Cth), require the ―efficient, effective and ethical use of resources‖ consistent with
government policy in procurement processes.513 The Australian and New Zealand
Government Framework for Sustainable Procurement was adopted in 2007 as a guide to
national, state and territory governments in their procurement functions. It contains
principles favouring efficient and sustainable approaches to procuring energy generating
and energy reliant goods and services, and has been implemented through federal and
state agencies.514
7.
Land use and zoning incentives
As already noted at ―2(d)‖ above, the Building Code of Australia, which mandates strict
energy efficiency standards for buildings, has been implemented in building regulations
in each State and Territory.
As already noted, planning regulation is mainly the responsibility of the States and
Territories and an analysis of specific planning measures is beyond the scope of this
paper. However, it would be true to say that sustainability principles are reflected in the
planning and policy instruments of the States and Territories. These principles would be
applied in decision-making on renewable energy projects, and the contribution to
ecological sustainability and community wellbeing that such projects would engender.
C.
512
513
514
The impact of legal and policy initiatives and incentives in the use of solar
energy in Australia
Ibid at pp 14-15.
Commonwealth of Australia, Department of Finance and Deregulation, Commonwealth Procurement
Guidelines, December 2008, available at http://www.finance.gov.au/publications/fmgseries/procurement-guidelines/index.html, at Section 6, viewed 14 October 2009.
Australian Procurement and Construction Council, Australian and New Zealand Government
Framework for Sustainable Procurement, 14 September 2007, available at
http://www.apcc.gov.au/Resources/News/SustainableProcurementFramework/tabid/63/Default.aspx,
viewed 14 October 2009.
74
The solar PV industry is still in its infancy in Australia with wind and solar combined
contributing less than .4% of overall electricity generation,515 and solar PV a very small
percentage of that.516 However, Australia has huge potential for rapid and dramatic
growth if the recent investment and R & D announcements are fully implemented.
Amongst these initiatives is an ambitious plan to build the largest solar PV power station
in the world (by a factor of 3) at 1000 MWh capacity. Once completed, it will add
approximately 2% to Australia‘s total generating capacity.
In educating the public and setting favorable economic and social conditions for
increased development of solar energy, the various subsidy schemes have been
moderately successful.
The recently introduced MRET program will give a major boost to solar PV installations
as one mechanism to help Australia reach its target of 20% renewable energy by 2020.
However, the scheme is unlikely to be as successful as the guaranteed 20 year gross feedin tariff used in Germany due to the lack of an ongoing incentive to produce more solar
energy at lower cost over an extended period.
Similarly, the Carbon Pollution Reduction Scheme, if implemented, will provide a
longer-term impetus for transition to renewable energy resources. There is no built-in
incentive specifically for solar energy development., thus solar energy will need to reach
price parity with other renewable such as wind and hydro to ensure it benefits from this
scheme.
Concentrated solar power production has not really featured on the Australian solar
power landscape yet. However, following the recent success of this technology in Spain,
it is likely to be a factor in future solar power development.
In terms of solar hot water and heating capacity, Australia ranks ninth in the world with
1.2 GW-thermal installed capacity at the end of 2007.517 The solar water heating sector
has probably had more success in Australia as it has been operating over a longer time
period and the various one-off subsidy schemes have been generous, making it an
economically prudent alternative to electrical heating for homeowners and communities.
Australia has a strong manufacturing and R & D record in the solar industry, and a
number of international and local companies have set up plant, R & D and testing
facilities in Australia. With the assistance of substantial government and private sector
515
Separate figures for solar generation are difficult to source. For the combined wind/solar figure, see
Australian Government, Department of Resources, Energy and Tourism, Energy in Australia 2009,
April 2009, available at www.abare.gov.au/publications_html/energy/energy_09/auEnergy09.pdf, at p
33, viewed 14 October 2009.
516
According to International Energy Agency (―IEA‖) figures for 2006, solar PV grid generation was only
1.8% of the wind generation figure. See IEA, IEA Statistics – Electricity/Heat in Australia, available at
http://www.iea.org/stats/countryresults.asp?COUNTRY_CODE=AU&Submit=Submit, viewed 14
October 2009.
517
Ren 21, Renewables Global Status Report - 2009 Update, available at
http://www.ren21.net/globalstatusreport/g2009.asp, at pp 13 and 25 (Table R5), viewed 14 October
2009.
75
investment, the solar industry has grown to become a large supplier of solar water heating
systems and PV solar power systems, both locally, and internationally.
D.
Legal and Policy Barriers to Solar technology
Australia appears to have few legal or policy barriers to solar energy uptake. On the
contrary, recent policy announcements and regulation at both the federal and state levels
has made the solar power landscape as favorable as it has ever been.
The main barriers appear to be the failure to introduce a nation-wide gross feed-in tariff
system as yet, the lack of tax concessions for energy efficiency and installation of
renewable energy systems, and the normal limitations on development contained in
environmental protection and land use planning regulation.
1.
No gross feed-in tariff for solar power
Feed-in tariffs have been discussed in detail above in the context of the MRET program,
and in relation to State and Territory level initiatives. The ACT has introduced a gross
feed-in tariff similar in concept to Germany‘s system, and Western Australia is
contemplating a similar measure. These state-level initiatives are the result of the
tardiness the federal government towards introducing a national gross feed-in tariff for
renewable energy. As noted above, a Bill to introduce a gross feed-in tariff has been with
the Senate Standing Committee on Environment, Communications and the Arts since
mid-2008, and that Committee has now reported back favorably. However, whether the
federal government has the appetite to enact such a measure, in addition to the MRET
and CPSC measures recently introduced, is doubtful.
2.
Lack of taxation incentivisation
It has been suggested that current taxation rules do not encourage investment in newer
efficient energy technology. For example, where an old electric motor wears out a ‗like
for like‖ replacement is entitled to an immediate 100% tax deduction as a ―cost of doing
business‖, whereas a replacement with newer more efficient technology is regarded as a
new capital investment and only eligible for normal depreciation.518 Various possible
options include enhanced tax deductions, depreciation allowances and tax credits for
renewable energy initiatives.
3.
Land use planning
The normal planning and environmental protection measures generally apply to
renewable energy developments, and to maintain the integrity of these measures such
developments must survive or fall on their overall environmental merits. However, the
518
See, eg, Clean Energy Council of Australia, Re: Australia’s Future Tax System, Submission to the
Australian Treasury, 28 October 2008, available at
http://www.cleanenergycouncil.org.au/cec/policyadvocacy/Submissions/past/mainColumnParagraphs/0/
text_files/file1/Henry%20Tax%20Review%20Submission%2028Oct08.pdf, viewed 14 October 2009.
76
considerations in favor of solar and other renewable energy developments often relate
more to global considerations of climate change and international obligations such as
those in the Kyoto Protocol, rather than local individual and community considerations
such as property rights, employment and economic development. Unless the higher-level
obligations are specifically made relevant to the planning and decision-making process,
they may not be given due weight. On the other hand, renewable energy development
provides jobs, improves local economies and is less damaging to the local environment
than coal or other fossil fuel alternatives, so the planning process does not appear to be a
major barrier in Australia to developments. One measure that could be considered is the
incorporation of the sustainability principle and the desirability of energy efficiency and
renewable energy alternatives as central purposes and principles in planning legislation.
This has occurred in New Zealand allowing decision-makers, and courts on appeal, to
specifically weigh the advantages of renewable energy in reducing GHG emissions and
meeting Kyoto obligations, against more localized property rights and parochial
considerations.
4.
Subsidies that favor traditional energy sources
As noted above, Australia is heavily dependent upon fossil fuels for its energy with 94%
of its domestic energy use coming from fossil fuels (including gas). Coal contributed
40% of this figure, and oil 34%. One of the reasons for the dominance of these industries,
apart from the abundance of coal resources in Australia, has been the high level of
subsidies paid. One study shows figures of $A9.3-10.1 billion in energy and transport
sector production and consumption subsidies during 2005-2006. The transport sector
accounted for 74%, electricity production for 18% and other stationary engines 8%. Total
subsidies by fuels were: 76% ($A7.4 billion) for oil, 17% ($A1.7 billion) for coal, and
4% ($A377 million) for gas. Renewables accounted for only 3% ($A326 million).519
There are two main consequences: First, such subsidies artificially reduce the costcompetitiveness of renewable energy technology, which already has price disadvantages,
particularly solar PV technology. Secondly, they prop up an industry – particularly coal –
which is often inefficient and would very likely be uneconomic if left to market forces.
The level of subsidization, however, reflects the strength of the fossil fuel lobby, and in
Australia, particularly the coal industry. This is one of the reasons renewable energy has
had less than enthusiastic support in States such as New South Wales which has a strong
coal mining industry.
E.
Conclusion
Australia is a country of vast solar energy potential. To date utilization of this resource
has primarily been for hot water heating and for stand-alone PV utilization in more
remote areas and communities. The relative low population density and dispersed nature
of settlements militates against grid-connected and large-scale PV installations, except
within and adjacent to the larger population centers in the South and East.
519
Reidy, C., Energy and Transport Subsidies in Australia – 2007 Update, Institute for Sustainable
Futures, University of Technology Sydney, April 2007, at pp iii – viii.
77
The raft of new regulation setting out ambitious GHG reduction targets and RPS‘s to
encourage renewable energy uptake, has put in place the framework for dramatically
increasing renewable energy use, and particularly to increase solar power generation.
However, without an effective gross feed-in tariff at the national level, increased uptake
is reliant upon the variable approaches of the states and territories on feed-in tariffs, and
upon targeted financial incentives, such as subsidies, public/private partnerships, and R &
D which will involve large-scale PV demonstration projects. The announced government
funding of a 1000MW solar power station in the Budget 2009 will provide major stimulus
for the solar manufacturing and installation industry, and will also serve to test the
economic viability of such a concentrated approach to solar generation.
78
Appendix B
DSIRE Summary:
State Incentives For Solar Energy
Summary of Financial Incentives for Renewable Power (Solar, Wind, Geothermal, etc) State, Utility, Local, and Non-Profit Incentives - Link
Personal Tax Credit
o 23 states and territories have personal tax credits
Corporate Tax Credit
o 26 states and territories have corporate tax credits
Sales Tax Credit
o 28 states and territories have sales tax credits
Property Tax Credit
o 34 states and territories have property tax credits
Rebates
o 44 states and territories offer rebates (20 are state laws/programs)
Grants
o 27 states and territories offer grants (24 are state laws/programs)
Loans
o 44 states and territories offer loans (35 are state laws/programs)
Industry Support
o 22 states and territories have industry support programs (21 are state
laws/programs)
Bonds
o 3 states and territories offer bonds
Production Incentives
o 27 states and territories have production incentives (9 are state
laws/programs)
Summary of Rules, Regulations, and Policies for Renewable Power (Solar, Wind,
Geothermal, etc) - State, Utility, Local, and Non-Profit Incentives - Link
Public Benefits Fund
o 19 states and territories have public benefits funds (18 are state
laws/programs)
Renewable Portfolio Standard
o 37 states and territories have renewable portfolio standards (36 are state
standards)
Net Metering
o 50 states and territories have net metering programs (46 are state
laws/programs)
Interconnection
o 42 states and territories have set interconnection standards
79
Line Extension
o 3 states and territories have conducted line extension analysis
Contractor Licensing
o 11 states and territories have contractor licensing programs (10 are state
laws/programs)
Equipment Certifications
o 5 states and territories have equipment certification
Access Laws
o 37 states and territories have access laws (37 are state laws/programs)
Green Building Standards and Requirements
o 36 states and territories have green building standards and requirements
(33 are state laws/programs)
Green Power Purchasing
o 19 states and territories have green power purchasing programs (9 are state
laws/programs)
Required Green Power
o 7 states and territories have required green power programs (6 are state
laws/programs)
80
Alabama
Financial Incentives
o State Loan Program
 Local Government Energy Loan Program - Last DSIRE Review:
04/08/2009 - Link
Alaska
Financial Incentives
o State Grant Program
 Alaska Energy Authority - Renewable Energy Grant Program H.B. 152 - Last DSIRE Review: 09/23/2008 - Link
o State Loan Program
 Power Project Loan Fund - AS § 42.45.010 - Last DSIRE Review:
06/09/2009 - Link
 Small Building Material Loan - Last DSIRE Review: 04/01/2009 Link
Rules, Regulations & Policies
o Solar Access Law/Guideline
 Solar Easements - AS 34.15.145 - Last DSIRE Review: 01/16/2009
- Link
Arizona
Financial Incentives
o Corporate Tax Credit
 Non-Residential Solar & Wind Tax Credit (Corporate) - .R.S. §431085, A.R.S. §43-1164, A.R.S. §41-1510.01 - Last DSIRE Review:
05/12/2009 - Link
o Green Building Incentive
 Chandler - Expedited Plan Review and Certification Fee
Reimbursement for Green Buildings - City Council Resolution
4199, Program Guidelines (Exhibit A) - Last DSIRE Review:
02/05/2009 - Link
 Scottsdale - Green Building Incentives - Last DSIRE Review:
08/12/2008 - Link
 Town of Buckeye - Green Building Incentive - Last DSIRE
Review: 06/10/2009 - Link
 Tucson - Permit Fee Credit for Solar Energy Systems - Last DSIRE
Review: 04/28/2009 - Link
o Industry Recruitment/Support
 Renewable Energy Business Tax Incentives - SB 1403 - Last
DSIRE Review: 08/04/2009 - Link
o Personal Tax Credit
81

Non-Residential Solar & Wind Tax Credit (Personal - A.R.S. §431085, A.R.S. §43-1164, A.R.S. §41-1510.01 - Last DSIRE Review:
05/12/2009 - Link
 Residential Solar and Wind Energy Systems Tax Credit - A.R.S. §
43-1083 - Last DSIRE Review: 05/12/2009 - Link
o Property Tax Assessment
 Property Tax Assessment for Renewable Energy Property - A.R.S.
§ 42-14155 - Last DSIRE Review: 07/07/2009 - Link
o Property Tax Exemption
 Energy Equipment Property Tax Exemption - A.R.S. §42-11054,
HB 2332 - Last DSIRE Review: 08/05/2009 - Link
o Sales Tax Exemption
 Solar and Wind Equipment Sales Tax Exemption - A.R.S. § 425061 (N), A.R.S. § 42-5075 (14) - Last DSIRE Review: 06/11/2009
- Link
o Utility Loan/Rebate Program – Several utilities in Arizona offer loans and
rebates for solar projects. Link
Rules, Regulations & Policies
o Building Energy Code
 Tucson - Solar Design Requirement for Homes - City Ordinance
No. 10549 - Last DSIRE Review: 04/27/2009 - Link
o Contractor Licensing
 Solar Contractor Licensing - A.R.S. § 32-1170 - Last DSIRE
Review: 10/22/2008 - Link
o Energy Standards for Public Buildings
 Chandler - Green Building Requirement for City Buildings - City
Council Resolution 4199, Program Guidelines (Exhibit A) - Last
DSIRE Review: 02/05/2009 - Link
 Renewable Energy and Green Building Standards in New State
Buildings - Executive Order 2005-05, A.R.S. § 34-451, Executive
Order 2008-29 - Last DSIRE Review: 12/19/2008 - Link
 Scottsdale - Green Building Policy for Public Buildings Scottsdale Resolution 6644 - Last DSIRE Review: 06/03/2009 Link
 Solar Design Standards for State Buildings - ARS 34-452 - Last
DSIRE Review: 06/04/2009 - Link
o Equipment Certification
 Solar & Wind Equipment Certification - A.R.S. § 44-1762 - Last
DSIRE Review: 09/19/2008 - Link
o Green Power Purchasing/Aggregation
 Scottsdale - Green Power Purchasing - Last DSIRE Review:
10/22/2008 - Link
o Interconnection
 Interconnection Guidelines - Last DSIRE Review: 04/23/2009 Link
o Line Extension Analysis
82

o
o
o
o
Line Extension Analysis for PV - Docket No. U-0000-93-052
Decision No. 58643 and Docket No. U-1345-94-363 Decision No.
58873 - Last DSIRE Review: 06/12/2009 - Link
Net Metering
 Arizona - Net Metering - ACC R14-2-2301 et seq. - Last DSIRE
Review: 05/01/2009 - Link
 Salt River Project (SRP) - Net Metering - Last DSIRE Review:
07/07/2009 - Link
Renewables Portfolio Standard
 Renewable Energy Standard - AAC R14-2-1801 et seq. - Last
DSIRE Review: 07/16/2009 - Link
Solar Access Law/Guideline
 Solar Energy Covenant Restrictions - A.R.S. §33-439, A.R.S. § 331816 - Last DSIRE Review: 08/18/2009 - Link
Solar/Wind Permitting Standards
 Maricopa Assn. Of Governments - PV and Solar Domestic Water
Heating Permitting Standards - PV Permit Standards, Solar
Domestic Water Heating Permit Standards - Last DSIRE Review:
09/19/2008 - Link
 Solar Construction Permitting Standards - A.R.S. § 9-468, A.R.S. §
11-323 - Last DSIRE Review: 07/16/2009 - Link
Arkansas
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Green Building Standards for State Facilities - AR Code § 22-31801 et seq., HB 1663 - Last DSIRE Review: 06/17/2009 - Link
o Interconnection
 Interconnection Standards - Arkansas Code § 23-18-603 et seq.,
AR PSC Order No. 8, Docket 06-105-U - Last DSIRE Review:
01/14/2009 - Link
o Net Metering
 Arkansas - Net Metering - Arkansas Code § 23-18-603 et seq., AR
PSC Order No. 8, Docket 06-105-U - Last DSIRE Review:
01/14/2009 - Link
California
Financial Incentives
o Personal Deduction
Colorado
Financial Incentives
o Green Building Incentive
83

o
o
o
o
o
o
o
Costa Mesa - Fee Waiver for Green Building - City Council
Resolution 08-71 - Last DSIRE Review: 09/29/2008 - Link
 Marin County - Green Building Incentive Program - Last DSIRE
Review: 09/29/2008 - Link
 San Bernardino County - Green Building Incentive - Last DSIRE
Review: 07/16/2009 - Link
 San Diego County - Green Building Program - Last DSIRE
Review: 11/03/2008 - Link
 Santa Monica - Building Permit Fee Waiver for Solar Projects Last DSIRE Review: 12/23/2008 - Link
 Santa Monica - Expedited Permitting for Green Buildings - : Santa
Monica Municipal Code 8-108-050 - Last DSIRE Review:
12/23/2008 - Link
Local Loan Program
 Berkeley - Financing Initiative for Renewable and Solar
Technology (FIRST) - Last DSIRE Review: 12/02/2008 - Link
 Palm Desert - Energy Independence Program - City Council
Resolution 08-89 - Last DSIRE Review: 07/22/2009 - Link
 Santa Monica - Solar Santa Monica - Last DSIRE Review:
10/24/2008 - Link
 Sonoma County - Energy Independence Program - Last DSIRE
Review: 04/07/2009 - Link
Local Rebate Program
 Marin County - Solar Rebate Program - Last DSIRE Review:
09/29/2008 - Link
 San Francisco - Solar Energy Incentive Program - City Ordinance
No. 102-08, City Ordinance No. 106-08 - Last DSIRE Review:
03/23/2009 - Link
Production Incentive
 California Feed-In Tariff - CA Public Utilities Code § 399.20,
CPUC Resolution E-4137, SB 380 - Last DSIRE Review:
11/06/2008 - Link
 City of Palo Alto Utilities - Solar Renewable Energy Credit
Purchase Program - City Council Resolution 8773 - Last DSIRE
Review: 06/17/2009 - Link
Property Tax Exemption
 Property Tax Exclusion for Solar Energy Systems - Cal Rev & Tax
Code § 73, AB 1451 - Last DSIRE Review: 01/20/2009 - Link
Property Tax Financing Authorization
 Local Option - Municipal Energy Districts - CA Streets and
Highways Code § 5898.10 et. seq. - Last DSIRE Review:
07/16/2009 - Link
State Grant Program
 School Facility Program - Modernization Grants - Last DSIRE
Review: 01/26/2009 - Link
State Rebate Program
84

California Solar Initiative - SB 1, CSI Handbook (2009), CPUC
decision 06-01-024, CPUC Proceeding R0803008 - Last DSIRE
Review: 03/13/2009 - Link
 California Solar Initiative - Multi-Family Affordable Solar
Housing (MASH) Program - SB 1, CPUC Decision 08-10-036 Last DSIRE Review: 03/20/2009 - Link
 California Energy Commission (CEC) - New Solar Homes
Partnership - NSHP Guidebook (2008) - Last DSIRE Review:
03/13/2009 - Link
o Utility Loan/Rebate Program – Several utilities in California offer loans
and rebates for solar projects. Link
Rules, Regulations & Policies
o Building Energy Code
 California State Energy Code - 2008 Standards - Last DSIRE
Review: 07/06/2009 - Link
 City of Palo Alto - Green Building Requirement - Palo Alto
Municipal Code 18.44 - Last DSIRE Review: 07/23/2009 - Link
 Marin County - Single Family Dwelling Energy Efficiency
Ordinance - Marin County Code 19.04.100 - Last DSIRE Review:
12/23/2008 - Link
 San Francisco - Green Building Code - San Francisco Ordinance
180-08 - Last DSIRE Review: 12/08/2008 - Link
o Contractor Licensing
 Solar Contractor Licensing - 16 CCR § 832.46 - Last DSIRE
Review: 07/16/2009 - Link
o Energy Standards for Public Buildings
 Green Building Action Plan for State Facilities - EXECUTIVE
ORDER S-20-04, CA Government Code § 14710 et seq., CA
Government Code § 14684.1 - Last DSIRE Review: 11/03/2008 Link
 Berkeley - Green Building Standards for City Owned and Operated
Projects - Resolution No. 62284-N.S. - Last DSIRE Review:
06/17/2009 - Link
 San Diego - Sustainable Building Policy - City of San Diego
Council Policy 900-14, City of San Diego Council Policy 900-18 Last DSIRE Review: 09/16/2008 - Link
 San Francisco - Green Building Requirement for City Buildings San Francisco Environment Code, Chapter 7 - Last DSIRE Review:
08/26/2008 - Link
 San Jose - Green Building Program - Last DSIRE Review:
06/16/2009 - Link
o Green Power Purchasing/Aggregation
 Davis - Green Power Purchasing - CA PUC §2826.5 - Last DSIRE
Review: 09/25/2008 - Link
85

o
o
o
o
o
San Diego - Green Power Purchasing - San Diego Municipal Code,
§26.04, San Diego Resolution # R-298412 - Last DSIRE Review:
12/19/2008 - Link
 San Francisco - Renewable Energy Purchasing - Proposition B,
Proposition H - Last DSIRE Review: 12/23/2008 - Link
 Santa Monica - Green Power Purchasing - Last DSIRE Review:
06/17/2009 - Link
Interconnection
 Interconnection Standards - CPUC decision 02-03-057 - Last
DSIRE Review: 04/24/2009 - Link
Net Metering
 California - Net Metering - Cal Pub Util Code § 2827, et seq. Last DSIRE Review: 04/16/2009 - Link
Public Benefits Fund
 Public Benefits Funds for Renewables & Efficiency - Last DSIRE
Review: 07/16/2009 - Link
Renewables Portfolio Standard
 Renewables Portfolio Standard - CA Public Utilities Code §
399.11 et seq., Public Resources Code § 25740 et seq. - Last
DSIRE Review: 07/16/2009 - Link
Solar Access Law/Guideline
 Los Angeles - Zoning Code - Los Angeles Municipal Code
Chapter 1 Section 12, Los Angeles Municipal Code Chapter 9
Section 91.107 - Last DSIRE Review: 10/10/2008 - Link
 Marin County - Solar Access Code - Marin County Code, Section
20.20.030 Energy conservation - Last DSIRE Review: 12/23/2008 Link
 Sacramento - Zoning and Subdivision Regulations - Sacramento
City Code 16.48.110, Sacramento City Code 17.220.010 - Last
DSIRE Review: 10/10/2008 - Link
 San Diego County - Solar Access Regulations - San Diego County
Code of Regulatory Ordinances, CH. 4 SEC. 81.401. Design of
Subdivision - Last DSIRE Review: 10/10/2008 - Link
 San Jose - Solar Access Design Guidelines - Last DSIRE Review:
07/01/2009 - Link
 Santa Cruz - Solar Access Ordinance - Santa Cruz Municipal
Code, Title 24.08.430 - Last DSIRE Review: 10/10/2008 - Link
 Santa Cruz County - Solar Access Protection - City of Sebastopol
Municipal Code, Section 16.36.060 - Last DSIRE Review:
10/10/2008 - Link
 Sebastopol - Solar Access - Santa Cruz County Code, Chapter
12.28 Solar Access Protection - Last DSIRE Review: 10/10/2008 Link
 Solar Easement and the Solar Shade Control Act - CA Civil Code
§801.5, CA Government Code § 65850.5, CA Public Resources
86
Code § 25980 et seq. (Solar Shade Control Act), CA Health and
Safety Code § 17959.1 - Last DSIRE Review: 07/17/2009 - Link
 Solar Rights Act - CA Civil Code § 714 et seq., CA Health and
Safety Code § 17959.1, CA Government Code § 65850.5, AB
1892, AB 2180 - Last DSIRE Review: 10/10/2008 - Link
o Solar/Wind Permitting Standards
 San Jose - Solar Hot Water Heaters & Photovoltaic Systems Permit
Requirements - City of San Jose Building Division Informational
Handout - Last DSIRE Review: 06/18/2009 - Link
Connecticut
Financial Incentives
o Industry Recruitment/Support
 CCEF - Operational Demonstration Program - Conn. Gen. Stat. §
16-245n - Last DSIRE Review: 11/20/2008 - Link
 New Energy Technology Program - Last DSIRE Review:
07/22/2009 - Link
o Leasing/Lease Purchase
 Connecticut Clean Energy Fund (CCEF) - CT Solar Lease - Last
DSIRE Review: 01/22/2009 - Link
o Property Tax Exemption
 Property Tax Exemption for Renewable Energy Systems - Conn.
Gen. Stat. § 12-81 - Last DSIRE Review: 07/14/2009 - Link
o Sales Tax Exemption
 Sales and Use Tax Exemption for Energy-Efficient Products Conn. Gen. Stat. § 12-412k - Last DSIRE Review: 07/06/2009 Link
 Sales and Use Tax Exemption for Solar and Geothermal System Conn. Gen. Stat. § 12-412 - Last DSIRE Review: 07/06/2009 Link
o State Grant Program
 Connecticut Clean Energy Fund (CCEF) - Community Innovations
Grant Program - Last DSIRE Review: 12/10/2008 - Link
 Connecticut Clean Energy Fund (CCEF) - On-Site Renewable DG
Program - Last DSIRE Review: 01/08/2009 - Link
 Connecticut Clean Energy Fund (CCEF) - Project 150 Initiative Conn. Gen. Stat. § 16-244c - Last DSIRE Review: 04/08/2009 Link
o State Loan Program
 Connecticut Housing Investment Fund, Inc. (CHIF) - Energy
Conservation Loan - C.G.S. 32-315, et seq., C.G.S. 16a-40b - Last
DSIRE Review: 04/09/2009 - Link
 DPUC - Low-Interest Loans for Customer-Side Distributed
Resources - Conn. Gen. Stat. § 16-243j - Last DSIRE Review:
02/09/2009 - Link
87
o State Rebate Program
 Connecticut Clean Energy Fund (CCEF) - Solar PV Rebate
Program - Last DSIRE Review: 07/01/2009 - Link
Rules, Regulations & Policies
o Contractor Licensing
 Solar and Wind Contractor Licensing - Conn. Gen. Stat. § 20-330
et seq., Regs., Conn. State Agencies § 20-332-2 and § 20-332-5 Last DSIRE Review: 07/14/2009 - Link
o Energy Standards for Public Buildings
 Green Building Standards for State Facilities - Conn. Gen. Stat. §
16a-38k, Public Act 07-242, Regs., Conn. State Agencies § 16a38k-1 thru 16a-38k-9 - Last DSIRE Review: 08/19/2009 - Link
o Green Power Purchasing/Aggregation
 Connecticut - Green Power Purchase Plan - Executive Order 32 Last DSIRE Review: 06/16/2009 - Link
 Connecticut Municipalities - SmartPower 20% by 2010 Campaign
- Last DSIRE Review: 03/31/2009 - Link
o Interconnection
 Interconnection Guidelines - Conn. Gen. Stat. § 16-243a, CT
DPUC Decision, Docket No. 03-01-15RE01 - Last DSIRE Review:
02/13/2009 - Link
o Net Metering
 Connecticut - Net Metering - Conn. Gen. Stat. § 16-243h - Last
DSIRE Review: 02/06/2009 - Link
o Public Benefits Fund
 Connecticut Clean Energy Fund (CCEF) - Conn. Gen. Stat. § 16245n - Last DSIRE Review: 01/26/2009 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - Conn. Gen. Stat. § 16-245a et
seq., Public Act No. 07-242, Sec. 40-44 - Last DSIRE Review:
01/30/2009 - Link
88
Delaware
Financial Incentives
o State Grant Program
 Research and Development Grants - 29 Del. C. § 8051 et seq.,
Green Energy Fund Regulations - Last DSIRE Review: 07/21/2009
- Link
 Technology and Demonstration Grants - 29 Del. C. § 8051 et seq.,
Green Energy Fund Regulations - Last DSIRE Review: 07/21/2009
- Link
o State Rebate Program
 Green Energy Program Incentives - 29 Del. C. § 8051 et seq.,
Green Energy Fund Regulations, Delaware Electric Cooperative
Renewable Resources Program Regulations, Municipal Utilities'
Green Program Fund Program Regulations - Last DSIRE Review:
08/20/2009 - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Guidelines - Last DSIRE Review: 08/18/2009 Link
o Mandatory Utility Green Power Option
 Delaware Electric Cooperative - Green Power Program - 26 Del.
C. § 363 - Last DSIRE Review: 08/03/2009 - Link
 The Delaware Municipal Electric Corporation (DEMEC) - Green
Power Program - 26 Del. C. § 363 - Last DSIRE Review:
07/30/2009 - Link
o Net Metering
 Delaware - Net Metering - 26 Del. C. § 1014(d), PSC Order No.
7435, S.B. 85 - Last DSIRE Review: 07/10/2009 - Link
o Public Benefits Fund
 Delaware Electric Cooperative - Green Energy Fund - 26 Del. C. §
363, Delaware Electric Cooperative Renewable Resources
Program Regulations - Last DSIRE Review: 08/20/2009 - Link
 Delaware Municipal Electric Corporation (DEMEC) - Green
Energy Fund - 26 Del. C. § 363, DEMEC - Green Energy Program
Regulations - Last DSIRE Review: 08/29/2008 - Link
 Green Energy Fund - 26 Del. C. § 1014, 29 Del. C. § 8051 et seq.,
Green Energy Fund Regulations - Last DSIRE Review: 09/05/2008
- Link
o Renewables Portfolio Standard
 Renewable Portfolio Standard - 26 Del. C. § 351 et seq., RPS
Rules and Procedures - Last DSIRE Review: 07/02/2009 - Link
o Solar Access Law/Guideline
 Solar Access Law - S.S. 1 for S.B. 49 - Last DSIRE Review:
07/10/2009 - Link
89
District of Columbia
Financial Incentives
o State Rebate Program
 Renewable Energy Incentive Program - Last DSIRE Review:
03/06/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Green Building Requirement - D.C. § 6-1451.01 et seq., Council
Bill B17-492 - Last DSIRE Review: 05/05/2009 - Link
o Interconnection
 Interconnection Standards - District of Columbia Small Generator
Interconnection Rules (DCSGIR) - Last DSIRE Review:
02/13/2009 - Link
o Net Metering
 District of Columbia - Net Metering - DC Code § 34-1501 et seq.,
DCMR 15-900, DC PSC Order No. 14840 - Last DSIRE Review:
07/01/2009 - Link
o Public Benefits Fund
 Sustainable Energy Trust Fund - D.C. Code § 34-1514, Council
Bill 17-492 - Last DSIRE Review: 10/08/2008 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - D.C. Code § 34-1431 et seq., DC
PSC Order No 14697, Council Bill 17-492 - Last DSIRE Review:
10/08/2008 - Link
Florida
Financial Incentives
o Corporate Tax Credit
 Renewable Energy Production Tax Credit - Fla. Stat. § 220.193 Last DSIRE Review: 06/17/2009 - Link
 Renewable Energy Technologies Investment Tax Credit - Fla. Stat.
§ 220.192 - Last DSIRE Review: 09/06/2008 - Link
o Green Building Incentive
 Miami-Dade County - Green Buildings Expedite Process - MiamiDade County Ordinance - Last DSIRE Review: 06/19/2009 - Link
o Industry Recruitment/Support
 Miami-Dade County - Targeted Jobs Incentive Fund - Ordinance
Amending Targeted Jobs Incentive Fund to Incorporate Solar
Industry Incentives - Last DSIRE Review: 11/11/2008 - Link
o Production Incentive
 Gainesville Regional Utilities - Solar Feed-In-Tariff - Ordinance 008-88 - Last DSIRE Review: 03/06/200Last DSIRE Review:
03/06/2009 - Link
90

Orlando Utilities Commission - Pilot Solar Programs - Last DSIRE
Review: 02/03/2009 - Link
o Property Tax Exemption
 Renewable Energy Property Tax Exemption - Fla. Stat. § 196.175,
HB 7135 - Last DSIRE Review: 11/14/2008 - Link
o Sales Tax Exemption
 Solar Energy Systems Equipment Sales Tax Exemption - Fla. Stat.
§ 212.08 - Last DSIRE Review: 01/21/2009 - Link
o Sales Tax Refund
 Renewable Energy Equipment Sales Tax Exemption - Fla. Stat. §
212.08 - Last DSIRE Review: 01/21/2009 - Link
o State Grant Program
 Renewable Energy Technologies Grants Program - Fla. Stat. §
377.804 - Last DSIRE Review: 11/14/2008 - Link
o State Rebate Program
 Solar Energy System Incentives Program - Fla. Stat. § 377.806,
Rule 27N-1.500 (Solar Energy Systems Incentives Program - Last
DSIRE Review: 05/28/2009 - Link
o Utility Loan/Rebate Program – Several utilities in Florida offer loans and
rebates for solar projects. Link
Rules, Regulations & Policies
o Contractor Licensing
 Solar Contractor Licensing - Fla. Stat. § 489.105 et seq. - Last
DSIRE Review: 11/11/2008 - Link
o Energy Standards for Public Buildings
 Energy Conservation in Public Buildings - Fla. Stat. § 255.251 et
seq., Fla. Stat. § 1013.44, Executive Order 07-126, HB 7135 - Last
DSIRE Review: 05/06/2009 - Link
o Equipment Certification
 Solar Energy Equipment Certification - Fla. Stat. § 377.705 - Last
DSIRE Review: 12/03/2008 - Link
o Interconnection
 Interconnection Standards - 25-6.065, F.A.C., Fla. Stat. § 366.91 Last DSIRE Review: 02/03/2009 - Link
o Net Metering
 Florida - Net Metering - 25-6.065, F.A.C., Fla. Stat. § 366.91 Last DSIRE Review: 02/03/2009 - Link
o Renewables Portfolio Standard
 Jacksonville Electric Authority (JEA) - Clean Power Program Last DSIRE Review: 02/19/2009 - Link
o Solar Access Law/Guideline
 Gainesville - Public Facilities Siting - City of Gainesville Code of
Ordinances §30.251, et seq. - Last DSIRE Review: 06/19/2009 Link
o Solar and Wind Access Law
91

Renewable Energy Access Laws - Fla. Stat. § 704.07, Fla. Stat. §
163.04, Fla. Stat. § 718.113 (8) - Last DSIRE Review: 06/15/2009 Link
Georgia
Financial Incentives
o Corporate Tax Credit
 Clean Energy Tax Credit (Corporate) - O.C.G. § 48-7-29.14 - Last
DSIRE Review: 04/20/2009 - Link
o Personal Tax Credit
 Clean Energy Tax Credit (Personal) -O.C.G. § 48-7-29.14 - Last
DSIRE Review: 04/20/2009 - Link
o Production Incentive
 Georgia Power - Solar Buyback Program - Last DSIRE Review:
08/11/2009 - Link
o Utility Rebate Program – Several utilities in Georgia offer rebates for solar
projects. Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - O.C.G. § 46-3-56 - Last DSIRE
Review: 06/18/2009 - Link
o Net Metering
 Georgia - Net Metering - O.C.G. § 46-3-50 et seq. - Last DSIRE
Review: 06/18/2009 - Link
o Solar Access Law/Guideline
 Solar Easements - O.C.G. § 44-9-21 et seq. - Last DSIRE Review:
09/11/2008 - Link
Hawaii
Financial Incentives
o Corporate Tax Credit
 Solar and Wind Energy Credit (Corporate) - HRS §235-12.5, SB
464 - Last DSIRE Review: 06/26/2009 - Link
o Green Building Incentive
 Priority Permit Processing for Green Buildings - HRS §46-19.6 Last DSIRE Review: 02/23/2009 - Link
o Industry Recruitment/Support
 High Technology Business Investment Tax Credit - HRS § 235110.9 - Last DSIRE Review: 07/23/2009 - Link
o Personal Tax Credit
 Solar and Wind Energy Credit (Personal) - HRS §235-12.5, HB
1464, SB 464 - Last DSIRE Review: 06/26/2009 - Link
o State Loan Program
92

Farm and Aquaculture Alternative Energy Loan - HRS § 155-8 et
seq., HB 2261 - Last DSIRE Review: 06/19/2009 - Link
Rules, Regulations & Policies
o Contractor Licensing
 Solar Contractor Licensing - HAR §16-77-32 et seq. - Last DSIRE
Review: 09/11/2008 - Link
o Energy Standards for Public Buildings
 Renewables and Efficiency in State Facilities & Operations - HRS
§196 - Last DSIRE Review: 06/29/2009 - Link
o Interconnection
 Interconnection Standards - HRS § 269-101 et seq., HI PUC Order
No. 19773 - Last DSIRE Review: 04/02/2009 - Link
o Net Metering
 Hawaii - Net Metering - HRS § 269-101 et seq., HI PUC Order,
Docket 2006-0084 - Last DSIRE Review: 01/22/2009 - Link
o Renewables Portfolio Standard
 Renewable Portfolio Standard - HRS § 269-91 et seq., HB 1464 Last DSIRE Review: 06/26/2009 - Link
o Solar Access Law/Guideline
 Prohibition of Covenant Restrictions - HRS § 196-7 - Last DSIRE
Review: 03/17/2009 - Link
Idaho
Financial Incentives
o Personal Deduction
 Residential Alternative Energy Tax Deduction - Idaho Code § 633022C - Last DSIRE Review: 08/04/2009 – Link
o Sales Tax Refund
 Renewable Energy Equipment Sales Tax Refund - Idaho Code §
63-3622QQ - Last DSIRE Review: 03/17/2009 – Link
o State Bond Program
 Renewable Energy Project Bond Program - Idaho Code § 67-8901
et seq. - Last DSIRE Review: 09/12/2008 – Link
o State Loan Program
 Low-Interest Energy Loan Programs - Last DSIRE Review:
04/20/2009 - Link
Rules, Regulations & Policies
o Net Metering - Idaho does not have a statewide net-metering policy.
However, each of the state's three investor-owned utilities -- Avista
Utilities, Idaho Power and Rocky Mountain Power -- has developed a netmetering tariff that has been approved by the Idaho Public Utilities
Commission (PUC).
 Avista Utilities - Net Metering - Last DSIRE Review: 03/13/2009 –
Link
93

Idaho Power - Net Metering - Last DSIRE Review: 03/13/2009 Link
 Rocky Mountain Power - Net Metering - Last DSIRE Review:
03/13/2009 – Link
o Solar Access Law/Guideline
 Solar Easements - Idaho Code § 55-615 - Last DSIRE Review:
01/05/2009 – Link
Illinois
Financial Incentives
o Green Building Incentive
 Chicago - Green Permit Program - Last DSIRE Review:
04/22/2009 - Link
o Property Tax Exemption
 Special Assessment for Solar Energy Systems - § 35 ILCS 200/105,10 - Last DSIRE Review: 11/06/2008 – Link
o State Bond Program
 Illinois Finance Authority Renewable Energy Project Financing 20 ILCS 3501/825-65 et seq. - Last DSIRE Review: 08/03/2009 –
Link
o State Grant Program
 Department of Commerce and Economic Opportunity - Solar
Energy Incentive Program - § 20 ILCS 687/6-3 - Last DSIRE
Review: 02/17/2009 – Link
o State Rebate Program
 Department of Commerce and Economic Opportunity - Solar
Energy Rebate Program - § 20 ILCS 687/6-3 - Last DSIRE
Review: 04/23/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Energy Efficiency in State Government - § 20 ILCS 3105/10.04, §
20 ILCS 20/1 et seq., EO 7 (2009) - Last DSIRE Review:
07/31/2009 – Link
o Green Power Purchasing/Aggregation
 Illinois - Green Power Purchasing - Last DSIRE Review:
05/12/2009 - Link
o Interconnection
 Interconnection Standards - § 220 ILCS 5/16-107.5, 83 Ill. Adm.
Code, Part 466 – Last DSIRE Review: 07/15/2009 - Link
o Net Metering
 Illinois - Net Metering - § 220 ILCS 5/16-107.5, 83 Ill. Adm.
Code, Part 465 - Last DSIRE Review: 05/12/2009 - Link
o Public Benefits Fund
94

Renewable Energy Resources Trust Fund - 20 ILCS 687/6-1 et
seq., § 220 ILCS 5/16-111.1 - Last DSIRE Review: 10/27/2008 –
Link
o Renewable Portfolio Standard
 Renewable Portfolio Standard - § 20 ILCS 3855/1-75, Public Act
095-1027 - Last DSIRE Review: 02/05/2009 - Link
Indiana
Financial Incentives
o Property Tax Exemption
 Renewable Energy Property Tax Exemption - Ind. Code § 6-1.112-26 et seq. - Last DSIRE Review: 10/02/2008 – Link
o State Grant Program
 Alternative Power & Energy Grant Program - Last DSIRE Review:
09/23/2008 – Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Bloomington - Green Building Requirements for Municipal
Buildings - Ordinance 09-04 - Last DSIRE Review: 07/14/2009 Link
 Energy Efficient State Building Initiative - Executive Order 08-14
- Last DSIRE Review: 05/29/2009 - Link
o Green Power Purchasing/Aggregation
 Indiana - Green Power Purchasing - Last DSIRE Review:
05/12/2009 - Link
o Interconnection
 Interconnection Standards - 170 IAC 4-4.3 - Last DSIRE Review:
01/21/2009 - Link
o Net Metering
 Indiana - Net Metering - 170 IAC 4-4.2 - Last DSIRE Review:
01/21/2009 - Link
o Solar Access Law/Guideline
 Solar Access Laws - Ind. Code § 32-23-4-1 et seq., Ind. Code § 367-2-1 et seq. - Last DSIRE Review: 01/15/2009 - Link
Iowa
Financial Incentives
o Corporate Tax Credit
 Renewable Energy Production Tax Credits (Corporate) - IA Code
§ 476B, IA Code § 476C, IAC 199-15.18 et seq., S.F. 456 - Last
DSIRE Review: 05/04/2009 - Link
o Excise Tax Incentive
 Energy Replacement Generation Tax Exemption - Iowa Code §
437A.6, Iowa Code § 437A.3(27) - Last DSIRE Review:
12/09/2008 - Link
95
o Personal Tax Credit
 Renewable Energy Production Tax Credit (Personal) - IA Code §
476B, IA Code § 476C, IAC 199-15.18 et seq., S.F. 456 - Last
DSIRE Review: 05/04/2009 - Link
o Property Tax Exemption
 Property Tax Exemption for Renewable Energy Systems - Iowa
Code § 441.21(8), Last DSIRE Review: 01/28/2009 - Link
o Sales Tax Exemption
 Wind and Solar Energy Equipment Exemption - IA Code § 423.3
(Sec. 54, 90) - Last DSIRE Review: 07/20/2009 - Link
o State Grant Program
 Iowa Energy Center - Grants for Energy Efficiency and Renewable
Energy Research - : Iowa Code § 266.39C - Last DSIRE Review:
07/08/2009 - Link
o State Loan Program
 Alternate Energy Revolving Loan Program - Iowa Code § 476.46,
S.F. 376 - Last DSIRE Review: 07/06/2009 - Link
 Iowa Building Energy Smart Program - Iowa Code 473.19 et seq.,
S.F. 471 - Last DSIRE Review: 07/08/2009 - Link
o Utility Rebate Program – Several utilities in Iowa offer rebates for
renewable energy projects - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Guidelines - IAC § 199-15.10 et seq. - Last DSIRE
Review: 01/14/2009 - Link
o Mandatory Utility Green Power Option
 Mandatory Utility Green Power Option - Iowa Code § 476.47 Last DSIRE Review: 10/06/2008 - Link
o Net Metering
 Iowa - Iowa Code § 476.41 et seq., IAC § 199-15.11(5) - Net
Metering - Last DSIRE Review: 12/04/2008 - Link
o Renewables Set Aside
 Alternative Energy Law (AEL) - Iowa Code § 476.41 et seq., IAC
199-15.11(1), Iowa Utilities Board Order, Docket No. AEP-07-1 Last DSIRE Review: 03/09/2009 - Link
o Solar Access Law/Guideline
 Solar Access Easements - Iowa Code § 564A - Last DSIRE
Review: 06/19/2009 - Link
Kansas
Financial Incentives
o Industry Recruitment/Support
 Solar and Wind Manufacturing Incentive - SB 108 - Last DSIRE
Review: 06/11/2009 - Link
o Property Tax Exemption
96

Renewable Energy Property Tax Exemption - Kansas Statutes 79201 - Last DSIRE Review: 04/30/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Greensburg - Green Building Requirement for New Municipal
Buildings - City Ordinance 2007-17 - Last DSIRE Review:
03/09/2009 - Link
o Interconnection
 Interconnection Standards - HB 2369 - Last DSIRE Review:
06/09/2009 - Link
o Net Metering
 Kansas - Net Metering - HB 2369 - Last DSIRE Review:
05/29/2009 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - HB 2369 - Last DSIRE Review:
05/27/2009 - Link
o Solar Access Law/Guideline
 Solar Easements - Kansas Statute 58-3801 et seq. - Last DSIRE
Review: 01/14/2009 - Link
Kentucky
Financial Incentives
o Corporate Tax Credit
 Renewable Energy Tax Credit (Corporate) - KRS § 141.435 et seq.
- Last DSIRE Review: 04/21/2009 - Link
 Tax Credit for Renewable Energy Facilities - KRS § 154.27-010 et
seq. , 307 KAR 1:040 - Last DSIRE Review: 07/15/2009 - Link
o Personal Tax Credit
 Renewable Energy Tax Credit (Personal) - KRS § 141.435 et seq. Last DSIRE Review: 04/21/2009 - Link
o Production Incentive
 Tennessee Valley Authority (TVA) - Green Power Switch
Generation Partners Program - Last DSIRE Review: 04/28/2009 Link
o Sales Tax Exemption
 Sales Tax Exemption for Large-Scale Renewable Energy Projects KRS § 154.27-010 et seq., 103 KAR 31:190 - Last DSIRE Review:
07/15/2009 - Link
o Utility Rebate Program – Several utilities in Kentucky offer rebates for
renewable energy projects - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - KRS § 278.465 et seq., KY PSC Order
2008-00169 - Last DSIRE Review: 02/05/2009 - Link
o Net Metering
97

Kentucky - Net Metering - KRS § 278.465 et seq., KY PSC Order
2008-00169 - Last DSIRE Review: 02/04/2009 - Link
o Solar Access Law/Guideline
 Solar Easements - KRS § 381.200 - Last DSIRE Review:
06/10/2009 - Link
Louisiana
Financial Incentives
o Corporate Tax Credit
 Tax Credit for Solar and Wind Energy Systems on Residential
Property (Corporate) - La. R.S. 47:6030, LAC 61:I.1907 - Last
DSIRE Review: 07/22/2009 - Link
o Personal Tax Credit
 Tax Credit for Solar and Wind Energy Systems on Residential
Property (Personal) - La. R.S. 47:6030, LAC 61:I.1907 - Last
DSIRE Review: 07/22/2009 - Link
o Property Tax Exemption
 Solar Energy System Exemption - La. R.S. 47:1706 - Last DSIRE
Review: 01/20/2009 - Link
o Property Tax Financing Authorization
 Local Option - Sustainable Energy Financing Districts - S.B. 224 Last DSIRE Review: 07/16/2009 - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - La. R.S. 51:3061 et seq., LA PSC
Order, Docket No. R-27558 - Last DSIRE Review: 11/07/2008 Link
o Net Metering
 City of New Orleans - Net Metering - New Orleans City Council
Resolution R-07-132, New Orleans City Council Resolution R-07221, SB 359 of 2008 - Last DSIRE Review: 07/18/2008 - Link
 Louisiana - Net Metering - La. R.S. 51:3061 et seq., LA PSC
Order, Docket No. R-27558 - Last DSIRE Review: 06/18/2009 Link
Maine
Financial Incentives
o Production Incentive
 Community Based Renewable Energy Production Incentive (Pilot
Program) - LD 1075 - Last DSIRE Review: 07/17/2009 - Link
o State Grant Program
 Voluntary Renewable Resources Grants - 35-A M.R.S.A. §3210,
ME PUC 65.407, Ch. 312 - Last DSIRE Review: 07/16/2009 - Link
o State Rebate Program
98

Solar and Wind Energy Rebate Program - 35-A M.R.S. § 3211-C,
Maine PUC Ch. 930, LD 220 - Last DSIRE Review: 07/01/2009 Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Energy-Efficient Building Standards for State Facilities - ME
Executive Order 8 (FY 04/05), 5 M.R.S. § 1764-A - Last DSIRE
Review: 06/11/2009 - Link
o Green Power Purchasing/Aggregation
 Maine - Green Power Purchasing - Last DSIRE Review:
05/19/2009 - Link
o Net Metering
 Maine - Net Energy Billing - CMR 65-407-313, LD 336 - Last
DSIRE Review: 06/11/2009 - Link
o Public Benefits Fund
 Renewable Resource Fund - 35-A M.R.S. § 3210, CMR 65-407312, HB 1038 - Last DSIRE Review: 06/16/2009 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - 35-A M.R.S. § 3210, 35-A
M.R.S. § 3210-C, CMR 65-407-311, LD 1075 - Last DSIRE
Review: 06/30/2009 - Link
o Solar Access Law/Guideline
 Solar Easements - 33 M.R.S. §1401 et seq. - Last DSIRE Review:
02/06/2009 - Link
 Solar Rights - HB 62 - Last DSIRE Review: 06/16/2009 - Link
Maryland
Financial Incentives
o Corporate Tax Credit
 Clean Energy Production Tax Credit (Corporate) - Md. TAXGENERAL Code § 10-720, COMAR 14.26.06 - Last DSIRE
Review: 11/07/2008 - Link
 Income Tax Credit for Green Buildings (Corporate) - Md Code:
Tax - General § 10-722, COMAR 14.26.02 - Last DSIRE Review:
07/09/2009 - Link
o Local Rebate Program
 Montgomery County - Clean Energy Rewards Program Montgomery County Bill 39-04, Montgomery County Executive
Regulation 26-08AM, Clean Energy Rewards Program,
Montgomery County Resolution 16-737 - Last DSIRE Review:
12/09/2008 - Link
o Personal Tax Credit
 Clean Energy Production Tax Credit (Personal) - Md. TAXGENERAL Code § 10-720, COMAR 14.26.06 - Last DSIRE
Review: 11/07/2008 - Link
99

Income Tax Credit for Green Buildings (Personal) - Md Code: Tax
- General § 10-722, COMAR 14.26.02 - Last DSIRE Review:
07/09/2009 - Link
o Property Tax Exemption
 Anne Arundel County - Solar Energy Equipment Property Tax
Credit - Anne Arundel County Code § 4-2-309 - Last DSIRE
Review: 03/06/2009 - Link
 Harford County - Property Tax Credit for Solar and Geothermal
Devices - Harford County Code § 123-44 - Last DSIRE Review:
03/18/2009 - Link
 Howard County - High Performance Building Property Tax Credit
- Howard County Code § 20.129B - Last DSIRE Review:
07/24/2009 - Link
 Howard County - Residential Solar and Geothermal Property Tax
Credit - Howard County Code 20-128A - Last DSIRE Review:
12/15/2008 - Link
 Local Option - Property Tax Credit for High Performance
Buildings - Md Code: Property Tax § 9-242 - Last DSIRE Review:
07/24/2009 - Link
 Local Option - Property Tax Credit for Renewables and Energy
Conservation Devices - Md Code: Property Tax § 9-203 - Last
DSIRE Review: 07/22/2009 - Link
 Montgomery County - High Performance Building Property Tax
Credit - Montgomery County Code Sec. 52-18Q - Last DSIRE
Review: 02/04/2009 - Link
 Montgomery County - Residential Energy Conservation Property
Tax Credits - Montgomery County Code Sec. 52-18R, County
Council Bill 02-09, Last DSIRE Review: 06/18/2009 - Link
 Montgomery County - Residential Energy Conservation Property
Tax Credits - Montgomery County Code Sec. 52-18R, County
Council Bill 02-09 - Last DSIRE Review: 06/18/2009 - Link
 Prince George's County - Solar and Geothermal Residential
Property Tax Credit - Prince George's County Code Sec. 10-235.06
- Last DSIRE Review: 06/18/2009 - Link
 Property Tax Exemption for Solar and Wind Energy Systems - Md
Code: Property Tax §7-242, H.B. 1171, S.B. 621 - Last DSIRE
Review: 05/22/2009 - Link
 Special Property Assessment for Renewable Heating & Cooling
Systems - Md Code: Property Tax § 8-240 - Last DSIRE Review:
05/06/2009 - Link
o Property Tax Financing Authorization
 Local Option - Clean Energy Loan Program - H.B. 1567 - Last
DSIRE Review: 07/16/2009 - Link
o Sales Tax Exemption
100

Sales and Use Tax Exemption for Renewable Energy Equipment Md Code: General Tax §11-230, H.B. 1171, S.B. 621 - Last
DSIRE Review: 05/22/2009 - Link
o State Loan Program
 Jane E. Lawton Conservation Loan Program - Md Code: State
Government §9–20A–01 et seq., H.B. 1442 - Last DSIRE Review:
05/20/2009 - Link
 State Agency Loan Program - Last DSIRE Review: 07/08/2009 Link
o State Rebate Program
 Solar Energy Grant Program - MD STATE-GOVT §9–2007 - Last
DSIRE Review: 06/02/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Maryland - Energy Conservation in State Buildings - S.B. 208,
Maryland Code: State Finance and Procurement § 4-808, Md. State
Finance and Procurement Code § 4-806, MD Executive Order
01.01.2001.02 - Last DSIRE Review: 05/11/2009 - Link
o Green Power Purchasing/Aggregation
 Maryland - Clean Energy Procurement - Executive Order
01.01.2001.02 - Last DSIRE Review: 04/20/2009 - Link
 Montgomery County - Green Power Purchasing - County
Resolution 16-757 - Last DSIRE Review: 06/18/2009 - Link
o Interconnection
 Interconnection Standards - COMAR 20.50.09 Small Generator
Interconnection Standards - Last DSIRE Review: 05/22/2009 Link
o Net Metering
 Maryland - Net Metering - Md. Public Utility Companies Code §
7-306, S.B. 981, H.B. 1057 - Last DSIRE Review: 07/01/2009 Link
o Renewables Portfolio Standard
 Renewable Energy Portfolio Standard - Md. Public Utility
Companies Code § 7-701 et seq., COMAR 20.61.01 et seq. - Last
DSIRE Review: 05/22/2009 - Link
o Solar Access Law/Guideline
 Solar Access Laws - Md Code: Real Property § 2-119, Md Code:
Real Property § 2-118 - Last DSIRE Review: 04/17/2009 - Link
Massachusetts
Financial Incentives
o Corporate Deduction
 Alternative Energy and Energy Conservation Patent Exemption
(Corporate) - MGL ch. 62, § 2(a)(2)(G) - Last DSIRE Review:
06/19/2009 - Link
101

Excise Tax Deduction for Solar- or Wind-Powered Systems MGL ch. 63, § 38H - Last DSIRE Review: 04/30/2009 - Link
o Corporate Exemption
 Excise Tax Exemption for Solar- or Wind-Powered Systems MGL ch. 63, § 38H - Last DSIRE Review: 04/30/2009 - Link
o Industry Recruitment/Support
 MTC - Sustainable Energy Economic Development (SEED)
Initiative - Last DSIRE Review: 02/24/2009 - Link
o Personal Deduction
 Alternative Energy and Energy Conservation Patent Exemption
(Personal) - MGL ch. 62, § 2(a)(2)(G) - Last DSIRE Review:
06/19/2009 - Link
o Personal Tax Credit
 Residential Renewable Energy Income Tax Credit - M.G.L. Ch.
62, § 6(d) - Last DSIRE Review: 12/05/2008 - Link
o Production Incentive
 Mass Energy - Renewable Energy Certificate Incentive - Last
DSIRE Review: 07/13/2009 - Link
o Property Tax Exemption
 Renewable Energy Property Tax Exemption - M.G.L. ch. 59 § 5
(45, 45A) - Last DSIRE Review: 11/11/2008 - Link
o Sales Tax Exemption
 Renewable Energy Equipment Sales Tax Exemption - M.G.L.
64H.6(dd) - Last DSIRE Review: 04/21/2009 - Link
o State Grant Program
 Massachusetts Technology Collaborative (MTC) - Matching
Grants for Communities - Last DSIRE Review: 02/09/2009 - Link
o State Rebate Program
 Massachusetts Technology Collaborative (MTC) - Commonwealth
Solar Rebates - Last DSIRE Review: 12/29/2008 - Link
o Utility Rebate Program – Four utilities in Massachusetts offer rebates for
solar projects. Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Energy Reduction Plan for State Buildings - Executive Order 484
(2007), S.B. 2768 - Last DSIRE Review: 05/07/2009 - Link
o Green Power Purchasing/Aggregation
 Boston - Green Power Purchasing - Executive Order Relative to
Climate Action in Boston - Last DSIRE Review: 06/15/2009 - Link
 Massachusetts - Green Power Purchasing Commitment - Executive
Order 484 (2007) - Last DSIRE Review: 06/19/2009 - Link
o Interconnection
 Interconnection Standards - Model Interconnection Tariff, Docket
No. 02-38 - Last DSIRE Review: 06/10/2009 - Link
o Net Metering
102

Massachusetts - Net Metering - M.G.L. ch. 164, § 1G et seq.
(subsequently amended), S.B. 2768, 220 CMR 11.04, 220 CMR
18.00 et seq., 220 CMR 8.00 et seq. - Last DSIRE Review:
07/01/2009 - Link
o Public Benefits Fund
 Renewable Energy Trust Fund - M.G.L. ch. 40J, § 4E, M.G.L. ch.
25, § 20 - Last DSIRE Review: 07/06/2009 - Link
o Renewables Portfolio Standard
 Renewable Portfolio Standard - M.G.L. ch. 25A, § 11F, 225 CMR
14.00, 225 CMR 15.00 - Last DSIRE Review: 06/12/2009 - Link
o Solar Access Law/Guideline
 Solar Access Laws - M.G.L. ch. 187 § 1A. Solar easements,
M.G.L. ch. 184 § 23C. Solar energy systems; installation or use;
restrictive provisions, M.G.L. ch. 40A § 1A. Definitions, M.G.L.
ch. 41 § 81Q. Planning board; adoption of rules and regulations,
M.G.L. ch. 40A § 9B. Solar access - Last DSIRE Review:
02/10/2009 - Link
Michigan
Financial Incentives
o Industry Recruitment/Support
 Nonrefundable Business Activity Tax Credit - MCL § 208.1429,
MCL § 207.821 et seq. - Last DSIRE Review: 12/05/2008 - Link
 Refundable Payroll Tax Credit - MCL § 208.1429, MCL § 207.821
et seq. - Last DSIRE Review: 12/10/2008 - Link
 Renewable Energy Renaissance Zones - MCL § 125.2681 et seq. Last DSIRE Review: 01/15/2009 - Link
o Production Incentive
 Consumers Energy - Photovoltaic Purchase Tariff - Experimental
Advanced Renewables Program Tariff (multiple sheets), EARP
Application Instructions, EARP Program Application - Last DSIRE
Review: 08/03/2009 - Link
o Property Tax Exemption
 Alternative Energy Personal Property Tax Exemption - MCL
§211.9(i), MCL § 207.821 et seq. - Last DSIRE Review:
12/05/2008 - Link
o Utility Rebate Program
 WPPI Energy - Renewable Energy Rebates (offered by seven MI
utilities) - Last DSIRE Review: 01/23/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Energy Efficiency in State Buildings - MCL § 460.1131 et seq.,
Executive Directive 2007-22 - Last DSIRE Review: 08/10/2009 Link
103

o
o
o
o
o
Grand Rapids - Green Building Requirements for Municipal
Buildings - Commission Resolution No. 74599 - Last DSIRE
Review: 07/31/2009 - Link
Green Power Purchasing/Aggregation
 Ann Arbor - Green Power Purchasing - Resolution to Set
Renewable Energy Goals for Ann Arbor - Last DSIRE Review:
07/30/2009 - Link
 Grand Rapids - Green Power Purchasing Policy - Commission
Resolution No. 76792 - Last DSIRE Review: 12/15/2008 - Link
 Lansing - Green Power Purchasing Policy - Executive Order 200701 - Last DSIRE Review: 11/19/2008 - Link
Interconnection
 Interconnection Standards - Public Act 295 (2008), Michigan PSC
Order, Case No. U-15787 - Last DSIRE Review: 05/28/2009 - Link
Net Metering
 Michigan - Net Metering - Public Act 295 (2008), PSC Order,
Docket U-15787 - Last DSIRE Review: 06/04/2009 - Link
Public Benefits Fund
 Low-Income and Energy Efficiency Fund (LIEEF) - MCL §
460.10d - Last DSIRE Review: 03/17/2009 - Link
Renewables Portfolio Standard
 Lansing Board of Water and Light - Renewables Portfolio Goal Resolution 2007-1-9 - Last DSIRE Review: 11/19/2008 - Link
 Renewable Energy Standard - Public Act 295 (2008) - Last DSIRE
Review: 10/22/2008 - Link
Minnesota
Financial Incentives
o Production Incentive
 Austin Public Utilities - Solar Choice Program - Last DSIRE
Review: 10/06/2008 - Link
 Minnesota - Renewable Energy Production Incentive - Minn. Stat.
§ 216C.41 - Last DSIRE Review: 06/29/2009 - Link
o Property Tax Exemption
 Wind and Solar-Electric (PV) Systems Exemption - Minn. Stat. §
272.02, Minn. Stat. § 272.028, Minn. Stat. § 272.029, H.F. 1298,
Article 2, Sec. 12 - Last DSIRE Review: 07/02/2009 - Link
o Sales Tax Exemption
 Solar Energy Sales Tax Exemption - Minn. Stat. § 297A.67, Subd.
29 - Last DSIRE Review: 07/02/2009 - Link
o State Rebate Program
 Solar-Electric (PV) Rebate Program - Last DSIRE Review:
07/16/2009 - Link
o Utility Grant/Loan/Rebate Program – Several Minnesota utilities offer
grants, loans, and rebates for solar projects. Link
Rules, Regulations & Policies
104
o Energy Standards for Public Buildings
 Sustainable Building Guidelines for New State Construction and
Renovations - Minn. Stat. § 16B.32 et seq., H.F. 380, S.F. 2706 Last DSIRE Review: 05/07/2009 - Link
o Equipment Certification
 Solar Equipment Certification - Minn. Stat. § 216C.25, Minnesota
Rules 1325.1100 - Last DSIRE Review: 10/28/2008 - Link
o Interconnection
 Interconnection Standards - Minn. Stat. § 216B.1611, Minnesota
PUC Order, Docket No. E-999/CI-01-1023 - Last DSIRE Review:
02/03/2009 - Link
o Net Metering
 Minnesota - Net Metering - Minn. Stat. § 216B.164, Minn. R.
7835.3300 - Last DSIRE Review: 02/03/2009 - Link
o Other Policy
 Community-Based Energy Development (C-BED) Tariff - Minn.
Stat. § 216B.1612, S.F. 550, Sec. 10 - Last DSIRE Review:
06/30/2009 - Link
o Public Benefits Fund
 Renewable Development Fund (RDF) - Minn. Stat. § 116C.779 Last DSIRE Review: 03/23/2009 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - Minn. Stat. § 216B.1691, PUC
Order, Docket E-999/CI-04-1616, PUC Order, Docket E-999/CI04-1616, S.F. 550, Sec. 13 - Last DSIRE Review: 06/19/2009 Link
o Solar and Wind Access Law
 Solar and Wind Easements - Minn. Stat. § 500.30, S.F. 145, Article
4, Section 15, S.F. 3337, Article 1, Section 25 - Last DSIRE
Review: 10/28/2008 - Link
Mississippi
Financial Incentives
o Production Incentive
 Tennessee Valley Authority (TVA) - Green Power Switch
Generation Partners Program - Last DSIRE Review: 04/28/2009 Link
o State Loan Program
 Energy Investment Loan Program - Miss. Code § 57-39-39 - Last
DSIRE Review: 06/12/2009 - Link
Missouri
Financial Incentives
o State Loan Program
 Energy Loan Program - R.S. Mo. § 640.651 et seq. - Last DSIRE
Review: 04/14/2009 - Link
105
o Utility Rebate Program
 Columbia Water & Light - Solar & Efficiency Rebates - Last
DSIRE Review: 05/12/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Life-Cycle Analysis and Energy Efficiency in State Buildings R.S. Mo. § 8.810 et seq., S.B. 376 - Last DSIRE Review:
07/14/2009 - Link
o Interconnection
 Interconnection Standards - R.S. Mo. § 386.890, 4 CSR 24020.065, PSC Order Docket EX-2009-0267 - Last DSIRE Review:
06/24/2009 - Link
o Net Metering
 Missouri - Net Metering - R.S. Mo. § 386.890, 4 CSR 240-20.065,
PSC Order Docket EX-2009-0267 - Last DSIRE Review:
06/24/2009 - Link
o Renewables Portfolio Standard
 Columbia - Renewables Portfolio Standard - Columbia Code of
Ordinances, §27-106 - Last DSIRE Review: 06/17/2009 - Link
 Renewable Electricity Standard - Proposition C (2008) - Last
DSIRE Review: 11/07/2008 - Link
o Solar and Wind Access Law
 Solar Easements - R.S. Mo. § 442.012 - Last DSIRE Review:
11/03/2008 - Link
Montana
Financial Incentives
o Corporate Tax Credit
 Alternative Energy Investment Tax Credit (Corporate) - MCA §
15-32-401 et seq. - Last DSIRE Review: 09/12/2008 - Link
o Industry Recruitment/Support
 Alternative Energy Investment Tax Credit - MCA § 15-32-401 et
seq. - Last DSIRE Review: 09/12/2008 - Link
 Property Tax Abatement for Production and Manufacturing
Facilities - MCA § 15-24-3111, MCA § 15-6-157 - Last DSIRE
Review: 09/12/2008 - Link
o Personal Tax Credit
 Alternative Energy Investment Tax Credit (Personal) - MCA § 1532-401 et seq. - Last DSIRE Review: 09/12/2008 - Link
 Residential Alternative Energy System Tax Credit - MCA § 15-32201 - Last DSIRE Review: 09/12/2008 - Link
o Property Tax Assessment
 Corporate Property Tax Reduction for New/Expanded Generating
Facilities - MCA § 15-24-1402 - Last DSIRE Review: 03/17/2009 Link
o Property Tax Exemption
106

Generation Facility Corporate Tax Exemption - MCA § 15-6-225 Last DSIRE Review: 03/17/2009 - Link
 Renewable Energy Systems Exemption - MCA § 15-6-224, MCA
§ 15-32-102 - Last DSIRE Review: 03/16/2009 - Link
o State Loan Program
 Alternative Energy Revolving Loan Program - MCA § 75-25-101
et seq. - Last DSIRE Review: 04/22/2009 - Link
o Utility Grant Program
 NorthWestern Energy - USB Renewable Energy Fund - Last
DSIRE Review: 09/22/2008 - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - Mont. Code § 69-8-604 - Last DSIRE
Review: 03/31/2009 - Link
o Mandatory Utility Green Power Option
 Mandatory Utility Green Power Option - MCA 69-8-210 - Last
DSIRE Review: 06/10/2009 - Link
o Net Metering
 Montana - Net Metering - Mont. Code § 69-8-601 et seq. - Last
DSIRE Review: 02/12/2009 - Link
 Montana Electric Cooperatives - Net Metering - Last DSIRE
Review: 01/15/2009 - Link
o Public Benefits Fund
 Universal System Benefits Program - MCA 69-8-402, MONT.
ADMIN. R. 42.29.101 et seq. - Last DSIRE Review: 03/30/2009 Link
o Renewables Portfolio Standard
 Renewable Resource Standard - MCA 69-3-2001 et seq., MONT.
ADMIN. R. 38.5.8301 - Last DSIRE Review: 05/18/2009 - Link
o Solar and Wind Access Law
 Solar and Wind Easements - MCA § 70-17-301 et seq. - Last
DSIRE Review: 01/14/2009 - Link
Nebraska
Financial Incentives
o State Loan Program
 Dollar and Energy Savings Loans - Last DSIRE Review:
11/14/2008 - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - LB 436 - Last DSIRE Review:
05/19/2009 - Link
o Net Metering
 Nebraska - Net Metering - LB 436 - Last DSIRE Review:
05/19/2009 - Link
o Solar and Wind Access Law
107

Solar and Wind Easements - LB 568 - Last DSIRE Review:
07/07/2009 - Link
Nevada
Financial Incentives
o Property Tax Assessment
 Property Tax Abatement for Green Buildings - NRS § 701A.110
(amended in 2007), Adopted Regulation R116-07 - Last DSIRE
Review: 02/10/2009 - Link
 Renewable Energy Producers Property Tax Abatement - NRS §
701A.220, AB 522 - Last DSIRE Review: 07/07/2009 - Link
o Property Tax Exemption
 Renewable Energy Systems Property Tax Exemption - NRS §
701A.200 - Last DSIRE Review: 12/05/2008 - Link
o Property Tax Financing Authorization
 Local Option - Special Improvement Districts - NRS 271.010 et
seq., SB 358 - Last DSIRE Review: 07/31/2009 - Link
o Sales Tax Exemption
 Renewable Energy Sales and Use Tax Abatement - NRS §
701A.230, AB 522 - Last DSIRE Review: 07/07/2009 - Link
o State Rebate Program
 NV Energy – RenewableGenerations Rebate Program - NRS §
701B.010 et. seq., CB File R175-07 - Last DSIRE Review:
03/30/2009 - Link
Rules, Regulations & Policies
o Contractor Licensing
 Solar Contractor Licensing - NAC 624.190 and 624.540, NRS
§618.910 et seq. - Last DSIRE Review: 12/05/2008 - Link
o Interconnection
 Interconnection Standards - Last DSIRE Review: 12/23/2008 Link
o Net Metering
 Nevada - Net Metering - NRS 704.766 et seq., NAC 704.8901 et
seq. - Last DSIRE Review: 12/23/2008 - Link
 Valley Electric Association - Net Metering - Net Metering Policy Last DSIRE Review: 04/24/2009 - Link
o Renewables Portfolio Standard
 Energy Portfolio Standard - NRS 704.7801 et seq., AC 704.8831 et
seq., LCB File R167-05 (Revised Regulations), SB 358 - Last
DSIRE Review: 06/22/2009 - Link
o Solar and Wind Access Law
 Solar and Wind Access Laws - NRS § 111.370 et seq., NRS §
111.239, NRS § 278.0208, NRS § 116.2111, SB 114 - Last DSIRE
Review: 06/03/2009 - Link
New Hampshire
108
Financial Incentives
o Property Tax Exemption
 Local Option Property Tax Exemption for Renewable Energy New Hampshire Statutes, Chapter 72:61 et seq., Last DSIRE
Review: 10/24/2008 - Link
o State Loan Program
 Renewable Energy and Energy Efficiency Business Loan - Last
DSIRE Review: 07/01/2009 - Link
o State Rebate Program
 Renewable Energy Rebate Program - New Hampshire Statutes,
Chapter 362-F:10, HB 229, Order 24.985 - Last DSIRE Review:
07/15/2009 - Link
o Utility Rebate Program – Two New Hampshire Utilities offer rebates for
solar projects. Link
Rules, Regulations & Policies
o Building Energy Code
 Town of Epping - Energy Efficiency and Sustainable Design
Requirement - Town of Epping Ordinance: Article 22 - Last
DSIRE Review: 04/23/2009 - Link
o Interconnection
 Interconnection Standards - New Hampshire Statutes § 362-A:1-a,
New Hampshire Statutes § 362-A:9, N.H. Admin. Rules, Puc 900 Last DSIRE Review: 07/29/2009 - Link
o Net Metering
 New Hampshire - Net Metering - New Hampshire Statutes § 362A:1-a, New Hampshire Statutes § 362-A:9, N.H. Admin. Rules,
Puc 900 - Last DSIRE Review: 07/29/2009 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - New Hampshire Statutes, Chapter
362-F, N.H. Admin. Rules, Puc 2500, HB 229 - Last DSIRE
Review: 06/17/2009 - Link
o Solar Access Law/Guideline
 Solar Easements - New Hampshire Statutes § 477:49 et seq. - Last
DSIRE Review: 02/09/2009 - Link
New Jersey
Financial Incentives
o Industry Recruitment/Support
 Edison Innovation Clean Energy Manufacturing Fund - Grants and
Loans - Last DSIRE Review: 07/17/2009 - Link
o Production Incentive
 NJ Board of Public Utilities - Solar Renewable Energy Certificates
(SRECs) - N.J. Stat. § 48:3-87, N.J.A.C. 14:8-2.2 et seq., NJ BPU
Solar Transition Board Order, NJ BPU Solar Financing Board
Order - Last DSIRE Review: 07/31/2009 - Link
o Property Tax Exemption
109

Property Tax Exemption for Renewable Energy Systems - S.B.
241 - Last DSIRE Review: 10/28/2008 - Link
o Sales Tax Exemption
 Solar Energy Sales Tax Exemption - N.J. Stat. § 54:32B-8.33
(2008) - Last DSIRE Review: 02/27/2009 - Link
o State Loan Program
 Clean Energy Solutions Capital Investment Loan/Grant Program Last DSIRE Review: 06/30/2009 - Link
o State Rebate Program
 New Jersey Customer-Sited Renewable Energy Rebates - N.J. Stat.
§ 48:3-60 (2008) - Last DSIRE Review: 06/29/2009 - Link
o Utility Loan Program
 Public Service Electric and Gas (PSE&G) of New Jersey - Solar
Loan Program - Last DSIRE Review: 07/15/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Energy Efficiency in New School Construction - NJ Executive
Order #24 (2002) - Last DSIRE Review: 05/07/2009 - Link
 High Performance Building Standards in New State Construction S.B. 2146, N.J. Stat. § 52:34-6.4 - Last DSIRE Review: 05/07/2009
- Link
o Interconnection
 Interconnection Standards - N.J. Stat. § 48:3-87, N.J.A.C. § 14:84.1 et seq. - Last DSIRE Review: 12/19/2008 - Link
o Net Metering
 New Jersey - Net Metering - N.J. Stat. § 48:3-87, N.J.A.C. § 14:84.1 et seq. - Last DSIRE Review: 05/01/2009 - Link
o Public Benefits Fund
 Societal Benefits Charge - N.J. Stat. § 48:3-60 - Last DSIRE
Review: 04/03/2009 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - N.J. Stat. § 48:3-49 et seq.,
N.J.A.C. 14:8-1.1 et seq. - Last DSIRE Review: 06/25/2009 - Link
o Solar Access Law/Guideline
 Solar Access Law - N.J. Stat. § 45:22A-48.2 - Last DSIRE Review:
10/03/2008 – Link
 Solar Easements - N.J. Stat. § 46:3-24 et seq. - Last DSIRE
Review: 12/18/2008 - Link
New Mexico
Financial Incentives
o Corporate Tax Credit
 Advanced Energy Tax Credit (Corporate) - N.M. Stat. § 7-9G-2,
N.M. Stat. § 62-6-28, SB 237 - Last DSIRE Review: 04/17/2009 Link
110

Renewable Energy Production Tax Credit (Corporate) - N.M. Stat.
§ 7-2A-19 - Last DSIRE Review: 05/14/2009 - Link
 Sustainable Building Tax Credit (Corporate) - N.M. Stat. § 7-2A21, SB 291 - Last DSIRE Review: 04/28/2009 - Link
o Industry Recruitment/Support
 Alternative Energy Product Manufacturers Tax Credit - N.M. Stat.
§ 7-9J-1 et seq. - Last DSIRE Review: 06/15/2009 - Link
o Personal Tax Credit
 Advanced Energy Tax Credit (Personal) - SB 237 - Last DSIRE
Review: 04/17/2009 - Link
 Renewable Energy Production Tax Credit (Personal) - N.M. Stat. §
7-2-18.18 - Last DSIRE Review: 05/14/2009 - Link
 Solar Market Development Tax Credit - NM Stat. § 7-2-18.14,
3.3.28 NMAC (Solar System Certification Requirements), SB 257
- Last DSIRE Review: 04/10/2009 - Link
 Sustainable Building Tax Credit (Personal) - N.M. Stat. § 7-218.19, SB 291 - Last DSIRE Review: 04/28/2009 - Link
o Production Incentive
 Three New Mexico utility companies are offering production
incentives for solar power. Link
o Property Tax Financing Authorization
 Local Option - Renewable Energy Improvement Special
Assessments - S.B. 647 - Last DSIRE Review: 07/16/2009 - Link
o Sales Tax Exemption
 Solar Energy Gross Receipts Tax Deduction - N.M. Stat. § 7-9-112
- Last DSIRE Review: 08/08/2008 - Link
o State Bond Program
 Energy Efficiency & Renewable Energy Bond Program - N.M.
Stat. 6-21D-1 et seq. (Amended 2007) - Last DSIRE Review:
09/17/2008 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Energy Efficiency Standards for State Buildings - Executive Order
2006-001, Executive Order 2007-053 - Last DSIRE Review:
12/22/2008 - Link
o Interconnection
 Interconnection Standards – NMAC 17.9.568, NMAC 17.9.569,
The New Mexico Interconnection Manual - Last DSIRE Review:
08/15/2008 - Link
o Mandatory Utility Green Power Option
 Mandatory Utility Green Power Option - NMAC 17.9.572 - Last
DSIRE Review: 12/23/2008 - Link
o Net Metering
 Farmington Electric Utility System - Net Metering - Net Metering
Tariff and Interconnection Agreement - Last DSIRE Review:
08/25/2008 - Link
111

New Mexico - Net Metering - NMAC 17.9.570 - Last DSIRE
Review: 08/15/2008 - Link
o Renewables Portfolio Standard
 Renewables Portfolio Standard - NMAC 17.9.572, N.M. Stat. §
62-15-34 et seq., N.M. Stat. § 62-16-1 et seq. - Last DSIRE
Review: 12/09/2008 - Link
o Solar Access Law/Guideline
 Solar Access Laws - NMSA § 47-3-1 et seq., NMSA § 3-18-32 Last DSIRE Review: 03/13/2009 - Link
New York
Financial Incentives
o Corporate Tax Credit
 Green Building Tax Credit Program (Corporate) - NY CLS Tax,
Article 1 § 19 - Last DSIRE Review: 07/17/2009 - Link
o Green Building Incentive
 Riverhead - Energy Conservation Device Permitting Fees - Town
Code § 52-10(F) - Last DSIRE Review: 07/21/2009 - Link
o Industry Recruitment/Support
 New York State Energy Research and Development Authority
(NYSERDA) - Clean Energy Business Growth and Development Last DSIRE Review: 08/13/2009 - Link
 New York State Energy Research and Development Authority
(NYSERDA) - Renewable, Clean Energy, and Energy Efficient
Product Manufacturing Incentive Program - Last DSIRE Review:
08/12/2009 - Link
o Local Rebate Program
 Town of Southampton - Photovoltaic (PV) Rebate Program Southampton Town Code § Chapter 176 - Last DSIRE Review:
12/12/2008 - Link
o Personal Tax Credit
 Green Building Tax Credit Program (Personal) - NY CLS Tax,
Article 1, § 19 - Last DSIRE Review: 07/17/2009 - Link
 Solar and Fuel Cell Tax Credit - NY CLS Tax, Article 22 § 606 (g1) et seq. - Last DSIRE Review: 05/27/2009 - Link
o Property Tax Assessment
 New York City - Property Tax Abatement for Photovoltaic (PV)
Equipment Expenditures - NY CLS RPTL § 499-aaaa et seq.,
Rules of the City of New York § 105-02 - Last DSIRE Review:
05/04/2009 - Link
o Property Tax Exemption
 Energy Conservation Improvements Property Tax Exemption - NY
CLS Real Property Tax Law §487-a - Last DSIRE Review:
04/29/2009 - Link
112

Local Option - Solar, Wind & Biomass Energy Systems
Exemption - NY CLS Real Property Tax, Article 4 § 487 - Last
DSIRE Review: 08/11/2009 - Link
o Sales Tax Exemption
 Solar Sales Tax Exemption - NY CLS Tax, Article 28 § 1115 (ee) Last DSIRE Review: 04/10/2009 - Link
o State Grant Program
 New York State Energy Research and Development Authority
(NYSERDA) - Assisted Home Performance Grants - Last DSIRE
Review: 04/20/2009 - Link
 New York State Energy Research and Development Authority
(NYSERDA) - Grants for Public and Non-Profit Energy
Conservation Projects - Last DSIRE Review: 07/31/2009 - Link
o State Loan Program
 New York State Energy Research and Development Authority
(NYSERDA) - Energy $mart Loan Fund - Last DSIRE Review:
08/04/2009 - Link
 New York State Energy Research and Development Authority
(NYSERDA) - Home Performance with Energy Star Loan
Program - Last DSIRE Review: 04/23/2009 - Link
o State Rebate Program
 New York State Energy Research and Development Authority
(NYSERDA) - Energy $mart Multifamily Performance Program Last DSIRE Review: 04/27/2009 - Link
 New York State Energy Research and Development Authority
(NYSERDA) - PV Incentive Program - Last DSIRE Review:
06/22/2009 - Link
o Utility Rebate Program
 Long Island Power Authority - Solar Rebate Program - Last DSIRE
Review: 01/29/2009 - Link
 National Grid - Solar Thermal Rebate Program (Long Island and
metro New York) - Last DSIRE Review: 11/24/2008 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 New York - Energy Efficiency Standards for State Facilities Executive Order No. 2, Executive Order No. 111, Executive Order
No. 111 Guidelines - Last DSIRE Review: 06/04/2009 - Link
 New York City - Green Building Requirements for Municipal
Buildings - Local Law No. 86 (2005), Green Building Standard
Final Rules, Local Law No. 119 (2005) - Last DSIRE Review:
07/30/2009 - Link
o Green Power Purchasing/Aggregation
 New York - Renewable Power Procurement Policy - Executive
Order No. 111, Executive Order No. 111 Guidelines - Last DSIRE
Review: 10/20/2008 - Link
113

o
o
o
o
o
Suffolk County - Green Power Purchasing Policy - Suffolk County
Resolution No. 236-2005, Suffolk County Resolution No. 3492005 - Last DSIRE Review: 09/12/2008 - Link
Interconnection
 Interconnection Standards - NY PSC Order, Case 94-E-0952, NY
PSC Order, Case 02-E-1282, NY PSC Order, Case 08-E-1018,
New York Standard Interconnection Requirements (SIR) - Last
DSIRE Review: 02/26/2009 - Link
Net Metering
 Long Island Power Authority - Net Metering - LIPA Tariff Leaf
No. 34 et seq. - Last DSIRE Review: 01/09/2009 - Link
 New York - Net Metering - NY CLS Public Service, Article 4 §
66-j and § 66-l, NY PSC Order Case 08-E-1305 et al., NY PSC
Order Case 09-E-0284 et al. - Last DSIRE Review: 06/24/2009 Link
Public Benefits Fund
 System Benefits Charge - New York PSC Opinion No. 96-12
(Cases 94-E-0952 et al.), New York PSC Order (Case 94-E-0952),
New York PSC Order (Case 05-M-0090) - Last DSIRE Review:
08/18/2009 - Link
Renewables Portfolio Standard
 Long Island Power Authority - Renewable Electricity Goal - LIPA
2004-2013 Energy Plan - Last DSIRE Review: 01/29/2009 - Link
 Renewables Portfolio Standard - NY PSC Order, Case 03-E-0188,
NY PSC Order, Case 03-E-0188 - Last DSIRE Review: 07/15/2009
- Link
Solar Access Law/Guideline
 Solar Easements - NY CLS Real Property, Article 9 § 335-b, NY
CLS General City, Article 2-A § 20 (24) - Last DSIRE Review:
01/27/2009 - Link
North Carolina
Financial Incentives
o Corporate Tax Credit
 Renewable Energy Tax Credit (Corporate) - N.C. Gen. Stat. § 105129.15 et seq., NC Tax Credit Guidelines - Last DSIRE Review:
07/28/2009 - Link
o Green Building Incentive
 Asheville - Building Permit Fee Waiver - Asheville Permitting
Fees - Last DSIRE Review: 09/15/2008 - Link
 Local Option - Green Building Incentives - N.C. Gen. Stat. §
153A-340, N.C. Gen. Stat. § 160A-381, N.C. Gen. Stat. § 160A383.4, SB 52 - Last DSIRE Review: 08/11/2009 - Link
 Mecklenburg County - Green Permit Rebate Program - Last
DSIRE Review: 06/26/2009 - Link
o Personal Tax Credit
114

Renewable Energy Tax Credit (Personal) - N.C. Gen. Stat. § 105129.15 et seq., NC Tax Credit Guidelines - Last DSIRE Review:
07/28/2009 - Link
o Production Incentive
 NC GreenPower Production Incentive - NCUC Order, Docket No.
E-100, Sub 90 - Last DSIRE Review: 02/10/2009 - Link
 Tennessee Valley Authority (TVA) - Green Power Switch
Generation Partners Program - Last DSIRE Review: 04/28/2009 Link
o Property Tax Assessment
 Property Tax Abatement for Solar Electric Systems - N.C. Gen.
Stat. § 105-275 (section 45) - Last DSIRE Review: 01/20/2009 Link
o State Grant Program
 North Carolina Green Business Fund - HB 1473 (2007), SB 202
(sec. 14.12) - Last DSIRE Review: 08/11/2009 - Link
o State Loan Program
 Energy Improvement Loan Program (EILP) - N.C. Gen. Stat. §
143-345.18 - Last DSIRE Review: 07/17/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Asheville - Efficiency Standards for City Buildings - Asheville
City Resolutions 07-90, 07-91 - Last DSIRE Review: 01/27/2009 Link
 Chapel Hill - Energy Conservation Requirements for Town
Buildings - Chapel Hill Code of Ordinances, Article VII, Sec. 5121 et seq. - Last DSIRE Review: 06/18/2009 - Link
 Durham County - High Performance Building Policy - County
Resolution - Last DSIRE Review: 12/09/2008 - Link
o Interconnection
 Interconnection Standards - NCUC Order, Docket No. E-100, Sub
101 - Last DSIRE Review: 12/19/2008 - Link
o Net Metering
 North Carolina - Net Metering - NCUC Order, Docket No. E-100,
Sub 83 (NC05R), NCUC Order, Docket No. E-100, Sub 83
(NC05Rb), NCUC Order, Docket No. E-100, Sub 83 (NC05Rc) ,
NCUC Order, Docket No. E-100, Sub 83 (NC05Rd) - Last DSIRE
Review: 04/16/2009 - Link
o Renewables Portfolio Standard
 Renewable Energy and Energy Efficiency Portfolio Standard N.C. Gen. Stat. § 62-133.8, NCUC Order, Docket No. E-100, Sub
113 - Last DSIRE Review: 03/19/2009 - Link
o Solar Access Law/Guideline
 Chapel Hill - Land Use Management Ordinance - Land Use
Management Ordinance, Article 4.6.7 - Last DSIRE Review:
06/18/2009 - Link
115

Solar Access Laws - SB 670 of 2007 - Last DSIRE Review:
08/21/2008 - Link
North Dakota
Financial Incentives
o Corporate Tax Credit
 Renewable Energy Tax Credit (Corporate) - ND Century Code 5738-01.8 (See page 16), H.B. 1277 - Last DSIRE Review:
04/17/2009 - Link
o Personal Tax Credit
 Renewable Energy Tax Credit (Personal) - ND Century Code 5738-01.8 (See page 16), H.B. 1277 - Last DSIRE Review:
04/17/2009 - Link
o Property Tax Exemption
 Geothermal, Solar and Wind Property Exemption - ND Century
Code 57-02-08(27) - Last DSIRE Review: 12/09/2008 - Link
Rules, Regulations & Policies
o Net Metering
 North Dakota - Net Metering - ND Administrative Code 69-09-0709 - Last DSIRE Review: 02/11/2009 - Link
o Renewables Portfolio Standard
 Renewable and Recycled Energy Objective - ND Century Code §
49-02-24 et seq., N.D. Admin. Code 69-09-08, ND PSC Order,
Case No. PU-07-318 - Last DSIRE Review: 07/15/2009 - Link
o Solar Access Law/Guideline
 Solar Easements - N.D. Cent. Code, § 47-05-01.1 et seq. - Last
DSIRE Review: 02/10/2009 - Link
Ohio
Financial Incentives
o Corporate Exemption
 Energy Conversion Facilities Corporate Tax Exemption - ORC
5709.20 et seq., ORC 5733.05, OAC 5703-1-06 - Last DSIRE
Review: 06/19/2009 - Link
o Industry Recruitment/Support
 Ohio Job Stimulus Plan - Advanced Energy Program (Ohio Air
Quality Development Authority) - ORC § 3706.25 et seq, ORC §
4928.621 - Last DSIRE Review: 05/29/2009 - Link
o Local Loan Program
 Hamilton County - Property Improvement Program - Last DSIRE
Review: 02/11/2009 - Link
o Other Incentive
 Tax Incentives for Improving Air Quality in Ohio (Ohio Air
Quality Development Authority) - ORC 3706 et seq. - Last DSIRE
Review: 06/19/2009 - Link
o Property Tax Exemption
116

Cincinnati - Property Tax Abatement for Green Buildings - City
Ordinance 182-2007, City Ordinance 446-2007 - Last DSIRE
Review: 02/17/2009 - Link
 Energy Conversion Facilities Property Tax Exemption - ORC
5709.20 et seq., OAC 5703-1-06 - Last DSIRE Review: 06/19/2009
- Link
o Property Tax Financing Authorization
 Local Option - Special Energy Improvement Districts - H.B. 1 Last DSIRE Review: 07/21/2009 - Link
o Sales Tax Exemption
 Energy Conversion Facilities Sales Tax Exemption - ORC 5709.20
et seq., ORC 5709.25, OAC 5703-1-06 - Last DSIRE Review:
06/19/2009 - Link
o State Grant Program
 Ohio Department of Development (ODOD) - Advanced Energy
Program Grants - Non-Residential Renewable Energy Incentive ORC § 4928.61 et seq. - Last DSIRE Review: 03/02/2009 - Link
 Ohio Department of Development (ODOD) - Advanced Energy
Program Grants - Residential Solar Photovoltaic Energy Incentive
- ORC § 4928.61 et seq. - Last DSIRE Review: 01/30/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Energy Efficiency and Sustainable Design in New School
Construction - Last DSIRE Review: 07/17/2009 - Link
o Interconnection
 Interconnection Standards - ORC 4928.11, OAC 4901:1-22 - Last
DSIRE Review: 05/20/2009 - Link
o Net Metering
 Ohio - Net Metering - ORC 4928.67, OAC 4901:1-10-28, OAC
4901:1-21-13, Finding and Order Docket 06-0653-EL-ORD - Last
DSIRE Review: 07/13/2009 - Link
 Yellow Springs Utilities - Net Metering - Last DSIRE Review:
02/04/2009 - Link
o Public Benefits Fund
 Advanced Energy Fund - ORC 4928.61 et seq. - Last DSIRE
Review: 10/27/2008 - Link
o Renewables Portfolio Standard
 Alternative Energy Resource Standard - ORC 4928.64 et seq.,
Ohio Public Utilities Commission Order 08-888-EL-ORD - Last
DSIRE Review: 05/11/2009 - Link
o Solar Access Law/Guideline
 Solar Easements - ORC § 5301.63 - Last DSIRE Review:
01/22/2009 - Link
Oklahoma
Financial Incentives
117
o Corporate Tax Credit
 Zero-Emission Facilities Production Tax Credit - 68 Okl. St. §
2357.32A - Last DSIRE Review: 06/04/2009 - Link
o Property Tax Financing Authorization
 Local Option - County Energy District Authority - S.B. 668 - Last
DSIRE Review: 07/16/2009 - Link
o State Loan Program
 Community Energy Education Management Program - Last DSIRE
Review: 07/16/2009 - Link
 Energy Loan Fund for Schools - Last DSIRE Review: 07/16/2009 Link
 Higher Education Energy Loan Program - Last DSIRE Review:
07/16/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 High Performance Building Standards in State Buildings - H.B.
3394 - Last DSIRE Review: 05/07/2009 - Link
o Net Metering
 Oklahoma - Net Metering - O.A.C. § 165:40-9 - Last DSIRE
Review: 06/10/2009 - Link
Oregon
Financial Incentives
o Corporate Tax Credit
 Business Energy Tax Credit - OAR 330-090-0105 to 330-0900150 - Last DSIRE Review: 05/20/2009 - Link
o Industry Recruitment/Support
 Tax Credit for Renewable Energy Equipment Manufacturers OAR 330-090-0105 to 330-090-0150 - Last DSIRE Review:
05/20/2009 - Link
o Personal Tax Credit
 Residential Energy Tax Credit - ORS § 469.185 et seq., OAR 330070-0010 to 330-070-0097, ORS § 315.354 - Last DSIRE Review:
11/03/2008 - Link
o Production Incentive
 Eugene Water & Electric Board's (EWEB) - Solar Electric
Program (Production Incentive) - EWEB Solar Electric Program
Information and Requirements - Last DSIRE Review: 10/29/2008 Link
 Oregon Pilot Solar Feed-in-Tariff - HB 3039 - Last DSIRE Review:
07/30/2009 - Link
o Property Tax Exemption
 Renewable Energy Systems Exemption - ORS § 307.175 - Last
DSIRE Review: 01/20/2009 - Link
o Property Tax Financing Authorization
118

Local Option - Local Improvement Districts - HB 2626 - Last
DSIRE Review: 07/29/2009 - Link
o State Grant Program
 Energy Trust - Open Solicitation Program - Last DSIRE Review:
06/17/2009 - Link
o State Loan Program
 GreenStreet Lending Program - Last DSIRE Review: 08/21/2009 Link
 Small-Scale Energy Loan Program - OAR 330-110-0005 et seq.,
ORS § 470.050 et seq. - Last DSIRE Review: 04/22/2009 - Link
o State Rebate Program
 Energy Trust - New Homes Rebate Program - Last DSIRE Review:
06/12/2009 - Link
 Energy Trust - Solar Electric Buy-Down Program - Last DSIRE
Review: 02/19/2009 - Link
o Utility Rebate Program – Several utilities in Oregon offer rebates for solar
projects. Link
Rules, Regulations & Policies
o Building Energy Code
 Oregon Energy Code for Buildings - Last DSIRE Review:
01/21/2009 - Link
o Contractor Licensing
 Renewable Energy Contractor Licensing - ORS § 447.065, ORS §
479.630 - Last DSIRE Review: 06/10/2009 - Link
o Energy Standards for Public Buildings
 Solar Energy Systems on Public Buildings - OAR 330-135-0010 to
330-135-0055, ORS § 279C.527 et seq. - Last DSIRE Review:
06/05/2009 - Link
 Portland - Green Building Policy and LEED Certification Resolution Number 36310, Resolution Number 6262 - Last DSIRE
Review: 02/25/2009 - Link
o Green Power Purchasing/Aggregation
 Portland - Green Power Purchasing & Generation - Portland,
Oregon - Local Action Plan for Global Warming 2001 - Last
DSIRE Review: 04/27/2009 - Link
o Interconnection
 Interconnection Standards - ORS § 757.300, Or. Admin. R. 860039 - Last DSIRE Review: 12/16/2008 - Link
o Mandatory Utility Green Power Option
 Mandatory Utility Green Power Option - ORS § 469A.205 - Last
DSIRE Review: 01/07/2009 - Link
o Net Metering
 Ashland Electric - Net Metering - Last DSIRE Review: 01/07/2009
- Link
119

o
o
o
o
o
Oregon - Net Metering - OR Revised Statutes 757.300, Or. Admin.
R. 860-039, Or. Admin. R. 860-022-0075 - Last DSIRE Review:
12/16/2008 - Link
Public Benefits Fund
 Oregon Energy Trust - ORS 757.612 et seq. - Last DSIRE Review:
08/11/2009 - Link
Renewables Portfolio Standard
 Renewable Portfolio Standard - ORS § 469A, OAR 330-160-0005
to 330-160-0030 - Last DSIRE Review: 07/30/2009 - Link
Solar Access Law/Guideline
 Ashland - Solar Access Ordinance - City of Ashland Municipal
Code Chapter 18.70 - Last DSIRE Review: 09/12/2008 - Link
 Eugene - Solar Standards - City of Eugene City Codes Chapter 9 Last DSIRE Review: 12/02/2008 - Link
Solar and Wind Access Law
 Solar and Wind Access Laws - ORS § 105.880 et seq., ORS §
215.044 et seq., ORS § 227.190 et seq. - Last DSIRE Review:
01/20/2009 - Link
Solar/Wind Permitting Standards
 Model Ordinance for Renewable Energy Projects - Model
Ordinance for Energy Projects - Last DSIRE Review: 02/03/2009 Link
Pennsylvania
Financial Incentives
o Corporate Tax Credit
 Alternative Energy Production Tax Credit (Corporate) - 73 P.S. §
1649.701 et seq. - Last DSIRE Review: 08/04/2009 - Link
o Industry Recruitment/Support
 Department of Community and Economic Development (DCED) Solar Energy Incentives Program - Special Session H.B. 1 - Last
DSIRE Review: 08/12/2009 - Link
o Personal Tax Credit
 Alternative Energy Production Tax Credit (Personal) - 73 P.S. §
1649.701 et seq. - Last DSIRE Review: 08/04/2009 - Link
o State Grant Program
 Department of Community and Economic Development (DCED) High Performance Building Incentives Program - Special Session
H.B. 1 - Last DSIRE Review: 04/22/2009 - Link
 Department of Community and Economic Development (DCED) Solar Energy Incentives Program - Special Session H.B. 1 - Last
DSIRE Review: 08/12/2009 - Link
 High Performance Green Schools Planning Grants - 24 P.S. § 252574(c.4) - Last DSIRE Review: 07/16/2009 - Link
 Pennsylvania Energy Development Authority (PEDA) – Grants 71 P.S. § 720.1 et seq. - Last DSIRE Review: 06/04/2009 - Link
120

Pennsylvania Energy Harvest Grant Program - Last DSIRE
Review: 04/16/2009 - Link
o State Loan Program
 Department of Community and Economic Development (DCED) High Performance Buildings Incentive Program - Special Session
H.B. 1 - Last DSIRE Review: 08/11/2009 - Link
 Solar Energy Incentives Program - Special Session H.B. 1 - Last
DSIRE Review: 08/12/2009 - Link
o State Rebate Program
 Pennsylvania Sunshine Solar Rebate Program - Special Session
H.B. 1 - Last DSIRE Review: 05/26/2009 - Link
o Utility Grant Program
 PPL Electric Utilities - LEED Certification Partnership Program Last DSIRE Review: 07/15/2009 - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - 73 P.S. § 1648.5, 52 Pa. Code Chapter
75, Subchapter C, PUC Order Docket M-00051865 - Last DSIRE
Review: 06/23/2009 - Link
o Net Metering
 Pennsylvania - Net Metering - 73 P.S. § 1648.1 et seq., 52 Pa.
Code Chapter 75, Subchapter B, PUC Rulemaking Order L00050174 - Last DSIRE Review: 12/15/2008 - Link
o Public Benefits Fund
 Public Benefits Programs - Last DSIRE Review: 04/17/2009 - Link
o Renewables Portfolio Standard
 Alternative Energy Portfolio Standard - 73 P.S. § 1648.1 et seq., 66
Pa.C.S. § 2814, PUC Rulemaking Order L-00060180, PUC Order
Docket No. M-2009-2093383 - Last DSIRE Review: 06/22/2009 Link
Rhode Island
Financial Incentives
o Corporate Tax Credit
 Residential Renewable Energy Tax Credit (Corporate) - R.I.G.L. §
44-57-1, et seq. - Last DSIRE Review: 04/08/2009 - Link
o Personal Tax Credit
 Residential Renewable Energy Tax Credit (Personal) - R.I.G.L. §
44-57-1, et seq. - Last DSIRE Review: 04/08/2009 - Link
o Property Tax Exemption
 Local Option - Property Tax Exemption for Renewable Energy
Systems - R.I.G.L § 44-3-21 - Last DSIRE Review: 11/11/2008 Link
 Residential Solar Property Tax Exemption - R.I. Gen. Laws § 4457-4 (a)(6) - Last DSIRE Review: 11/11/2008 - Link
o Sales Tax Exemption
121

Renewable Energy Sales Tax Exemption - R.I.G.L § 44-18-30 Last DSIRE Review: 05/20/2009 - Link
o State Grant Program
 Rhode Island Economic Development Corporation (RIEDC) Renewable Energy Fund Grants - R.I. Gen. Laws § 39-2-1.2, H.B.
7806, RIEDC Rules and Regulations for the Renewable Energy
Development Fund - Last DSIRE Review: 04/01/2009 - Link
o State Loan Program
 Rhode Island Economic Development Corporation (RIEDC) Renewable Energy Fund Loans - R.I. Gen. Laws § 39-2-1.2, H.B.
7806, RIEDC Rules and Regulations for the Renewable Energy
Development Fund - Last DSIRE Review: 04/01/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Green Building Standards for State Facilities - RI Executive Order
05-14 - Last DSIRE Review: 06/15/2009 - Link
o Net Metering
 Rhode Island - Net Metering - R.I. Gen. Laws § 39-1-27.7, R.I.
Gen. Laws § 39-26-6 , Rhode Island PUC Order, Docket No. 3999,
SB 485 - Last DSIRE Review: 07/21/2009 - Link
o Public Benefits Fund
 Rhode Island Renewable Energy Fund (RIREF) - R.I. Gen. Laws §
39-2-1.2, RIEDC Rules and Regulations for the Renewable Energy
Development Fund - Last DSIRE Review: 12/18/2008 - Link
o Renewables Portfolio Standard
 Renewable Energy Standard - R.I. Gen. Laws § 39-26-1 et seq.,
CRIR 90-060-015, H5002Aam - Last DSIRE Review: 07/17/2009 Link
o Solar Access Law/Guideline
 Solar Easements - R.I. Gen. Laws § 34-40, R.I. Gen. Laws § 4524-33 - Last DSIRE Review: 03/30/2009 - Link
South Carolina
Financial Incentives
o Corporate Tax Credit
 Solar Energy and Small Hydropower Tax Credit (Corporate) - S.C.
Code § 12-6-3587 - Last DSIRE Review: 06/30/2009 - Link
o Personal Tax Credit
 Solar Energy and Small Hydropower Tax Credit (Personal) - S.C.
Code § 12-6-3587 - Last DSIRE Review: 12/11/2008 - Link
o Production Incentive
 Palmetto Clean Energy (PaCE) Program - Last DSIRE Review:
12/11/2008 - Link
 Progress Energy Carolinas - SunSense Commercial PV Incentive
Program - Last DSIRE Review: 07/14/2009 - Link
o State Loan Program
122

ConserFund Loan Program - Last DSIRE Review: 06/02/2009 Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 State Building Energy Standards - S.C. Code § 48-52-10 et seq.,
H.B. 4766 - Last DSIRE Review: 10/08/2008 - Link
o Interconnection
 Interconnection Standards - PSC Order, Docket No. 2005-387-E Last DSIRE Review: 08/13/2009 - Link
o Net Metering
 Duke Energy - Net Metering - Last DSIRE Review: 08/11/2009 Link
 Progress Energy - Net Metering - Last DSIRE Review: 08/11/2009
- Link
 South Carolina Electric & Gas (SCE&G) - Net Metering - Last
DSIRE Review: 08/11/2009 - Link
South Dakota
Financial Incentives
o Property Tax Exemption
 Renewable Energy Systems Exemption - SDCL § 10-6-35.8 et seq.
- Last DSIRE Review: 05/21/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 High Performance Building Requirements for State Buildings S.B. 202, S.B. 188 - Last DSIRE Review: 05/08/2009 - Link
o Interconnection
 Interconnection Standards - S.D. Administrative Code § 20:10:36 Last DSIRE Review: 06/15/2009 - Link
o Renewables Portfolio Standard
 Renewable, Recycled and Conserved Energy Objective - SDCL §
49-34A-101 et seq., S.B. 57, SDCL § 49-34A-94 et seq. - Last
DSIRE Review: 03/16/2009 - Link
Tennessee
Financial Incentives
o Industry Recruitment/Support
 Sales and Use Tax Credit for Qualified Facility Manufacturing
Clean Energy Technology - Tenn. Code § 67-6-232, S.B. 2300 Last DSIRE Review: 07/09/2009 - Link
o Production Incentive
 Tennessee Valley Authority (TVA) - Green Power Switch
Generation Partners Program - Last DSIRE Review: 04/28/2009 Link
o State Grant Program
123

Tennessee Clean Energy Technology Grant - TN-CET Grant
Application - Last DSIRE Review: 07/09/2009 - Link
o State Loan Program
 Small Business Energy Loan Program - Tenn. Code § 4-3-710,
Tenn. Code § 4-3-702 - Last DSIRE Review: 04/22/2009 - Link
Rules, Regulations & Policies
o Solar Access Law/Guideline
 Solar Easements - Tenn. Code § 66-9-201 et seq. - Last DSIRE
Review: 03/30/2009 - Link
Texas
Financial Incentives
o Corporate Deduction
 Solar and Wind Energy Device Franchise Tax Deduction - Texas
Statutes § 171.107 - Last DSIRE Review: 11/21/2008 - Link
o Industry Recruitment/Support
 Solar and Wind Energy Business Franchise Tax Exemption - Tex.
Tax Code § 171.056 - Last DSIRE Review: 11/21/2008 - Link
o Property Tax Exemption
 Renewable Energy Systems Property Tax Exemption - Texas
Statutes § 11.27, Exemption handbook - Last DSIRE Review:
03/23/2009 - Link
o Property Tax Financing Authorization
 Local Option - Contractual Assessments for Energy Efficient
Improvements - H.B. 1937 - Last DSIRE Review: 07/16/2009 Link
o State Loan Program
 LoanSTAR Revolving Loan Program - Last DSIRE Review:
04/24/2009 - Link
o Utility Rebate Program – Several utilities in Texas offer rebates for solar
projects. Link
Rules, Regulations & Policies
o Building Energy Code
 Austin - Commercial and Residential Green Building
Requirements - Austin Code §25 (Land Development), City
Council Res. No. 20070215-23, City Council Resolution
20071213-64 - Last DSIRE Review: 11/07/2008 - Link
o Energy Standards for Public Buildings
 Alternative Energy in New State Construction - Texas Government
Code § 2166.401 et seq. - Last DSIRE Review: 04/07/2009 - Link
 Austin - Green Building Requirement for City Projects Resolution No. 20071129-045 - Last DSIRE Review: 05/22/2009 Link
 Dallas - Green Building Requirements for Municipal Buildings Dallas City Council Resolution 03-0367, 2006 Policy Update Last DSIRE Review: 07/23/2009 - Link
124
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o
o
o
o
Houston - Green Building Requirements for New Municipal
Structures - City Resolution No. 2004-15 - Last DSIRE Review:
04/01/2009 - Link
 Plano - LEED Standard for Public Buildings - Last DSIRE Review:
07/15/2009 - Link
Interconnection
 Interconnection Standards - 16 TAC § 25.211 et seq. - Last DSIRE
Review: 12/11/2008 - Link
Line Extension Analysis
 Line Extension and Construction Charges - PUCT Substantive
Rules § 25.22(7) - Last DSIRE Review: 04/02/2009 - Link
Net Metering
 Austin Energy - Net Metering - Ordinance No. 040527-79 Distributed Generation from Renewable Sources Rider - Last
DSIRE Review: 11/26/2008 - Link
Renewables Portfolio Standard
 Austin - Renewables Portfolio Standard - City Council Resolution
No. 990211-36, City Council Resolution No. 030925-2, Austin
Energy's Ten-Year Strategic Plan, City Council Resolution No.
20070215-023 - Last DSIRE Review: 11/17/2008 - Link
 Renewable Generation Requirement - Tex. Utilities Code §
39.904, PUCT Substantive Rule 25.173 - Last DSIRE Review:
06/17/2009 - Link
 San Antonio City Public Service (CPS Energy) - Renewables
Portfolio Goal - Last DSIRE Review: 07/14/2009 - Link
Utah
Financial Incentives
o Corporate Tax Credit
 Renewable Energy Systems Tax Credit (Corporate) - Utah Code
59-7-614, UAC R638-2 - Last DSIRE Review: 06/17/2009 - Link
o Industry Recruitment/Support
 Renewable Energy Development Incentive - HB 430 - Last DSIRE
Review: 07/15/2009 - Link
o Personal Tax Credit
 Renewable Energy Systems Tax Credit (Personal) - UAC R638-2,
Utah Code 59-10-1014, Utah Code 59-10-1106 - Last DSIRE
Review: 06/17/2009 - Link
o Sales Tax Exemption
 Renewable Energy Sales Tax Exemption - Utah Code 59-12-104 Last DSIRE Review: 11/05/2008 - Link
o Utility Rebate Program – Several utilities in Utah offer rebates for solar
projects. Link
Rules, Regulations & Policies
o Contractor Licensing
125
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o
o
o
o
o
Solar Contractor Licensing - Utah Admin Code R156-55a-301 Last DSIRE Review: 07/27/2009 - Link
Energy Standards for Public Buildings
 Salt Lake City - High Performance City-Owned Buildings Executive Order - Last DSIRE Review: 10/01/2008 - Link
Interconnection
 Interconnection Standards - Utah Code § 54-15-101 et seq. - Last
DSIRE Review: 02/20/2009 - Link
Net Metering
 City of St. George - Net Metering - Policy No. 10.95 - Last DSIRE
Review: 07/21/2009 - Link
 Murray City Power - Net Metering Pilot Program - Murray City
Ordinance 06-13, Murray City Net Metering Pilot Program
Interconnection & Service Agreement - Last DSIRE Review:
07/21/2009 - Link
 Utah - Net Metering - Utah Code § 54-15-101 et seq., PSC Order,
Docket No. 08-035-78 - Last DSIRE Review: 02/19/2009 - Link
 Washington City - Net Metering - Last DSIRE Review: 07/21/2009
- Link
Renewables Portfolio Standard
 Renewables Portfolio Goal - Utah Code 54-17-101 et seq., Utah
Code 10-19-101 et seq. - Last DSIRE Review: 05/14/2009 - Link
Solar Access Law/Guideline
 Local Option Solar Access Law - Utah Code 57-13, Utah Code 109a-610 - Last DSIRE Review: 01/08/2009 - Link
Vermont
Financial Incentives
o Corporate Tax Credit
 Business Tax Credit for Solar (Corporate) - 32 V.S.A. § 5930z, H.
313 - Last DSIRE Review: 06/09/2009 - Link
o Personal Tax Credit
 Business Tax Credit for Solar (Personal) - 32 V.S.A. § 5822, H.
313 - Last DSIRE Review: 06/09/2009 - Link
o Production Incentive
 Vermont Standard Offer for Qualifying SPEED Resources - 30
V.S.A. § 8001 et seq., CVR 30 000 054. 4.300, H. 446 - Last
DSIRE Review: 06/04/2009 - Link
o Property Tax Exemption
 Local Option - Property Tax Exemption - 32 V.S.A. § 3845 - Last
DSIRE Review: 03/25/2009 - Link
o Property Tax Financing Authorization
 Local Option - Clean Energy Finance Districts - H.B. 446 - Last
DSIRE Review: 07/16/2009 - Link
o Sales Tax Exemption
126

Renewable Energy Systems Sales Tax Exemption - 32 V.S.A. §
9741(46) - Last DSIRE Review: 05/20/2009 - Link
o State Grant Program
 Clean Energy Development Fund (CEDF) Grant Program - 10
V.S.A. § 6523, H 313 - Last DSIRE Review: 07/06/2009 - Link
o State Loan Program
 Clean Energy Development Fund (CEDF) Loan Program - 10
V.S.A. § 6523 - Last DSIRE Review: 10/06/2008 - Link
o State Rebate Program
 Vermont Small-Scale Renewable Energy Incentive Program - Act
69 of 2003 - Last DSIRE Review: 03/03/2009 - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - 30 V.S.A. § 219a, CVR 30 000 048.
5.100, CVR 30 000 048. 5.500 - Last DSIRE Review: 12/08/2008 Link
o Net Metering
 Vermont - Net Metering - 30 V.S.A. § 219a, Rule 5.100 - Last
DSIRE Review: 06/05/2009 - Link
o Public Benefits Fund
 Clean Energy Development Fund (CEDF) - 10 V.S.A. § 6523, H.
313 - Last DSIRE Review: 06/04/2009 - Link
o Renewables Portfolio Standard
 Sustainably Priced Energy Enterprise Development (SPEED)
Goals - 30 V.S.A. § 8001 et seq., CVR 30 000 054. 4.300, H. 446 Last DSIRE Review: 06/04/2009 - Link
o Solar and Wind Access Law
 Renewable Energy Access Law - H. 446 - Last DSIRE Review:
06/08/2009 - Link
Virginia
Financial Incentives
o Green Building Incentive
 Arlington County - Green Building Incentive Program - Last
DSIRE Review: 04/14/2009 - Link
o Industry Recruitment/Support
 Solar Manufacturing Incentive Grant (SMIG) Program - Va. Code
§ 45.1-392 - Last DSIRE Review: 12/12/2008 - Link
o Production Incentive
 Tennessee Valley Authority (TVA) - Green Power Switch
Generation Partners Program - Last DSIRE Review: 04/28/2009 Link
o Property Tax Exemption
 Local Option - Property Tax Exemption for Solar - Va. Code §
58.1-3661 - Last DSIRE Review: 11/20/2008 - Link
o Property Tax Financing Authorization
127

Local Option - Clean Energy Financing - Va. Code § 15.2-958.3 Last DSIRE Review: 07/16/2009 - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 State Buildings Energy Reduction Plan - Executive Order 82
(2009) - Last DSIRE Review: 06/15/2009 - Link
o Interconnection
 Interconnection Standards - Va. Code § 56-594, 20 VAC 5-315-40
et seq., Va. Code § 56-578, PUE-2008-00004 - Last DSIRE
Review: 05/31/2009 - Link
o Net Metering
 Virginia - Net Metering - Va. Code § 56-594, 20 VAC 5-315-10 et
seq., H.B. 2155 - Last DSIRE Review: 07/01/2009 - Link
o Renewables Portfolio Standard
 Voluntary Renewable Energy Portfolio Goal - Va. Code § 56585.2, HB 1994 - Last DSIRE Review: 04/03/2009 - Link
o Solar Access Law/Guideline
 Solar Access Laws - Va. Code § 67-700 et seq., HB 2417 - Last
DSIRE Review: 05/22/2009 - Link
 Solar Easements - Va. Code § 55-352 et seq. - Last DSIRE Review:
05/22/2009 - Link
Washington
Financial Incentives
o Green Building Incentive
 Evergreen Sustainable Development Standard for Affordable
Housing - Last DSIRE Review: 05/07/2009 - Link
 Seattle - Density Bonus for Green Buildings - City of Seattle
Ordinance Number: 122054 - Last DSIRE Review: 03/30/2009 Link
o Industry Recruitment/Support
 Tax Abatement for Solar Manufacturers - RCW 82.04.294 - Last
DSIRE Review: 05/19/2009 - Link
o Local Grant Program
 King County - LEED Grants Program - Last DSIRE Review:
12/30/2008 - Link
o Production Incentive
 Washington Renewable Energy Production Incentives - RCW
82.16.110 et seq., WAC 458-20-273 - Last DSIRE Review:
05/19/2009 - Link
 Some utilities and Public Utility Districts (PUDs) in Washington
offer production incentives. - Link
o Sales Tax Exemption
 Renewable Energy Sales and Use Tax Exemption - RCW §
82.08.02567, RCW § 82.08.835 - Last DSIRE Review: 05/19/2009
- Link
128
o Utility Loan/Rebate Program - Several utilities and Public Utility Districts
(PUDs) in Washington offer loans and rebates for renewable energy
projects - Link
Rules, Regulations & Policies
o Energy Standards for Public Buildings
 Green Building and Energy Reduction Standards for State
Agencies - WA Executive Order 05-01, RCW § 39.35D.010 et seq.
- Last DSIRE Review: 05/18/2009 - Link
 Seattle - Sustainable Building Policy - Last DSIRE Review:
05/18/2009 - Link
o Green Power Purchasing/Aggregation
 Clark County - Green Power Purchasing - Last DSIRE Review:
09/17/2008 - Link
 Seattle - Green Power Purchasing - Resolution Number 30144,
Ordinance Number 120529 - Last DSIRE Review: 08/04/2008 Link
o Interconnection
 Interconnection Standards - Chapter 480-108 WAC - Last DSIRE
Review: 12/19/2008 - Link
o Mandatory Utility Green Power Option
 Mandatory Utility Green Power Option - RCW 19.29A.090 - Last
DSIRE Review: 01/20/2009 - Link
o Net Metering
 Grays Harbor PUD - Net Metering - Last DSIRE Review:
09/22/2008 - Link
 Washington - Net Metering - Rev. Code Wash. § 80.60 - Last
DSIRE Review: 05/22/2009 - Link
o Renewables Portfolio Standard
 Renewable Energy Standard - RCW 19.285 - Energy
Independence Act, WAC 480-109 - Last DSIRE Review:
09/10/2008 - Link
o Solar Access Law/Guideline
 Solar Easements & Access Law - RCW 64.04.140, S.B. 5136 Last DSIRE Review: 04/17/2009 - Link
West Virginia
Financial Incentives
o Personal Tax Credit
 Residential Solar Energy Tax Credit - HB 2535 - Last DSIRE
Review: 06/09/2009 - Link
Rules, Regulations & Policies
o Net Metering
 West Virginia - Net Metering - West Virginia PSC Order, Case
No. 06-0708-E-GI, West Virginia PSC Order, Case No. 06-0708E-GI, HB 103 - Last DSIRE Review: 07/02/2009 - Link
129
Wisconsin
Financial Incentives
o Industry Recruitment/Support
 Clean Energy Business Loan Program - Last DSIRE Review:
08/05/2009 - Link
 Energy Independence Fund Grant and Loan Program - Last DSIRE
Review: 04/10/2009 - Link
 Focus on Energy - Business & Marketing Grant - Last DSIRE
Review: 07/07/2009 - Link
o Production Incentive – Several Wisconsin utilities are offering production
incentives for solar power. Link
o Property Tax Exemption
 Solar and Wind Energy Equipment Exemption - Wis. Stat. §
70.111(18), Wis. Adm. Code Tax 12.50 - Last DSIRE Review:
09/29/2008 - Link
o Sales Tax Exemption
 Renewable Energy Sales Tax Exemptions - Wis. Stat. § 77.54(30),
Wis. Stat. § 77.54(56), Wis. Stat. § 196.378(1)(ar) - Last DSIRE
Review: 01/22/2009 - Link
o State Rebate Program
 Focus on Energy - Renewable Energy Cash-Back Rewards - Last
DSIRE Review: 07/06/2009 - Link
o Utility Grant/Rebate Program – Some utilities in Wisconsin offer grants
and rebates for solar projects. Link
Rules, Regulations & Policies
o Contractor Licensing
 Madison - Contractor Licensing - Madison Code of Ordinances,
30.01, Madison Common Council Legislative File 11077 - Last
DSIRE Review: 01/14/2009 - Link
o Energy Standards for Public Buildings
 Energy Efficiency and Green Building Standards for State
Buildings - S.B. 459 (2005), Executive Order 145 (2006) - Last
DSIRE Review: 05/12/2009 - Link
o Green Power Purchasing/Aggregation
 Madison - Green Power Purchasing - City Resolution 07-00343 Last DSIRE Review: 10/02/2008 - Link
 Wisconsin - Green Power Purchasing - Wis. Stat. § 16.75(12) Last DSIRE Review: 07/30/2009 - Link
o Interconnection
 Interconnection Standards - Wis. Stat. § 196.496, Chapter PSC 119
- Last DSIRE Review: 12/16/2008 - Link
o Net Metering
 Wisconsin - Net Metering - PSCW Order, Docket No. 05-EP-6 Last DSIRE Review: 03/23/2009 - Link
o Public Benefits Fund
130

Focus on Energy Program - Wis. Stat. § 16.957, Wis. Stat. §
196.374, Chapter PSC 137 - Last DSIRE Review: 08/22/2008 Link
o Renewables Portfolio Standard
 Renewable Portfolio Standard - Wis. Stat. § 196.378, Chapter PSC
118 - Last DSIRE Review: 07/14/2009 - Link
o Solar and Wind Access Law
 Madison - Solar and Wind Access and Planning Laws - Madison
Code of Ordinances, 16.23.8 et al., Madison Common Council
Legislative File 11077 - Last DSIRE Review: 01/14/2009 - Link
 Solar and Wind Access Laws - Wis. Stat. § 66.0401 et seq., Wis.
Stat. § 700.41, Wis. Stat. § 236.292, Wis. Stat. § 844.22 - Last
DSIRE Review: 09/25/2008 - Link
Wyoming
Financial Incentives
o Sales Tax Exemption
 Renewable Energy Sales Tax Exemption - Wyo. Stat. § 39-15105(a)(viii)(N), Wyo. Stat. § 39-16-105(a)(viii)(C), HB 215 - Last
DSIRE Review: 03/18/2009 - Link
o State Rebate Program
 Photovoltaic Incentive Program - Last DSIRE Review:
12/04/2008 - Link
Rules, Regulations & Policies
o Interconnection
 Interconnection Standards - Wyo. Stat. § 37-16-101 et seq. - Last
DSIRE Review: 12/18/2008 - Link
o Net Metering
 Wyoming - Net Metering - Wyo. Stat. § 37-16-101 et seq. - Last
DSIRE Review: 12/18/2008 - Link
U.S. Territories
Financial Incentives
o Corporate Tax Credit
 Puerto Rico - Solar Tax Credit (Corporate) - C3268 (2008) Act No.
248 (in Spanish), C1326 (2009) Act No. 7 (in Spanish), Hacienda
AD 09-05 (in Spanish) - Last DSIRE Review: 07/30/2009 - Link
o Industry Recruitment/Support
 Puerto Rico - Economic Development Incentives for Renewables C4350 (2008) Act No. 73, C1326 (2009) Act No. 7 (in Spanish),
Hacienda AD 09-05 (in Spanish) - Last DSIRE Review:
07/30/2009 - Link
o Personal Deduction
 Puerto Rico - Tax Deduction for Solar and Wind Energy Systems 13 L.P.R. § 8423 - Last DSIRE Review: 02/11/2009 - Link
o Personal Tax Credit
131

Puerto Rico - Solar Tax Credit (Personal) - C3268 (2008) Act No.
248 (in Spanish), C1326 (2009) Act No. 7 (in Spanish), Hacienda
AD 09-05 (in Spanish) - Last DSIRE Review: 07/30/2009 - Link
o Property Tax Exemption
 Puerto Rico - Property Tax Exemption for Solar Equipment - 21
L.P.R. § 5151, C3268 (2008) Ley 248 - Last DSIRE Review:
12/17/2008 - Link
o Sales Tax Exemption
 Puerto Rico - Excise Tax Exemption for Farmers - 13 L.P.R. §
10405 - Last DSIRE Review: 02/10/2009 - Link
 Puerto Rico - Sales and Use Tax Exemption for Solar Electric
Equipment - C3268 (2008) Ley 248 - Last DSIRE Review:
12/16/2008 - Link
o State Rebate Program
 U.S. Virgin Islands - Energy Efficiency & Renewable Energy
Rebate Program - Last DSIRE Review: 12/23/2008 - Link
Rules, Regulations & Policies
o Contractor Licensing
 Solar Contractor Licensing - C3268 (2008) Act No. 248 (in
Spanish), Reglamento 7599 (Certification of Photovoltaic Systems
and Installers - In Spanish) - Last DSIRE Review: 02/10/2009 Link
o Equipment Certification
 Puerto Rico - Solar & Wind Equipment Certification - 23 L.P.R. §
1062 et seq., C3268 (2008) Act No. 248 (in Spanish), Reglamento
7599 (Certification of Photovoltaic Systems - In Spanish) - Last
DSIRE Review: 02/10/2009 - Link
o Interconnection
 Puerto Rico - Interconnection Standards - PREPA Reglamento
7544 (in Spanish) - Last DSIRE Review: 12/16/2008 - Link
o Net Metering
 American Samoa - Net Metering - ASAC § 12.06 - Last DSIRE
Review: 03/11/2009 - Link
 Guam - Net Metering - Guam Public Law 27-132 - Last DSIRE
Review: 06/10/2009 - Link
 Puerto Rico - Net Metering - 2007 PR LS 114, S2377 (2008) Act
No. 211 (In Spanish), PREPA Reglamento 7579 (Net Metering
Regulations - In Spanish) - Last DSIRE Review: 11/25/2008 - Link
 U.S. Virgin Islands - Net Metering - Last DSIRE Review:
05/12/2009 - Link
o Renewables Portfolio Standard
 Guam - Renewable Energy Portfolio Goal - Guam Public Law 2962 - Last DSIRE Review: 03/05/2009 - Link
o Solar and Wind Access Law
U.S. Virgin Islands - Solar and Wind Access Laws - 28 V.I.C. § 1001 et seq. - Last
DSIRE Review: 05/12/2009 - Link
132
Appendix C
Federal Legislative Framework
520
Rapid Deployment of Solar Technologies
Assessment of the Current
Federal Legal Framework
520
U.S. Chamber of Commerce Institute for 21st Century Energy, http://www.energyxxi.org/ (last visited
April 13, 2009).
133
OUTLINE
a. National energy strategy
b. National technology policy
c. Federal energy legislation
d. Incentives for technology development/deployment/diffusion
i. Tax incentives
ii. Technology R & D
iii. Regulatory policies
e. Disincentives for technology development/deployment/diffusion
i. Inconsistency of tax incentives
ii. Absence of a National Renewables Portfolio Standard
f. Overt and hidden subsidies of traditional energy sources
g. Government role in overcoming commercialization barriers
h. Intellectual property issues
134
National energy policy has always had multiple objectives, most of which have
been in reaction to oil price volatility. Beginning with the 1970 oil embargo, the
exponential rise of oil prices spurred concerns of energy security, conservation, diversity
and international competitiveness. Congress devoted millions to the research and
development (R&D) of renewable energy sources and fuel substitutes.521 Once oil prices
stabilized in the1980s, however, renewable energy policies took a back seat to more
pressing national objectives, until the Persian Gulf War in the early 1990s.
Now, the U.S. is once again embroiled in a war in the Middle East with gas and
oil prices spiking at new highs. The yo-yo approach to renewable energy policy has
yielded steady, but sluggish results, in terms of actually creating a diversified energy
resource portfolio. Solar and renewable energy proponents have asked the Obama
Administration to implement a comprehensive national energy policy that will fully
support the commercialization and market deployment of renewable energy sources.522
Solar is considered the premier renewable energy source.523 It is an inexhaustible,
and safe zero carbon energy source. Over the years, solar energy research programs have
received consistent funding at varying levels, but barriers created by other policies have
thwarted deployment efforts of the scale experienced by Germany and Japan.524
521
Government Accountability Office, Advanced Energy Technologies: Budget Trends and Challenges for
DOE's Energy R&D Program, GAO-08-556T, (March 5, 2008)
http://www.gao.gov/new.items/d08556t.pdf.
522
U.S. Chamber of Commerce Institute for 21st Century Energy, Transition Plan for Securing America's
Energy Future, http://www.energyxxi.org/(last visited April 13, 2009).
523
SolarBuzz, Fast Solar Facts, http://www.solarbuzz.com/FastFactsIndustry.htm (―Solar Energy demand
has grown at about 30% per annum over the past 15 years.‖ ―The US market grew to 357 megawatts in
2008.‖).
524
Mark Detsky, The Global Light: An Analysis of International and Local Developments in the Solar
Electric Industry and Their Lessons for United Sates Energy Policy, 14 Colo. J. In‘l Envtl. L. & Pol‘y 301
(Spring 2003).
135
NATIONAL ENERGY STRATEGY
The Obama Administration has put forth a five-pronged energy plan.525 The plan
aims to increase the national dependence on renewable sources and has set aggressive
goals for achieving 10% renewable energy dependency by 2012 and 25% by 2025.
President Obama‘s strategy for building a clean energy future is underway with the
enactment of the Recovery Act.526 The Recovery Act and the FY10 budget dramatically
increase investment in cutting-edge research, the development and deployment of clean
energy technologies, and incentives for private sector R&D. The strategy focuses on
clean energy investments to ensure future economic prosperity, reduce our dependence
on foreign oil, and help combat climate change. 527
NATIONAL TECHNOLOGY POLICY
The Obama Administration and the Office of Science and Technology Policy
have committed to addressing the three-pronged challenge of climate change, sustainable
development, and the need to foster new and cleaner sources of energy in a way that will
strengthen the economy and enhance national security. The Administration recognizes
525
The plan will (1) create five million new clean energy jobs over the next ten years, (2) reduce oil
consumption imported from Middle East and Venezuela, and (3) increase the national dependence on
renewable sources (10% by 2012, 25% by 2025). The White House, The Agenda,
http://www.whitehouse.gov/agenda/energy_and_environment/ (last visited April 13, 2009).
526
American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5.
527
The White House, Office of the Press Secretary, Fact Sheet: Investing In Our Clean Energy Future
(March 23, 2009) http://www.whitehouse.gov/the_press_office/Fact-Sheet-Investing-in-Our-Clean-EnergyFuture/ (last visited April 13, 2009). See also SEIA, Statement on President Obama's Investment in
Renewable Energy in Budget Proposal, March 23, 2009 http://seia.org/cs/news_detail?pressrelease.id=389
(last visited April 14, 2009).
136
that attainment of these goals will require ―harnessing the best science and technology
and employing evidence-based policy decisions.‖528
FEDERAL ENERGY LEGISLATION
Public Utilities Holding Company Act of 1935 (PUHCA) 529
In response to corruption and scandals in the energy companies of the time,
PUHCA was enacted as a part of the New Deal legislation. PUHCA enabled extensive
regulation of the size, spread, business type, and finances of the holding companies that
owned and operated the energy utilities. Under PUHCA, any companies that sought to
become owners of public utilities had to divest themselves of their non-utility holdings.
PUHCA rules were designed to make it difficult for energy holding companies to get
involved in risky businesses.
The Energy Policy Act of 2005repealed PUHCA. Now, there are no restrictions
on consolidations or who can buy public utilities. Geographic restrictions on the number
of holdings are similarly gone. Holding companies will no longer be required to divest
non-utility businesses.
Public Utilities Regulatory Policy Act of 1978 (PURPA)530
PURPA was enacted to combat the increasing fossil-fuel prices of the 1970s.
PURPA increased competition by requiring utilities to purchase power from independent
528
Office of Science and Technology Policy, http://www.ostp.gov/cs/issues/energy_environment (last
visited April 13, 2009).
529
15 U.S.C. 79 et seq.
530
Pub. L. No. 95-617.
137
generators located in their service territory. Through profitable ―qualifying facilities‖
contracts, PURPA removed a barrier for new entrants which resulted in the growth of a
large amount of renewable energy in the 1980s and ended in the 1990s. PURPA‘s
implementation varied greatly by state and was modified in 2005.
The National Energy Act of 1978 (NEA) 531
The purposes of the Act were to shift dependence away from foreign oil, promote
coal, increase energy efficiency, modernize utility ratemaking, stimulate conservation,
encourage/create markets for alternative energy sources in electricity, 532 and restructure
the natural gas market. Based on the mandate of the Solar Energy Research
Development Act of 1974,533 to pursue commercial scale solar energy development, the
Solar Photovoltaic Energy Research Development and Demonstration Act of 1978534 was
enacted as part of the NEA. This Act established the U.S. policy to research and develop
solar photovoltaic energy systems.
The National Energy Policy Act of 1992
The Act significantly opened the industry to competition and required utilities to
provide ―nondiscriminatory‖ access to high voltage transmission. The Act established
the Renewable Energy Electricity Production Tax Credit (PTC), which has been a
cornerstone for rapid wind energy development. As a result, the last several years have
seen a dramatic restructuring of the electric utility industry.
531
Pub. L. No. 95-619, 92 Stat. 3206.
See also Solar Energy and Energy Conservation Act of 1980, Pub.L.No. 96-294, 94 Stat. 719.
533
42 U.S.C. § § 5551-661 (2000).
534
42 U.S.C. § 5581 (2000).
532
138
The Energy Policy Act of 2005 (EPAct)535
EPAct authorized several new renewable energy demonstration and deployment
programs. A variety of tax, grant, loan, and regulatory provisions were established for
renewable fuels, including 17 programs spanning 5 agencies. EPAct established a 30%
tax credit, capped at $2,000, for the purchase and installation of residential PV property
and a no-cap 30% tax credit for commercial property PV purchases and installations. For
non-profit electric utilities, and only for 2006 and 2007, EPAct authorized $800 million
in clean energy bonds (CREBs), a tax credit bond that allowed the bond holder to receive
a federal tax credit in lieu of interest paid by the issuer.
The Energy Independence and Security Act of 2007 (EISA)536
EISA strengthened and extended existing renewable energy tax credits, while
creating new incentives for the use and production of renewable energy. It increased
incentives and funding of research for solar and other renewable energy. EISA provides
new clean renewable energy bonds (new CREBs) for electric cooperatives and public
power providers to install facilities that generate electricity from renewable resources.
There was disappointment when the national renewable sources portfolio standard
and a package of subsidies for solar and other alternative energy sources were eliminated
from the final legislation.537 The original bill contained provisions to extend federal tax
incentives for renewable energy. But, in the final days of the Congressional session, the
bill was significantly altered.
535
Energy Policy Act of 2005, Pub. L. No. 109-58, § 988, 119 Stat. 594, 910–11 (codified at 42 U.S.C. §
16352 (Supp. V 2006)).
536
Pub. L. No. 110-140, 121 Stat. 1492.
537
John M. Broder, Bush Signs Broad Energy Bill, New York Times, (December 19, 2007) available at
http://www.nytimes.com/2007/12/19/washington/19cnd-energy.html?hp.
139
EISA also includes incentives to boost the production of biofuels and the number
of Flex Fuel and other alternative fuel vehicles. EISA mandates to increase CAFE
standards to 35 miles per gallon by 2020, reduce oil imports, cut production of the gases
that scientists blame for global warming, and significantly increase the efficiency of the
nation‘s auto fleet.
Renewable Energy & Job Creation Act of 2008
The bill passed the Senate on September 23, 2008, was amended and renamed the
Energy Improvement and Extension Act of 2008, but never became law. Instead, the
provisions were enacted as a component of the Emergency Economic Stabilization Act of
2008. The Act would have amended the Internal Revenue Code to extend and modify
expiring provisions related to energy production and conservation and to provide for
revenue enhancements.
Emergency Economic Stabilization Act of 2008 (EESA)538
The Act extends the 30 % investment tax credit for solar energy and the
residential solar property credit through 2016. In addition to extending the federal solar
investment tax credit (ITC) for 8 years, the legislation includes the removal of a
prohibition that previously prevented electric utilities from taking advantage of the credit.
It allows alternative minimum tax (AMT) filers and public utilities to claim the business
solar investment tax credits. Companies and utilities that put solar energy property in
service will receive a credit against their income tax liability, including AMT. EESA
removes the cap on the credit for solar electric property placed in service after December
538
Pub. L. No. 110-343, 122 Stat. 3765.
140
31, 2008. EESA allows individual taxpayers to carry unused credits forward to the next
succeeding taxable year and authorizes $800 million of new CREBs to finance facilities
that generate electricity from renewable resources, including solar facilities. EESA also
extends the termination date for existing CREBs by one year, thereby allowing for
CREBs to finance new renewable electric power facilities, including solar installations,
through December 31, 2009.
The American Recovery and Reinvestment Act of 2009 (Recovery Act)539
Signed into law on February 17, the Recovery Act includes $43 billion for
energy-related programs; a significant portion of which is available for solar energy
technology development and deployment. The Recovery Act provides (1) $4.5 million
for investment in smart grid technologies;540 (2) $2.5 billion in funding for existing
Department of Energy (DOE) programs, which include the Solar Energy Program; and
(3) a new $6 billion temporary loan guarantee program, the Innovative Technology Loan
Guarantee Program, to be administered by the DOE.
Tax incentive provisions include an extension of the renewable electricity
production credit, election of investment credit (ITC) instead of Production Credit,541 and
grants for specified energy property.542 These tax incentives provide much needed
assurance to investors. ―The ebb and flow of tax equity transactions over the past several
years in renewable energy projects has been tied to availability of tax credits; uncertainty
539
American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5.
Originally authorized by Title XIII of the Energy Independence and Security Act of 2007.
541
American Recovery and Reinvestment Tax Act of 2009 § 1102 (to be codified at 26 U.S.C. § 48).
542
American Recovery and Reinvestment Tax Act of 2009 § 1603.
540
141
as to tax credit availability has often hindered investor confidence in wind, solar and
other renewable project development.‖543
American Clean Energy and Security Act 2009 (pending)
Rep. Henry Waxman and Edward Markey have sponsored this bill ―to create
millions of new clean energy jobs, save consumers hundreds of billions of dollars in
energy costs, enhance America‘s energy independence, and cut global warming
pollution.‖ 544
INCENTIVES FOR TECHNOLOGY
DEVELOPMENT/DEPLOYMENT/DIFFUSION
Solar industry growth of 30 to 40 percent annually is expected to continue in
years to come as the economics of solar, which is currently approximately twice the cost
of delivered retail electricity on a per kilowatt basis, begins to approach that of traditional
electricity-generation technologies.545
Tax incentives
The solar industry saw some of the most significant national solar policy victories
ever in late 2008 and early 2009. EESA and the Recovery Act implemented changes
543
Dewey & LeBoeuf, LLP, American Recovery and Reinvestment Act of 2009: Key Energy Provisions
(February 16, 2009) http://www.deweyleboeuf.com/files/News/4625d1d9-d8f9-42c8-94530d77220fd57f/Presentation/NewsAttachment/68c47f9a-1570-45fa-b27a0dad98c0c826/ClientAlert_20090216.pdf (last visited April 13, 2009).
544
See discussion draft March 31 2009
http://energycommerce.house.gov/Press_111/20090331/acesa_discussiondraft.pdf (last visited April 14,
2009).
545
Intel Corporation, http://www.intel.com/pressroom/archive/releases/20080616corp.htm (last visited
April 10, 2009).
142
that, if fully funded and not undermined by parallel policies, will create long-term policy
stability and help companies in the U.S. solar market make longer-term investment
decisions and attract better financing. Ultimately, these changes could be the catalyst that
shifts our energy market towards clean, renewable power.
Technology R & D
Studies provide evidence that costs, almost always, decline as cumulative
production increases.546 A 2009 study found that (1) successful R&D programs reduced
costs more than did subsidies, (2) successful R&D enabled PV to achieve a cost target of
4c/kWh, and (3) the cost of PV did not reach the target when only subsidies, and not
R&D, were implemented.547
DOE's energy R&D program has focused on reducing high up-front capital costs
and improving the operating efficiency of advanced energy technologies to enable them
to better compete with conventional energy technologies. Between fiscal years 1978 and
1998, DOE's budget authority for renewable, fossil, and nuclear energy R&D fell 92 %
when adjusted for inflation (from its $6 billion peak in FY1978 to $505 million in
FY1998). It has since rebounded to $1.4 billion in FY2008. However, R&D funding
plunged in the 1980s as oil prices returned to their historic levels. DOE's FY2009
budget, as compared with 2008, requests slightly less budget authority for renewable
546
Gregory F. Nemet, Interim Monitoring of Cost Dynamics for Publicly Supported Energy Technologies,
Energy Policy, March 2009, at 825.
547
Id.
143
energy R&D, while seeking increases of 34 % for fossil energy R&D and 44 % for
nuclear energy R&D.548
Regulatory policies
As one of the nation‘s largest purchasers, the Federal government can immensely
impact the environment and the renewables market. In 2007, President Bush issued
Executive Order 13423, directing all federal agencies to strengthen federal
environmental, energy, and transportation management.549 The Office of the Federal
Environmental Executive is tasked with promoting environmental stewardship through
the Federal government. One of its most successful programs is green purchasing.
Federal agencies have worked together to institutionalize acquisition practices for
environmentally preferable products and services, including renewable energy. To this
end, the General Services Administration has schedules for renewable energy systems
and solar energysystems. DOE and the Federal Executive have implemented policies
fostering green building construction.550
EPAct and EISA reaffirmed and expanded several previous goals and standards to
reduce energy use in existing and new federal buildings. EISA extended the federal
energy reduction goal to 30% by FY2015; directed federal agencies to purchase Energy
Star and Federal Energy Management Program designated products; and required new
548
Government Accountability Office, Advanced Energy Technologies: Budget Trends and Challenges for
DOE's Energy R&D Program, GAO-08-556T, (March 5, 2008)
http://www.gao.gov/new.items/d08556t.pdf.
549
72 Fed. Reg. 3919 (January 26, 2007).
550
Examples include solar paneled parking garages, solar water heaters at campgrounds, projects to convert
superfund land for solar parks.
144
federal buildings to be built 30% below American Society of Heating, Refrigerating and
Air-Conditioning Engineers standards or the International Energy Conservation Code.
DOE, the Bureau of Land Management, and the Department of the Interior are
preparing a Programmatic Environmental Impact Statement (PEIS) to evaluate utilityscale solar energy development, to develop and implement Agency-specific programs
that would establish environmental policies and mitigation strategies for solar energy
projects, and to amend relevant Agency land use plans with the consideration of
establishing a new Bureau of Land Management solar energy development program.551
DISINCENTIVES FOR TECHNOLOGY
DEVELOPMENT/DEPLOYMENT/DIFFUSION
Inconsistency of tax incentives
Although solar technologies, like photovoltaics, are well developed, significant
market penetration has not occurred. In large part, this is due to inconsistent, sporadic
and unfunded incentive programs. Congress‘ failure to commit to a consistent renewable
incentive scheme has caused the United States to fall behind while other countries reap
the benefits of renewable energy.552 There are numerous examples of inconsistent
treatment of renewable energy tax incentives. For example, after its implementation in
1992, the PTC has expired and been reinstated three times and extended two other
551
Bureau of Land Management, solareis.anl.gov/ (last visited April 16, 2009).
Mona Hymel, The United States’ Experience with the Energy-based Tax Incentives: The evidence
Supporting Tax Incentives for Renewable Energy, 38 Loy.U. Chi. L.J. 43, 75-76 (Fall 2006).
552
145
times.553 Amazingly, the PTC has had a positive, yet erratic, boom-bust effect on the
development of the wind energy industry.554
Few in the solar industry have taken advantage of the PTC, because the PTC is
less valuable for solar energy equipment when compared to the business and residential
investment tax credits (ITC).555 Like the PTC, the ITC has suffered expiration and
extensions. In fighting for the ITC, the solar industry testified that the business ITC is the
most important tax incentive for solar equipment.556
Contradictory policies and agency prerogatives also disincentivize development,
deployment and diffusion. In direct conflict with policies encouraging federal land use
and support, the Bureau of Land Management announced a moratorium on applications
for solar development on federal lands. The moratorium was immediately repealed after
an outcry. However, the damage has been done and now the few in the industry are
cautiously exploring federal land projects with the Environmental Protection Agency.557
The inconsistency of payments from the Federal government has discouraged
many public utilities from pursuing renewable projects on their own. The renewable
energy production incentive (REPI) established in 1992 has been consistently
underfunded and the FY2009 appropriation was reduced to zero. CREBs and new
CREBs were established to replace the REPI. Again, the incentive was undermined by
553
Fred Sissine, Renewable Energy: Background and Issues for the 110 th Congress, CRS Report RL34162,
at 14 (December 10, 1008).
554
American Wind Energy Association, Legislative Priorities: Production Tax Credit Extension,
http://www.awea.org/legislature/ (last visited April 11, 2009).
555
House Ways and Means Committee, Tax Credits for Renewables, Energy Information Administration
Testimony, p. 6-9.
556
House Ways and Means Committee, Tax Credits for Electricity Production from Renewable Sources,
Testimony of American Public Power Association, p, 61-63; Testimony of National Rural Electric
Cooperative Association, p. 67-69 (May 24, 2005).
557
Janice Valverde, Interactive Mapping Website Facilitates Renewable Energy Siting on Brownfields,
BNA Daily Environment Report, 212 DEN A-2 (Nov. 3, 2008).
146
insufficient funding. For 2006 and 2007, the $800 million authorization fell short of the
$2.6 billion CREBs requests.558 According to the Solar Energy Industry Association
(SEIA), the solar energy industry has projects on hold until the Departments of Energy
and Treasury finalize rules for the loan guarantee and grant programs.559
Absence of a National Renewables Portfolio Standard
EISA, until the last minute, included provisions for a national renewable portfolio
standard (RPS). The RPS would have required electric utilities to procure a certain
percentage of their electricity from renewable resources or purchase renewable energy
credits from other sources to meet the standard. Years of vigorous debate without
legislation may not have been in vain. 560 President Obama has specifically stated that
there will be a national renewable portfolio standard during his administration.561
OVERT AND HIDDEN SUBSIDIES OF TRADITIONAL ENERGY SOURCES
DOE's appropriations for electricity-related R&D, adjusted for inflation, grew
35 % and totaled $11.5 billion from FY2002 through FY2007. At $6.2 billion from
FY2002 through FY2007, nuclear programs received the largest share of electricityrelated R&D funding. Fossil fuel programs were appropriated $3.1 billion in electricity-
558
Id. at 23.
SEIA, Statement on President Obama's Investment in Renewable Energy in Budget Proposal, March 23,
2009 http://seia.org/cs/news_detail?pressrelease.id=389 (last visited April 11, 2009).
560
Joshua P. Fershee Changing Resources, Changing Market: The Impact of a National Renewable
Portfolio Standard on the U.S. Energy Industry, 29 Energy Law Journal 1 (2008).
561
Office of Science and Technology Policy, http://www.ostp.gov/cs/issues/energy_environment (last
visited April 13, 2009).
559
147
related R&D funding from FY2002 through FY2007 (e.g., Clean Coal Power Initiative
and FutureGen program).
Fossil fuels received the largest share of electricity-related tax expenditures,
totaling $13.7 billion from FY2002 through FY2007. Although renewable programs
grew by 23 %, they were appropriated only $1.4 billion from FY2002 through FY2007,
with funding for the solar program representing the largest share of program funding.562
Overt Subsidies
Since the development of the fossil fuel industry, the Federal government has
implemented tax incentives and other subsidies to promote the industry. The Federal
government‘s steady investments in the industry influenced the rate of development by
incentives which spurred development and consumption.563 The Federal government
continues to encourage greenhouse gas emissions by subsidizing fossil fuel use in a
variety of ways;564 with the primary tax incentives being (1) deduction for intangible
drilling costs and the percentage depletion allowance for oil and gas exploration and (2)
credits for nonconventional fuels and enhanced recovery costs.
An overwhelming majority of energy tax incentives support businesses that
extract, produce, and transport nonrenewable resources.565 In EPAct, fossil fuel subsidies
562
Government Accountability Office, Federal Electricity Subsidies: Information on Research Funding,
Tax Expenditures, and Other Activities That Support Electricity Production, GAO-08-102 (October 26,
2007) available at http://www.gao.gov/new.items/d08102.pdf
563
Mona Hymel, The United States’ Experience with the Energy-based Tax Incentives: The evidence
Supporting Tax Incentives for Renewable Energy, 38 Loy.U. Chi. L.J. 43, 64-65 (Fall 2006).
564
Peter Lehner, Changing Markets to Address Climate Change, 35 B.C. Envtl. Aff. L. Rev. 385, 389
(2008) (Fossil fuels are subsidized through favorable tax treatment, direct subsidies, lenient environmental
regulations, and highway funding).
565
Mona Hymel, The United States’ Experience with the Energy-based Tax Incentives: The evidence
Supporting Tax Incentives for Renewable Energy, 38 Loy.U. Chi. L.J. 43, 54 (Fall 2006).
148
accounted for more than two-thirds of the total tax expenditure provisions for energy.566
Most recently, the Recovery Act appropriated $3.4 billion for fossil energy research and
development, while appropriating only $2.5 billion to efficient and renewable energy.
Many longtime opponents say that policy-makers must respond by eliminating wasteful
subsidies and crafting tax incentives and other subsidies for biofuels that will facilitate
the move away from fossil fuels toward renewable energy sources.567
For years, Congress has debated the elimination of oil and natural gas subsidies to
the five largest/ most profitable oil companies. However, prevailing opponents to the
repeal argue that the repeal would cause a decline in oil industry jobs and raise gas prices
and energy costs.568
Hidden Subsidies
Because most biofuels are consumed as blends with gasoline or petroleum diesel,
they complement, and do not actually compete with fossil fuels. Hidden subsidies come
in the form of widespread and largely uncritical support for liquid biofuels. Current
forecasts are that biofuels would account for less than 5 % of total transport fuel use in
2010.569 Nonetheless, biofuel subsidies eclipse other energy alternatives. Moreover, the
sheer levels of government support to biofuels appear out of proportion to their ability to
satisfy domestic transport-fuel requirements.
566
Id. at 76.
Roberta F. Mann and Mona L. Hymel, Moonshine To Motorfuel: Tax Incentives For Fuel Ethanol, 19
Duke Envtl. L. & Pol'y F. 43 (Fall 2008).
568
Congressional Record. February 27, 2008. p. H1091-H1131.
569
Global Subsidies Initiative, Biofuels - At What Cost? Government Support for Ethanol and Biodiesel in
the United States - 2007 Update, available at http://www.globalsubsidies.org/files/assets/Brochure__US_Update.pdf (―we suggest that the U.S. Congress and the States declare a moratorium on programs that
would increase or extend subsidies to liquid biofuels, with a view to developing a plan for phasing out
subsidies to all transport fuels as quickly as possible.‖).
567
149
Smart Technologies
One of the biggest roadblocks to boosting solar generating capacity is the
electrical grid. It has been assumed that when solar electricity contributes to a small
percent of the grid's power, there are no problems, however, when the fraction of
contribution rises above one-sixth, the variability of solar electricity creates a difficult
and costly reliability problem.570 If true, the solution may be found in smart
technologies. Smart energy technologies are intended to transmit energy efficiently, to
reduce the size of power generation units, and to be closer to the source of
consumption.571 Because solar is variable, a demand-responsive electrical grid that uses
energy efficiently is critical.572 Whether for non-utility, distributed generation production
or utility-scale power production, the solar industry will benefit from a smarter grid.
GOVERNMENT ROLE IN OVERCOMING
COMMERCIALIZATION BARRIERS
A key GAO report found that successful commercialization of renewables
occurred through the use of standards, mandates, and financial incentives that require, for
570
Cf. Jeffrey Winters, No Renewable Bottleneck, Mechanical Engineering, Feb 2009, at 14. The
assumption has been challenged by engineers at Stanford University in California, who have modeled
California's power grid and demand curves. Simulating both electricity demand and renewable output for
typical days, the team discovered that solar and wind worked well together, with the highest wind output
corresponding to night hours when solar stations cannot operate. See Elaine Hart and Mark Z. Jacobson,
Power Flow Simulations of a More Renewable California Grid Utilizing Wind and Solar Insolation
Forecasting, American Geophysical Union Fall Meeting 2008, (December 15-19, 2008)
http://www.agu.org/cgibin/SFgate/SFgate?&listenv=table&multiple=1&range=1&directget=1&application=fm08&database=%2F
data%2Fepubs%2Fwais%2Findexes%2Ffm08%2Ffm08&maxhits=200&=%22A21E-0227%22 (last visited
April 14, 2009).
571
Joseph P. Tomain, Smart Energy Path: How Willie Nelson Saved the Planet, 36 Cumb. L. Rev. 417, 451
(2006).
572
Dan Delurey, Smart Grid Briefing at the Congressional Complex, (January 8, 2009).
150
example, power companies to provide small producers with access to the power
transmission grid and purchase their excess energy.573 Through external partnerships,574
the DOE Solar Energy Technologies Program (SETP or Solar Program) promotes the
commercialization of solar technologies by addressing non-technical issues that act as
barriers575 to the adoption of solar energy technologies.576 Recently, DOE partnered with
the GreenVolts to commercialize a new solar cell design technology which has
demonstrated one of the highest solar cell efficiencies for reliability and cost reduction.577
DOE's R&D efforts have resulted in steady incremental progress in reducing costs
for renewable energy technologies. The key challenge for solar technologies is
developing improved solar technologies that can better compete with conventional
technologies.
INTELLECTUAL PROPERTY ISSUES
In the solar energy industry, intellectual property concerns center around ―knowefficient, at a lower price, in higher quantities, and with quality.578 The
573
Government Accountability Office, Department of Energy: Key Challenges Remain for Developing and
Deploying Advanced Energy Technologies to Meet Future Needs, GAO-07-106 (December 20, 2006)
available at http://www.gao.gov/new.items/d07106.pdf.
574
Partnering with cities (Solar America Cities) and high-visibility locations (Solar America Showcases);
Solar America Board for Codes and Standards (coordinated recommendations to organizations establishing
codes and standards for existing and new solar technologies); outreach to state governments and energy
agencies, utilities, and builders; workforce education, training, and development.
575
Market barriers: A shortage of information about solar technologies and little consumer awareness,
insufficient product standards, inconsistent interconnection, net metering, and utility rate structures and
practices for solar systems, inadequate codes and complex and expensive permitting procedures,
inconsistent and insufficient state and local financial incentives and other market drivers, a lack of flexible,
sophisticated, and proven financing mechanisms, limited education for and insufficient numbers of trained
and experienced personnel and services. See The Solar Energy Technologies Program,
http://www1.eere.energy.gov/solar/ (last visited April 11, 2009).
576
The Solar Energy Technologies Program, http://www1.eere.energy.gov/solar/ (last visited April 11,
2009).
577
National Renewable Energy Laboratory, http://www.nrel.gov/technologytransfer/news/2009/677.html
(last visited April 15, 2009).
578
See IPCheckups Report, Grid-Scale Concentrated Solar Thermal: Thermal Energy Storage
Technologies, http://greenpatentblog.com/category/solar-power/ (last visited April 14, 2009). (identifies
151
focus is on protecting know-how, due in large part to the cost reductions that can be
achieved through know-how protection compared to patenting. In the solar energy
industry, there are broadly two categories of companies: those which come from the
semiconductor and microelectronics sector and those which historically belong to the
energy sector, particularly to the oil industry. The first group is generally technology
developers. They generate and own all their intellectual property as a result of internal
research and development activities. These companies strive to be independent from the
competition in generating new technology and ahead of the competition in the
applications market so as to take advantage of being the first with a new technology, or in
a market, and to use intellectual property to make the most of that competitive advantage.
The second group tends to buy in technologies from outside. They will often
license-in technology for development or jointly develop technologies in cooperation, for
example, with a research center or university. 579
the important patents and players in the space and analyzes the level of patent protection, including patent
claims assessments and key licensing agreements).
579
Elizabeth March, OMPI, Oficina del Director General, United Nations, World Intellectual Property
Organization, Hot Property – IP Strategies in the Solar Tech Sector (March 2009) available at
http://www.wipo.int/wipo_magazine/en/2009/02/article_0008.html.
152
Appendix D
State Conisderation of Third-Party Providers as a Public Utility
Arizona
There are two open dockets before the Arizona Corporation Commission that will
determine whether or not the owners of solar arrays in retail solar PPAs will be
considered ―public service corporations‖ that are subject to the regulation of the Arizona
Corporation Commission. The first docket is ―In the matter of the application of The
Solar Alliance for approval of an Adjudication of "Not a Public Service Corporation"
Status‖ opened by The Solar Alliance, a trade group representing interested solar
companies.580 The Commission has ruled that there must be a hearing to decide the case,
and the Commission has indicated that without a specific retail solar PPA and specific
party to analyze, a ruling will only be advisory for future cases.581
The second docket was opened by SolarCity Corporation ―for a determination that when
its provides solar service to Arizona schools, governments, and non-profit entities, it is
not acting as a public service corporation pursuant to Art.15, Section 2 of the Arizona
Constitution.‖582
California
580
In The Matter of The Application of The Solar Alliance for a Declaratory Order That Providers of
Certain Solar Service Agreements Would Not Be Public Service Corporations, Docket E-20633A-08-0513
(pending).
581
Id.
582
In The Matter of The Application of Solarcity for a Determination That When It Provides Solar Service
to Arizona Schools, Governments, and Non- 1 Profit Entities It Is Not 1 Acting As A Public Service
Corporation Pursuant To Art. 15, Section 2 Of The Arizona Constitution, Docket E-20690A-09-0346
(pending).
153
California leads the nation in retail solar PPAs in both the total wattage of power
generated and the number of sites. Indeed, ―In California alone, the use of [retail solar
PPAs] has facilitated the installation of 128.5 MW of solar.‖583 SunEdison, one of the
leading companies in commercial retail solar PPAs, manages 148 sites generating 40.5
MW of solar power in California.584 California‘s aggressive RPS is likely the primary
motivating cause for the amount of solar power generated in the state.
To support retail solar PPAs, California has made several changes to its Public Utility
Code including the following: (1) Exempting companies or individuals that house
facilities that generate power for use on site or to be sold to a utility or state or local
public agency from being classified as ―electrical corporations‖ that are subject to
regulation;585 (2) Exempting companies or individuals that generate solar power for their
own use or the use of its tenants from being classified as ―electric service providers;‖586
and (3) For the purposes of net metering for residential or small commercial customers,
defining an eligible customer-generator not as the owner of a solar power array, but as the
owner or renter of the land on which the array is located.587
Massachusetts
583
Comments Of The Interstate Renewable Energy Council With Respect To The Staff Report Submitted To
The Commission On March 11,2009. Docket No. E-20633A-08-0513 (Mar. 11,2009).
584
Sun Edison Map, available at http://www.sunedison.com/map/SunEdisonMap.html.
585
Cal. Pub. Util. Code § 218 (2009).
586
Cal. Pub. Util. Code § 218.3(c) (2009); Cal. Pub. Util. Code § 2868(b) (2009).
587
Cal. Pub. Util. Code § 2827 (2009).
154
On June 26, 2009, the Massachusetts Department of Public Utilities (DPU) issued a
ruling for docket D.P.U. 08-75-A, a docket opened to address questions relating to the
implementation of a net metering law.588 In the ruling, the Massachusetts DPU adopted
―a new section in the regulations clarifying that third-party ownership or financing of Net
Metering facilities is permissible, consistent with DOER's [Department of Energy
Resources] proposal.‖589 The regulation now states, ―Nothing in 220 CMR 18.00 is
intended in any way to limit eligibility for Net Metering services based upon a third party
ownership or financing agreement related to a Net Metering facility, where Net Metering
services would otherwise be available.‖590
New Mexico
New Mexico‘s Public Utility Commission is currently considering the issue of third party
ownership of solar arrays under Docket 09-00217-UT.591
Nevada
588
Order Instituting a Rulemaking pursuant to G.L. c. 30A, s 2 and 220 C.M.R. s 2.00 et seq. to Implement
the Net Metering Provisions of An Act Relative to Green Communities, St. 2008, c. 169, s 78 and to Amend
220 C.M.R. s 8.00 et seq., Qualifying Facilities and On Site Generating Facilities, and 220 C.M.R. s 11.00
et seq., Electric Industry Restructuring, D.P.U. 08-75-A (June 26, 2009), available at
http://db.state.ma.us/dpu/qorders/frmDocketSingle.asp?docknum=08-75.
589
Id.
590
220 Mass. Code Regs. 18.09(5) (2009).
591
Order, In the Matter of a Declaratory Order Regarding Third-Party Arrangements for Renewable
Energy Generation, Case No. 09-00217-UT (June 16, 2009), available at
http://www.nmprc.state.nm.us/generalcounsel/pdf/09-00217-UTInitialOrder.pdf; Supplemental Order (June
24, 2009), available at http://www.nmprc.state.nm.us/generalcounsel/pdf/09-00217UTSupplementalOrder.pdf.
155
In 2008, the Nevada Public Utilities Commission ruled on Docket 07-06024 and 0706027 in a joint final order. In its final order, the Nevada PUC rules that ―An
examination of Nevada Revised Statute (―NRS‖) 704.020(2)(a) (definition of a public
utility in Nevada), and NRS 704.766 through 704.775 (the statutes providing for a net
metering program in Nevada), through the lens of the established rules of statutory
interpretation indicates that private entities who install, lease, sell, and/or maintain
renewable energy systems on the private property of customer-generators for the purpose
of net metering, are not public utilities pursuant to the laws of the state of Nevada. They
are therefore not subject to regulation by the Commission.‖592 An important point of the
Nevada PUC decision was recognizing that the solar energysystems in question do not
serve the public but rather a single-customer under a private contract. This is in stark
contrast to a public utility which exists to serve the public and will continue to serve the
customer-generators contracting with the providers of solar systems.
Oregon
On July 31, 2008, the Oregon Public Utility Commission issued Order No. 08-388.593 In
its decision, the Oregon PUC ruled that Honeywell International, Inc., the provider of the
solar energysystem, was neither a public utility nor an ―electricity service suppler‖ (ESS).
In the Matter of Honeywell International, Inc., and Honeywell Global Finance, LLC, and
592
Investigation and rulemaking to adopt, amend, or repeal regulations pertaining to Chapters 703 and
704 of the Nevada Administrative Code regarding the Renewable Energy School Pilot Program and other
related utility matters in accordance with Senate Bill 437, 07-06027 (Nov. 26, 2008), available at
http://pucweb1.state.nv.us/PUCN/RenewableEnergy.aspx.
593
In the Matter of Honewell Int’l, Inc. and Honeywell Global Finance, LLC, and Pacificorp, dba Pacific
Power, Order No. 08-388 (July 31, 2008), available at http://apps.puc.state.or.us/orders/2008ords/08388.pdf.
156
Pacificorp, dba Pacific Power, 08-388 (July 31, 2008). The justifications, however, for
deciding that Honeywell was neither a utility of an ESS are formalistic. The Oregon
PUC ruled that Honeywell was not a utility solely based on ORS 757.005(1)(b)(C)(iii),
which exempts a company that provides power from wind or solar sources as from public
utility status.594 The PUC further ruled that Honeywell was not an ESS because ―ORS
757.600(16) defines ‗Electricity service supplier‗ as: …a person or entity that offers to
sell electricity services available pursuant to direct access to more than one retail
electricity consumer.‖595 ―Direct access‖ is defined in ORS 757.600(6) ―the ability of a
retail electricity consumer to purchase electricity and certain ancillary services.‖ O.R.S.
757.600(6) (emphasis added).596 The Oregon PUC focuses on the ―and‖ portion of the
definition and rules that since Honeywell only provides electricity but does not build or
maintain infrastructure, Honeywell is not an ESS.597 Additionally, the Oregon PUC ruled
that Honeywell‘s customers were ―customer generators‖ under the Oregon net metering
law.598
594
Id.; Or. Rev. Stat. §757(1)(b)(C)(iii) (2008).
In the Matter of Honeywell; Or. Rev. Stat. § 757.600(16) (2008).
596
Or. Rev. Stat. § O.R.S. 757.600(6) (2008).
597
In the Matter of Honewell Int’l, Inc. and Honeywell Global Finance, LLC, and Pacificorp, dba Pacific
Power, Order No. 08-388 (July 31, 2008), available at http://apps.puc.state.or.us/orders/2008ords/08388.pdf.
598
Id.
595
157
Appendix E
Resources
Tawny L Alvarez, Don’t Take My Sunshine Away: Right-to-Light and Solar Energy in
the Twenty-First Century, 28 Pace Law Review 535 (2008).
Energy Efficiency and Renewable Energy, Solar America Initiative: A Plan for the
Integrated Research, Development, and Market Transformation of Solar Energy
Technologies, U.S. Department of Energy (SETP-2006-0010) (2007), http://www1.eere.
energy.gov/solar/solar_america/pdfs/sai_draft_plan_Feb5_07.pdf.
G. Strahs & C. Tombari, Laying the foundation for a Solar America: The Million Solar
Roofs Initiative, U.S. Department of Energy (2006), http://www1.eere.energy.gov/
solar/solar_america/pdfs/40483.pdf.
Chadbourne & Parke, LLP, Guide to Federal Tax Incentives for Solar Energy (2008),
available at http//seia.org.
Bernadette Del Chiaro, Government's Role in Creating a Vibrant Solar Power Market in
California, 36 Golden Gate U. L. Rev. 347 (Spring 2006).
Sanya Carleyolsen, Tangled in the Wires: An Assessment of the Existing U.S. Renewable
Energy Legal Framework, 46 Nat. Resources J. 759 (Summer 2006).
U.S. Energy Information Administration. Policies to Promote Non-Hydro Renewable
Energy in the United States and Selected Countries (February 2005), available at
http://www.eia.doe.gov/cneaf/solar.renewables/page/non_hydro/nonhydrorenewablespap
er_final.pdf#page=1.
Richard L. Ottinger Rebecca Williams, Renewable Energy Sources For Development 32
Envtl. L. 331 (Spring 2002).
The Naval Air Station North Island features a structure
wich supports approximately 81,470 square feet of PV
panels, which provides more than 1 million kWh of
energy each year.
158
Appendix F
Graphics
159
160
161
162