Household Renewable Energy

Transcription

1 Household Renewable Energy Commissioner Richard Campbell May 23, 2012

2 Renewable Energy Promotion Methods for Households Net Metering Interconnection Rules Subsidies Tax Credits 2

3 Net Metering Net metering is a utility program offered to customers that install renewable energy systems to generate their own electricity. This energy can be used to offset a portion of the electric energy provided by the utility. Any excess energy generated by the customer during the monthly billing cycle would be sold to the utility company and credited to the customer. 3

4 Interconnection Interconnection deals with the technical aspects of connecting the renewable generator to the grid. Utilities generally establish procedures through interconnection agreements. The terms of interconnection agreements can promote renewable generation or could pose barriers. 4

5 Subsidies Subsidies are a grant of money to promote a beneficial purpose. p Energy subsides can keep prices for consumers below market levels or reduce their costs. Energy subsides for producers can keep prices above market levels or reduce their costs. 5

6 Types of Subsides Subsidies may come in the form of: Direct cash transfers to producers Direct cash transfers to consumers Rebates Price controls Trade restrictions Tax exemptions 6

7 Tax Credits A tax credit reduces the amount of tax for which an individual is liable. Unlike a deduction, which reduces the amount of income subject to tax, a tax credit directly reduces the tax liability. 7

8 Example of a Tax Credit Federal Residential Renewable Energy Tax Credit Provides that a taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the U.S. used as a residence by the taxpayer. Eligible technologies include: solar hot water, solar PV, wind, fuel cells, geothermal heat pumps, and other solar electric 8 technologies.

9 Utah Case Study 9

10 Utah Public Service Commission 3 commissioners Appointed by the Governor to 6 year terms Approximately 60 staff members involved in utility regulation Regulate electricity, natural gas, telecommunications, water and sewer The name "Utah" comes from the The name Utah comes from the Native American "Ute" tribe and means people of the mountains. 10

11 Utah Law Net metering law: passed in modified in 2003, 2008 and Interconnection rules applicable to net metering and non-net metering facilities issued 11 in 2010.

12 Eligibility Not more than 25 kw for a residential facility Not more than 2 MW for a non-residential facility, unless the governing authority approves a greater generation capacity. Note: Utah Public Service Commission Interconnection rules allow non-net metering facilities of up to 20 MW to interconnect to the distribution system. 12

13 Eligibility Facility is located on, or adjacent to, the premises of the customer. Operates in parallel and is interconnected with the distribution utility. Intended to offset part or all of the customer s requirements for electricity. Controlled by an inverter or switchgear. 13

14 Facility Types Solar photovoltaic Solar thermal Wind Hydrogen Organic waste Hydroelectric Waste gas and waste heat capture 14 or recovery

15 Facility Types Biomass Forest or rangeland woody debris Agricultural residues Dedicated energy crops Landfill gas or biogas from organic matter Geothermal 15

16 Other Provisions New metering equipment required Interconnection agreements Billing determinations Additional standby fees prohibited Safety standard requirements Cannot compromise the quality of service to other customers Credits for non-used excess customer- generated electricity expire at the end of the annualized billing period 16

17 Net Metering Program Evaluation In 2006, the Utah Public Service Commission asked staff to investigate and evaluate the status and level of participation in Utah s net metering program. Staff was asked to identify potential barriers to participation and potential strategies to increase program poga participation cpa and deffectiveness. ec e ess 17

18 Specific Barriers Identified Economic (competing against low rates) Quantity caps too low Lack of public outreach Interconnection standards too stringent 18

19 Recommended Solutions Financial incentives Program goals on public education and outreach Streamlined customer application process with simplified interconnection standards Raise caps on allowable generation 19

20 Additional Feedback Annual Report Card published by: The Vote Solar Initiative & Network for New Energy Choices 20

21 Report Card 21

22 A Mountain to Climb 22

23 Improvement Process Benchmarked ourselves with states that were successful. Took a number of steps to improve net metering rules and procedures. 23

24 Step #1 Increased aggregate capacity limit (cap): Statute originally proscribed limit at.1% of peak demand, subject to commission modification Allowed up to 20% of peak demand Justified by the renewable portfolio goal enacted in the Utah s 2008 Energy Resource and Carbon Emissions Reduction Initiative 24

25 Step #2 Established interconnection rules: Simplified and increased transparency of the interconnection process Streamlined interconnection application 25

26 Step #3 Established a reporting process from utility Annual report must contain information on Number and type of installations Capacity of installations Total capacity Total annualized billing credits expired Total capacity compared to cap Barriers identified 26

27 Step #4 Clarified ownership of non-energy attributes associated with the electricity ygenerated by a renewable facility: Unless otherwise agreed to by a separate contract, the owner of the renewable energy facility retains ownership of the non-energy attributes associated with electricity the facility generates. May become helpful if aggregation of renewable energy credits can be viable. 27

28 Step # 5 Made determination on disconnect switch for small facilities: For customer generating systems of 10 kw or less that are inverter-based, a public utility shall not require a disconnect switch. Safety is an important concern, but based upon the company s maintenance policies a disconnect switch could not be justified on smaller systems and was an additional barrier/cost to residential consumers. 28

29 Step #6 Implemented a Solar Photovoltaic Pilot program $300,000/year solar pilot program $1.55/watt incentive Provided subsidies to 29 installations in Program installed kw in There is a disagreement between the utility and customers relating to the economics of the program. 29

30 Step #7 Utah State Income Tax Credit Tax credit for residential systems is 25 percent of the equipment and installation ti cost up to a maximum of $2000. Commercial systems receive a 10 percent investment tax credit up to a maximum of $50, Commercial systems that use wind, biomass, or geothermal energy and have a production capacity greater than 600 kilowatts are not eligible for an investment tax credit but are eligible for a production tax credit of 0.35 cents per kilowatt hour of electricity produced. 30

31 Step #7 continued Renewable Energy Sales and Use Tax Exemption The Utah Sales and Use Tax Exemption for Energy Related Equipment and Machinery exempts the purchase or lease of equipment used to generate electricity from wind, solar, biomass, landfill gas, anaerobic digestion, hydroelectricity, and geothermal resources from the state sales tax. A facility is eligible if it has a generation capacity of 20 kw or greater or if it increases its generation capacity by one or more MW as a result of the machinery or equipment. 31

32 Step #7 continued Cash Rebates for Solar and Wind Energy Systems In August 2011, the Utah Office of Energy Development accepted applications on the $1.8 million available in rebates for solar and wind energy systems installations, funded through the federal American Recovery and Reinvestment Act and aimed to stimulate employment in grid-tied renewable energy construction and increase distributed renewable energy capacity. The rebate for residential PV Solar was $1.50 per DC watt with a $4,500 cap for residential and $25,000 for commercial. All systems were subject to reasonable cost and 25 percent of total system cost limits. 32

33 At the Top 33

34 Results Interconnections kw December 31, ,101.2 March 31, ,219 6,

35 2012 Utah Law on Renewable Energy Contracts Customers may select a renewable energy facility. Utility must contract with the customer to allow power to flow over its grid. Customer agrees to pay for all incremental costs associated with the transaction. 35

36 April 10, 2012 Today, we are announcing ebay s largest solar installation to date, atop the Topaz data center. The installation includes a 665 kilowatt (kw) solar power system, designed and installed by SPG Solar, featuring 72,000 square feet of solar panels, covering virtually every inch of roof space on the data center. The installation will produce 924,013 kilowatt hours (kwh) of clean electricity annually, which is equivalent to offsetting 702 tons of greenhouse gas emissions i or planting 136 acres of pine forests. 36

37 Summary Utilities may have incentives to obstruct the use of net metering. Barriers need to be identified and eliminated. In the end, economics may have the largest influence on program results. 37

38 References Utah Net Metering Statute Utah Code Title 54 Chapter 15 - Net Metering of Electricity t h / /TITLE54/54 Utah Interconnection Rule Utah Administrative Code R Electrical Interconnection Utah Dockets of Interest: : In the Matter: of the Consideration of Changes to Rocky Mountain Power s Schedule No Net Metering Service, / indx.html 38

39 References continued T14: In the Matter of: The Solar Incentive Program is a pilot program and will gather information on the viability of a photo voltaic program funded by the Company, participating customers and tax credit, : In the Matter of: the filing of Rocky Mountain Power s Customer Owned Generation and Net Metering Report for the period January 1, 2010 through March 31, 2011, 39