Green Counsel

US Solar Tax Credit Needs Help

The Securing America’s Energy Independence Act (SAEI)(H.R. 550, S. 590) currently has 54 cosponsors in the House and 13 in the Senate. To see the current list of cosponsors, go here. But for the bill to become law, it needs help! To help, copy and paste the text below into an email to your colleagues, family and friends.

Re: Ask Congress to Support Solar Energy!

Dear colleagues and friends,

With clean energy becoming a central issue for the Congress and our country, we have the biggest opportunity yet to jumpstart solar – but we need your help to make it happen. The newly introduced "Securing America's Energy Independence Act" is the largest, most important solar energy legislation ever introduced in this country.

The bi-partisan legislation (introduced in the House as HR. 550 and the Senate as S. 590) would make America's energy future a lot brighter by making solar energy more affordable across the country. In many states, solar would be cheaper than buying electricity from the grid.

Specifically, the bill extends the 30% federal solar investment tax credit (currently set to expire at the end of 2008) for another 8 years, modifies the photovoltaics incentive to $1500 per half-kW of capacity and removes the $2000 residential cap.

Solar energy has the potential to provide much of the electricity our country needs. Temporary financial incentives are necessary to build economies of scale—and extending the tax credits over a longer period gives the solar industry the market certainty necessary to make long-term investments.

Use the link below to email your elected representatives, tell them how important building a clean, renewable energy future is to you, and ask them to co-sponsor the "Securing America's Energy Independence Act.”

Please forward this email on to family, friends and colleagues who support solar energy development in the United States.

http://seia.org/cosponsors.php

Thank you.

Solar Panels Should Be Exempt from Property Tax Assessments

A Trenton Times editorial today discusses NJ homeowners who placed solar panels on their home only to find that the Town Tax Assessor slapped them with a $12,000 increase on the value of their home, leading to a $400 increase in property taxes.

At one time, New Jersey exempted solar panels from property taxes, but the exemption was not renewed in 1988. The Times argues that the exemption should be reenacted and that the tax assessment undermines the state's tax credits that are designed to create an incentive for solar. "Given what we now know about mankind's role in global warming," says the Times, "there shouldn't be disincentives to going green."

Pride of Cucamonga

The New York Times reported today on a creative way that companies such as General Motors, Whole Foods and Staples are using large amounts of reliable solar electricity, and fixing their long term electricity costs with no capital outlay.

The GM warehouse in Cucamonga, CA, for example, now has a photovoltaic array on its roof that can generate 1.5 million kilowatt hours of electricity per year. Although it is expected that the installation will produce half of the building's electricity, it cost GM nothing to build, and is expected to reduce the warehouse's electricity costs by 10%.

The equipment was bought by Developing Energy Efficient Roof Systems (Deers) with the help of private financing and will be owned -- not by GM -- but by Deers. GM signed a long term contract with Deers to buy the electricity substantially below the prevailing regional rate.

Otherwise known as the "solar services model," similar arrangements are cropping up around the country including a project built by Solar Integrated Technologies and financed by GE Energy Financial Services that supplies half the electricity at 23 San Diego schools. One advantage of these projects is that they allow businesses with very narrow margins that cant afford large capital investments on non-core projects, to gain the benefits of distributed, reliable, solar energy at fixed rates. Developers get a reliable return on their investment and get the benefits of tax credits and other rebates offered by states for renewable energy projects. The parties often negotiate who will get the potential credits for reducing carbon emissions.

Whole Foods Market, in a deal with SunEdison with investors including Goldman Sachs, will be using solar cells to provide about 10% of its electricty in four buildings, and plans many more. According to Whole Foods' green mission specialist, "There's just no downside."

They Paved Paradise... and Put Up a PV Lot

Dr. Richard Perez, who does excellent work at the University of Albany demonsrating the viability of solar electricity, just issued this report showing how effective it can be to place solar photovoltaics on parking lots.

The bottom line: there is enough space on parking lots in the Hudson Valley, New York City and Long Island to displace about 15-20% of the region's peak electrical demand with PVs.

Dr Perez's other studies can be found here.

California Dreaming

The New York Times today has an an excellent page 1 article on California's efforts to tackle global warming. Highlights include:

1) California's annual per capita electricity use has been almost flat since the 1970's, as the rest of the country's increased by more than 50%.

2) California's recent decision to cut CO2 emissions by 25% by 2020 is predicted to add $60 billion and 17,000 jobs to the California economy by 2020.

3) A new California law calls for renewable sources to make up 20% of electricity fuels by 2010. And California does not consider large hydro (currently 17% of California's energy portfolio) a renewable source. (New York, by contrast, does, which signficantly lessens New York's commitment to reach 25% renewables by 2013, since 17% of New York's electricity currently comes from hydro, mostly from Niagara Falls.)

4) In August, California passed a bill requiring builders to offer home buyers roofs with solar electric tiles.

5) California -- which for years has required large appliances to be energy efficient -- now imposes similar requirements on cellphone chargers, computers, and remote controlled devices. (It is estimated that chargers and "vampire" appliances that draw power even when they are off use up to 10% of an average home's power).

6) Since 1982, California has "decoupled" utilities sales from profits so that utilities make more money when customers to use less electricity. Every other state rewards utilities for selling more energy.

7) California's huge pension fund, Calpers, is committing just under $1 billion to renewable energy investments.

8) Investor-owned eletrical utilitities in California cannot sign long term contracts to buy energy unless the seller meets stringent emissions standards that cannot exceed those of the cleanest gas-driven plants. Since California represents 40% of the total electricity consumption in the West, this is affecting power producers in the many western states that produce California's electricity.

9) California law prohibits construction of nuclear plants until questions of waste disposal are resolved.

The article is entitled "California, Taking Big Gamble, Tries to Curb Greenhouse Gases." The article fails to note the even bigger gamble that others are taking by doing less.

And on Page 4, a Beautiful Sunny Day

Another typical day of depressing energy/global warming related news from today's New York Times:

"Death Toll is Over 100 in California Heat Wave"
"Exxon Posts $10 Billion Profit"
"Hussein Now Awaits Verdict"
"Today: partly sunny, afternoon thunderstorms [apocalyptic and happening now], high 89"
"Death Toll From Heat in Europe Passes 80"
"Utilities Pay Scientist Ally On Warming"
"Tide of Arab Opinion Turns to Support for Hezbollah"
"Series of Woes Mar Iraq Project Hailed as Model"

But on page 4, a glimmer of hope: "Hot German July Doesn't Faze Farmer Who Reaps the Sun."

The Times reports that as Germany "sizzles through what is expected to be its hottest July on record," a pig farmer from Bavaria has covered his 150 year-old 200-acre pig farm with 10,050 solar panels that can supply power to all 7,000 residents of his village when running at full capacity. The local utility buys the electricity to meet peak demand during heatwaves when air conditioners are running full blast. And the solar famer makes $600,000 per year from the sale of his electricity which will allow him to pay off his loans in 15 to 16 years.

The farm was made possible as a result of Germany's progressive feed-in tariffs that guarantee solar farmers a minimum price for each kilowatt of electricity for twenty years.

To hedge his bets, the German farmer has held on to his pigs. Meanwhile the U.S. energy pigs are hedging their bets by trying to increase fossil fuel drilling in Alaska and in the nation's coastal waters. (See, e.g., Today's NY Times: "Senate Chiefs Plan to Resist Compromise on Energy Bill".)

"Talking 'bout My (Distributed) Generation"

Several years ago, I attended a conference about renewable energy at the Association of the Bar of the City of New York. The City Bar is a great granddaddy of a bar association -- housed in a beautiful but stodgy old building with many of its members hailing from the largest and oldest law firms in New York -- and I was pleased that the City Bar was so forward-thinking to have a conference on renewables.

The conference, however, was immediately disappointing; it was mostly about financing and siting issues relating to large wind projects, with almost nothing about solar, distributed generation or energy efficiency -- the things I was most interested in.

Upon reflection, the reasons were obvious. Clearly, large wind projects were moving forward and law firms wanted the legal work. But beyond that, why is large wind moving forward faster in the U.S. than other renewables? Is it solely that large wind technology is inherently better and more cost efficient than other renewables? Is it a quirk of nature that large wind is more efficient than solar? Or is something else going on?

Whatever technical advantages large wind may have, one major institutional factor favoring large wind is that it fits the model of traditional electricity generation. Although large wind has great environmental benefits, from an energy and economic perspective it is similar to coal, natural gas and nuclear. The power is generated in large facilities and transmitted through the electric grid to consumers. Large wind is financed, sited, developed, and implemented almost identically to how the energy business has been conducted for years by utilities, governments, lenders and lawyers.

By contrast, distributed generation -- where energy is produced at the point of use and every home and business can be an energy producer -- is revolutionary and threatening to those who benefit from the current infrastructure. For that reason (and others), it doesn't receive the same favor from governments as coal, natural gas and nuclear, and is resisted by utilities and other entrenched interests. This is one reason why, for example, utilities in the United States are almost universally against improved net metering laws (that allow locally generated electricity to be put back into the grid). Utilities claim there are "safety" issues, but there doesn't appear to be evidence of danger, and the real reason appears to be that distributed generation is threatening to utilities' income base and method of doing business.

The benefits of distributed generation are great: a more stable grid, more energy security, more efficiency, elimination of transmission costs and waste, and more possibilities for use of renewables such as solar and small wind. Fortunately, the institutional barriers against distributed generation can be largely overcome by good government policies and sufficient incentives to get the industry started, as evidenced by German and Japan. New Jersey and California have made signficant strides, and the province of Ontario just implemented a "Standard Offer Contract" (similar to feed-in tariffs in Germany).

All the states and the federal government need to implement similar programs so that the next City Bar program on renewables will focus on legal issues relating to distributed generation.

Does Your Town Hall Have Solar Panels?

Ours does! This Saturday, May 13, 2006, the Town of Greenburgh, NY (in Westchester County), will have an Energy Conservation Fair when, among other things, they will celebrate the Town Hall's new solar photovoltaic (PV) system.

The PV system is the product of several key decisions demonstrating the best in state and local government. First, several years ago the State of New York won a law suit against a Virginia utility for acid rain from coal plants, and NY Attorney General (and gubernatorial candidate) Elliot Spitzer negotiated that $2.1 million of the settlement would go to New York to install solar energy equipment on government-owned buildings in the state. The fund is administered by the New York Energy Research and Development Authority (NYSERDA), which made the money available by grant to local governments.

Paul Feiner, the Greenburgh Town Supervisor pushed the Town to apply for a grant, and after some opposition and wrangling, he succeeded in getting the project funded and completed. Greenburgh is one of twelve municipalities from New York State that are using this fund to develop solar projects. One of the goals of the NYSERDA funding was to create high visibility projects, and the Town hopes that as a result "businesses and residents will be motivated to pursue solar panels and other energy alternatives at their homes/businesses."

Greenburgh is a clean energy leader for other reasons as well: it has appointed one of the country's few local energy conservation coordinators, Nikki Coddington; and several years ago Greenburgh became the first locality in New York to require new dwellings to comply with New York Energy Star guidelines, ensuring considerably less energy use.

Coddington has organized this weekend's energy fair that will feature exhibitors and speakers to help residents learn about saving energy, energy audits, solar energy, biodiesell, hybrid vehicles, ride-sharing programs, green construction, and buying green power from wind and hydro. The Greenburgh Library is planning to take advantage of geothermal (earth energy) technology when they expand the library.

For more info on the Energy Fair, see the press release.

Extension of Solar Tax Credit Proposed in Washington

An important and necessary extension of the solar tax credit has been proposed in Washington -- "Securing America's Energy Independence Act"  -- which would extend the solar tax credit for eight years and increase the credit cap from $2000 per system to $2000 per kilowatt.   Because this would extend the credit for eight years (from two years), it is much more likely to help build the solar industry.  According to Renewable Energy Access, "A long-term extension, [experts] say, is essential to reducing the cost of solar energy, as it would create market conditions that allow solar companies to make investments and drive down costs through economies of scale."

Net Metering Bill in CT Needs Help

Renewable energy (such as PV) is booming in states such as California and NJ where there are subsidies (that help compensate for the subsidizes received by traditional energy producers) and where there is a fair legal and regulatory environment. One of the major needs is for net metering -- a mechanism that allows distributed electricity producers to place their excess electricity onto the grid and receive a credit on their electric bill. Their electric meter literally goes backwards -- hence "net metering."  This is important because renewable energy sources such as PV are intermittent frequently producing excess electricity in the day that would be wasted if it could not be sold back into the grid.

New Jersey -- that permits net metering up to 2 MW -- currently has the best net metering law in the United States, and the solar business is booming.  New York by contrast excludes commercial application and has limits of 10 kW for residential solar (25 kW for residential wind; and 125 kW for farm-based wind); as a consequence, there are many new installations of small residential solar in NY, but commercial PV applications are much rarer.

There is an important, pro-renewable energy bill in the Connecticut legislature, that has become stalled in the final days of the session: Substitute Bill No. 211, An Act Concerning Renewable Energy. Among other things, the bill would 1) increase net metering limit from 100 kilowatts to 1 megawatt; 2) increase the net metering carryover period from 1 month to 12 months; and 3) exempt solar systems from the sales tax. 

The Solar Energy Business Association of New England is requesting that Connecticut legislators be contacted, asked to move the bill forward and told that it is an important bill for the environment and the solar energy industry. Obviously, contacts from Connecticut residents will carry the most weight. Legislators to contact:  Representative Fontana steve.fontana@cga.ct.gov 860-240-0434 Senator Fonfara fonfara@senatedems.ct.gov 860-240-0043; Representative DelGobbo kevin.delgobbo@housegop.state.ct.us 860-240-8700;Senator Herlihy thomas.herlihy@cga.ct.gov 860-240-0436