Groton, VT – Notice of Public Hearing

PHOTOVOLTAIC SYSTEM

The Town of Groton is considering entering an agreement to install a 26 array photovoltaic system on property owned by the Town between Clarks Landing and Wells River, VT. A public hearing will be held at the Groton Town Hall, 1476 Scott Highway, Groton, VT 05046 at 7 pm on Wednesday, September 1, 2010, to obtain the views of the citizens of the community on the entire project.

The electricity generated by the system will offset 100% of the cost of electricity that the Town of Groton pays Green Mountain Power each year, and 40% of the energy needs of Blue Mountain School.

Under a proposed agreement, Groton and Blue Mountain Union School would pay $1,000 to AllEarth Renewables to install the arrays. They would them pay AllEarth 19¢ per Kilowatt hour generated by the system. Green Mountain Power will credit the Town and BMU 19.2¢, plus 6¢ for the solar incentive.

Copies of the proposed agreement are available at the Town Clerk’s Office, 1467 Scott Highway, Groton, VT 05046 and may be viewed during the hours of 9 am to 5 pm on Monday, Tuesday and Thursday, and 9 am to noon on Wednesday and Friday.

Public Hearing Notice from ‘The Bridge Weekly Sho-Case’, August 24, 2010, page 24

Local Renewable Energy and Smart Grid Efforts

WASHINGTON, August 26 – Sens. Patrick Leahy (D-Vt.) and Bernie Sanders (I-Vt.) and Rep. Peter Welch (D-Vt.) today announced $5.7 million in federal funding to help Vermont households utilize “smart meter” systems and install solar thermal and solar hot water technologies.

The non-profit Vermont Energy Investment Corporation, which operates Efficiency Vermont, will administer a $700,000 project to complement smart grid technology being deployed across the state due to an earlier $69 million stimulus investment.  This outreach project will install energy use monitors and provide information and access to technical support to help approximately 750 low-income households better understand their energy use and identify savings opportunities.

In addition, the U.S. Department of Energy’s Weatherization Assistance Program has awarded $5 million in federal stimulus funding for solar thermal and solar hot water technologies through local agencies in Barre, Burlington, Derby, Hinesburg, Rutland, St. Johnsbury, and Westminster.

Leahy said, “Vermont is a national leader in using the Weatherization Program’s stimulus funds for cost and energy savings for low-income households.  It’s encouraging that so many local agencies have come together to ensure that these investments are made in our state.  With our older housing stock and longer winters, these investments are likely to save Vermont families far more than the national average of $400 a year in reduced energy costs.”

Sanders said, “There is little doubt in my mind that in the years to come the energy mix in this state will be very different than it is today – with a far greater reliance on energy efficiency and sustainable energy.  This federal support will be a major step forward in moving our state toward a greener economy.”

Welch, a member of the House Energy and Commerce Committee and author of the Home Star Energy Retrofit Act, said, “For years, Vermont has led the way in showing the nation that investing in energy efficiency creates jobs, saves homeowners money and reduces harmful carbon emissions. This additional $5.7 million award recognizes Vermont’s past successes, while paving the way for future savings.”

The funds also may be used to promote bulk buying strategies and cooperative partnerships in buying solar technologies in order to lower the costs of materials.  Community-based marketing approaches to help families save energy and money also may be funded under the grants.

The Vermont grant recipients were among 120 organizations across the country selected to receive $120 million under the U.S. Department of Energy’s Weatherization Assistance Program.

The Bennington-Rutland Opportunity Council, Inc., located in Rutland, will receive $900,000.

The Central Vermont Community Action Council, Inc., based in Barre, will receive $900,000.

The Champlain Valley Office of Economic Opportunity, Inc., located in Burlington and Hinesburg, will receive more than $1.1 million, and will undertake program management and evaluation in addition to the project.

The Northeast Employment & Training Organization, Inc., based in Derby and St. Johnsbury, will receive $900,000.

The South Eastern Vermont Community Action, Inc, located in Westminster, will receive over $900,000.

Vermont leads the nation in taking dramatic steps toward energy efficiency. By making low-income homes more energy efficient, families save an average of $437 on their energy bills, according the U.S. Department of Energy.

Contacts:
Michael Briggs (Sanders): 202 224-5141
David Carle (Leahy): 202 224-3693
Paul Heintz (Welch): 202 226-8346

For Immediate Release:

Packed Room Learns About the Economic Benefits of Feed-In Tariffs

Speakers discuss employment, tax, and investment benefits of FITs at Capitol briefing

Sacramento – The FIT Coalition hosted an educational briefing on the economic benefits of Feed-In Tariffs (FITs) in a packed State Capitol committee room on Wednesday.  Featured speakers included Dan Pellissier, Deputy Cabinet Secretary for Governor Arnold Schwarzenegger, Mary Nichols, California Air Resources Board Chairman, Hans-Josef Fell, Member of the German Parliament and co-author of Germany’s Renewable Energy Sources Act, and Craig Lewis, FIT Coalition Executive Director.  Dan Jacobson of Environment California moderated the briefing.

The standing room only crowd heard evidence on how Feed-In Tariffs provide tremendous economic benefits.   FITs are fixed price, long-term contracts that require a utility to buy electricity produced by renewable energy generators.  Pellissier opened the discussion remarking that, “Feed-In Tariffs are completely in line with the Governor’s approach to increasing renewable energy generation in California and transitioning the state to a clean energy economy.  While it is too soon to know whether the Governor would sign a specific measure, we’re hopeful that the Coalition can get a good Feed-In Tariff bill to the Governor’s desk this year.”

Hans-Josef Fell presented a compelling presentation on how Germany has been able to deploy more solar and wind projects than any other country of comparable size because of their robust Feed-In Tariff.  He went on to highlight the phenomenal economic benefits that come with such growth.  “In the 10 years of our FIT program, people employed by the renewable energy industry have increased 10-fold.”  In referencing cost, Fell explained, “For the price of about one beer per month per household, the German people are importing 6 billion Euros less of fossil fuels per year and getting 16% of their energy from renewable sources.”

California Air Resources Board Chairman Mary Nichols said Feed-In Tariffs complement California’s landmark climate law, AB 32, which requires the state to reduce global warming emissions to 1990 levels by 2020.  “A well-crafted FIT would help Californians get where they need and want to be on cleaner air and more efficient energy – only faster,” Nichols said. “It would help launch thousands of renewable energy projects across the state quickly and cost-effectively.”

Craig Lewis dove into the details of a FIT legislative proposal called the REESA, or the Renewable Energy and Economic Stimulus Act, which will be introduced in the 2011 legislative session in California.  Lewis explained, “The REESA creates a statewide FIT for renewable energy projects up to 20-megawatts (MW) in size that would deliver an incremental 2% of California’s energy every year through 2020.”    Lewis explained how FITs work by removing barriers and leveling the playing field.  “By having a set price for each type of renewable technology – solar, wind, biomass, etc. – investors and developers can start their renewable energy projects with confidence and ease knowing that utilities will interconnect their projects and purchase the generated power at a known price.  The fact that FITs are simple, fair, and effective is the reason that FITs are responsible for the vast majority of renewable energy that has been deployed in the world.”

Lewis also presented the findings of a recent UC Berkeley study, led by Professor Dan Kammen, showing that a comprehensive FIT would create 3 times the number of jobs, over $2 billion in additional tax revenue, and stimulate tens of billions in new investment in the state compared to current models for how California will reach its 33%-by-2020 Renewable Portfolio Standard goal.  “The UC Berkeley study shows that FITs are the best policy mechanism for accelerating the deployment of cost-effective renewables while delivering tremendous economic benefits.  The State of California must act to leverage this unparalleled opportunity for creating hundreds of thousands of jobs, attracting tens of billions in renewable energy investment, and yielding billions to the State through increased tax revenue.  It’s a win-win-win for California,” concluded Lewis.

Moderator Dan Jacobson wrapped up the briefing by summing up the economic benefits of Feed-In Tariffs in the following manner, “Thousands of new jobs with no tax payer money used.  Now that is clean energy policy that works.”

The FIT Coalition is a leading force in replicating Feed-In Tariffs and other global renewable energy best-practices throughout the United States.  The FIT Coalition’s mission is to identify and advocate for policies that will accelerate the deployment of cost-effective renewable energy. The FIT Coalition believes the right policies will result in a timely transition to renewable energy while yielding tremendous economic benefits, including new job creation, increased tax revenue, and the establishment of an economic foundation that will drive growth for decades.  The FIT Coalition is active at the national, state, and municipal levels.

For further information on the FIT Coalition, please visit www.FITCoalition.com.

Contact:              Mircalla Wozniak

Mircalla@FITCoalition.com

415-448-7734

Please join us for a PACE stakeholder update conference call on Wednesday, July 14th at 1pm EST.   We will have a limit in participants so please RSVP  as soon at possible to PACEcallin@gmail.com to ensure your participation.    There is strong support in Washington for PACE legislation and with your help we can clear the final hurdle for PACE financed retrofits.

In advance of the call, please consider what support letters you can help shepherd (municipal leaders, state legislators who sponsored state PACE enabling legislation).

Call information:    July 14th, 1PM EST Toll-free: 866-506-1209/ Participant: 7183152#  RSVP to PACEcallin@gmail.com

Date: July 8, 2010
To: PACE Stakeholders
From: PACENow
RE: PACE Legislation Conference Call So our Nation’s PACE Programs Can Proceed!

Conference Call Information:   July 14th, 1PM EST.   Toll-free: 866-506-1209/ Participant: 7183152#  RSVP to PACEcallin@gmail.com

We are writing to enlist your support for legislation that will permit our nation’s PACE trials to proceed (click here for description of PACE innovation). Over the past year, due to your support and hard work,  20+ states have passed PACE enabling legislation and a 24 month trial for nationwide PACE programs supported by DOE ARRA funds was set to begin this month. Unfortunately, on July 6th the FHFA and OCC (“The Regulators”), announced their  plan to block the trial period for our nation’s PACE programs by both treating PACE financing’s as mortgage defaults and by red lining PACE communities with additional borrower requirements that would be prohibitively costly (link to FHFA announcement & OCC announcement).  As Governor Schwarzenegger points out, this action by the Regulators also challenges the 100+ year history of tax assessments being managed by local government (link to Governor Schwarzenegger letter).

The veto by the Regulators is very surprising as this was a trial period, which was designed by DOE, HUD, NEC and CEQ, and was the means to test PACE and its benefits.  Moreover, the Regulators could block PACE at the end of the trial period if the results proved unsatisfactory.  The Regulator criticisms of PACE consisted of the senior lien status of PACE and a number of old concerns that were solved by a White House led inter-agency task force (and which FHFA provided feedback to).  The Regulators also ignored specific proposals made over the last few weeks to the FHFA’s general counsel, Alfred Pollard, from senior administration officials and PACE stakeholders. Put simply, the Regulators ignored the immateriality of the risk given the safeguards that were developed (click here for White House PACE Best Practice requirements) and the fact that that this was designed specifically as a 24 month trial period – yes a trial period that they retained the full power to stop at the end.  Listed below in Item 1 is a chronology of the FHFA/OCC concerns and how they were either solved or proposed to be solved (see Item 3 below for regulators who supported the PACE veto).

Our nation’s leadership wrote to the FHFA to permit these programs to proceed so we could gather the necessary data on this innovation and determine the benefits to homeowners, lenders, job creation and energy security (see below Item 2 list of 50 of our nation’s political leaders who wrote to the FHFA). Unfortunately, due to scars from the sub-prime crisis, the banking regulators did not focus on the facts.  Instead, they chose to raise the fear associated with our nation’s mortgage crisis in an attempt to block a program that has the potential to benefit all stakeholders – and that they could have curtailed if the trial proved unsuccessful.

We encourage you to work aggressively with us on legislation so the PACE can proceed as planned by the DOE, HUD, NEC and CEQ. These nationwide trials will provide the necessary data to determine if PACE can accelerate the much needed retrofit of our nation’s built environment without harming stakeholders, as the PACE supporters believe.

For municipal supporters of PACE we will have a draft of a sign on letter that will be sent to congressional leadership ready for distribution shortly.

Thank you for your continued work on this important initiative.  We have made great strides over the last year and the legislative cure is the final hurdle to unlock the potential of retrofitting our nation’s homes and buildings.

__________________________________________________________

Item 1:  Chronology of Regulator Critique of PACE and Solutions Developed Yet Ignored by FHFA/OCC:

• Regulator Critique 1: “PACE does not have ample protections for consumers and lenders and needs more safety and soundness data”
• Solutions:
  1.     White House Inter-Agency Task Force develops consumer and lender protections (click here for White House Best Practice Consumer/Lender protections)
  2.    Safety and soundness protections developed above and requirement for trial period data to review success of safety and soundness (click here for June 8th letter discussing safety and soundness – see items 5 & 6)

• Regulator Critique 2: “PACE will be bad for existing mortgage lenders because PACE is a senior lien”
• Solution: Two improvements were made to the nationwide standard to improve homeowner cash flow/reduce potential risk to below $200 per home:
  1. PACE financed retrofits would target cash flow positive/reduce mortgage delinquencies – The Administration agreed to require that homeowners only do retrofits where the savings in year 1 would exceed the annual assessment – such that the homeowner’s cash flow would improve and the risk of mortgage default would go down. Note: Sonoma county, the largest PACE county in our nation, is experiencing tax delinquencies on PACE homes that is 60% below non-PACE homes – a testament to the potential of PACE to benefit all stakeholders, including existing mortgage lenders.
  2. PACE senior lien status limited to past due payments – One of the biggest criticisms from FHFA was that in a foreclosure the PACE lien gets paid before the mortgage. This risk was cured by requiring that PACE programs only permit past due PACE payments when a home is in foreclosure (typically 1 year of payments out of a total of 15 years) to be paid senior to the existing mortgage. The remaining PACE balance and future payments would be assumed by the new home purchaser. This modification reduced PACE senior lien exposure from the full balance of the retrofit (approximately $15,000 on average) to only the delinquent back payment (approximately $1,500).  The $1,500 of potential senior lien risk is further reduced by fact that mortgage defaults range from 5% to 10% so that the potential exposure would be $75-$150 per PACE home.

• Regulator Critique 3: “The PACE trials are too broad”
• Solution: FHFA/OCC were offered a cap on the PACE trial of 270,000 homes nationwide (see letter to Alfred Pollard, FHFA, with cap proposal – see section 2 – II).      FHFA never responded to this offer.

• Regulator Critique 4: “We need a debt to income test”
• Solution: The cash flow positive requirement alleviated the need for a debt to income test but when the Regulators continued to insist, FHFA/OCC were offered a debt to income test but never responded but instead argued in the July 6th letter there were no debt tests (see letter to Alfred Pollard with Debt to Income test proposal – see section 2 – III).

• Regulator Critique 5: “We need truth in lending disclosures”
• Solution: FHFA/OCC were offered Truth in Lending disclosures but never responded and again argued in the July 6th letter that truth in lending was a problem (see attached letter to Alfred Pollard – see section 2 – V)

• Regulator Critique 6: “PACE assessments are unusual and will challenge lenders, servicers, and mortgage investors”.
• Solution: Created a trial period and capped total number of homes.  FHFA/OCC never responded.  In addition, there are 37,000 assessment districts where homeowners, lenders, servicers and mortgage investors deal with assessments (for sewers, common sidewalks, etc….).  See Paul Hastings legal opinion on PACE assessment districts (link here).  Finally, given that PACE in the trial stage is immaterial, mortgage investors have had no issue with it (note: a number of mortgage backed deals have been successfully issued with PACE disclosures).

Item 2:  Political leaders who have written to FHFA so that our nation’s PACE trials can proceed:

To see actual letters click here and go to section 7A (link)

Senators: Mark Begich (AK), Michael Bennet (CO), Jeff Bingaman (NM), Russ Feingold (WI), Kirsten Gillibrand (NY), Mary Landrieu (LA), Jeff Merkley (OR), Bernard Sanders (VT), Charles Schumer (NY), Jeanne Shaheen (NH), Tom Udall (NM), Mark Warner (VA), Ron Wyden (OR)

Members of Congress: Tammy Baldwin (WI), Timothy Bishop (NY), Earl Blumenauer (OR), Russ Carnahan (MI), Gerry Connolly (VA), Bob Filner (CA), Barney Frank (MA), Gabrielle Giffords (AZ), John Hall (NY), Martin Heinrich (NM), Maurice Hinchey (NY), Rush Holt (NJ), Mike Honda (CA), Jay Inslee (WA), Steve Israel (NY), Peter King (NY), Barbara Lee (CA), Zoe Lofgren (CA), Ben Ray Lujan (NM), Betsy Markey (CO), Jim McDermott (WA), Bill Pascrell, Jr. (NJ), Tom Perriello (VA), Jared Polis (CO), Tim Ryan (OH), John Salazar (CO), John Sarbanes (MD), Jackie Speier (CA), Betty Sutton (OH), Paul Tonko (NY), Chris Van Hollen (MD), Henry Waxman (CA)

Governors & Mayors: Governor’s Richardson (NM), Ritter (CO), Schwarzenegger (CA); Mayor’s Bloomberg (NYC), Newsom (SF)

Attorney Generals: Edmund Brown (CA)

Item 3:  Regulators who supported PACE block:

• Alfred Pollard, General Counsel, FHFA alfred.pollard@fhfa.gov (202) 414-3788
  Edward DeMarco, Acting Director, FHFA  Director@FHFA.gov (202) 414-6923
  ·      Mario Ugoletti, Deputy Director, Office of Financial Institutions Policy, FHFA mario.ugoletti@fhfa.gov (866) 796-5595
  ·      Marianne Sullivan, Senior Vice President, Single-Family Chief Risk Officer, Fannie Mae marianne_sullivan@fanniemae.com (202) 752-7000
  ·      John Forlines, Vice President for Credit Risk Management, Fannie Mae John_Forlines@fanniemae.com (202) 752-7000
  ·      Pam Holland, Legal, Fannie Mae pam_holland@fanniemae.com (202) 752-7000
  ·      Marvin Shaw, Senior Attorney, Office of Thrift Supervision marvin.shaw@ots.treas.gov (202) 906-6639
  ·      Patricia McClung, Vice President, Offerings Management/Affordable Lending, Freddie Mac patricia_mcclung@freddiemac.com (571) 382-4400
  ·      Lisa Ledbetter, Legal, Freddie Mac Lisa_ledbetter@freddiemac.com (703) 903-2000
  ·      Joseph A. Smith, Group Leader, Retail Credit Division, Office of the Comptroller of the Currency (202) 874-5170 josepha.smith@occ.treas.gov
  ·      Timothy W. Long, Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner, Office of the Comptroller of the Currency (202) 874-2870 tim.long@occ.treas.gov
  ·      Suzy Gardner, Senior Examination Specialist, FDIC BGardner@FDIC.gov (202) 898-3640
  ·      Virginia Gibbs, Senior Supervisory Financial Analyst, Federal Reserve Board gibbsv@frb.gov (202) 452-2521
  ·      Susan Eckert, Director, Retail Credit Policy, Office of the Comptroller of the Currency susan.eckert@occ.treas.gov (202) 874-5170

July 8, 2010

By Paul Gipe

The Los Angeles Business Council (LABC) today released a report calling for a modest solar photovoltaic (PV) feed-in tariff program in the City of Angels.

The second of two reports by UCLA’s Luskin Center lays out a detailed economic proposal for creating a multi-tiered system of feed-in tariffs (FIT) for solar PV that would result in 600 MW of solar PV within ten years.

The proposal’s limited objective will contribute to only 3% the city’s electricity supply in 2020. Further, LABC’s proposal considers only solar PV and not any other form of renewable energy.

However, the study itself, Bringing Solar Energy to Los Angeles: An Assessment of the Feasibility and Impacts of an In-basin Solar Feed-in Tariff Program weighs the costs and benefits of a program installing up to 1,000 MW of solar PV by 2020, the equivalent of 5% of electricity supply under conditions in southern California.

LABC proposes to use only 10% of the more than 5,500 MW of rooftop solar PV potential in the city identified by the UCLA study. UCLA found that the City of Los Angeles has the potential of 1,000 MW from projects of 5-10 kW, and another 1,500 MW from projects of 10-50 kW of rooftop solar PV. There is an additional 1,800 MW of potential from projects of 50-500 kW.

UCLA estimated that there is 3,300 MW of solar PV that is “economically available” today. LABC’s proposal would tap only 20% of that potential by installing 60 MW per year for ten years.

The report defends its timid request by noting that the “goal is large relative to other FIT programs implemented in the U.S.” Restricting the report’s purview to only the weak feed-in tariff programs in the US will no doubt play well with US general-interest media. However, the trade press and certainly the foreign language trade press will be less tolerant.

Fortunately for LABC, the report does not compare their proposal to the open-ended feed-in tariff policy in Ontario, Canada.

Ontario’s feed-in tariff program has stimulated nearly $9 billion in new capital investment in the province since it was launched late last year. There are nearly 1,000 MW of contacts or contracts pending for solar PV alone in Ontario today. And, unlike the LABC proposal that limits the feed-in tariff to solar only, Ontario’s program includes wind, hydro, biomass, and biogas. Ontario also encourages local ownership by offering special bonus payments for farmers and community groups.

LABC’s limited objective is surprising giving the report’s generally bullish outlook on solar PV in the Los Angeles basin. According to the UCLA study, “Los Angeles can still feasibly incorporate gigawatts of this latent rooftop solar capacity more cost-effectively than virtually any other place in North America.” This begs the question: If solar PV in Los Angeles is so attractive, why then is the target so low?

Nevertheless, there are gems in the meaty report. For example, the UCLA study outlines the first multi-tiered differentiated solar PV tariffs in the US. Ontario, Canada implemented solar PV tariffs in 2009 with five tranches, Both Indianapolis Power & Light and Gainesville Regional Utilities offer solar PV tariffs in two tranches. UCLA studied three tranches: two rooftop tranches and one tranche for groundmounted systems.

And the report is one of the few to not only openly acknowledge that the US system of solar tax credits favor certain forms of corporate development over individuals and non-profits, but also to suggest that this inequity be addressed. “The interaction between tax-based incentives and FIT payments should be anticipated and pro-actively addressed by program administrators,” says the UCLA study. Despite this, there is only one tariff track in the report.

UCLA’s tariff calculations are all based on installations using the full 30% federal tax credit and accelerated depreciation. Significantly, the UCLA report says that without federal tax credits and depreciation, the $0.30 per kWh tariff would have to rise to $0.43 per kWh to produce the same level of profitability, an increase of more than 40% to compensate for the loss of federal benefits.

UCLA estimates that the LABC proposal will result in 11,000 jobs and at full build out result in 600 MW of solar PV generating 800 million kWh per year or 3% of supply.

Currently, LADWP generates 76% of its 26 TWh per year supply with fossil fuels, the majority coal.

The proposal would have to be approved by Los Angeles’ fractious city council and then implemented by the Los Angeles Department of Water & Power (LADWP) before it would go into effect.

The LABC has begun a campaign to raise its proposal to city council. Toward that end they have created a coalition of business groups to support the effort: LABC Solar Feed-in Tariff Coalition.

• Solar PV in Los Angeles: The Emperor Has No Clothes Says UCLA–Report Calls for Designing Feed-in Tariffs That Work . . . The blockbuster report could have profound repercussions on renewable energy policy not only in Los Angeles, but also in California. . .

• Bringing Solar Energy to Los Angeles: An Assessment of the Feasibility and Impacts of an In-basin Solar Feed-in Tariff Program

-End-

Paul Gipe
661 325 9590, 661 472 1657 mobile
pgipe@igc.org, www.wind-works.org

At a recent REVermont Energy Conference in Manchester, VT., Paul Gipe‘s keynote address encouraged Vermont to take the lead in the US for renewable energy – that we are in the position to do so, more than any other state, due to our lead with our renewable energy policies. Gipe encourages us to raise or do away with this limiting ‘cap’ on the FiT policy.  Germany has been able to accomplish so much more than we have in this country – Ontario is taking a strong move into renewables, as well.

We hope that this limiting factor changes soon so that we can move forward … to expedite and enable us to meet our energy needs with renewables.  Let your state representatives know how you feel about this!

7 July 2010
For Immediate Release:

UC Berkeley Study Touts Economic Benefits of a Feed-In Tariff

Analysis shows unparalleled job growth, tax benefits, and investment potential of a comprehensive FIT achieving the 33% RPS

Berkeley – University of California, Berkeley announces today the results of a study examining the economic benefits of a comprehensive Feed-In Tariff (FIT).  The analysis shows that enacting a robust FIT in California to achieve the state’s 33% Renewables Portfolio Standard (RPS) would create 3 times the number of jobs, over 2 billion in additional tax revenue, and stimulate tens of billions in new investment.  Furthermore, the adoption of a comprehensive FIT will cost-effectively fulfill California’s 33%-by-2020 goal on schedule.

Headed by Distinguished Professor of Energy Dan Kammen of UC Berkeley’s Energy and Resources Group, the analysis examined the economic benefits of a FIT deployed in California to facilitate the state’s effort to achieve the 33% RPS by 2020.  A FIT is essentially a fixed price, long-term contract for a utility to buy electricity produced by renewable energy generators.  The Berkeley study specifically examined a FIT that would be available to solar projects up to 20 megawatts (MW) in size.  Professor Kammen and his colleague Max Wei studied the impact of such a FIT on employment, tax revenue, and investment compared to current RPS scenarios being modeled by California regulatory agencies.

The study’s key findings include that three times the number of jobs will be created if a FIT is enacted to complement the RPS.  This translates into roughly 280,000 more jobs over the next decade, or an average of 28,000 jobs per year, with more jobs created in the early years because wholesale distributed generation (WDG) projects can come online quickly.  Another key finding includes over $2 billion in additional tax revenue for the state.  Further, the study found that a comprehensive FIT would stimulate up to $50 billion in new private investment in the state with the potential for those renewable energy projects to be eligible for another $15 billion in federal tax benefits.

Craig Lewis, Executive Director of the FIT Coalition, expressed his enthusiasm for the study, “Dan Kammen and his group at UC Berkeley are the most knowledgeable experts on the renewable energy and economic considerations that were examined in this study.  The conclusions confirm the FIT Coalition’s unvarying position that FITs are the best policy mechanism for accelerating the deployment of cost-effective renewables while delivering tremendous economic benefits wherever FITs are designed to achieve scale. This study will open many policymakers’ minds to the unparalleled benefits of FITs and their ability to unleash the wholesale distributed generation market segment.”

“I’ve worked closely with state and national policymakers providing research on renewable energy and economic policies to help craft legislation.  In examining the effects of a FIT in California, I was pleased at what the policy could do for the state. The economic benefits are clear.  A FIT policy that is sized to the state’s RPS goals would produce significant distributed renewable energy generation growth across California – creating jobs, attracting investment and helping alleviate state budget issues.  These key results should be carefully considered by policymakers across the political spectrum,” said Kammen.

“This report demonstrates the benefits of using a feed-in tariff as one of the tools to achieve job creation and get our economy back on track in addition to achieving energy independence and reducing our need for fossil fuels.  It is a wonderful guide to the kind of policies that will get us to a more prosperous and sustainable energy economy.  I am grateful to Dan Kammen, Max Wei, and their colleagues for continuing to produce the kind of solid analysis we need to make better policy decisions,” stated Senator Fran Pavley (D-Agoura Hills) in review of the report.

“Today, utilities are already having trouble reaching their renewable portfolio standards.  This study shows that a Feed-In Tariff can help California create a greener, more sustainable energy supply system.   Feed-in tariffs can not only help reduce our dependence on dirty energy but, if done properly with sufficient public input, should also lead to well-paying jobs for Californians,” said Assemblymember Ira Ruskin (D-Redwood City) in response to UC Berkeley’s findings.

Commissioner Jeff Byron at the California Energy Commission reviewed the study and had the following to say, “The work of the Renewable and Appropriate Energy Laboratory verifies the conclusions of the Energy Commission regarding Feed-In Tariffs and why we have supported their adoption in the past.  I hope my colleagues at the CPUC are persuaded to expand their previous FIT decision to 20 MW with unlimited applications.  As the UC Berkeley Study shows, job creation and capital investment opportunities are compelling reasons to expand this renewable policy mechanism and require utilities to implement FITs.”

Araceli Ruano, Senior Vice President and Director of California’s Center for American Progress office, had the following to say on the UC Berkeley report, “The Center for American Progress has conducted extensive research that shows Americans are ready to embrace clean energy and the policies needed to make the transition to a clean energy economy.  The UC Berkeley report demonstrates that feed-in tariffs are a powerful tool that can make that change possible while delivering tremendous economic benefits from day one and providing significant savings to ratepayers within a few years.”

“The Los Angeles Business Council supports the findings of the UC Berkeley report saying that a well-designed FIT will create steady growth in renewable energy deployments, which will spur job creation and increased tax revenue in one of the most important industries to American economic leadership over the coming decades,” commented Mary Leslie, President, Los Angeles Business Council.

Hanafi Fraval, President of Innate Energy California, LLC, a biomass technology company that converts waste to energy, also received an advance copy of the report.  Fraval remarked, “This report is significant because it underscores the need for California to quickly put policies in place that help small renewable energy generators get going.  A FIT will help companies like mine create a boom in jobs and revenue for the state while developing our clean energy industry and bringing our cost of energy down over time.  It is imperative that policymakers act quickly on the findings of this study by implementing a comprehensive FIT to fulfill the 33% RPS.”

For details on the study’s methodology, please see the accompanying summary or view the entire report at http://www.fitcoalition.com/economic-benefits-of-a-fit/.

The FIT Coalition is a leading force in replicating Feed-In Tariffs and other global renewable energy best-practices throughout the United States.  The FIT Coalition’s mission is to identify and advocate for policies that will accelerate the deployment of cost-effective renewable energy in the United States. The FIT Coalition believes the right policies will result in a timely transition to renewable energy while yielding tremendous economic benefits, including new job creation, increased tax revenue, and the establishment of an economic foundation that will drive growth for decades.  The FIT Coalition is active at the national, state, and municipal levels.

For further information on the FIT Coalition, please visit www.FITCoalition.com.

Contact: Mircalla Wozniak   Mircalla@FITCoalition.com
415-448-7734

June 28, 2010

In a dramatic display of the power feed-in tariffs have in driving markets, Italy installed more solar photovoltaics (PV) in 2009 than the entire US. Moreover, within the first quarter of 2010, Italy’s total installed solar PV capacity was expected to exceed that of the US.

Italy installed 720 MW of solar PV in 2009, nearly all of that on rooftops. In contrast, the US installed 435 MW during the same period, according to a draft report by the Interstate Renewable Energy Council (IREC).

Italy introduced a system of feed-in tariffs for solar PV in February, 2007 after concluding that the previous program of Tradable Green Certificates was not delivering the results desired.

By the end of 2007, Italy had installed five times more solar PV than in the previous year. Despite numerous bureaucratic roadblocks, the solar industry took off in 2008 and installed nearly 350 MW, then a record-breaking number. Solar PV installations have been doubling since then and are expected to reach 1,500 MW in 2010.

Italy is three-fourths the size of California, with which it is often compared because of their similarly-sized economies. Italy has a population of 60 million, to California’s 40 million. The population of the US is five times that of Italy.

Italy is now the world’s second largest annual market for solar PV, after Germany.

IREC estimates that there were 1,250 MW of total installed solar PV capacity in the US at the end of 2009. Currently, the US is installing 40-50 MW per month, and Italy 125 MW per month. At this pace, Italy surpassed the US in total installed PV capacity before the end of the first quarter and likely by the end of February, 2010.

Italy is installing more capacity–250 MW–every two months than California is installing per year.

By the end of 2010, Italy will have a total installed capacity of more than 2,500 MW. This is two and one-half times more capacity than expected in California, and one and one-half times more than expected in the US.

Italy’s 2007 decree also set a solar PV target of 1,200 MW. They reached their target earlier this year.

Unlike Spain, the government has no plans to cut the program dramatically. The proposed revision to the feed-in tariff program (conto energia), currently waiting approval, reduces the tariffs and sets a new target of 3,000 MW for the three-year period from 2011 to 2013. The revisions are expected to be approved sometime this summer. The proposal cuts the tariffs 18% in three equal steps of 6% during each of the first three quarters in 2011.

According to Gruppo Imprese Fotovoltaiche Italiane (GIFI), 93% of all solar PV in Italy is installed on rooftops in distributed applications.

Data from Gestore dei Servizi Energetici indicates that about one-fourth of all Italian solar PV installations are less than 20 kW in size, or about 300 MW.

• <3 kW: 6%
• >3 kW<20 kW: 21%
• >20 kW<200 kW: 23%
• >200 kW<1,000 kW: 36%
• >1,000 kW: 14%

-End-

According to an article on TimesArgus.com, a Williamstown, Vermont 16-acre property site off Exit 5 of Interstate 89 is slated to become the largest solar farm in the state. Triland Partners, a Massachusetts firm is submitting plans to transform a gently sloping plateau into a 2.1 megawatt solar farm with 8,948 solar panels.

The Williamstown Selectboard has approved a waiver that should expedite the state Public Service Board’s pending review of the project and TriLand Partners is expected to submit a formal petition to the Board early next month. The location is in “close proximity of Washington Electric Cooperative’s existing three-phase service line,” according to TriLand’s managing general partner. The renewable energy generated by the proposed solar farm would be sent onto the state’s electric grid in keeping with the Vermont Energy Efficiency and Affordability Act. The law, which was passed in 2008, established a mandate of producing 25% of the state’s energy from renewable sources by 2025.

Documents filed with the town suggest a “nominal upgrade” to existing transmission system would be needed to accommodate the interconnection, which would be financed by TriLand.  The base of the sloping panels, which would be grouped in arrays of 12 to 24, would be roughly four feet off the ground and with the tops between eight and nine feet off the ground. However, documents indicate the topography of the site, coupled with surrounding woodlands, should mean the solar farm won’t be “… highly visible from public viewing locations.”

In addition to the nearly 9,000 solar panels, the plan also calls for the construction of two pre-engineered metal structures, each of which will house four 260-kilowatt inverters needed to convert photovoltaic electricity from direct current to alternating current so that it can be safely conducted to the grid. The buildings, which will each be 10 feet high, nine feet wide and 36 feet long, will be located on the eastern perimeter of the field and screened in order to minimize visibility from abutters and adjacent roads, according to Garden.

The company says ornamental fencing will be installed along the Route 64 portion of the property as a security measure and the existing entrance to the property, which is part of the designated Vermont Association of Snow Travelers snowmobile trail network, will not be disrupted. A kiosk to provide info about the solar project and Williamstown history is also planned.

When the federal government approved the Cape Wind project in April, allowing 130 power-generating turbines to be placed in the waters off Cape Cod, it gave a significant boost to the prospects of wind energy. The comparatively high costs of wind power, however, remain a problem. But in a study, MIT researchers have concluded that some of the price problems associated with wind power can be remedied right now, given a couple of changes to the electricity grid.

“Everyone knows advances in technology are critical for more widespread use of clean energy, but effective operations are also vital for profitability and can help us take advantage of current opportunities,” says Jarrod Goentzel, director of the MEng in Logistics (MLOG) program at MIT’s Center for Transportation and Logistics (CTL), who helped direct the study. “Obviously without good technology we won’t get there, but we will get there sooner by operating the technology in a more efficient way.”

A key insight of the study is that wind’s apparent drawbacks as a power source — it only blows intermittently, and in many places blows harder at night than during the day — could actually be used to the advantage of power companies, with one condition. If power grids were equipped with large storage batteries that are commercially available right now, placed near urban areas, they could accumulate energy via wind power during off-peak night hours, then discharge the saved power during peak afternoon hours (when people have their air-conditioning on during the summer, for instance). That would make economic sense for the power-grid operators, which pay higher rates to generators during peak hours, while keeping consumer prices intact.

“With existing battery technology and realistic costs, we wanted to see if it is possible to take advantage of market dynamics to make wind power profitable now,” says Goentzel. He and his colleagues combined information about leading-edge grid-scale batteries with two years of historical data on wind speeds, utility prices and consumer electricity use throughout New England. For power companies, Goentzel says, wind can work, but “it comes down to how you manage the battery: When you charge, when you discharge and where you locate it.”

Location, location, location

The MIT study began as a piece of research in the 2008-09 academic year by two MLOG students, Prashant Saran and Clayton Siegert, whom Goentzel supervised. Now the paper, “Economic Analysis of Wind Plant and Battery Storage Operation using Supply Chain Management Techniques,” has been accepted for presentation at the July 2010 IEEE Power Engineering Society General Meeting, in Minneapolis.

In New England, retail electricity prices in February 2010 averaged 16.3 cents per kilowatt-hour (a standard industry measure), according to the Department of Energy. The Cape Wind project is slated to begin selling wholesale electricity to National Grid, a utility firm, at 20.7 cents per kilowatt-hour.

In general, however, the cost of wind energy depends on wind speed, location — onshore turbines generate cheaper power than offshore machines, due to installation expenses — and other factors like transmission costs. Nationally, according to the American Wind Energy Association, a trade group, wind costs a wholesale price of 4.8 cents per kilowatt-hour with wind speeds of around 16 miles per hour, and 2.6 cents per kilowatt-hour at about 21 miles per hour. (This factors in the federal government’s renewable energy production tax credit, worth 2.1 cents per kilowatt-hour.)

To calculate costs, the MIT team first received detailed data about current and next-generation products from officials at two companies that build large-scale modular batteries suitable for grid use (the firms asked for anonymity). Then, after scrutinizing the historical data, the researchers noticed something that could make wind power feasible: In all locations, electricity prices vary between peak and off-peak hours, but the spread is greater in heavily populated areas, like Boston, Providence or southern Connecticut. Yet because of civic politics, notes Siegert, “Wind plants are located further away from where the demand is.” People tend not to want windmills spoiling the view from their windows.

To turn wind power into affordable electricity, then, the key is to connect rural wind farms to power-storage devices near cities, rather than locating storage devices near wind farms. “If you put batteries in upstate Maine, yeah, you’re going to get lower prices at night and higher prices during the day, but the difference is not as extreme as in the area around Greenwich or Cos Cob, Connecticut,” observes Siegert. “So if you look strategically at where to place grid-scale batteries, there are huge arbitrage opportunities in some locations.”

Batteries not included (yet)

To see if wind power would fit into a profitable power-delivery model, the researchers built a Monte Carlo simulation model of the grid, plugged in a rich set of data on weather patterns and market prices, and then examined the expected profits.

The two types of large batteries in the model cost $144 million and $60 million, respectively. Given the current range of electricity prices, the researchers’ conclusion is that the second type of battery would pay back its costs after 14 years of summer-level use (when electricity consumption is higher) and 32 years of winter-level use, and would have an operating life of 30 years.

The operating profit, they found, increases sharply when grid batteries charge and discharge dynamically throughout the day depending on conditions. Other energy analysts have studied the battery concept while assuming operators would employ six-hour spans for charging at night and discharging during the day. But consumer use fluctuates more rapidly than that; an energy-delivery program with shorter charging and discharging periods would not only fit demand patterns more closely, but help extend battery life, too. Moreover, adds, Goentzel, “Any technological advances in batteries will only make the business case better.”

One additional policy qualification is needed to make the concept practical, adds Goentzel. Grid operators pay pumped hydro-power facility owners in order to have backup power capacity ready at all times. Applying the same concept to battery-stored power would give businesses incentive to invest in wind farms. “Installed capacity payments are important in making large-scale battery storage viable,” acknowledges Goentzel, “But it’s not some kind of special green energy subsidy, it would just require extending the current policy for pumped hydro to batteries.”

“Having additional energy-storage resources on the grid could potentially improve the economic viability of wind resources in any part of the country, assuming the economic viability of energy storage itself,” says Chris Namovicz, a long-term renewable-energy forecasting expert at the federal government’s Energy Information Administration (EIA), in response to e-mailed questions.

If large-scale batteries are a profitable investment for energy-delivery companies, then, and can be operated in a way that fits the characteristics of wind power, the final question is how much room there is for wind power to grow. The offshore areas of Massachusetts are the windiest in the state. On dry land, New England’s largest contiguous windy area is Eastern Maine.

Namovicz says the EIA projects that as much as 8,500 megawatts of wind energy — enough to power between 1.9 million and 2.6 million homes — is available in New England at economically viable prices.

The critical question the study has answered, Goentzel says, is that “certain operational strategies can help profitably deploy battery storage at scale without special subsidies. The concept is not limited to experimental projects, like putting a small battery on a wind-farm site.”

Peter Dizikes, MIT News Office

From EPA June 2010 Monthly Updates