implementing the energy [r]evolution
2.1 energy [r]evolution 2010 – u.s. policy brief
the 2009 federal stimulus package The American Recovery and Reinvestment Act of 2009 (ARRA), designed to stimulate the national economy, provides $16.8 billion for renewable energy and energy efficiency, allocates another $3.5 billion for smart-grid investments and provides $4 billion of loan guarantees for renewable energy projects. Naturally, only a small portion of these amounts have been spent, but there are signs that these funds will have a significant impact on investment in the very near future.
One potentially significant aspect of the stimulus is the provision for a cash grant from the treasury in place of the production tax credit (for wind, geothermal, and closed-loop biomass) and the investment tax credit (mostly solar and small wind projects). This is important because developers had difficulty before ARRA in securing financing against potential tax equity. Now, ARRA provides the certainty needed to get projects going again. That means that construction is underway, or soon will be, on many projects that otherwise would have remained dormant.
The coal and nuclear industries are not entirely left out in the cold. $3.5 billion is provided for CCS demonstration under ARRA. The Administration also announced in February 2010 a $8.33 billion loan guarantee for two new nuclear reactors in Georgia.
climate-specific legislation Cap-and-trade legislation (Waxman- Markey) was passed by the house in June 2009 , albeit with too weak a 2020 target and other problematic provisions that included subsidies for coal. The Senate has been unable to finalize its own legislation, and the direction has been toward a set of policies even weaker than passed by the House.
renewable electricity A national Renewable Electricity Standard was passed by the House as part of Waxman-Markey, but, though approved by the more bipartisan Senate Energy and Natural Resources Committee it remains blocked in the Senate.
The Investment Tax Credit (mostly important for solar) has been extended through 2016. The Production Tax Credit has been extended through 2012 under ARRA, which also allows developers to take the ITC in place of the PTC on projects that begin construction before the end of this year.
biofuels The U.S. EPA is establishing changes to the Renewable Fuels Standard Program, which will increase the share of renewable sources in transportation fuel. The total renewable fuel requirement will increase to 8.25 percent of transportation fuel or 12.95 billion gallons in 2010 (from 9 billion gallons in 2008). This amount is to rise to 36 billion gallons by 2022. Last month, the Senate passed a bill reinstating a biodiesel blenders’ tax credit that expired at the end of 2009 but final passage is uncertain. Also, to the chagrin of Archer Daniels Midland, tax credits specifically for ethanol, plus an import tariff on same, also remain uncertain beyond 2010.
state policies - PACE financing
Property-Assessed Clean Energy (PACE) financing is a growing trend. PACE programs allow low-interest funding of renewable energy installations by property owners, usually to be repaid through additional property tax assessments. At last count, the laws of nineteen states allowed local governments to form PACE programs to facilitate and encourage renewable energy installations in their municipalities. The latest addition (April 2010) was the state of Maine, passing a law specifically authorizing municipalities to collect special assessments to repay the PACE loans.
renewable portfolio standards Three additional states implemented an RPS in 2008 (MI, MO, and OH) and one in 2009 (KS), for a total of 29 states plus the District of Columbia with some form of a renewable portfolio standard.10 A larger number of states, six in 2008 and seven in 2009, modified existing RPS provisions, mostly expanding targets and carving out a larger role for solar.
Many states are making special provisions for solar and distributed generation within RPS mandates. Nine states and DC made new provisions specific to solar in 2009.11 One of these states is Nevada, which raised its RPS from 20 percent in 2020 to 25 percent in 2025, but also modestly increased the solar share to 1.5% of total sales by 2025 and added a credit multiplier for solar generation. As of April 2010, 16 states and DC have special provisions for solar and distributed generation, sometimes combined with credit multipliers. So far, RPS programs predominantly drive wind power development while other sources (solar, biomass and geothermal) are expected to gain ground.
investment incentives (such as direct rebates, tax credits or rebates, and loans) As noted above, Federal stimulus money helped boost incentive programs for renewables and energy efficiency. Still, some states did not increase available funding or even reduced funding due to budget constraints. In 2009, about forty new solar programs were launched at the state level. Significant new incentive programs included the Alaska Energy Authority Renewable Energy Grant Program and the Pennsylvania Sunshine Solar Rebate Program, each topping $100 million in funding for 2009. Many states increased tax incentives in various ways, such as increasing caps on tax credits, increasing the size of systems eligible for consideration, expanding programs to include additional renewable technologies, or extending program duration. Only two states, Hawaii and Vermont, placed new restrictions on their tax incentives.
Read more in Chapter 1 of the usa energy [r]evolution report.