1. Justin Barnes N.C. Solar Center N.C. State University ASES 2009 Buffalo, New York May 13, 2009 U.S. Photovoltaic Markets: PV Policies Leading the Way

2. The DSIRE Project Database of State Incentives for Renewables & Efficiency Created in 1995 Funded by U.S. DOE Managed by NCSU; works closely with IREC Project Scope: policies/programs that promote RE/EE Breakdown of Data: ~2,000 total records ~850 solar records ~770 PV records www.dsireusa.org

3. DSIRE SOLAR!! Interactive Policy Map: Provides quick access to state specific solar information Solar Policy Guide: Offers descriptions of various state and local policy types for promoting solar; status and trends of individual policies; specific policy examples; and links to additional resources Summary Maps: Provide a geographical overview of incentives across the country Solar Policy Comparison Tables: Highlight individual elements of state rebate and tax credit programs Search Function: Allows users to create a custom list of programs by solar technology, incentive type, eligible sector, or other criteria.

4. Leading Policy Approaches  Financial Incentives  Solar Portfolio Standards  Simplified Grid Connection  Net Metering Coordinated Policies for Sustainable Markets  Rate Design & Revenue Policies  REC/SREC Market Access  Third-party Ownership (i.e., legality of PPA’s)  Solar Access Laws  Industry Recruitment & Support  Solar in Public Buildings  Workforce Development  Local Codes & Standards  Education & Marketing i.e., Three of the Solar Alliance “Four Pillars of Solar” 

5. State Financial Incentives for PV ASES 2008  ASES 2009 Direct Incentives 25 29 Rebates Grants Production Incentives Tax Credits & Deductions 22 23 Low-Interest Loans 23 24 Sales Tax Exemptions 18 21 Property Tax Incentives 26 29 # of states

6. Varies by project $10K - $50K 10-20% up to $75K $60K - $1M $2K - $10K 50% up to $10K Direct Incentives for PV, 1997 www.dsireusa.org

7. State Rebates & PBIs for PV www.dsireusa.orgwww.dsireusa.org May 2009 20 state rebate (+ DC) program & PBIs* 26 state grant programs (not shown on map) 31 non-state PBIs (not shown on map) 77 utility rebate programs (not shown on map) DE: ≤35% $4/W VT: $1.75-3.50/W MD: $2.50/W $2-2.25/W 50%, $3k max ≤35% 30% NY: $2-5/W $2-3/W ≤$3.50/W $2.30-4.60/W ME: $2K max NH: $3/W NJ: $1-1.75/W SRECs: ~$0.46/kWh CT: $2.50-4/W MA: $1-4.40/W * Includes RPS-inspired utility rebate programs in AZ, CO & NV 15 - 54¢/kWh $1-2.25/W ≤$3.25/W ≤50¢/kWh, 5 yrs. DC: $1-3/W

8. (R) Residential; (C) Commercial; (NR) Non-Residential State Tax Incentives for PV Credits in 18 states + P.R. Range: 10% - 75% FL, IA, MD, OK have small PTCs (not shown on map) www.dsireusa.orgwww.dsireusa.org May 2009 35% 10% (Non-Corp.) ~2.7¢/kWh 10 yrs. (C) $ 3/W (R) 50% (C) 10% (NR) 25% (R) MA: 15% (R) 15% 35% 100% Deduct. (R) 25% (R) 10% (C) 50% RI: 25% 25% VT: 30% (C) 35% $500 (R) $1K (C) 35% P.R.: 75% 10% Deduct. (C)

9.  Stable, long-term incentive, declining over time  Reasonably easy application process  Administrative flexibility to modify program  Cost-effective quality assurance mechanism  Track program usage details and share data  Partnerships with banks, installers, nonprofits  Education & outreach Financial Incentives: Best Practices

10. RPS Policies with Solar/DG Provisions State renewable portfolio standard with solar / distributed generation (DG) provision State renewable portfolio goal with solar / distributed generation provision www.dsireusa.orgwww.dsireusa.org / May 2009 Solar water heating counts toward solar provision WA: double credit for DG NV: 1% solar by 2015; 2.4 to 2.45 multiplier for PV UT: 2.4 multiplier for solar AZ: 4.5% DG by 2025 NM: 4% solar-electric by 2020 0.6% DG by 2020 TX: double credit for non-wind (Non-wind goal: 500 MW) CO: 0.8% solar-electric by 2020 MO: 0.3% solar-electric by 2021 MI: triple credit for solar OH: 0. 5% solar by 2025 NC: 0. 2% solar by 2018 MD: 2% solar-electric in 2022 DC: 0.4% solar by 2020; 1.1 multiplier for solar NY: 0.1542% customer-sited by 2013 DE: 2.005% solar PV by 2019; triple credit for PV NH: 0.3% solar-electric by 2014 NJ: 2.12% solar-electric by 2021 PA: 0.5% solar PV by 2020 MA: TBD 14 states & DC have an RPS with solar/DG provisions

11. Source: LBNL Environmental Energy Technologies Division / Energy Analysis Department Largest RPS Markets for Solar (2009): AZ, NJ, NV, and CO

12.  Establish an explicit solar set-aside in the RPS that ramps up over time.  Develop a mechanism for tracking, verifying and trading solar renewable energy certificates (SRECs) (e.g., NJ – Transparent SREC trading platform)  Impose a monetary penalty or include an alternative compliance payment provision for electricity suppliers that do not meet solar generation requirements (e.g., PA – ACP 200% SREC market value)  Require long-term power-purchase or SREC contracts to ensure project developers can access financing (e.g., MD – Requires 15-year contracts, up-front payment for 10 kW or less)  Encourage small-scale, distributed systems (e.g., AZ – 4.5% DG carve out with 50% for residential) Promoting Solar through RPS Policies

13. Allows customers to store any excess electricity generated, usually in the form of a kWh credit, on the grid for later use. Available “statewide” in 40 states. State policies vary dramatically. Net Metering Freeing the Grid 2008: www.newenergychoices.orgwww.newenergychoices.org IREC model: www.irecusa.org/index.php?id=88www.irecusa.org/index.php?id=88

14. Net Metering State policy Voluntary utility program(s) only www.dsireusa.orgwww.dsireusa.org / May 2009 * State policy applies to certain utility types only (e.g., investor-owned utilities) WA: 100 OR: 25/2,000* CA: 1,000* MT: 50* NV: 1,000* UT: 25/2,000* AZ: no limit* ND: 100* NM: 80,000* WY: 25* HI: 100 KIUC: 50 CO: 2,000 co-ops & munis: 10/25 OK: 100* MN: 40 LA: 25/300 AR: 25/300 MI: 20* WI: 20* MO: 100 IA: 500*IN: 10* IL: 40* FL: 2,000* KY: 30* OH: no limit* GA: 10/100 WV: 25 NC: 1,000* ME: 100 VT: 250 VA: 20/500* NH: 100 MA: 60/1,000/2,000* RI: 1,650/2,250/3,500* CT: 2,000* NY: 25/500/2,000* PA: 50/3,000/5,000* NJ: 2,000* DE: 25/500/2,000* MD: 2,000 DC: 1,000 40 states & DC have adopted a net metering policy Note: Numbers indicate system capacity limit in kW. Some state limits vary by customer type, technology and/or system application. Other limits might also apply.

15. Net Metering: Best Practices  Maximum system capacity ≥ 2 MW  All renewables eligible  All utilities must participate  All customer classes eligible  Limit on aggregate capacity ≥ 5%  Annual reconciliation of NEG, or no expiration  No application fee  No special charges, fees or tariff change  Customer owns RECs

16. Interconnection Standards Freeing the Grid 2008: www.newenergychoices.orgwww.newenergychoices.org Technical issues include safety, power quality, system impacts. Technical issues largely resolved. Policy issues include legal and procedural considerations. State approaches vary widely. IREC model: www.irecusa.org/index.php?id=88www.irecusa.org/index.php?id=88

17. Interconnection Standards State policy www.dsireusa.orgwww.dsireusa.org / May 2009 * Standard only applies to net-metered systems WA: 20,000 OR: 25/2,000* CA: no limit MT: 50* NV: 20,000 UT: 25/2,000* NM: 80,000 WY: 25* HI: no limit CO: 10,000 MN: 10,000 LA: 25/300* AR: 25/300* MI: no limit WI: 15,000 MO: 100* IN: no limit IL: 10,000 FL: 2,000* KY: 30* OH: 20,000 NC: no limit VT: no limit NH: 100* MA: no limit 35 states + DC & PR have adopted an interconnection policy Notes: Numbers indicate system capacity limit in kW. Some state limits vary by customer type (e.g., residential/non-residential).“No limit” means that there is no stated maximum size for individual systems. Other limits may apply. Generally, state interconnection standards apply only to investor-owned utilities. CT: 20,000 PA: no limit NJ: 2,000* DC: 10,000 MD: 10,000 NY: 2,000 VA: 10/500* SC: 20/100* GA: 10/100* PR: no limit DE: varies* TX: 10,000

18. Interconnection Standards: Best Practices  Establish state-wide policies that are uniform, transparent, detailed, and public  Set fees and technical requirements proportional to a project’s size  Process applications quickly; set timetable  Standardize and simplify forms  No redundant safety requirements – external disconnect switch  No additional insurance requirements for small systems

19. The “Whole” Picture StateRebate/PBITax IncentiveSolar/DG RPS Interconnection (+C) Net Metering (+B)Total 1 Massachusetts 11111 5 2 Arizona 11111 5 3 New York 11111 5 4 Colorado 10111 4 5 Maryland 10111 4 6 New Jersey 10111 4 7 Oregon 11 011 4 8 Pennsylvania 01111 4 9 Nevada 10111 4 10 Vermont 11011 4 11 New Mexico 01111 4 12 California 100.511 3.5 13 Illinois 10011 3 14 Delaware 10101 3 15 Texas 010.510 2.5

20. Utility Revenue Policies & Rate Design Utility Revenue Policy  Many states implementing or considering decoupling  Remove disincentive for EE and DG, by removing the link between electricity sales and profits.  Reward utilities for achieving specific EE/DG targets Electricity Rate Design  Minimize Fixed Monthly Charges & Demand Charges  Develop Time-of-Use Energy Rates  Give Customers Rate Choice

21. Third-Party Ownership/PPA Model  Third-party ownership allows a site owner to install PV, but avoid typical problems of: - high up-front costs - lack of adequate tax liability (e.g., government buildings) - need to finance, build, and maintain system BUT…  Issues related to the regulation of “public utilities” and traditional utility monopoly rights can pose problems in otherwise favorable markets. - The Oregon PUC has ruled that solar and wind providers cannot be considered public utilities AND determined that they are not subject to PUC regulation as “electric service suppliers”.  Net metering regulations that imply that the net metering customer and the system owner are the same “person” may also inhibit adoption. - The Michigan PSC revised its proposed net metering rules in response to comments during the rulemaking process, replacing the word “owns” with “uses” in the definition “customer-generator”.

22. Solar Access Laws 17 states limit or prohibit restrictions that neighborhood covenants and/or local ordinances may impose on the use of solar- energy systems. Solar easements (31 states) allow for the rights to existing solar access on the part of one property owner to be secured from another property owner whose property could be developed in such a way as to restrict the solar resource. Transferred with property title. 14 states have provisions for both types of policy. Example Contents*  Apply law to a comprehensive list of instruments. [Hawaii - deeds, covenant, lease, restriction, and others; provides that “no person shall be prevented…from installing a solar energy device…”]  Define the type of solar energy equipment protected by the law [New Mexico – includes solar electric, solar thermal, passive solar construction, etc.]  Define the types of structures covered by the law [California – applies to both residential and commercial structures]  Provide for enforcement outside of the legal system [New Jersey – law may be enforced by Department of Community Affairs, possibly avoiding the need for litigation]  Award costs and reasonable attorneys' fees to prevailing party in civil action arising from disputes with HOAs. [Arizona] *See A Comprehensive Review of Solar Access Law in the United States (http://www.solarabcs.org/solaraccess/Solaraccess-full.pdf) by Colleen Kettles.http://www.solarabcs.org/solaraccess/Solaraccess-full.pdf DC Solar Easements Provision Solar Rights Provision Solar Easements and Solar Rights Provisions

23.  Tax Credits OR - 50% of the construction costs of facility for manufacturing RE equipment NM - 5% of the cost alternative energy manufacturing equipment  Loans/Loan Guarantees PA – $35,000 per job created within 3 years at 5% interest rate (April 2009). Also offers option of a loan guarantee of up to $30 M structured as a grant to be used in the event of a default. NJ – Loans for up to $3 M at 0% interest over 10 years for Class I renewables to assist them in becoming competitive with traditional generation (grants also available)  Grants NYSERDA Manufacturing & Incentive Program - facility/site characterization; pre-production development; and incentive payment based on product sales. $1.5M/project; $10M for program through 2011  Property Tax Abatement MT - new RE production facilities, new RE mfg. facilities, and RE R&D assessed at 50% of taxable value for property tax purposes. 35% tax credit also available.  Higher Incentives for Using Components Manufactured In-State Washington State, Massachusetts, New Jersey (rules under development) Industry Recruitment & Development

24.  Green building or efficiency standards for new state facilities (29 + DC)  Goals to reduce energy usage (23)  Requirements for evaluation/use of on-site use of renewable energy generation (7)  Derive specified % of energy for state facilities from RE – purchase green power or install RE systems (9) ☼ Install solar by 1/1/09 on any public facility, new or existing, if cost-effective over the life of the system – California ☼ Invest in solar at a level of at least 1.5% of the total contract price for new state projects – Oregon ☼ Managers must supply 2% of a building's total energy use with on-site wind and solar power or supply a full cost and carbon analysis explaining why renewables would not be cost effective - Minnesota Lead by Example: Solar in Public Buildings (# of states)

25. What will this presentation look like next year?? Feed-in Tariffs – When and where? National RPS, solar carve-out? Accelerating state RPS requirements. Local initiatives gain ground. What is the next “Berkeley Model”? Next generation renewables funding

26. Leading Policy Approaches  Financial Incentives  Solar Portfolio Standards  Simplified Grid Connection  Net Metering Coordinated Policies for Sustainable Markets  Rate Design & Revenue Policies  REC/SREC Market Access  Third-party Ownership (i.e., legality of PPA’s)  Solar Access Laws  Industry Recruitment & Support  Solar in Public Buildings  Workforce Development  Local Codes & Standards  Education & Marketing i.e., Three of the Solar Alliance “Four Pillars of Solar” 

27. QUESTIONS?? CONTACT: Justin Barnes N.C. Solar Center N.C. State University justin_barnes@ncsu.edu DSIRE: www.dsireusa.orgwww.dsireusa.org