2. State Solar Policy: 2008-09 Developments & Current Trends Justin Barnes N.C. Solar Center N.C. State University NESEA: Building Energy March 12, 2009

3. NESEA is a Registered Provider with The American Institute of Architects Continuing Education Systems. Credit earned on completion of this program will be reported to CES Records for AIA members. Certificates of Completion for non-AIA members will be mailed after the conference. This program is registered with the AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.

4. Focus & Learning Objectives Recent Federal Policy Changes & Implications “Four Pillars” Updates - RPS, Net Metering, Interconnection, Incentives Innovative Policy Mechanisms - Property tax financing, Community NM, Next Generation Funding, Solar Renewable Energy Certificates (SRECs).

5. The DSIRE Project www.dsireusa.org 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: ~1,950 total records ~825 solar records ~750 PV records

6. The Solar Alliance: www.solar-alliance.org/model_policieswww.solar-alliance.org/model_policies

7. Federal Update Extended to 12/31/2016 May be used to offset AMT Extended to utilities Commercial Solar ITC (10/08) Grants in lieu of tax credit for COMMERCIAL TAXPAYERS. The grants are equivalent to 30% of the installed cost and are available through 2010. Commercial Solar ITC (02/09)

8. Federal Update (cont’d) Residential Solar Credit (10/08) Extended to 12/31/2016 $2,000 cap removed for PV (1/1/2009) May be used to offset AMT Other Federal Incentives Tax Credit Bonds: CREBs ($2.4 B) and QECBs ($3.2 B) Bonus Depreciation: Extended through Dec. 31, 2009 (02/09) Subsidized Energy Financing: 100% haircut repealed (02/09) Manufacturing Tax Credit: 30% of investment, competitive, $2.3 B (02/09) Residential Solar Credit: $2,000 cap on SHW removed (02/09)

9. Rebates (new): CO (local), CT (PV), MA (PV), MN (SWH), NH, OH (residential PV & SHW reactivated), PA (coming soon??) Tax credits (new/improved): GA (35%), KY (small), OR (limit doubled), PA (15%), VT (30%), PR (75%) Property tax incentives: AZ, FL, MD, NC, NJ, NY Finance: NJ (Loans/Contracts), MD (Contracts), CA (Berkeley First) New RPS/RPG: OH, MI, MO, SD, UT Revised RPS/RPG: D.C., IL, MA, MD, NH (minor) Solar RPS: D.C., OH, MI, MA, MO Net Metering (improved): AZ, CO, CT, D.C., FL, HI, IL, KY, LA, MA, MI, NY, OH, RI, UT, VT Interconnection Standards (new/improved): CO, D.C., FL, IL, KY MD, MI, NC, NM, NY Solar access (improved): CA, CO, FL, MD, VA State Developments, 2008-09

10. State Financial Incentives for Solar Direct Incentives Rebates (19/24) Grants (20/29) Production Incentives (3/3) Tax Credits/Deductions/Exemptions (27/58) Low-Interest Loans (27/31) Sales Tax Exemptions (22/23) Property Tax Incentives (30/40) Industry Recruitment Incentives (13/19) (# of states / # of programs)

11. Rebate ProgramsPV: 18/20SHW: 13 Grant ProgramsPV: 20/28SHW: 14/17 Production IncentivesPV: 3SHW: 0 Personal Tax IncentivesPV: 19/27SHW: 17/21 Corporate Tax IncentivesPV: 23/26SHW: 17/19 Loan ProgramsPV: 25/30SHW: 24/28 Sales Tax IncentivesPV: 22/23SHW: 16 Property Tax IncentivesPV: 30SHW: 27 Industry RecruitmentPV: 13SHW: 7 State Financial Incentives for Solar www.dsireusa.orgwww.dsireusa.org February 2009

12. 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

13. State Rebates & PBIs for PV DE: 50% $4/W CT: $2.50-4/W MA: $1-4.40/W VT: $1.75-3.50/W MD: $2.50/W $2-2.25/W 50%, $3k max ≤35% ≤$3.25/W ≤50¢/kWh, 5 yrs. $1-2.25/W 30% 15 - 54¢/kWh NY: $2-5/W NJ: $1-1.75/W SRECs: ~$0.42/kWh February 2009 ME: $2K max $2-3/W ≤$3.50/W 19 state rebate programs & PBIs* 28 state grant programs (not shown on map) 29 non-state PBIs (not shown on map) 77 utility rebate programs (not shown on map) $2.30-4.60/W * Includes RPS-inspired utility rebate programs in AZ, CO & NV NH: $3/W

14. Federal Policy Implications Residential Cap Removal = State Incentive Reductions (NJ, NY, CO, CT, MA, MD?) Consideration in other states Over-subscription, boom/bust cycle is also a factor $4.00/W

15. (R) Residential; (C) Commercial; (NR) Non-Residential State Tax Credits for PV 35% 30% (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% Credits in 18 states + P.R. Range: 10% - 75% FL, IA, MD, OK have small PTCs (not shown on map) RI: 25% www.dsireusa.orgwww.dsireusa.org February 2009 25% VT: 30% (C) 35% $500 (R) $1K (C) 35% P.R.: 75% 10% Deduct. (C)

16. Property Tax Incentives Tax Credits: NYC, numerous counties in Maryland Removal of subsidized energy financing “haircut”. Innovative Financing: Berkeley First model

17. State Regulatory Policies Public Benefits Funds (16+DC & ME) Renewables Standards/Goals (28+DC & 5 goals) Net Metering (40 + D.C.) Solar Access Laws/Easements (35) Contractor Licensing (9) Equipment Certification (3 + P.R.)

18. Public Benefit Funds for Renewables www.dsireusa.orgwww.dsireusa.org March 2008 16 state funds + DC and ME $6.8B by 2017 (est.) RI: $2.2M in 2008 $38M from 1997-2017* MA: $25M in 2008 $525M from 1998-2017* NJ: $102M in 2008 $637M from 2001-2012 DE: $3.5M in 2008 $49M from 1999-2017* CT: $24M in 2008 $435M from 2000-2017* VT: $6.6M in 2008 $34M from 2004-2011 PA: $950,000 in 2008 $63M from 1999-2010 IL: $5.5M in 2008 $99M from 1998-2015 NY: $9.5M in 2008 $114M from 1999-2011 WI: $5.5M in 2008 $97M from 2001-2017* MN: $16M in 2008 $264M from 1999-2017* MT: $750,000 in 2008 $8.3M from 1999-2009 OH: $3.2M in 2008 $63M from 2001-2010 MI: $1.7M in 2008 $25M from 2001-2017* ME: voluntary contributions $411,000 from 2002-2008 OR: $12M in 2008 $182M from 2001-2017** CA: $331M in 2008 $4,149M from 1998-2016 D.C.: $400,000 in 2008 $5.1M from 2004-2017* * Denotes funds that do not have defined expiration dates and do not require future reauthorization or budgetary approval in order to continue operations. (These funds are not scheduled to expire in 2017.) ** The Oregon Energy Trust is scheduled to expire in 2025.

19. Non-PBF Renewable Funds AK Energy Authority: $100 M (FY 2009), appropriated, utility-based, end-use IA Power Fund: $ 75 M through 2011, focused on R&D and commercialization OH Air Quality Development Authority: $84 M through 2012, funded by state bonds PA Energy Independence Fund: $650 M, broad based, funded by state bonds. WI Energy Independence Fund: $150 M for grants and loans over 10 years.

20. Regional Greenhouse Gas Initiative (RGGI) 09/08: $38.6 M 12/08: $106.5 M 03/09: ?? ~ $500 M possible for remaining 2009 allowances.

21. MA (under development) AZ: 1.1% by 2007 NV: 1% by 2009 ME: 30% by 2000 IA: 105 MW by 1999 MN: 425 MW by 2002 www.dsireusa.org Renewables Portfolio Standards, 1997

22. Renewables Portfolio Standards State Goal ☼ PA: 18%** by 2020 ☼ NJ: 22.5% by 2021 CT: 23% by 2020 WI : requirement varies by utility; 10% by 2015 goal IA: 105 MW MN: 25% by 2025 (Xcel: 30% by 2020) TX: 5,880 MW by 2015 ☼ AZ: 15% by 2025 CA: 20% by 2010 ☼ * NV: 20% by 2015 ME: 30% by 2000 10% by 2017 - new RE State RPS Solar hot water eligible ☼ Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE ** Includes separate tier of non-renewable “alternative” energy resources HI: 20% by 2020 RI: 16% by 2020 ☼ CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis ) ☼ DC: 20% by 2020 DSIRE: www.dsireusa.org February 2009www.dsireusa.org ☼ NY: 24% by 2013 MT: 15% by 2015 IL: 25% by 2025 VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by 2017 ☼ MD: 20% by 2022 ☼ NH: 23.8% in 2025 OR: 25% by 2025 (large utilities ) 5% - 10% by 2025 (smaller utilities) *VA: 12% by 2022 ☼ *DE: 20% by 2019 ☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) ☼ NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) ND: 10% by 2015 SD: 10% by 2015 * UT: 20% by 2025 ☼ OH : 25%** by 2025 *MI: 10% + 1,100 MW by 2015 ☼ MA: 15% by 2020 + 1% annual increase (Class I Renewables) ☼ MO: 15 % by 2021 *WA: 15% by 2020 28 states have an RPS; 5 states have an RE goal

23. Solar/DG Provisions in RPS Policies LBNL Estimate: 7,656 MW in 2025 NM: 4% solar electric by 2020 0.6% DG by 2015 AZ: 4.5% DG by 2025 NV: 1% solar by 2015; 2.4 to 2.45 multiplier for PV MD: 2% solar electric in 2022 CO: 0.8% solar electric by 2020 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 Solar water heating counts towards solar set-aside DSIRE: www.dsireusa.org February 2009www.dsireusa.org WA: double credit for DG DG: Distributed Generation NH: 0.3% solar electric by 2014 NJ: 2.12% solar electric by 2021 PA: 0.5% solar PV by 2020 NC: 0. 2% solar by 2018 OH: 0. 5% solar by 2025 MA: TBD by MA DOER MI: triple credit for solar MO: 0.3% solar electric by 2021 State RPS with solar/DG provision State renewables goal with solar/DG provision TX: double credit for non-wind (non-wind goal: 500 MW) UT: 2.4 multiplier for solar

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

25. RECs and SRECs Who owns them? How can you use them? - LBNL (04/06): 11 states address ownership (+ 2 pending at the time) - DSIRE (02/09): 23 states address ownership, of 12 “new” policies, 9 to customer-generator. Bundled or Unbundled (e.g., CA) Innovative Programs - Xcel solar rebates + SREC purchase, PSEG (NJ) Solar Loan, NJ SREC contracts, MD SREC contracts.

26. Interconnection Standards * Freeing the Grid 2008: www.newenergychoices.orgwww.newenergychoices.org IREC model: www.irecusa.org/index.php?id=87www.irecusa.org/index.php?id=87 Technical issues include safety, power quality, system impacts. Technical issues largely resolved. Policy issues include legal and procedural considerations. State approaches vary widely. Best policies adopted by IL, NJ, PA, NM, MD.*

27. 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 39 states. State policies vary dramatically. Best policies adopted by CO, MD, FL, NJ, OR.* Net Metering IREC model: www.irecusa.org/index.php?id=88www.irecusa.org/index.php?id=88 * Freeing the Grid 2008: www.newenergychoices.orgwww.newenergychoices.org

28. Net Metering (February 2007) State-wide net metering for certain utility types (e.g., IOUs only) Net metering offered by one or more individual utilities Net metering is available in 41 states + D.C. NH: 25 MA: 60 RI: 25 * CT: 100 50 www.dsireusa.org 80,000 100 1,000 25 50 100 40 20 25/100 2,000 40 150 10/100 25 no limit 25/100 10 500 VT: 15/150 10/400 PA: 50/1,000/2,000 NJ: 2,000 DE: 25 MD: 500 DC: 100 VA: 10/500 15 10 100 25 50 10 30 * State-wide net metering for all utility types * * * * * * * * * * * * * * * * #s indicate system size limit (kW); in some cases limits are different for residential and commercial as shown * 20/100 * * * 25 Only 5 States with 1 MW+ Net Metering

29. Net Metering State-wide net metering for certain utility types only (e.g., investor-owned utilities) Net metering offered voluntarily by one or more individual utilities Net metering is available in 44 states + D.C. NH: 100 MA: 60/1,000/2,000* RI: 1,650/2,250/3,500* CT: 2,000* 100 DSIRE: www.dsireusa.org February 2009www.dsireusa.org 80,000 100 1,000 100 40 20 2,000 1,000 10/100 25 No limit LA: 25/300 25/300 500 VT: 250 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 VA: 10/500* NC: 20/100* 30 10 100 50 State-wide net metering for all utility types * * * * * * * * * * * Note: Numbers indicate individual system size limit in kilowatts (kW). Some states’ limits vary by customer type, technology and/or system application; this is the case when multiple numbers appear for one state. Other limits may also apply. For complete details, see www.dsireusa.org. 25 100 25/2,000 * 25/100 * 40 * * FL: 2,000* * 25/2,000 (KIUC: 50) co-ops, munis: 10/25 25 20/100 * 20 No limit * 20

30. Net Metering: Meter Aggregation/Community Net Metering Aggregation: OR, WA, PA, ME, VT, RI Community: NJ, CA, MA, VT Proposed: VA, CO Could make participation more flexible and help achieve DG goals at a lower cost BUT community net metering poses numerous of policy questions for regulators (e.g., definition of community, program limitations).

31. Solar Access Laws 14 states limit or prohibit restrictions that neighborhood covenants and/or local ordinances may impose on the use of solar-energy systems. (Solar easements 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. Many other states allow these.)

32. In Conclusion… State trends: Dominance of RPS Super-sized net metering Interest in FITs/PBIs Property Tax Vehicles State/Federal Interaction Room for Improvement: Incentives for non-taxpayers Utility rate structures REC-selling opportunities Market coordination Wild cards: Federal RPS? Credit markets? State budgets? Electricity rates? Technology breakthroughs?

33. QUESTIONS?? This concludes The American Institute of Architects Continuing Education Systems Program Northeast Sustainable Energy Association

34. Justin Barnes N.C. Solar Center N.C. State University justin_barnes@ncsu.edu www.dsireusa.org www.dsireusa.org 919.513.0792 Contact:

35. S lar P rtal  Solar-Specific Incentive Information  Clickable U.S. Map for Quick Access to PV Incentives  PV Incentive Summary Maps  State-by-State Incentive Comparison Tables  Tax Credits, Rebates, Solar Portfolio Standards, Net Metering  PV Incentive Program Installation Data from IREC  # of Installations, Incentive $ Expenditures, Capacity Installed  Solar Policy Guide

36. StateProgram NameEligibilityIncentive AmountMaximum Incentive REC Ownership Eligible System SizeFunding SourceProgram Budget Expiration Date Project Pre- approval Required CaliforniaCalifornia Solar Initiative Incentives All customers of investor-owned and publicly owned California utilities Varies by sector and system size Varies by sector and administering utility Remains with project owner 1 kW minimumRate-payer funds$3.2 billion over 10 years, beginning 1/1/2007 12/31/2017Yes ConnecticutCCEF - Solar PV Rebate Program Non-Commercial customers of United Illuminating Company or Connecticut Light & Power. (Homes limited to four family residences.) Residential: $5/W (PTC rating) for first 5 kW; $4.30/W (PTC) for next 5 kW, adjusted based on expected performance; Gov't/Non-profit: $5/W (PTC rating), adjusted based on expected performance Residential: $46,500; Gov't/Non-profit: $50,000 Incentives will be subject to a maximum of the customer’s average annual or expected electric usage Remains with project owner 10 kW maximumConnecticut Clean Energy Fund (public benefits fund) $11.5M beginning 10/1/2004 When funds are exhausted Yes ConnecticutCCEF - On-Site Renewable DG Program Non-Residential Customers of United Illuminating Company or Connecticut Light & Power $5/W PTC plus $0.02/kWh for projects installed in southwestern Connecticut $2.5M (plus, potentially, $0.02/kWh for projects installed in southwestern Connecticut). Incentive funding limited to systems with a maximum capacity of 500 kW (PTC). Remains with project owner 10 kW minimum; Maximum size is limited to the difference between the most recent 12 months’ peak demand and the “base load.” System’s AC generation output may not be sized greater than 80% of the facility’s highest peak load in any one hour. Connecticut Clean Energy Fund (public benefits fund) $42.5M program budget beginning 12/1/05 NoneYes DelawareGreen Energy Program Incentives All customers of Delmarva, Delaware EC and customers of participating municipal utilities 50% of installed cost; PV system cost may not be in excess of $12/W Delmarva: Residential: $31,500; Commercial: $250,000 / Co-ops and Munis: Residential: $15,000; Commercial: $30,000 Remains with project owner No system size restrictions Green Energy Fund (Delmarva), DEC Renewable Resources Fund, Municipal Utility Green Energy Fund (public benefits fund) Delmarva: ~2.08 million; DEC: Varies by month (FY 07: 207,000); Munis: Varies by month (FY 07: 321,044 across 9 municipals) New funds allocated monthly Yes FloridaSolar Energy System Incentives Program Any resident or entity$4/watt DCResidential: $20,000; Non-residential: $100,000 Remains with system owner 2 kW minimumGeneral Revenue Funds (appropriated annually) FY 2007-08: $3.5M6/30/2010No Excerpt from State PV Rebate Comparison Table

37. California goal of 3,000 MW equals ~ 1.5% Most Aggressive RPSs, Required Solar as % of Sales Source: LBNL Environmental Energy Technologies Division / Energy Analysis Department

39. Solar Capacity Resulting from RPS Solar Policies 2005 Outlook~ 1,000 MW 2006 Outlook~ 2,700 MW 2007 Outlook~ 6,000 MW 2008 Outlook ~ 7,550 MW Largest markets: NJ (1500 MW) MD (1500 MW) AZ (1000-1500 MW) PA (850 MW)