Energy Leadership Training Palestine & Arizona Understanding Solar Energy Policy Part 1 Prof. Martin J. Pasqualetti Arizona State University

Outline 1.What is policy, why is it necessary, and what are its essential elements? 2.What are the most useful sources of information on solar energy policy? 3.What are the pillars of solar policy and who establishes the policies themselves? 4.What are some examples of existing policies? 5.What are the impacts of solar policies? 2

Learning Objectives Learning outcomes: After completing this unit, you should be able to: –Describe — The role of policy on solar energy development –Explain — What policy is, the role of policy, how policies are developed, existing solar energy policies, the barriers to solar energy policy, the drawbacks to solar energy policy, the future role of solar energy policy 3

Section One What is policy, why is it necessary, and what are its essential elements? 4

Policy is many things a goal -- what you're trying to achieve official strategy to achieve something legal framework to manage a resource conscious use of resources to achieve the goal statements/guidelines to follow a goal structure by which you can work (can be for individuals, government or NGOs)

Public policy is the interaction of values, interests and resources, guided through institutions and mediated by politics. Policy and politics are not easily separated, since each informs the other. But neither should policy simply be reduced to consideration of the politics of the moment. Additional Ingredients in Policy

The Role of Politics P olitics is the essential ingredient for producing workable policies, which are more publicly accountable and politically justifiable... While some are uncomfortable with the notion that politics can enhance rational decision-making, preferring to see politics as expediency, it is integral to the processes of deciding defensible outcomes. We are unable to combine values, interests and resources in ways which are not political.

Two crucial issues in making policy work Important to know what you're trying to achieve Democracy and social capital are important to policy process -- policies tend not to work if a dictator just decides what needs to be done

POLICY A policy is a document written to structure and outline the strategy to those that it affects and to those who must implement it. STRATEGY A strategy is devised at the relevant level of management and is a long-term plan of change and improvement for an organisation. What is the difference between a ‘policy’ and a ‘strategy’?

What are the Barriers to Solar PV Development? Societal Issues Barriers to RE Development are largely societal, rather than technical in character, and this means that the policies that are implemented should be targeted toward social issues as well. Slide 10 Technical Issues

The Widening Valley of Death for Cleantech 11

What Are the Essential Elements of Solar Policy? Successful Solar Deployment

Policy Goals for Successful Solar Deployment Slide 13

Policies should aim at internalizing externalities and unlocking RE technology learning Slide 14 External Costs – Policy intervention that includes the external costs allow proper comparison between conventional and renewables Source: IEA – Renewable Energy, Policy Considerations for Deploying Renewables, 11/2011

Section Two What are the most useful sources of information on solar energy policy? 15

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Background on the Governor's Office of Energy Policy The Governor's Office of Energy Policy (OEP) was established by Governor Jan Brewer and effective July 1, 2011, moved the Energy Office from the Arizona Commerce Authority. VISION To lead Arizona to a clean and reliable energy future by promoting policies and initiatives that strengthen the economy, better the environment and ensure lasting energy security. MISSION To be the national leader in renewable energy development, while buoying traditional energy sources with new clean technologies and increased efficiency to benefit all Arizonans. 17

Arizona Office of Energy Policy 18

Background on DSIRE Database of State Incentives for Renewables & Efficiency Created by the NC Solar Center in 1995 Funded by the US DOE (EERE) Administered by NREL Approximately 2,700 entries Renewable energy and energy efficiency Rules, regulations, policies, and incentives Approximately 170,000 unique visitors/month

DSIRE Database Content All State incentives and policies – including DC and territories All Federal incentives and policies Most Utility incentives Some Local policies and incentives – examples and largest cities/counties

DSIRE

edu Mission: To provide informed, timely and fact- based summaries on energy policy issues that affect Arizona Vision: To advance Arizona's energy industry potential, energy security and public welfare Where we Are: The Center for Law, Science & Innovation, the Sandra Day O’Connor College of Law, Arizona State University

Background on EPIC Energy Policy Innovation Council 23 us Like us on facebookfacebook Follow us on Twitter

24 EPIC

Section Three What are the pillars of solar policy and who establishes the policies themselves? 25

Solar Energy Policies can be Established by just About Any Entity International National Regional State Municipality Neighborhood Private and Public Company University 27

ASU Solarization Initiative Milestones as of June 30, 2012: Total Solar Generation Capacity:15.3 MW Total Solar Systems: 58 (52 on Tempe campus; 2 on West campus; 2 on Downtown campus; 2 on Polytechnic campus) Total Number of Modules and Collectors Installed: 61,203 ASU has the largest solar portfolio of any university in the U.S. Visit ASU's solar website at asusolar.asu.edu asusolar.asu.edu Details on installations: Power Parasol at ASU

Section Four What are some examples of existing policies? 29

Conventional Policy Instruments for Promoting Solar Energy 30

FEDERAL POLICIES 31

32 Business Energy Investment Tax Credit (ITC)

ITC Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool- heating systems are not eligible. In general, credits are available for eligible systems placed in service on or before December 31, 2016: 33

Renewable Electricity Production Tax Credit (PTC) 34

PTC (2) The federal renewable electricity production tax credit (PTC) is a per-kilowatt-hour tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by H.R (Div. B, Sec. 101 & 102) in October 2008 and again by H.R. 1 (Div. B, Section 1101 & 1102) in February 2009.H.R (Div. B, Sec. 101 & 102)H.R. 1 (Div. B, Section 1101 & 1102) 35

Solar Benefits if PTC expires? 36

RRETC (2) Solar-electric property There is no maximum credit for systems placed in service after The maximum credit is $2,000 for systems placed in service before January 1, Systems must be placed in service on or after January 1, 2006, and on or before December 31, The home served by the system does not have to be the taxpayer’s principal residence. Solar water-heating property There is no maximum credit for systems placed in service after The maximum credit is $2,000 for systems placed in service before January 1, Systems must be placed in service on or after January 1, 2006, and on or before December 31, Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. At least half the energy used to heat the dwelling's water must be from solar in order for the solar water-heating property expenditures to be eligible. The tax credit does not apply to solar water-heating property for swimming pools or hot tubs. The home served by the system does not have to be the taxpayer’s principal residence. 37

Residential Renewable Energy Tax Credit (RRETC) 38

STATE POLICIES 39

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Property Tax Assessment for Renewable Energy Equipment 41

42 Property Tax Incentives for Renewables.. / June States, + Puerto Rico, offer property tax incentives for renewables. 38 States, + Puerto Rico, offer property tax incentives for renewables.

43 State Sales Tax Incentives for Solar Projects. / May states, + Puerto Rico, offer sales tax incentives for solar projects. 22 states, + Puerto Rico, offer sales tax incentives for solar projects.

Solar and Wind Equipment Sales Tax Exemption 44

45 State Tax Credits for Solar Projects / May states offer tax credits for solar projects. 22 states offer tax credits for solar projects.

Non-Residential Solar & Wind Tax Credit (Personal) 46

Non-Residential Solar & Wind Tax Credit (Corporate) 47

Renewable Energy Production Tax Credit (Personal) 48

Residential Solar and Wind Energy Systems Tax Credit 49

50 State Solar Access Laws / May states, + the US Virgin Islands, have solar access laws. 40 states, + the US Virgin Islands, have solar access laws.

Solar Access 51

Solar easements allow for the rights to existing solar access on the part of one property owner to be secured from an owner whose property could be developed in such a way as to restrict that resource. Most common type of solar access law. 22 states limit or prohibit restrictions that neighborhood covenants and/or local ordinances may impose on the use of solar equipment. Solar Access Laws