RENEWABLE INCENTIVES AND 2016 LEGISLATIVE SESSION PRESENTATION TO SOLAR WA January 13, 2016 Jaimes Valdez Policy Manager

EFFORTS AND BILLS UNDERWAY BILLS FILED  HB 2346: Reps. Morris and Smith - Promoting a sustainable, local renewable energy industry through modifying renewable energy system tax incentives and providing guidance for renewable energy system component recycling.  SB 6188 : Senators McCoy, Keiser, Rolfes, Chase, Ranker, and Frockt : Relating to distributed generation  SB 6253 : Senators Sheldon, Rolfes, Rivers, Takko, Roach, Becker, Bailey, Miloscia, Warnick, Hargrove, Hobbs, and Hewitt: Relating to public utility districts owning community solar projects within or without district boundaries

INCENTIVE COMPARISON (PER OPR) Existing LawHB 2346 (Rep. Morris) Tax preference expiration dates Cost Recovery Incentive:  June 30, (Utilities may claim Public Utility Tax (PUT) credit through June 30, 2021.) Sales Tax Exemptions:  For under 10kW systems: June 30,  For other systems: July 1, Production Incentive:  No new certifications after June 30, 2020; but certifications issued until that date entitle participant to 10 years of payments. Sales Tax Exemptions:  For solar systems up to 500 kW: June 30, Cap on total funds available for each utility 0.5% of utility’s taxable power sales or $100,000, whichever is greater. 2.0% of utility’s taxable power sales in 2014, or $250,000, whichever is greater. Agency administering the program Department of Revenue.WSU Extension Energy Program. What happens if funds run out If requests for the incentive exceed the amount of funds available for credit, annual payments must be reduced proportionately. WSU must stop issuing new 10-year certifications for that utility if certification is likely to result in exceeding the available funds for credit.

INCENTIVE COMPARISON (PER OPR) CONT… Existing LawHB 2346 (Rep. Morris) Eligible system ownership requirements Customer must:  own the system; and  own the premises where the system is installed. Customer must:  own the system; and  occupy, but need not own, the premises where the system is installed. Solar module recycling program N/ABeginning January 1, 2019, certification for production incentive may only be issued if the solar module manufacture has filed a plan for a self-directed solar module recycling program with the Department of Ecology. Agency administering the program Department of Revenue.WSU Extension Energy Program. Cap on Annual Payments per Participant  $5,000 per system.  $5,000 per Community Solar (CS) project participant.  $25,000 for larger (Class B) systems.  $5,000 per CS project participant.

INCENTIVE COMPARISON (PER OPR) CONT… Existing LawHB 2346 (Rep. Morris) Base Incentive Rates (per kW-h) $0.15Starting rates in 2017<> End rate in 2020 Class A: $0.22 <> $0.16 Class B: $0.18 <>$0.12 (Declines $0.02 per year) Community Solar Base Rates (per kW-h) $0.30$0.32, declining to $0.26 in 2020 "Made in WA" (MIW) Bonus: Applying multipliers, results in:  up to $0.39/kW-h bonus for MIW solar components, residential  up to $0.78/kW-h bonus for CS MIW $0.10, declining $0.02 per year to $0.04 Effective Max Incentive (per kWh) $0.54 On-Site $1.08 Community Solar $0.32 On Site Class A $0.28 On-site Class B $0.42 Community Solar Incentive Payment Term Until June 30, Years from first certification (new systems only)

INCENTIVE COMPARISON (PER OPR) CONT… Existing LawHB 2346 (Rep. Morris) Community Solar Structure $Up to 75 kW in size Three options:  owned by local individuals, households, or non-utility businesses and installed on local government property;  utility-owned and voluntarily funded by the utility's ratepayers in exchange for credits on utility bills; or  owned by a limited liability company, a cooperative, a mutual corporation, or association. Up to 500 kW in size  must be administered by a utility or non-profit organization;  must have at least ten participants, all utility customers; and  Nonprofits must file a business plan with WSU, who must establish eligibility guidelines. Caps on total funds available for Community Solar  Utility-owned CS projects: 25 percent  Company-owned CS projects: 5 percent CS projects (administered by a utility or a non-profit organization): 25 percent

SUPPORT / CONCERNS DISCUSSION ON NEXT STEPS Build support and move the bill! HB 2346 TimelineDate Introduced1/11/16 Hearing in Technology Economic Development Committee (TED)1/12/16 Possible Executive Work Session1/21/16 Cutoff for TED Committee2/5/16 House Fiscal Committee Cutoff2/9/16 House Floor Cutoff2/17/16 Senate Policy Committee Cutoff2/26/16

Level 6: Leading Level 5: Owning Level 4: Contributing Level 3: Endorsing Level 2: Following Level 1: Observing ENGAGEMENT PYRAMID

ADVOCACY AND OPPORTUNITIES  Anytime : Letters / Calls to Legislators  January 28 th : SIW Lobby Day  TBD : Testify at Finance Committee Hearing  Opportunities to Meet with Legislators – Contact via staff or advocates Jaimes Valdez Policy Manager Northwest SEED