1. Update from DSIRE: Solar Policy News & Trends Susan Gouchoe North Carolina Solar Center IREC Annual Meeting Long Beach, California September 24, 2007

2. Focusing on… Solar Portfolio Standards Rebates & Other Direct Incentives New & Expanded Tax Credits Solar Access Laws

3. The Year of the RPS New RPS Mandates New RP Goals Existing RPS Expanded and/or Increased RPS Policies with Solar Set-Asides

4. *NEW* Renewables Portfolio Standards & Goals State Goal State RPS DSIRE: www.dsireusa.org September 2007 WA: 15% by 2020 NH: 23.8% in 2025 VA: 12% by 2022 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) ND: 10% by 2015 OR: 25% by 2025 (lg. utilities) 5% - 10% by 2025 (sm. utilities) MO: 11% by 2020 double credit for DG 0.3% solar electric by 2014 0.2% solar by 2018 IL: 25% by 2025 300 MW 33 MW 300 MW

5. Increased/Expanded RPS Policies CT: 23% by 2020 MN: 25% by 2025 (Xcel: 30% by 2020) AZ: 15% by 2025 CO: 20% by 2020 (IOUs) 10% by 2020 (co-ops & large munis) DSIRE: www.dsireusa.org September 2007 MD: 9.5% in 2022 DE: 20% by 2019 NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) 2% solar PV 2% solar electric 4.5% DG 0.8% solar electric 4% solar electric by 2020; 0.6% DG by 2015 500 MW 1250 MW 180 MW 1500 MW 175 MW

6. Solar/DG Provisions in RPS Policies [~6,000 MW solar capacity] MD: 2% solar electric in 2022 DC: 0.386% solar electric by 2022 DE: 2.005% solar PV by 2019 Triple credit for PV Solar thermal counts towards solar set-aside DSIRE: www.dsireusa.org September 2007 DG: Distributed Generation NJ: 2.12% solar electric by 2021 PA: 0.5% solar PV in 2020 NC: 0.2% solar by 2018 AZ: 4.5% DG by 2025 NV: 1% solar by 2015; 2.4 to 2.45 multiplier for PV NM: 4% solar electric by 2020 0.6% DG by 2015 CO: 0.8% solar electric by 2020 NH: 0.3% solar electric by 2014 NY: 0.1542% customer-sited by 2013 WA: double credit for DG

7. Promoting Solar through RPS Policies Increasing support of solar in RPS policies Favoring set-asides rather than multipliers (MD, NM, DE) Separate requirements for IOUs and munis/co-ops Non-electric solar thermal is RPS-eligible in 10 states  Eligible for set-aside in 3 states Potential solar capacity from solar set-asides: ~6,000 MW

8. Renewables Portfolio Standards State Goal ☼ PA: 18%¹ by 2020 ☼ NJ: 22.5% by 2021 CT: 23% by 2020 MA: 4% by 2009 + 1% annual increase 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 ☼ Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE ¹PA: 8% Tier I / 10% Tier II (includes non-renewables) HI: 20% by 2020 RI: 16% by 2020 ☼ CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis ) ☼ DC: 11% by 2022 DSIRE: www.dsireusa.org September 2007 ☼ NY: 24% by 2013 MT: 15% by 2015 IL: 25% by 2025 VT: RE meets load growth by 2012 Solar water heating eligible *WA: 15% by 2020 ☼ MD: 9.5% in 2022 ☼ NH: 23.8% in 2025 OR: 25% by 2025 (large utilities ) 5% - 10% by 2025 (smaller utilities) *VA: 12% by 2022 MO: 11% by 2020 ☼ *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

9. Renewables Portfolio Standards MA: Not Yet Determined AZ: 1.1% by 2007 NV: 1% by 2009 ME: 30% by 2000 State RPS DSIRE: www.dsireusa.org September 1997 IA: 105 MW by 1999 MN: 425 MW by 2002

10. 22 “state” programs (includes CO, NV, AZ – RPS-inspired U programs) No new states w/ rebates  NJ, CA transitions ~ 55 utilities/non-profits in 20 states New utility PV programs  Rocky Mtn Power (UT)  Columbia W&L (MO)  Gainesville RU (FL) Solar PV - Direct Incentives DE: 50% $4/W CT: $5/W MA: $2+/W VT: $1.75-3.50/W MD: 20% $2/W 50% $1.50-$2/ kWh-1 yr. $3.50/W $1.90-$2.95/W 26-46 ¢ /kWh, 5 yrs. $1 – $2.25/W 30% 15 - 54¢/kWh NY: $4-5/W $2-4/W $3-5/W $2-4/W U U U U U U U U 13¢/kWh $2-4.50/W 18¢/kWh 40% U NJ: RECs U U $3.50/W U U U = Utility Program = State Program $/W $5/W

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

12. DSIRE: www.dsireusa.org September 2007 (R) Residential; (C) Commercial; (NR) Non-Residential Solar PV Tax Credits 35% 30% (Non-Corp.) ~2.7¢/kWh 10 yrs. (C) $ 3/W (R) 50% (C) 10% (NR) 25% (R) MA: 15% (R) 35% (C) $500 (R) 15% 35% 100% Deduct. (R) 25% (R) 10% (C) 50% (R) Tax Credits in 13 States Range 10% - 50% FL, IA, NE, OK have small PTCs –> PV eligible ~10 states proposed new credits in past year RI: 25% (R) varies

13. New Solar Tax Credits Louisiana – Residential Solar/Wind Tax Credit 50% up to $12,500 for installations beginning 1/1/2008 Homes and apartment buildings eligible Eligible solar: PV, space heating, space cooling, or water heating Kentucky – Incentives for Energy Independence Variety of tax incentives for alt fuels and RE facilities Solar Electric: ≥ $1M investment; >50 kW; electricity sold to 3 rd party Combination of tax incentives may offset up to 50% of capital expenditures –100% reimbursement of sales tax on equipment, etc. purchased during construction –Up to 100% tax credit on KY income tax / limited liability entity tax owed –Wage assessment of up to 4% of employee gross wages; employee claims tax credit Specific tax incentive package is negotiated - KY Econ. Devel. Finance Authority Kentucky Alternative Fuel and Renewable Energy Fund created to promote R&D

14. States Expanding Solar Tax Credits Oregon - Business Energy Tax Credit Increased business credit from 35% to 50% w/ $10M max. Homebuilders now eligible - up to $9K for PV; $12K for high-performance home; 60¢/kWh 1-yr. savings + $3K for SWH Note: UT, RI also have homebuilder provision Arizona - Non-Residential Solar & Wind Tax Credit Extends commercial credit to all non-residential applications, including tax- exempt organizations. A third party that finances, installs or manufactures a system for a non- residential (e.g., non-profit, government) installation can claim the credit; Retroactive to 1/1/06 North Carolina – Renewable Energy Tax Credit Taxpayer who donates money to a tax-exempt nonprofit to help fund RE project can claim 35% tax credit on amount donated.

15. 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. Transferred with property title. 13 states limit or prohibit restrictions that neighborhood covenants and/or local ordinances can impose on the use of solar equipment. Solar Access Laws D.C.

16. At least eight states proposed measures this past year to create or strengthen solar access protections for homeowners New laws - North Carolina, New Jersey New Jersey: Limits HOA authority to adopt/enforce rules that would: –increase the solar installation or maintenance costs by >10% of total cost –inhibits the system from functioning at intended max. efficiency. Enhanced Laws - New Mexico, Arizona Arizona: Limits HOA authority to adopt rules that would: –prevent installation, adversely affect cost/efficiency, restrict use, impair function –courts must award attorney fees and cost of litigation to prevailing party New & Improved Solar Access Laws

17. Susan Gouchoe susan_gouchoe@ncsu.edu 919-513-3078 Rusty Haynes rusty_haynes@ncsu.edu 919-513-0445 www.dsireusa.org dsireinfo@ncsu.edu