2. Current Trends and Challenges in Analyzing Renewable-Energy Policy Rusty Haynes & Sue Gouchoe N.C. Solar Center N.C. State University NREL Strategic Energy Analysis Seminar December 11, 2008 A Report from DSIRE

3. The DSIRE Project www.dsireusa.org Database of State Incentives for Renewables & Efficiency Established in 1995 Funded by U.S. DOE Managed by NCSU; partners with IREC Project Scope: policies & programs that promote RE/EE Breakdown of data: ~1,900 total records ~1,060 RE records

4. DSIRE Unique Visitors (Monthly, 2005-08) 2006200520082007

5. Rebate Programs1839 Production Incentives77 Corporate Tax Incentives2026 Personal Tax Incentives1725 Grant Programs19 (+ DC) 34 Industry Recruitment/Support1620 Loan Programs2840 Property Tax Incentives3352 Sales Tax Incentives2326 State Financial Incentives for Renewables www.dsireusa.orgwww.dsireusa.org December 2008 # of states# of incentives

6. State Rebates for Renewables * DE: PV, SWH, Wind: ≤ 50% FL: PV: $4/W SWH: ≤$500 CT: PV: ≤$6/W MA: PV: ≤ $5.50/W Wind: ≤$4.75/W Hydro: ≤$6.50/W MD: PV: $2.50/W SWH: 30% Wind: $2.50/W MN: PV: ≤$2.25/W SWH: $30/sq. ft. WY: PV: $3k CA: PV: ≤$3.25/W or 50¢/kWh SWH: $20/sq. ft. Wind: $2.50/W IL: PV, SWH: 30% www.dsireusa.orgwww.dsireusa.org December 2008 AZ: ≤$3/W (RE) CO: PV: ≤$4.50/W NV: PV: ≤$4.60/W Wind: ≤$3/W Hydro: $2.50/W * Includes RPS-inspired utility rebate programs in AZ, CO & NV WI: PV, SWH: ≤30% Wind, Bio: ≤25% ME: PV: $2,000 SWH: ≤35% Wind: TBD VT: PV: ≤$3.50/W SWH: per BTU Wind: ≤$4.50/W NY: PV: ≤$5/W Wind: ≤$150k OR: PV: ≤$2.25/W SWH: ≤ 35% Wind: ≤ $4.50/W NJ: PV: ≤$4.10/W &/or SRECs Wind: varies Bio: ≤ $3/W

7. Strong, multi-year incentive, declining over time Stable funding source Easy application process Cost-effective quality-assurance mechanism Qualified installers Partnerships with banks, installers, NGOs Utility cooperation (esp. interconnection) Public & non-profit sector eligibility Program flexibility Track program usage details & share data Education & outreach component Financial Incentives: Best Practices

8. Public Benefits Funds16 (+ DC, ME) RPS Policies28 (+ DC & 5 goals) Solar/DG Carve-Outs14 (+ DC) Net Metering41 (+ DC) Interconnection Standards35 (+ DC) Solar/Wind Access Laws34 GP Purchasing Policies10 State Regulatory Policies www.dsireusa.orgwww.dsireusa.org December 2008

9. Public Benefit Funds for Renewables www.dsireusa.orgwww.dsireusa.org March 2008 16 state funds + DC $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.

10. 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 ☼ 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 December 2008www.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% by 2017 Solar water heating eligible *WA: 15% by 2020 ☼ 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

11. 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 Renewables Portfolio Standards, 1997

12. Solar/DG Provisions in RPS Policies 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 December 2008www.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 * It is unclear if solar water heating is eligible for OH’s solar carve-out. 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 ~7,550 MW by 2025 (LBNL est.), excluding MA & MO

13. 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. Best policies adopted by IL, NJ, NM, MD, MA, OR, PA, CA.*

14. Allows customers to store any excess electricity generated, in the form of a kWh credit, on the grid for later use. Available “statewide” in 41 states. State policies vary widely. Best policies adopted by CO, MD, FL, NJ, OR, PA, CA, CT.* Net Metering * Freeing the Grid 2008: www.newenergychoices.orgwww.newenergychoices.org

15. 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 December 2008www.dsireusa.org 80,000 100 1,000 50 100 40 20 2,000 1,000 10/100 25 OH: no limit 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 AZ: no limit *

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

17. Average Residential Retail Rates, 2007

18. In Conclusion… State Policy Trends: Dominance of RPS Super-sized net metering Regional markets Rebates programs in flux Next-generation RE funds PPA model (solar) Room for Improvement: Incentives for non-taxpayers Utility rate structures REC-selling opportunities Market coordination Federal policy Clarify 3rd-party sales Wild cards: New federal policies? Credit markets? State budgets? Electricity rates? Technology breakthroughs?

19. (intermission)

20. DSIRE: New Policy Projects 1.“DSIRE SOLAR”  A portal on the DSIRE site for solar-specific policy information 2.Quantitative Policy Databases for NREL Analysis Projects  Financial incentives for solar and wind  State RPS policies

21. Solar Portal DSIRE SOLAR Features:  Clickable U.S. Map for Quick Access to Solar Incentives  Solar Policy Guide  Detailed explanation of the solar policies covered by DSIRE  Solar Policy Summary Maps  Financial Incentives, Net Metering, Solar in RPS Policies  Solar Policy Comparison Tables  Tax Credits, Rebates, Solar Portfolio Standards, Net Metering

22. DRAFT of new DSIRE Web Design

24. DSIRE Solar Policy Guide  Provides a description and context for the 20+ policy options in DSIRE.  Distills and documents solar policy status and trends  Supplemented by policy summary maps and tables  Links to specific programs on DSIRE for examples, legislation, contacts.  Organized by policy topic (tax credits, rebates, net metering, solar access, etc.)  For each policy: Description, Status & Trends, Examples, Resources  Updated periodically to reflect new policies, trends, examples, and resources.

26. State Tax Credits & Deductions for Renewables State offers Personal & Corporate Tax Incentives State offers only Personal Tax Incentives State offers only Corporate Tax Incentives Puerto Rico D.C.

27. Solar Water Heating Incentives Utility/Regional Incentives U X% Tax Credit: (R) residential, (C) commercial State Rebate $ amt. or % January 2007 DE: 50% FL: $500 (Res.) $5,000 (Com.) VT: $1.75-$3.50 per 100 Btu/day MD: 20% WI: ~25% San Diego CSI Pilot Rebate OR: ~$1,000 (Res.) ~ 35% (Com.) IL: 30% 35% 30% (R) 35% (C) $0.60/kWh 1 st -yr. savings (R) 10% (C) 25% (R) MA: 15% RI: 25% (R) $500 (R) 15% 35% U U U 100% Deduction (R) U U U U U U U U TN: 40% ME: 25% 25% U OH: $3 per 100 Btu/day Sales Tax Exemption U

28. Solar/DG Provisions in RPS Policies 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 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 TX: double credit for non-wind (non-wind goal: 500 MW) UT: 2.4 multiplier for solar State goal with solar/DG provision DSIRE: www.dsireusa.org December 2008www.dsireusa.org

30. Eligibility Incentive Amount Maximum Incentive REC Ownership Eligible System Size Funding Source Program Budget Expiration Date Project Pre-approval Equipment Warranty Design/Installation Installer Qualification Inspections/Monitoring Incentive Expenditures # of Installations Installed Capacity Cumulative Incentive Expenditures Cumulative # of Installations Cumulative Installed Capacity Incentive Overview Mechanisms to Ensure System Performance Expenditure and Installation Data State Rebate Comparison Tables: Policy Elements

31. State PV Rebate Comparison Table - Excerpt StateProgram NameEligible RecipientsIncentive AmountMaximum IncentiveREC Ownership California California Solar Initiative 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 California CEC - New Solar Homes Partnership Home builders Varies. There are separate levels for new custom homes and homes in small developments, homes that are a part of large developments, individual units of low-income housing, and common areas of low-income housing developments. Incentives are adjusted based on expected performance, and will decline over time based on the total installed capacity. Not statedRemains with system owner Connecticut CCEF - On-Site Renewable DG Program Non-residential customers of United Illuminating Company or Connecticut Light & Power For for-profit owners: $4.50/W for first 100 kW, $3.50 for next 100 kW. Not-for-profit system owners: $4.75/W for first 100 kW, $4.25/W for next 100 kW. Additional $0.25/W premium for buildings that meet LEED Silver certification. CCEF also compensates system owners based on the estimated present value of the system's RECs. $850,000 (plus, potentially, $0.02/kWh for projects installed in southwestern CT by 6/30/08). RECs transfer to CCEF for systems 50 kW-PTC and larger. CCEF compensates system owners based on estimated present value of the system's RECs over 15 yrs. Connecticut CCEF - 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 customers average annual or expected electric usage Remains with project owner Delaware Green 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

32. Quantitative Financial Incentive Database  Detailed technology- and sector-specific quantitative data associated with government, utility, and private financial incentive programs for: o PV o Solar Water Heating o Solar Space Heating o CSP o Wind  Incentive Types Covered o Rebates & Grants o PBIs & FITs o Tax Credits & Deductions  ~220 data fields; >200 incentive programs

33. StateIncentive TypeProgram Name PV Res. Rebate $/kW PV Com. Rebate $/kW PV Non- P/Govt Rebate $/kW PV Rating Basis (AC/DC/PTC) PV % Cost Res. Max. PV % Cost Com. Max. PV % Cost Non-P/Govt Max. PV Res. Rebate Min. Size (kW) Arizona Utility Rebate Program TEP - Renewable Energy Credit Purchase Program$3,000$2,500 DC60% 1.2 Arizona Utility Rebate Program Trico Electric Cooperative - SunWatts Incentive Program$4,000 DC50% Arizona Utility Rebate Program UES - Renewable Energy Credit Purchase Program$3,000$2,500 DC60% 1.2 California Utility Rebate Program Alameda Power & Telecom - Solar Photovoltaics Rebates Program$2,800 AC California Utility Rebate Program Anaheim Public Utilities - PV Buydown Program$4,000$2,800 AC50% California Utility Rebate Program Azusa Light & Water - Solar Partnership Program$4,000 AC50% 1 Quantitative Incentive Database - Excerpt

34. Quantitative RPS Database  Detailed renewable energy generation requirements by resource class and by supplier category o Start year, overall RE required in start year (%, MW, MWh) o Target year, overall RE required in target year (%, MW, MWh) o % state load covered by RPS policy o % required for each resource tier, set-asides o “New” renewables date o % renewables that may be derived from existing renewables o Multipliers for favored resources/technologies o Annual ramp rate o Monetary penalties for each resource tier  ~85 data fields; 29 state RPS mandates

35. State Primary: % State Load Covered 1° Start Date 1° Total RPS Starting % 1° Total RPS Starting MW 1° Total RPS Target % 1° Total RPS Target MW 1° Target Date 1° Duratio n (Years) 1° Total RPS Ramp Rate (Increme ntal %) 1° Total RPS Ramp Rate (MW) 1° Penalty ($/MWh) New RE Date (mm/dd/ yyyy) Existing RE Allowed (%) 1° Tier 1 Start Date 1° Tier 1 Starting RPS (%) Arizona58.8%1/1/20061.25% 15% 12/31/202599990.724% 0% With the exception of incremental generation from existing hydorelectric facilities, generation from existing renewable energy facilties are not eligible. 1/1/20061.250% Colorado58.7%1/1/20073.00% 20% 12/31/202099991.308% 100%1/1/20072.880% Hawaii100.0% 1/1/2010 10.00% 20% 12/31/20209999 1.000% 100% Illinois46.0%5/31/20072.00% 25% 6/1/20259999 1.353% 100%5/31/20071.500% Quantitative RPS Database - Excerpt

36. Quantitative Data Challenges Incentives  Rapidly changing incentive programs  Many different, increasingly complex types of incentive structures  Variations and bonus incentives for different applications  Multiple options for taking a given incentive – rebate vs. PBI  State incentives available only to customers of certain utilities RPS  % load covered by RPS policy: exemptions, obligated entities  Different “New” date for different resources  Combinations of %, MW, and MWh standards  Multiple multipliers

37. Rusty Haynes N.C. Solar Center N.C. State University rusty_haynes@ncsu.edu 919.513.0445 Contact: Sue Gouchoe N.C. Solar Center N.C. State University susan_gouchoe@ncsu.edu 919.513.3078