Green Energy Legislation + (Tax Incentives + FIT) = Jobs and Economic Growth

03 Nov 2010 10:21 AM | Michelle Hickey
Some of the largest investments in Canadian history were negotiated and confirmed within the first year since the signing of the Green Energy Act (GEA), which ushered in the first true comprehensive Feed-in-Tariff (FIT) program in North America, and set ambitious goals for transitioning away from coal-generated energy. The legislation’s basic approach is that by creating a market for renewable energy, economic growth will follow. The legislation commits to a full transition away from coal-powered electric generation prior to 2014, which has created immediate demand for a broad spectrum of renewable energy power generation facilities and technologies.
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In March, OPA announced 510 projects for mid-scale FIT projects (10kW to 500 kW) with a total generating capacity of 112 MW. The following month, there were 184 new private-sector green energy projects, including a 300 MW off-shore wind projects in Lake Ontario – with a total value of $9 billion. Seventy-six of these projects are ground-mounted solar photovoltaic, 47 are on-shore wind and 46 are waterpower projects. The remainder includes: biogas, biomass, landfill gas, rooftop solar projects and one off-shore wind project.
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The connection between the FIT and the growth of renewable energy production is clear. The number of wind turbines in Ontario has grown from 10 in 2003 to more than 670 by the time the GEA regulations were announced in 2009. Wind output from Ontario’s commercial wind farms reached 2.3 terawatt hours in 2009, a 60 percent increase over the previous year. How did this happen? FIT payments for wind power, for example, are 13.5 cents per kilowatt-hour (c/kWh) for on-shore and 19.0 c/kWh for off-shore projects. The FIT also includes both a price escalation clause linked to inflation over the 20-year contract and a “price adder” to encourage the development of Aboriginal and community projects.

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Webinar Q&A

Q: There is a 2% limit on rate increases. Are you sure this is not a problem? The rate increase is in reference to the total procurement, so we do not anticipate it being an issue.


Q: I am a homeowner. Your invitation stated you may have some new information concerning Gov. Rauner's budget. That's what I'm particularly interested in. The proposed budget for 2015/2016, at this time has eliminated rebates and grants. ISEA’s position is that we will continue to advocate for the continuation of this program. There is also a legislative bill that has proposed an extension to this program through 2020 which we support and will continue to track.


Q: Can you provide an REC typical value for an average sized home with this proposed declining block program? I have a hard time explaining the value of RECs. Since Illinois has not had a REC price in the past, it’s difficult to estimate what the initial market value may be. The supplemental procurement will go a long way in establishing Illinois REC market prices. In the meantime, the Illinois Power Agency (IPA) will continue to research other markets to make the best decisions for the Illinois market. The goal, of course, is to install solar, and the purpose of the REC is to incentivize solar purchases and ensure pricing makes economic sense. As a reminder, there’s still a bit of the process left before we see what price RECs will have in Illinois. Once the legislation has been passed, and the REC price is published, we’ll update as needed.


Q: What recs are available for people who installed solar systems in 2014? If the system was energized prior to January 21, 2015, you qualify for the regular procurement event in September 2015.


Q: Does Exelon nuclear energy qualify as renewable energy with the 35% by 2030? It does not. Renewable energy is defined within the statute and includes wind, solar, and biofuels. More information can be found at http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=88&GA=99&DocTypeId=HB&DocNum=2607&GAID=13&LegID=88134&SpecSess=&Session=

It is important to note that the Clean Jobs Bill, not to be confused with other energy bills, is the only bill that focuses on renewable energy while producing 32000 jobs per year.


Q: Will clean energy that has already been produced from existing systems be considered for auction? No. The RECs will only be from the contract date of the accepted bid moving forward.


Q: If I plan to install more solar panels in 2015, are IL rebates still available, or is it dependent on Governor Rauner's budget proposal? The program for the 2014/2015 fiscal year is closed. So any future rebate availability will depend on the budget proposal. However, consider the procurement events of 2015/2016 as potential funding sources.  This scenario strongly highlights why we need to pass the Clean Jobs Bill (HB2607/SB1485) as it will provide a way to raise the status of renewable energy to equal that of all other forms of energy. Thus, any perceived dependence on rebates and grants will be removed.


Q: Evidently the 2014/20­15 rebates were frozen. Is that still the case? At this time, rebate decision letters have gone out, clarifying which will be paid and informing the owners that no further extensions will be granted.


Q: When will the specific process of solar customers contracting to be paid for future SRECs in place of the Illinois DCEO Rebate program be rolled out?­ The first supplemental procurement will be June 18, 2015. Aggregators are already available. We have a list of preferred companies here http://www.illinoissolar.org/SRECTrade-FAQ


Q: Once the REC schedule is defined, can you post some investment payback time scenarios on the ISEA blog, including the declining block ­ to let people know what is a realistic investment outlook?

We will try, however, we don’t anticipate seeing any information on this until early to mid 2016.



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