DLC | Model Initiatives | June 30, 2008 Promoting Renewable Power New Dem Play | Giving consumers incentives to install wind, solar, and energy saving devices. Where It's Working | 48 states and the District of Columbia Players | State officials, utilities, private homeowners More Environment, Energy & Transportation Plays Prices at the gasoline pump are not the only energy cost giving Americans heart-burn. It's also getting more and more expensive to keep the lights on. Soaring costs of natural gas -- a fuel increasingly used to generate electricity -- coupled with rising demands, have pushed power prices up in recent years. In response, states are stepping in to help ease the crunch on consumers and diversify electricity supplies from clean, renewable, and homegrown sources. As their name suggests, renewable energy sources are not finite like conventional fuels. They are also far less polluting. Innovative programs that allow homeowners who generate their own electricity and sell their surplus to utilities such as "net metering," a technology that spins electricity meters in reverse to measure the amount of unused renewable electricity homeowners place back on the grid are being use by some 42 states and Washington, D.C. Net metering programs are sponsored either by the state or by utilities, according to the Database of State Incentives for Renewable Energy (DSIRE) and used for both solar and wind energy. DSIRE is a comprehensive, searchable database of state, local, utility, and selected federal incentives that promote renewable energy. Established in 1995, it is an ongoing project of the Interstate Renewable Energy Council (IREC), funded by the U.S. Department of Energy and managed by the North Carolina Solar Center. In addition to net metering laws, 20 states and Puerto Rico provide homeowners with rebates or tax breaks that subsidize up to 30 percent or more of the cost of clean energy systems. To further such trends, 31 states and some municipalities and power companies operating in those states offer utility customers rebates on the purchase and installation of solar or wind systems, according to DSIRE. Rebates typically range from $150 to $4,000. In some cases, rebate programs are combined with low- or no-interest loans. Encouraging the installation and use of renewable energy sources such as solar and wind power can help to ease demand at peak demand times. California was the first state to offer a generous package of renewable-energy incentives for homes and businesses in the late 1990s as power companies were deregulated. Such programs tap the state's ample sunshine and help ease chronically high electricity rates and an overtaxed grid that helped contribute to rolling blackouts several years ago. To further boost the use of solar power, California regulators in January 2006 approved the California Solar Initiative (CSI), the largest solar energy policy ever enacted in the United States and second only to Germany in terms of global solar policy. The goal is to use rebates to drive so much demand that solar prices plunge, and the rebates can be phased out. But a worldwide shortage of solar panels, spurred by even-more-generous incentives in Japan and Germany, is keeping prices high until more factories are built in 18 months. The CSI allocated $3.3 billion for solar energy rebates in the state for the next 10 years, providing for the installation of approximately 3,000 MW of solar energy, roughly the power equivalent of six large natural-gas fired power plants. So far there are 28 states with rebate programs including California, Florida, Massachusetts, Nevada, New Jersey, New York, Illinois, and Rhode Island. State efforts got an added boost from the federal government in January 2006, when new $2,000 federal tax credit for solar power system purchases was implemented as part of the Energy Policy Act of 2005 (EPAct). Tax credits are still available for systems "placed in service" from January 2006 through December 31, 2008. While EPAct is set to expire in December of 2008, a new bill, called the Renewable Energy and Energy Conservation Tax Act of 2008, will improve and extend all of the "set to expire" tax credits. Thus far this proposed bill has been passed in the House and is being debated on in the Senate. This bill will help reduce dependence on foreign oil and expand tax incentives for renewable electricity, energy and fuel, and energy efficient homes and appliances. While solar energy has become a major source of renewable energy so has wind energy. In the United States, wind energy industries are continuing new installations of wind power facilities that span 10 states creating a capacity of 18,000 MW. Texas, placed as the nation's leader in wind power capacity, has added over half of this new capacity with 5,000 MW installed and nationwide over 4,000 MW of projects are under construction. According to the American Wind Energy Association (AWEA) the U.S. wind energy industry now represents over one percent of the nation's electrical supply with enough power to power 1.5 million American households. With growing jobs and manufacturing investments this AWEA expects this trend to continue to grow. Resources For Action The Database of State Incentives for Renewable Energy (DSIRE) www.dsireusa.org/ Model Distributed Generation Interconnection Procedures and Net Metering Provisions Interstate Renewable Energy Council www.irecusa.org/ American Wind Energy Association http://www.awea.org/faq/netbdef.html California Solar Initiative www.cpuc.ca.gov/Static/energy/electric/051213_casolar.htm Consumer Tax Incentives -- Solar Energy Systems http://www.energytaxincentives.org/ consumers/solar.php Department of Energy http://www.energy.gov/taxbreaks.htm Renewable Energy and Energy Conservation Tax Act http://www.speaker.gov/legislation?id=0162 Additional Reading "U.S. Wind and Solar Power Enjoys Another Year of Growth," Rick Laezman, Electrical Contractor Magazine, March 2008 http://www.ecmag.com/index.cfm?fa=article &articleID=8757 "U.S. Wind Industry Installs 1400 MW of Wind Power in the First Quarter 2008," Renewable Energy World, Washington, DC, USA, May, 8 2008 http://www.renewableenergyworld.com/rea/ news/story?id=52415 Contacts Interstate Renewable Energy Council (IREC) P.O. Box 1156 Latham, New York 12110-1156 (518) 458-6059 info@irecusa.org