Utility-Owned Solar PV and the Renewable Energy Expansion Act of 2010

http://www.renewableenergyworld.com/rea/news/article/2010/05/utility-owned-solar-pv-and-the-renewable-energy-expansion-act-of-2010

On Feb. 4, 2010, U.S. Representative Earl Blumenauer (D-Ore.) introduced the Renewable Energy Expansion Act of 2010. If enacted, the legislation would extend and expand the renewable energy tax incentives contained in the American Recovery and Reinvestment Act.

While the extension of the successful cash grants program is garnering most of the attention, a less visible piece of the legislation may also have a far reaching impact on the dynamics of the solar industry in the U.S. The bill also eliminates the requirement that electric utilities "normalize" the benefits of the Investment Tax Credit (ITC) over the lifetime of the solar system. In the words of Rep. Blumenauer, the bill "eliminates an unintended consequence of the normalization rules that limited the ability of regulated utilities to develop renewable power facilities, even if the project otherwise met the prudency tests required by their public utilities commissions." Click here to see the full bill.

To better understand the potential implications of these proposed changes, which may at first seem obscure and even unimportant, it is first necessary to provide some background on the ITC for solar and the normalization accounting rules utilities currently must apply to it.

In the Energy Policy Act of 2005 (EPAct 2005) (PDF), Congress introduced a 30 percent ITC for solar for both residential and commercial customers. The intent of the ITC was to incentivize investment in solar energy by individuals and businesses through a reduction in tax liability proportional to 30 percent of the capital costs of a solar project. While the ITC certainly increased investment in solar, one party was noticeably absent: utilities. Under EPAct 2005 utilities were not eligible to take advantage of the ITC. This changed, however, with passage of the Emergency Economic Stabilization Act of 2008. Here, Congress extended the ITC for eight years to 2016 and eliminated the prohibition that prevented regulated utilities from taking advantage of the ITC. This facilitated utility ownership of solar. As a result, the number of utilities seeking cost-recovery for new solar projects increased quickly.

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of New Jersey. It already has the lowest electric rates in the state, too.

My electric utility is municipally owned. Again, the only one in the state.

Coincidence?

to chop summer AC load peaks in NE