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Property Tax Assessments as a Finance Vehicle for Residential PV Installations: Opportunities and Potential Limitations

Description: Readily accessible credit has often been cited as a necessary ingredient to open up the market for residential photovoltaic (PV) systems. Though financing does not reduce the high up-front cost of PV, by spreading that cost over some portion of the system's life, financing can certainly make PV systems more affordable. As a result, a number of states have, in the past, set up special residential loan programs targeting the installation of renewable energy systems and/or energy efficiency improvements, and often featuring low interest rates, longer terms, and no-hassle application requirements. Historically, these loan programs have met with mixed success (particularly for PV), for a variety of reasons, including: (1) historical lack of homeowner interest in PV, (2) lack of program awareness, (3) reduced appeal in a low-interest-rate environment, and (4) a tendency for early PV adopters to be wealthy, and not in need of financing. Although some of these barriers have begun to fade--most notably, homeowner interest in PV has grown in some states, particularly those that offer solar rebates--the passage of the Energy Policy Act of 2005 (EPAct 2005) introduced one additional roadblock to the success of low-interest PV loan programs: a residential solar investment tax credit (ITC), subject to the Federal government's 'anti-double-dipping' rules. Specifically, the residential solar ITC--equal to 30% of the system's tax basis, capped at $2000--will be reduced or offset if the system also benefits from what is known as 'subsidized energy financing', which is likely to include most government-sponsored low-interest loan programs. Within this context, it has been interesting to note the recent flurry of announcements from several U.S cities concerning a new type of PV financing program. Led by the City of Berkeley, California, these cities propose to offer their residents the ability to finance the installation of a PV system using ...
Date: February 1, 2008
Creator: Bolinger, Mark A & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Comparison of AEO 2008 Natural Gas Price Forecast to NYMEX Futures Prices

Description: On December 12, 2007, the reference-case projections from Annual Energy Outlook 2008 (AEO 2008) were posted on the Energy Information Administration's (EIA) web site. We at LBNL have, in the past, compared the EIA's reference-case long-term natural gas price forecasts from the AEO series to contemporaneous natural gas prices that can be locked in through the forward market, with the goal of better understanding fuel price risk and the role that renewables can play in mitigating such risk. As such, we were curious to see how the latest AEO reference-case gas price forecast compares to the NYMEX natural gas futures strip. This brief memo presents our findings. Note that this memo pertains only to natural gas fuel price risk (i.e., the risk that natural gas prices might differ over the life of a gas-fired generation asset from what was expected when the decision to build the gas-fired unit was made). We do not take into consideration any of the other distinct attributes of gas-fired and renewable generation, such as dispatchability (or lack thereof) or environmental externalities. A comprehensive comparison of different resource types--which is well beyond the scope of this memo--would need to account for differences in all such attributes, including fuel price risk. Furthermore, our analysis focuses solely on natural-gas-fired generation (as opposed to coal-fired generation, for example), for several reasons: (1) price volatility has been more of a concern for natural gas than for other fuels used to generate power; (2) for environmental and other reasons, natural gas has, in recent years, been the fuel of choice among power plant developers (though its appeal has diminished somewhat as prices have increased); and (3) natural gas-fired generators often set the market clearing price in competitive wholesale power markets throughout the United States. That said, a more-complete analysis of how ...
Date: January 7, 2008
Creator: Bolinger, Mark A; Bolinger, Mark & Wiser, Ryan
Partner: UNT Libraries Government Documents Department

Financial Innovation Among the Community Wind Sector in the United States

Description: In the relatively brief history of utility-scale wind generation, the 'community wind' sector - defined here as consisting of relatively small utility-scale wind power projects that are at least partly owned by one or more members of the local community - has played a vitally important role as a 'test bed' or 'proving ground' for wind turbine manufacturers. In the 1980s and 1990s, for example, Vestas and other now-established European wind turbine manufacturers relied heavily on community wind projects in Scandinavia and Germany to install - and essentially field-test - new turbine designs. The fact that orders from community wind projects seldom exceeded more than a few turbines at a time enabled the manufacturers to correct any design flaws or manufacturing defects fairly rapidly, and without the risk of extensive (and expensive) serial defects that can accompany larger orders. Community wind has been slower to take root in the United States - the first such projects were installed in the state of Minnesota around the year 2000. Just as in Europe, however, the community wind sector in the U.S. has similarly served as a proving ground - but in this case for up-and-coming wind turbine manufacturers that are trying to break into the broader U.S. wind power market. For example, community wind projects have deployed the first U.S. installations of wind turbines from Suzlon (in 2003), DeWind (2008), Americas Wind Energy (2008) and later Emergya Wind Technologies (2010),1 Goldwind (2009), AAER/Pioneer (2009), Nordic Windpower (2010), Unison (2010), and Alstom (2011). Just as it has provided a proving ground for new turbines, so too has the community wind sector in the United States served as a laboratory for experimentation with innovative new financing structures. For example, a variation of one of the most common financing arrangements in the U.S. wind market ...
Date: January 19, 2011
Creator: Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice

Description: Increasing levels of financial support for customer-sited photovoltaic (PV) systems, provided through publicly-funded incentive programs, has heightened concerns about the long-term performance of these systems. Given the barriers that customers face to ensuring that their PV systems perform well, and the responsibility that PV incentive programs bear to ensure that public funds are prudently spent, these programs should, and often do, play a critical role in ensuring that PV systems receiving incentives perform well. To provide a point of reference for assessing the current state of the art, and to inform program design efforts going forward, we examine the approaches to encouraging PV system performance used by 32 prominent PV incentive programs in the U.S. We identify eight general strategies or groups of related strategies that these programs have used to address performance issues, and highlight important differences in the implementation of these strategies among programs.
Date: June 1, 2007
Creator: Barbose, Galen; Wiser, Ryan & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice in the U.S.

Description: In the U.S., the increasing financial support for customer-sited photovoltaic (PV) systems provided through publicly-funded incentive programs has heightened concerns about the long-term performance of these systems. Given the barriers that customers face to ensuring that their PV systems perform well, and the responsibility that PV incentive programs bear to ensure that public funds are prudently spent, these programs should, and often do, play a critical role in addressing PV system performance. To provide a point of reference for assessing the current state of the art, and to inform program design efforts going forward, we examine the approaches to encouraging PV system performance used by 32 prominent PV incentive programs in the U.S. We identify eight general strategies or groups of related strategies that these programs have used to address factors that affect performance, and describe key implementation details. Based on this review, we then offer recommendations for how PV incentive programs can be effectively designed to mitigate potential performance issues.
Date: October 6, 2006
Creator: Barbose, Galen; Wiser, Ryan & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Financing Non-Residential Photovoltaic Projects: Options and Implications

Description: Installations of grid-connected photovoltaic (PV) systems in the United States have increased dramatically in recent years, growing from less than 20 MW in 2000 to nearly 500 MW at the end of 2007, a compound average annual growth rate of 59%. Of particular note is the increasing contribution of 'non-residential' grid-connected PV systems--defined here as those systems installed on the customer (rather than utility) side of the meter at commercial, institutional, non-profit, or governmental properties--to the overall growth trend. Although there is some uncertainty in the numbers, non-residential PV capacity grew from less than half of aggregate annual capacity installations in 2000-2002 to nearly two-thirds in 2007. This relative growth trend is expected to have continued through 2008. The non-residential sector's commanding lead in terms of installed capacity in recent years primarily reflects two important differences between the non-residential and residential markets: (1) the greater federal 'Tax Benefits'--including the 30% investment tax credit (ITC) and accelerated tax depreciation--provided to commercial (relative to residential) PV systems, at least historically (this relative tax advantage has largely disappeared starting in 2009) and (2) larger non-residential project size. These two attributes have attracted to the market a number of institutional investors (referred to in this report as 'Tax Investors') seeking to invest in PV projects primarily to capture their Tax Benefits. The presence of these Tax Investors, in turn, has fostered a variety of innovative approaches to financing non-residential PV systems. This financial innovation--which is the topic of this report--has helped to overcome some of the largest barriers to the adoption of non-residential PV, and is therefore partly responsible (along with the policy changes that have driven this innovation) for the rapid growth in the market seen in recent years.ii Specifically, due to financial innovation, non-residential entities interested in PV no longer face prohibitively ...
Date: January 9, 2009
Creator: Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Preliminary Evaluation of the Impact of the Section 1603 Treasury Grant Program on Renewable Energy Deployment in 2009

Description: Federal support for renewable energy deployment in the United States has traditionally been delivered primarily through tax benefits, including the production tax credit ('PTC') in Section 45 of the U.S. tax code, investment tax credits ('ITC') in Sections 25D and 48, and accelerated tax depreciation in Section 168. Many renewable power project developers are unable to use the majority of these tax benefits directly or immediately, however, and have therefore often relied on third-party 'tax equity' investors for the necessary investment capital in order to monetize the available tax benefits. As has been well-publicized, most of these tax equity investors were hit hard by the global financial crisis that unfolded in the last months of 2008 and, as a result, most either withdrew from the renewable power market at that time or reduced their available investment capital. This left a significant financing gap beginning in late 2008, and placed at some risk the continued near-term growth of renewable energy supply in the U.S. In recognition of these developments, the U.S. Congress passed two stimulus bills - The Energy Improvement and Extension Act ('the Extension Act') in October 2008 and The American Recovery and Reinvestment Act ('the Recovery Act') in February 2009 - parts of which were intended to address the growing shortage of finance for renewable power projects. Most notably, Section 1603 of the Recovery Act enables qualifying commercial renewable energy projects to choose between the Section 45 PTC, the Section 48 ITC, or a cash grant of equal value to the Section 48 ITC (i.e., 30% of the project's eligible basis in most cases). By giving developers the option to receive a 30% cash grant (administered by the U.S. Department of the Treasury) in lieu of either the ITC or the PTC, Congress hoped to 'temporarily fill the gap ...
Date: March 31, 2010
Creator: Bolinger, Mark; Wiser, Ryan & Darghouth, Naim
Partner: UNT Libraries Government Documents Department

Centrales au gaz et Energies renouvelables: comparer des pommes avec des pommes

Description: The fundamental conclusion that we draw from this analysis is that one should not to base itself blindly on forecasts prices of natural gas when one compare contracts at price fixes with producers of renewable energy with contracts at variable prices with promoters power stations with gas. Indeed, forecasts of the prices of gas do not succeed not to enter the associated costs with the covering of the risk, that they are connected to the negative pressure against the cover, with the CAPM, with costs of transaction or with unspecified combination of three. Thus, insofar as price stability to length term is developed, better way of comparing the two choices would be to have recourse to the data on the prices in the long term natural gas, and not with forecasts of the prices. During three last years at least, the use of these prices in the long term would have besides license to correct a methodological error who, obviously, seem to have supported unduly, and of relatively important way, power stations with natural gas compared to their competitors of renewable energies.
Date: October 20, 2003
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

Power System Modeling of 20percent Wind-Generated Electricity by 2030

Description: The Wind Energy Deployment System model was used to estimate the costs and benefits associated with producing 20% of the nation's electricity from wind technology by 2030. This generation capacity expansion model selects from electricity generation technologies that include pulverized coal plants, combined cycle natural gas plants, combustion turbine natural gas plants, nuclear plants, and wind technology to meet projected demand in future years. Technology cost and performance projections, as well as transmission operation and expansion costs, are assumed. This study demonstrates that producing 20% of the nation's projected electricity demand in 2030 from wind technology is technically feasible, not cost-prohibitive, and provides benefits in the forms of carbon emission reductions, natural gas price reductions, and water savings.
Date: June 9, 2008
Creator: Bolinger, Mark A; Hand, Maureen; Blair, Nate; Bolinger, Mark; Wiser, Ryan; Hern, Tracy et al.
Partner: UNT Libraries Government Documents Department

Community Wind: Once Again Pushing the Envelope of Project Finance

Description: In the United States, the 'community wind' sector - loosely defined here as consisting of relatively small utility-scale wind power projects that sell power on the wholesale market and that are developed and owned primarily by local investors - has historically served as a 'test bed' or 'proving grounds' for up-and-coming wind turbine manufacturers that are trying to break into the U.S. wind power market. For example, community wind projects - and primarily those located in the state of Minnesota - have deployed the first U.S. installations of wind turbines from Suzlon (in 2003), DeWind (2008), Americas Wind Energy (2008) and later Emergya Wind Technologies (2010), Goldwind (2009), AAER/Pioneer (2009), Nordic Windpower (2010), Unison (2010), and Alstom (2011). Thus far, one of these turbine manufacturers - Suzlon - has subsequently achieved some success in the broader U.S. wind market as well. Just as it has provided a proving grounds for new turbines, so too has the community wind sector served as a laboratory for experimentation with innovative new financing structures. For example, a variation of one of the most common financing arrangements in the U.S. wind market today - the special allocation partnership flip structure (see Figure 1 in Section 2.1) - was first developed by community wind projects in Minnesota more than a decade ago (and is therefore sometimes referred to as the 'Minnesota flip' model) before being adopted by the broader wind market. More recently, a handful of community wind projects built over the past year have been financed via new and creative structures that push the envelope of wind project finance in the U.S. - in many cases, moving beyond the now-standard partnership flip structures involving strategic tax equity investors. These include: (1) a 4.5 MW project in Maine that combines low-cost government debt with local tax ...
Date: January 18, 2011
Creator: bolinger, Mark A.
Partner: UNT Libraries Government Documents Department

Preliminary Evaluation of the Section 1603 Treasury Grant Program for Renewable Power Projects in the United States

Description: This article evaluates the first year of the Section 1603 Treasury cash grant program, which enables renewable power projects in the U.S. to elect cash grants in lieu of the federal tax credits that are otherwise available. To date, the program has been heavily subscribed, particularly by wind power projects, which had received 86% of the nearly $2.6 billion in grants that had been disbursed as of March 1, 2010. As of that date, 6.2 GW of the 10 GW of new wind capacity installed in the U.S. in 2009 had applied for grants in lieu of production tax credits. Roughly 2.4 GW of this wind capacity may not have otherwise been built in 2009 absent the grant program; this 2.4 GW may have supported approximately 51,600 short-term full-time-equivalent (FTE) gross job-years in the U.S. during the construction phase of these wind projects, and 3,860 longterm FTE gross jobs during the operational phase. The program’s popularity stems from the significant economic value that it provides to renewable power projects, relative to the otherwise available tax credits. Although grants reward investment rather than efficient performance, this evaluation finds no evidence at this time of either widespread “gold-plating” or performance problems.
Date: May 5, 2010
Creator: Bolinger, Mark; Wiser, Ryan & Darghouth, Naim
Partner: UNT Libraries Government Documents Department

Understanding Trends in Wind Turbine Prices Over the Past Decade

Description: Taking a bottom-up approach, this report examines seven primary drivers of wind turbine prices in the United States, with the goal of estimating the degree to which each contributed to the doubling in turbine prices from 2002 through 2008, as well as the subsequent decline in prices through 2010 (our analysis does not extend into 2011 because several of these drivers are best gauged on a full-year basis due to seasonality issues). The first four of these drivers can be considered, at least to some degree, endogenous influences – i.e., those that are largely within the control of the wind industry – and include changes in: 1) Labor costs, which have historically risen during times of tight turbine supply; 2) Warranty provisions, which reflect technology performance and reliability, and are most often capitalized in turbine prices; 3) Turbine manufacturer profitability, which can impact turbine prices independently of costs; and 4) Turbine design, which for the purpose of this analysis is principally manifested through increased turbine size. The other three drivers analyzed in this study can be considered exogenous influences, in that they can impact wind turbine costs but fall mostly outside of the direct control of the wind industry. These exogenous drivers include changes in: 5) Raw materials prices, which affect the cost of inputs to the manufacturing process; 6) Energy prices, which impact the cost of manufacturing and transporting turbines; and 7) Foreign exchange rates, which can impact the dollar amount paid for turbines and components imported into the United States.
Date: October 26, 2011
Creator: Bolinger, Mark & Wiser, Ryan
Partner: UNT Libraries Government Documents Department

Can Deployment of Renewable Energy and Energy Efficiency PutDownward Pressure on Natural Gas Prices

Description: High and volatile natural gas prices have increasingly led to calls for investments in renewable energy and energy efficiency. One line of argument is that deployment of these resources may lead to reductions in the demand for and price of natural gas. Many recent U.S.-based modeling studies have demonstrated that this effect could provide significant consumer savings. In this article we evaluate these studies, and benchmark their findings against economic theory, other modeling results, and a limited empirical literature. We find that many uncertainties remain regarding the absolute magnitude of this effect, and that the reduction in natural gas prices may not represent an increase in aggregate economic wealth. Nonetheless, we conclude that many of the studies of the impact of renewable energy and energy efficiency on natural gas prices appear to have represented this effect within reason, given current knowledge. These studies specifically suggest that a 1% reduction in U.S. natural gas demand could lead to long-term average wellhead price reductions of 0.8% to 2%, and that each megawatt-hour of renewable energy and energy efficiency may benefit natural gas consumers to the tune of at least $7.5 to $20.
Date: June 1, 2005
Creator: Wiser, Ryan & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Balancing Cost and Risk: The Treatment of Renewable Energy inWestern Utility Resource Plans

Description: Markets for renewable electricity have grown significantly in recent years, motivated in part by federal tax incentives and in part by state renewables portfolio standards and renewable energy funds. State renewables portfolio standards, for example, motivated approximately 45% of the 4,300 MW of wind power installed in the U.S. from 2001 through 2004, while renewable energy funds supported an additional 15% of these installations. Despite the importance of these state policies, a less widely recognized driver for renewable energy market growth is poised to also play an important role in the coming years: utility integrated resource planning (IRP). Formal resource planning processes have re-emerged in recent years as an important tool for utilities and regulators, particularly in regions where retail competition has failed to take root. In the western United States, recent resource plans contemplate a significant amount of renewable energy additions. These planned additions - primarily coming from wind power - are motivated by the improved economics of wind power, a growing acceptance of wind by electric utilities, and an increasing recognition of the inherent risks (e.g., natural gas price risk, environmental compliance risk) in fossil-based generation portfolios. The treatment of renewable energy in utility resource plans is not uniform, however. Assumptions about the direct and indirect costs of renewable resources, as well as resource availability, differ, as do approaches to incorporating such resources into the candidate portfolios that are analyzed in utility IRPs. The treatment of natural gas price risk, as well as the risk of future environmental regulations, also varies substantially. How utilities balance expected portfolio cost versus risk in selecting a preferred portfolio also differs. Each of these variables may have a substantial effect on the degree to which renewable energy contributes to the preferred portfolio of each utility IRP. This article, which is based on ...
Date: September 1, 2005
Creator: Wiser, Ryan & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Accounting for fuel price risk when comparing renewable togas-fired generation: the role of forward natural gas prices

Description: Unlike natural gas-fired generation, renewable generation (e.g., from wind, solar, and geothermal power) is largely immune to fuel price risk. If ratepayers are rational and value long-term price stability, then--contrary to common practice--any comparison of the levelized cost of renewable to gas-fired generation should be based on a hedged gas price input, rather than an uncertain gas price forecast. This paper compares natural gas prices that can be locked in through futures, swaps, and physical supply contracts to contemporaneous long-term forecasts of spot gas prices. We find that from 2000-2003, forward gas prices for terms of 2-10 years have been considerably higher than most contemporaneous long-term gas price forecasts. This difference is striking, and implies that comparisons between renewable and gas-fired generation based on these forecasts over this period have arguably yielded results that are biased in favor of gas-fired generation.
Date: July 17, 2004
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

Designing PV Incentive Programs to Promote System Performance: AReview of Current Practice

Description: Some stakeholders continue to voice concerns about the performance of customer-sited photovoltaic (PV) systems, particularly because these systems typically receive financial support through ratepayer- or publicly-funded programs. Although much remains to be understood about the extent and specific causes of poor PV system performance, several studies of the larger programs and markets have shed some light on the issue. An evaluation of the California Energy Commission (CEC)'s Emerging Renewables Program, for example, found that 7% of systems, in a sample of 95, had lower-than-expected power output due to shading or soiling (KEMA 2005). About 3% of a larger sample of 140 systems were not operating at all or were operating well below expected output, due to failed equipment, faulty installation workmanship, and/or a lack of basic maintenance. In a recent evaluation of the other statewide PV incentive program in California, the Self-Generation Incentive Program, 9 of 52 projects sampled were found to have annual capacity factors less than 14.5%, although reasons for these low capacity factors generally were not identified (Itron 2005). Studies of PV systems in Germany and Japan, the two largest PV markets worldwide, have also revealed some performance problems associated with issues such as shading, equipment and installation defects, inverter failure, and deviations from module manufacturers' specifications (Otani et al. 2004, Jahn & Nasse 2004). Although owners of PV systems have an inherent incentive to ensure that their systems perform well, many homeowners and building operators may lack the necessary information and expertise to carry out this task effectively. Given this barrier, and the responsibility of PV incentive programs to ensure that public funds are prudently spent, these programs should (and often do) play a critical role in promoting PV system performance. Performance-based incentives (PBIs), which are based on actual energy production rather than the rated capacity ...
Date: November 12, 2006
Creator: Barbose, Galen; Wiser, Ryan & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Who Owns Renewable Energy Certificates?

Description: Renewable energy certificates (RECs) are tradable instruments that convey the attributes of a renewable energy generator and the right to make certain claims about energy purchases. RECs first appeared in US markets in the late 1990s and are particularly important in states that accept or require them as evidence of compliance with renewables portfolio standards (RPS). The emergence of RECs as a tradable commodity has made utilities, generators, and regulators increasingly aware of the need to specify who owns the RECs in energy transactions. In voluntary transactions, most agree that the question of REC ownership can and should be negotiated privately between the buyer and the seller, and should be clearly established by contract. Claims about purchasing or using renewable energy should only be made if REC ownership can be documented. In many other cases, however, renewable energy transactions are either mandated or encouraged through state or federal policy. Because of the recent appearance of RECs, legislation and regulation mandating the purchase of renewable energy has sometimes been silent on the disposition of the RECs associated with that generation. Furthermore, some renewable energy contracts pre-date the existence of RECs, and therefore do not address REC ownership. In both of these instances, the issue of REC ownership must often be answered by legislative or regulatory authorities. The resulting uncertainty in REC ownership has hindered the development of robust REC markets and has, in some cases, led to contention between buyers and sellers of renewable generation. This article, which is based on a longer Berkeley Lab report, reviews federal and state efforts to clarify the ownership of RECs from Qualifying Facilities (QFs) that sell their generation under the Public Utility Regulatory Policies Act (PURPA) of 1978. The full report also addresses state efforts to clarify REC ownership in two other situations, customer-owned ...
Date: June 1, 2006
Creator: Holt, Edward; Wiser, Ryan & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Making european-style community wind power development work in theUnited States

Description: Once primarily a European phenomenon, community wind power development--defined here as one or more locally owned, utility-scale wind turbines interconnected on either the customer or utility side of the meter--is gaining a foothold in an increasing number of states throughout the United States. This article describes the various policies and incentives that Minnesota, Wisconsin, Iowa, and Massachusetts are using to support community wind power development, and how state and federal support influences the types of projects and ownership structures that are being developed. Experience in these states demonstrates that, with an array of incentives and creative financing schemes targeted at community-scale projects, there are opportunities to make community wind work in the United States.
Date: April 26, 2004
Creator: Bolinger, Mark A.
Partner: UNT Libraries Government Documents Department

Is it Worth it? A Comparative Analysis of Cost-Benefit Projectionsfor State Renewables Portfolio Standards

Description: State renewables portfolio standards (RPS) have emerged as one of the most important policy drivers of renewable energy capacity expansion in the U.S. Collectively, these policies now apply to almost 40% of U.S. electricity load, and may have substantial impacts on electricity markets, ratepayers, and local economies. As RPS policies have been proposed or adopted in an increasing number of states, a growing number of studies have attempted to quantify the potential impacts of these policies, focusing primarily on projecting cost impacts, but sometimes also estimating macroeconomic and environmental effects. This report synthesizes and analyzes the results and methodologies of twenty-six distinct state or utility-level RPS cost impact analyses completed since 1998 (see Figure 1 and Appendix for a complete list of the studies). Together, these studies model proposed or adopted RPS policies in seventeen different states. We highlight the key findings of these studies on the costs and benefits of RPS policies, examine the sensitivity of projected costs to model assumptions, assess the attributes of different modeling approaches, and suggest possible areas of improvement for future RPS analysis.
Date: June 5, 2006
Creator: Chen, Cliff; Wiser, Ryan & Bolinger, Mark
Partner: UNT Libraries Government Documents Department

Full Steam Ahead for PV in US Homes?

Description: In October 2008, the United States Congress extended both the residential and commercial solar investment tax credits (ITCs) for an unprecedented eight years, lifted the $2,000 cap on the residential credit, removed the prohibition on utility use of the commercial credit, and eliminated restrictions on the use of both credits in conjunction with the Alternative Minimum Tax. These significant changes, which apply to systems placed in service on or after January 1, 2009, will increase the value of the solar credits for residential system owners in particular, and are likely--in conjunction with state, local, and utility rebate programs targeting solar--to spur significant growth in residential, commercial, and utility-scale photovoltaic (PV) installations in the years ahead. This article focuses specifically on the residential credit, describing three areas in which removal of the $2,000 cap on the residential ITC will have significant implications for PV rebate program administrators, PV system owners, and the PV industry.
Date: January 15, 2009
Creator: Bolinger, Mark A; Barbose, Galen & Wiser, Ryan
Partner: UNT Libraries Government Documents Department

PTC, ITC, or Cash Grant? An Analysis of the Choice Facing Renewable Power Projects in the United States

Description: Renewable power technologies are inherently capital-intensive, often (but not always) with relatively high construction costs and low operating costs. For this reason, renewable power technologies are typically more sensitive to the availability and cost of financing than are natural gas power plants, for example. In the United States, the bulk of renewable project finance in recent years has been provided by 'tax equity investors' (typically large investment banks and insurance companies) who partner with project developers through highly specialized financing structures (Bolinger, 2009; Cory et al., 2008; Harper et al., 2007). These structures have been designed primarily to capitalize on federal support for renewable power technologies, which has historically come in the form of tax credits and accelerated depreciation deductions. The number of tax equity investors active in the renewable power market has declined precipitously, however, as a result of the financial crisis that began unfolding across the globe in the summer of 2008. The resulting shortage and increased cost of project financing has, in turn, slowed the development of new renewable power projects, leading to layoffs throughout the entire industry supply chain. In recognition of the fact that tax-based policy incentives are not particularly effective when tax burdens are shrinking or non-existent, Congress included several provisions in 'The American Recovery and Reinvestment Act of 2009' (ARRA 2009) designed to make federal incentives for renewable power technologies more useful. Among these provisions is one that allows projects eligible to receive the production tax credit ('the PTC', see Text Box 1) to instead elect the investment tax credit ('the ITC', see Text Box 2). Another provision enables ITC-eligible projects (which now include most PTC-eligible renewable power projects) to instead receive--for a limited time only--a cash grant of equivalent value. These two provisions (among others) could have a significant impact on how ...
Date: March 11, 2009
Creator: Bolinger, Mark; Wiser, Ryan; Cory, Karlynn & James, Ted
Partner: UNT Libraries Government Documents Department

Comparison of AEO 2009 Natural Gas Price Forecast to NYMEX Futures Prices

Description: On December 17, 2008, the reference-case projections from Annual Energy Outlook 2009 (AEO 2009) were posted on the Energy Information Administration's (EIA) web site. We at LBNL have, in the past, compared the EIA's reference-case long-term natural gas price forecasts from the AEO series to contemporaneous natural gas prices that can be locked in through the forward market, with the goal of better understanding fuel price risk and the role that renewables can play in mitigating such risk. As such, we were curious to see how the latest AEO reference-case gas price forecast compares to the NYMEX natural gas futures strip. This brief memo presents our findings. Note that this memo pertains only to natural gas fuel price risk (i.e., the risk that natural gas prices might differ over the life of a gas-fired generation asset from what was expected when the decision to build the gas-fired unit was made). We do not take into consideration any of the other distinct attributes of gas-fired and renewable generation, such as dispatchability (or lack thereof), differences in capital costs and O&M expenses, or environmental externalities. A comprehensive comparison of different resource types--which is well beyond the scope of this memo--would need to account for differences in all such attributes, including fuel price risk. Furthermore, our analysis focuses solely on natural-gas-fired generation (as opposed to coal-fired or nuclear generation, for example), for several reasons: (1) price volatility has been more of a concern for natural gas than for other fuels used to generate power; (2) for environmental and other reasons, natural gas has, in recent years, been the fuel of choice among power plant developers; and (3) natural gas-fired generators often set the market clearing price in competitive wholesale power markets throughout the United States. That said, a more-complete analysis of how renewables ...
Date: January 28, 2009
Creator: Bolinger, Mark & Wiser, Ryan
Partner: UNT Libraries Government Documents Department