Trump Administration Issues 30% Solar Panel Import Tariff

The White House announced Monday that President Trump has issued a 30 percent year-one tariff on imported solar cells and modules.

Tariffs will decline over a four-year period. The first 2.5 gigawatts of imported cells are excluded from the additional tariff in each of those four years, according to the U.S. Trade Representative fact sheet.

The USTR noted that China’s industrial planning “has included a focus on increasing Chinese capacity and production of solar cells and modules, using state incentives, subsidies, and tariffs to dominate the global supply chain.”

As a result of these state-directed initiatives, China’s share of global solar cell production skyrocketed from 7 percent in 2005 to 61 percent in 2012. China currently produces 60 percent of the world’s solar cells and 71 percent of solar modules, according to the fact sheet. Over this period, the U.S. solar manufacturing industry “almost disappeared,” the USTR stated, with 25 companies closing since 2012.

Opponents have pointed out that only 10 percent of solar imports currently come directly from China. The majority of imports today come from factories in Korea and countries in Southeast Asia, though several are run by Chinese companies.

While the administration’s fact sheet centered on China, it is not the only country affected. Section 201 trade cases are intended to apply globally, and today’s fact sheet makes no mention of tariff exemptions for specific countries or for any companies. However, U.S. Trade Representative Robert Lighthizer issued a statement that he will engage in additional negotiations, which could potentially lead to tariff exclusions or changes for certain parties, as GTM previously reported.

“The U.S. Trade Representative will engage in discussions among interested parties that could lead to positive resolution of the separate antidumping and countervailing duty measures currently imposed on Chinese solar products and U.S. polysilicon,” the statement reads. “The goal of those discussions must be fair and sustainable trade throughout the whole solar energy value chain, which would benefit U.S. producers, workers, and consumers.”

GTM contacted the USTR to clarify the scope of these discussions and will update the story as new information becomes available.

Source: USTR 

U.S.-based crystalline-silicon solar PV (CSPV) manufacturers Suniva and SolarWorld Americas filed the petition last May under Section 201 of the Trade Act of 1974, arguing that increased imports had caused serious injury to the domestic industry.

The U.S. International Trade Commission made an injury determination last year, followed by a set of recommended tariffs. Two commissioners agreed on a 30 percent ad valorem tariff on imported CSPV modules, to decline by 5 percentage points per year over four years, as well as a four-year tariff-rate quota that would allow for up to 1 gigawatt of tariff-free cell imports, increasing by 0.2 gigawatts per year.

The Trump administration offered a more generous cell quota. Coupled with a relatively high module tariff, the decision could incentivize manufacturers to open domestic solar module production facilities. Reports have already been circulating that Jinko Solar may open a module factory in Jacksonville, Florida.

Juergen Stein, president of SolarWorld Americas, thanked Trump and the USTR for recognizing the importance of solar manufacturing to U.S. economic and national security.

“We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States,” he said. “We will work with the U.S. government to implement these remedies, including future negotiations, in the strongest way possible to benefit solar manufacturing and its thousands of American workers to ensure that U.S. solar manufacturing is world-class competitive for the long term.”

In the near term, President Trump’s decision will deal a blow to the U.S. solar market. The Solar Energy Industries Association said today’s decision will cause the loss of roughly 23,000 American jobs this year, including many in manufacturing. It’s also expected to trigger the delay or cancellation of billions of dollars in solar investments.

“While tariffs in this case will not create adequate cell or module manufacturing to meet U.S. demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs,” said Abigail Ross Hopper, SEIA’s president and CEO.

R Street Trade Policy Counsel Clark Packard said the Trump administration’s decision is regrettable.

“The domestic solar industry has been growing at a rapid pace in recent years,” he said. “The petitioners in this case — both bankrupt firms that are majority foreign-owned — employ about 1,000 Americans, while the rest of the domestic industry employs more than 260,000 Americans up the entire value chain.”

“More good-paying jobs will be jeopardized by today’s decision than could possibly be saved by bailing out the bankrupt companies that petitioned for protection,” Packard added. “Today’s decision also will jeopardize the environment by making clean energy sources less affordable.”

According to MJ Shiao, head of Americas research for GTM Research, today’s announced tariff levels are likely to increase solar module costs by 10 to 12 cents per watt, based on current U.S. import prices of 35 to 40 cents per watt. According to a GTM Research analysisconducted last fall, a 10 cent per watt tariff is expected to slow the market by 8.3 percent.

Tony Clifford, chief development officer at Standard Solar, said Trump’s tariff decision may slow, but will not stop, the U.S. solar industry.

“The solar industry has come through worse policy decisions and will come through this one, too,” he said. “The solar industry is nothing if not resilient, and I’m confident the innovative, tough and resourceful members of the industry will find workarounds to the latest obstacle placed in solar’s path. The Solar Century is here, and not even unfair tariffs will stand in its way.”

Earlier this year, Tesla, in partnership with Panasonic, confirmed that solar panel and solar tile production is now underway at the company’s solar manufacturing facility in Buffalo, New York. This is the most recent solar cell and module production facility to open in the U.S. Nonetheless, Tesla opposed the imposition of new tariffs on imported solar products because its domestic factory is not expected to meet all of Tesla’s solar panel needs — at least not in the short run.

A company spokesperson reaffirmed today that Tesla is dedicated to making solar panels in America. “Tesla is committed to expanding its domestic manufacturing, including Gigafactory 2 in Buffalo, New York, regardless of the solar tariff decision today.”

First Solar, which makes thin-film solar panels that are not subject to tariffs on CSPV products, came out in support of the Suniva and SolarWorld case last year. The thin-film solar manufacturer saw its stock price shoot up by nearly 6 percent in after-hours trading, at the time of publication.

This story was updated to include reactions from several industry members, and to clarify that 10 percent of U.S. imports currently come from China, as well as the USTR’s plans to partake in additional negotiations.

New Tax Bill Offers Unexpected Benefits to Commercial Solar Installations

The commercial solar industry entered the holiday season with an unexpected policy gift from Washington.

The new tax plan passed by Congress introduced two provisions favorable for commercial solar installations: a reduction in the corporate tax rate and the expansion of depreciation allowances.

Unsurprisingly, there are very strong and divergent opinions on whether the tax bill will benefit society at large. This article does not attempt to address these important societal questions, but rather will solely analyze how the return on investment and net present value for commercial solar installations will change under the new tax code.

We will perform a bottom-up analysis for a hypothetical commercial project in California. Given that the new tax plan applies nationally, we expect the results are broadly representative of commercial installations across the U.S.

Reduction in tax rates

Tucked in the commercial solar developer’s Christmas stocking was a reduction in the federal corporate tax rate from 35 percent to 21 percent, the lowest rate in almost 80 years according to data from the Tax Policy Center.

Commercial entities that go solar expect to reduce the energy they purchase from their utility, accordingly lowering bills. Lowering these bills makes the commercial entity more profitable, which increases the entity’s tax liability. The amount of tax commercial entities owe due to their increased profit can be calculated using the following formula, where ETRn is the effective tax rate in year n, d is the discount rate, and N is the system’s life in years.

A quick look at equation 1 shows that reducing the effective tax rate will lower the amount a corporation pays in taxes. The new tax plan reduces corporate tax rates by a whopping 40 percent, which significantly increases the attractiveness of going solar.

We used Aurora, a solar design software, to assess how much the corporate tax rate reduction boosts the returns of a commercial solar project. In Aurora, we designed a 366-kilowatt project in Northern California (pictured below), which is forecasted to generate approximately 570,000 kilowatt-hours per year.

We did not have precise interval energy consumption data for this building, so we used Aurora’s energy load profiler to estimate an annual energy consumption of 1,581,000 kilowatt-hoursConsequently, our installation is forecasted to offset about 36 percent of the building’s energy consumption.

Here are a few additional assumptions used when calculating the financial returns of the project:

  • System cost of $3/watt — the median price of commercial solar, according to Aurora’s database.
  • The system was purchased outright with cash — this simplifying assumption allows us to ignore the tax effects of loan interest payments.
  • Commercial entity was on Pacific Gas and Electric’s A-10 TOU Primary utility rate.

Depreciation: five-year MACRS, with a 50 percent bonus depreciation taken at the federal (but not state) level. We will later be assessing the effect of the change in depreciation rules.

Below are the complete financial simulations assumptions for the California commercial installation.

These assumptions allowed us to isolate the effects of lowering the federal corporate tax rate to 21 percent from 35 percent, while the state income tax rate remains unchanged at 8.84 percent. The table below shows the effect of the 14 percentage point reduction in federal corporate tax rates.

Our analysis shows that the reduction in tax rates will increase the rate of return by about 2 percent per year. Over time, this adds up: The total value of the project increases by 19 percent, which for this project amounts to over $140,000.

If you are a commercial solar developer who had a project rejected on economic grounds this year, you now have a New Year’s resolution: calling back those CFOs with updated figures.

Expanded bonus depreciation

If the reduction in corporate tax rates wasn’t enough to get the industry’s bells jingling, Congress also added the benefit of doubling the amount of bonus depreciation that can be claimed on commercial solar projects.

For background, depreciation is a way to allocate the cost of a large capital investment over time, such as a new solar installation. Prior to the passage of the new tax plan, Congress allowed you to depreciate 50 percent of a new asset’s value during its first year of operation.

In the commercial solar industry, the remaining 50 percent of the asset’s value is typically depreciated over five and a half years using a technique called the Modified Accelerated Cost Recovery System (MACRS). Until the new tax plan, the amount of bonus depreciation was scheduled to decrease to 40 percent of the system cost in 2018, and down to 30 percent in 2019.

Why would you want to spread the cost of a solar installation that is forecasted to last 25 years over only six years?

When calculating a company’s profits, depreciation is considered an expense, meaning it lowers the profits that you report for your taxes. Commercial entities generally prefer to avoid paying taxes as soon as possible, as opposed to waiting for a future period to avoid. This makes a shorter depreciation schedule attractive to corporations: They can claim their tax savings today as opposed to in the future.

Mathematically, the depreciation tax savings can be computed as follows:

With the new tax bill, Congress increased the bonus depreciation to 100 percent, meaning one can essentially deduct the entire cost of the system in the first year of operation.

Let’s return to our California project to analyze the impact of this depreciation tax reduction on solar returns. In order to isolate the effects of doubling the bonus depreciation from the general reduction in tax rates, we assumed a federal corporate tax rate of 35 percent and a state tax rate of 8.84 percent. The table below show the results of our analysis.

Once again, we find that the new tax rules help boost the return of commercial solar installations. Indeed, the total value of the project increases by over 6 percent.

Total return

So far, we have analyzed the economic effects of reducing tax rates and doubling the bonus depreciation separately. Each provision of the controversial new tax plan increases the financial return of commercial solar installations.

Let’s revisit our California site to evaluate how much the financial returns of commercial projects will change now that we’re in 2018.

A 27 percent increase in project value should have commercial solar salespeople fa la la la la-ing as they plan for the rest of 2018.

***

Samuel Adeyemo is the chief operating officer at Aurora Solar. Aurora’s solar design software is used to design and sell over 50,000 solar installations per month.

USDA Announces Funding for Renewable Energy and Energy Efficiency Projects

REAP Program Reduces Energy Costs for Ag Producers and Small Businesses, Boosts Economy, Reduces Dependence on Foreign Oil

WASHINGTON, Feb. 10, 2015 – Agriculture Secretary Tom Vilsack today announced that rural agricultural producers and small business owners can now apply for resources to purchase and install renewable energy systems or make energy efficiency improvements. These efforts help farmers, ranchers and other small business owners save money on their energy bills, reduce America’s dependence on foreign oil, support America’s clean energy economy, and cut carbon pollution. The resources announced today are made possible by the 2014 Farm Bill.

“Developing renewable energy presents an enormous economic opportunity for rural America,” Vilsack said. “The funding we are making available will help farmers, ranchers, business owners, tribal organizations and other entities incorporate renewable energy and energy efficiency technology into their operations. Doing so can help a business reduce energy use and costs while improving its bottom line. While saving producers money and creating jobs, these investments reduce dependence on foreign oil and cut carbon pollution as well.”

USDA is making more than $280 million available to eligible applicants through the Rural Energy for America Program (REAP). Application deadlines vary by project type and the type of assistance requested. Details on how to apply are on page 78029 of the December 29, 2014 Federal Register or are available by contacting state Rural Development offices.

USDA is offering grants for up to 25 percent of total project costs and loan guarantees for up to 75 percent of total project costs for renewable energy systems and energy efficiency improvements. The REAP application window has been expanded. USDA will now accept and review loan and grant applications year-round.

Eligible renewable energy projects must incorporate commercially available technology. This includes renewable energy from wind, solar, ocean, small hydropower, hydrogen, geothermal and renewable biomass (including anaerobic digesters). The maximum grant amount is $500,000, and the maximum loan amount is $25 million per applicant.

Energy efficiency improvement projects eligible for REAP funding include lighting, heating, cooling, ventilation, fans, automated controls and insulation upgrades that reduce energy consumption. The maximum grant amount is $250,000, and the maximum loan amount is $25 million per applicant.

USDA is offering a second type of grant to support organizations that help farmers, ranchers and small businesses conduct energy audits and operate renewable energy projects. Eligible applicants include: units of state, tribal or local governments; colleges, universities and other institutions of higher learning; rural electric cooperatives and public power entities, and conservation and development districts. The maximum grant is $100,000. Applications for these particular grants have been available since December 29 of last year and are due February 12.

The REAP program was created in the 2002 Farm Bill. Because of the success of the program, Congress reauthorized it in the 2014 Farm Bill with guaranteed funding of no less than $50 million in annual funding for the duration of the 5 year bill. The 2014 Farm Bill builds on historic economic gains in rural America over the past six years while achieving meaningful reform and billions of dollars in savings for taxpayers.

Since 2009, USDA has awarded $545 million for more than 8,800 REAP projects nationwide. This includes $361 million in REAP grants and loans for more than 2,900 renewable energy systems. When fully operational, these systems are expected to generate more than 6 billion kilowatt hours annually – enough to power more than 5.5 million homes for a year.

In 2013, owners of the Ideal Dairy restaurant in Richfield, Utah, used REAP funding to install 80 solar modules and two 10-kilowatt inverters, which convert energy from solar panels to electricity. The owners have saved, on average, $400 per month. These savings have helped them preserve their restaurant and livelihood.

President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities. USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values.

 

Iowa Environmental Council " title="Real potential, ready today: Solar energy in Iowa">

Iowa Environmental Council

Re-published with credit to: Iowa Environmental Council

Already a national leader in renewable wind energy, Iowa also has the potential to be a leader in solar photovoltaic (PV) energy production, according to Council research.  The amount of solar energy Iowa could reasonably produce ranks 16th in the nation, and improvements in solar technology along with years of falling prices are helping build momentum in the budding industry.

In a new report, Real Potential, Ready Today:  Solar Energy in Iowa, the Council explains how in addition to providing useful energy, solar PV offers many other benefits:  job creation, consumer savings, cleaner air and water, innovation and technology investment, and improved stability in the electric grid. The report also highlights prominent examples of solar installations from around the state and explains common public policies used in Iowa and nationwide to support solar energy.

“Customers are excited about solar energy, and it is showing up in many diverse settings—at farms, business, universities, utilities, and at homes around the state” said Nathaniel Baer, the Council’s energy program director and lead author of the new publication.  “As interest in solar energy grows, we wanted to share an overview of the role this energy source can play in the mix of energy options Iowa has.”

Use this link to download a copy of the publication (.pdf, 4.77 MB) or view it below.

Get your copy of the Council’s publication

Download Real Potential Ready Today: Solar Energy in Iowa a a .pdf (4.77 MB) or view it below.


Slides and figures from the Council’s publication are also available to view through SlideShare.

Iowa Farm Solar

Is Iowa prepared for more distributed energy?

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As Iowa faces a potential surge in distributed generation, advocates and some legislators are concerned the state isn’t prepared.

In recent comments to state regulators, MidAmerican Energy, one of the state’s two largest investor-owned utilities, says that to date this year inquiries about interconnections for distributed generation are coming in at twice the rate they did in early 2013.

However, the utility forecast that substantial growth in distributed power will cause a raft of problems, at least in the current policy environment.

The Iowa Utility Board, sensing a growing interest in renewables, in January invited feedback about where the potential and the pitfalls might lie. While dozens of people expressed a desire for more distributed energy in the state, they also identified significant issues that stand in the way.

In its comments, MidAmerican voiced concerns common among utilities: that customers who don’t generate their own power may be bearing an unfair proportion of the system-wide costs of transmission and distribution services – on which small generators rely just as much as customers who don’t produce power. Bills need to reflect the cost of services used by customers who generate at least some of their own power, the utility said.

MidAmerican roughly estimated that, should 25 percent of its customers install solar panels, costs for the other 75 percent of its customers might increase by about 8.5 percent.

Those concerns, however, were part of a raft of comments supportive of expanding distributed renewable power.

‘Part of the solution’

Since the board issued its notice of inquiry on Jan. 7, comments have come in from 208 people and organizations — including a man trying to build a net-zero house, a collection of 66 farmers and rural business-owners, the state’s large power utilities and 25 state legislators.

David Osterberg, founder of the Iowa Policy Project and a professor in the occupational and environmental health department at the University of Iowa, said the key is providing utilities with proper incentives.

“Climate change is a reality and the investor-owned utility companies must adjust their business model to contend with it,” he wrote. “The question for the board should be, ‘How does the state of Iowa procure more distributed electric generation installed in a way that gives the utilities a way to be part of the solution?’”

One recurring theme in the comments to the board concerns the need to determine the costs and benefits of distributed energy.

Utilities and advocates agree on the need for an objective assessment that has a chance of putting to rest questions about how distributed energy impacts utilities. Studies have been done in several states, yet the debate rages on about whether distributed energy is a net benefit or a net cost to the companies that move power from one point to another.

“We need to base decisions on actual data, rather than on fears or blanket assertions,” said Josh Mandelbaum, who submitted comments on behalf of seven environmental organizations including the Environmental Law & Policy Center, where he is a staff attorney.

The enthusiasm expressed for distributed energy comes just weeks after the Iowa legislature opted not to move ahead on three bills that would have advanced solar energy in the state. One of them proposed a new renewable energy standard requiring 105 megawatts of solar by 2017. Another would have doubled the amount of state tax credit funds available to subsidize installation of on-site renewables.

In a phone interview, Rep. Charles Isenhart said the utilities board, with the information gleaned from this information-gathering exercise, could add considerable heft to legislation aimed at fostering more distributed generation.

In the general assembly, he said, “It’s easier for us to move legislation that comes from agencies.” Proposals from the IUB that favor distributed energy “are going to get more serious consideration than if they came from a different direction.”

In comments submitted to the regulatory agency, Isenhart and two dozen legislative colleagues proposed:

• Establishing a solar renewable energy standard,
• maintaining the existing net metering law, which allows some utility customers whose systems produce excess power to earn credits against future bills,
• allowing several new financing methods, including third party power purchase agreements,
• and avoiding extra charges on small generators, at least until a cost-benefit analysis has been completed

Other ideas

Those who submitted comments addressed many other issues. Several parties wanted the state to extend existing incentives to industries for the development of combined heat and power, a largely untapped technology with substantial potential in Iowa to reduce industrial power use by generating both heat and electricity with a single fuel source.

Others urged the board to extend net metering, which now is available primarily only to customers of large investor-owned utilities, to customer/owners of rural electric cooperatives and municipal utilities.

Still others pointed to a need to update interconnection standards. Moving ahead with a distributed generation project requires an interconnection agreement with the local utility. And while the state’s large investor-owned utilities must comply with interconnection standards, “The customers of the cooperatives and municipal utilities in Iowa do not have that same level of predictability,” said Steve Guyer, president of GWA International, an Iowa designer and installer of solar systems. “In fact, many of the cooperatives and municipal utilities have policies in place that unduly increase the costs of interconnection.”

James L. Eliason, who identified himself as a retired scientist, expressed a common view that the transition to distributed energy is inevitable.

“I think the future of nearly all technological issues is decentralization,” he wrote. “The internet has decentralized information generation and transmission, and energy generation and transmission will not be far behind.”

Iowa solar installation

Move over wind? Solar energy market ‘exploding’ in Iowa

Move over wind? Solar energy market ‘exploding’ in Iowa

Iowa is well established as a national leader in wind energy and biofuels. And now the state is poised for serious growth in solar as well.

“The market is exploding in Iowa,” says Tim Dwight, a former Iowa Hawkeye and NFL star who has become one of his home state’s most visible solar energy advocates.

Homeowners, farmers, businesses and at least one school district in Iowa are going solar. Also, over the past year, several municipal utilities and rural electric co-ops have put up solar arrays, inviting customers to buy a share of the power generated.

“Solar growth in Iowa is where wind was in the first decade of the 2000s,” says Bill Haman of  the Iowa Energy Center. “We saw an explosion in wind.”

In Frytown, just outside Iowa City, the Farmers Electric Cooperative has been steadily adding on to a community solar project established on its property in 2011. And a few weeks ago, the co-op announced plans to put together a 750-kilowatt solar farm, which would be the largest solar-energy project in the state. It’s projected to meet about 15 percent of the co-op’s demand for power.

In September, the Iowa Association of Municipal Utilities put an 18-kilowatt array on the roofs of several buildings at its headquarters in Ankeny.

And in November, several organizations snagged a $1 million grant from the Department of Energy to streamline local permitting and zoning codes, and improve standards for connecting solar generation to the grid. The aim: to cut the time and costs of adding solar generation. State lawmakers who attended a recent solar tour have pledged to help.

Incentives high, costs low

Iowa’s solar capacity remains a tiny fraction of its overall energy mix — at the end of 2012 the state had only about 1 MW of solar installed compared to more than 5,000 MW of wind.

But the same market forces driving solar growth in other parts of the country are being felt in the heartland, too.

The biggest factor driving all of the fireworks, according to Haman, not surprisingly, is money.

“Incentives are at an all-time high, and costs are at an all-time low,” he said. The cost per watt is between $3 and $3.50 now, compared with a range of about $7 to $10 several years ago.

Systems typically pay for themselves within a decade now, given federal and state tax credits and, in much of central and eastern Iowa, a subsidy available to customers of Alliant Energy. A decade ago, Haman said, recouping the costs of a solar installation could take 30 to 50 years.

Haman says money is not the only factor, though. He said Iowans have been waking up to solar power – an observation shared by Warren McKenna, the general manager of the Farmers Electric Co-op.

Finding himself on sort of a solar-energy lecture circuit of late, McKenna gets to listen to lots of people. And he says they’ve been taking notice of solar panels in other places – Minnesota, Colorado, California — and have been pressing their utilities to get on board.

Traer Municipal Utilities installed a 40-kilowatt community solar project a few months ago, said manager Pat Stief. All 106 panels have been purchased by 42 customers. They paid $530 per panel, rated at 305 watts, and will see a credit on their monthly bill for 20 years.

The Hawkeye Rural Electric Cooperative in northeast Iowa intends to put 25 kilowatts of panels on its property in Cresco, and also will invite members to invest in a share of the power. Ted Kjos, manager of marketing and communications, is looking ahead to a possible second phase.

“We’ve done a survey of our membership. A significant amount of our membership is interested in the co-op providing this,” he said.

Utility incentives coming to an end

Solar in Iowa has gotten probably its greatest single boost from Alliant Energy. In 2008, when Alliant put together its efficiency plan, designed to outline efficiency efforts through 2013, it proposed to subsidize small, on-site renewable energy projects.

For the first few years, there were very few takers. But the story’s changed dramatically in the past year.

Haman, from the Iowa Energy Center, manages a state revolving loan fund that provides interest-free money to help people pay the upfront costs of installing renewable energy systems at their homes or businesses.

He said there’s been “a steep rise” this year in the number of people seeking loans for solar panels.

“They’ve all come in in this past quarter,” he said, and nearly all of them – at least 40 out of 45 solar projects that have been processed – are from within the Alliant territory.

Installer Michele Wei concurs that there’s been a mad dash of late.

Her business with Alliant picked up a little steam in 2012, but this year, she said, “It was like, ‘Oh boy – it’s ending!’”

The Decorah Community School District, interested in putting panels atop several schools, has scurried to get its application in before the program expires. Superintendent Michael Haluska said the district will start small – probably about 24 kilowatts atop three or four schools.

It would be just enough to “max out the Alliant rebate,” he said. “We don’t want to lose the opportunity for that rebate.”

And while there’s nothing like a deadline to organize the mind, several people familiar with solar matters in Iowa said that Alliant Energy could – and should – have made a greater effort to publicize the subsidy for on-site renewables, which it will be terminating as of Dec. 31. The utility claimed that not many people were taking advantage of it.

Haman suggested that might have been because Alliant’s effort to publicize it “wasn’t a very aggressive marketing campaign.”

Wei went a bit further, characterizing the solar rebate as a “best-kept secret. If you don’t go on their web site, you don’t know about it.”

Jennifer Easler, an attorney with the Iowa Office of Consumer Advocate, said that an outside committee convened to review Alliant’s efficiency programs recommended “a stronger outreach effort.”

Justin Foss, a spokesman for Alliant Energy, said that the company routinely informs customers of efficiency benefits, like the on-site solar rebate, through articles in a company newsletter that goes out with monthly bills.

The network of solar dealers working in the state is “the best collection point” for getting such information out, he said.

But when Alliant has changed procedures and moved up deadlines, Wei said, the utility has failed to keep installers up to date.

“There’s a lack of knowledge that the rebate is out there,” said Dwight, who is president of the Iowa Solar Energy Trade Association. “There’s not very strong advocacy of solar from the utilities. They don’t do a good job of educating customers.”

Meanwhile, business remains brisk for installers like Wei.

“We (installed) seven systems in the last month,” she said. “That’s definitely much more than we did last year. Since April or May, we’ve been installing nonstop.”

Iowa Lawmakers See Tax Credits Opening Wider Door For Solar

While solar advocates didn’t get everything they wanted in the Iowa legislature this year, a nearly-unanimous vote to triple the state’s tax-credit fund for rooftop installations is expected to have a major impact.

Provided the bill is signed by Gov. Terry Branstad, it also could be a prelude to bigger developments next year, according to two lawmakers.

“I think this will give an enormous boost to an already rapidly-growing solar industry,” said Sen. Rob Hogg, one of the measure’s sponsors. Increasing the available tax credits “will allow us to keep up with the growth and boost it further.”

In addition to tripling the available tax-credit funds from $1.5 million to $4.5 million annually, the measure increases the maximum credit. For residential projects, the cap has been hiked from $3,000 to $5,000. For commercial projects, it’s been increased from $15,000 to $20,000. The law also enhances the total allowable claim from the current 50 percent of the federal solar tax credit to 60 percent of it.

Hogg thinks perhaps the bill’s most potent provision is the one allowing businesses with multiple locations — like retail chains, for example — to receive a separate tax credit for each facility. Businesses are the leaders in adopting solar in Iowa, according to Hogg, and allowing them to apply for a separate credit for each location puts a whole new spin on investing in solar energy.

“A lot of businesses have taken advantage of solar energy,” he said. “It’s being spread through the business community.” With the possibility of a $20,000 credit for each location with a solar installation, he said, “The day is coming when it will be the norm to put solar into a business project. I think we’re getting very close to that point.”

State Sen. Joe Bolkcom, who also advocated for the tax-credit expansion, expects “a lot more projects to be deployed” as a result. “There’s been a lot of interest in the credit.”

In fact, applications for the credit in 2013 far exceeded the $1.5 million available. A revenue department spokeswoman said that as of April 15, applications for about $755,000 in state tax credits were on a “waiting list” because last year’s $1.5 million pool was exhausted. Once the governor signs the bill, the agency will have the funds to resume processing those.

Bolkcom said he’s confident Gov. Branstad will sign the bill.

“He told advocates at a recent forum that if it got to his desk, he would sign it,” Bolkcom said

‘Keep the momentum going’

If the bill becomes law, installers generally expect the expanded benefits to add fuel to the solar fire.

“It will help keep the momentum going on solar,” said Roger Garde, who sells and installs solar systems in southeast Iowa. “People ran into the cap last year. Businesses maxed out and some homeowners did too. There were people who would have put in a bigger system, but they stopped because they ran into the rebate limit.”

People who run businesses out of their homes, and farmers – many of whom power their farm operations and homes on one residential meter – would gain from a higher cap, Garde said.

Michelle Wei, a solar installer based in Des Moines, predicted that more generous tax benefits “will definitely give some push to solar.” In particular, because of the $5,000 increase in the commercial solar cap, she believes that “on the commercial side it will pick up.”

Mike Haman isn’t so convinced. As the industrial program manager of the Iowa Energy Center, he closely monitors solar installations statewide. Lately, they’ve been concentrated in the part of Iowa served by Alliant Energy, which offered an extremely generous solar benefit last year. The Iowa Utilities Board allowed the company to terminate it last Dec. 31.

After those projects are completed later this year, Haman said, “I’d expect the activity will start to decline. If I saw more of a balance between MidAmerican [territory] and Alliant [territory], my conclusion would be different.”

Alliant’s solar rebates typically ranged between $7,000 and $10,000, Haman said. Even with state tax credits boosted to $5,000, he said, solar is now much less profitable for customers of Alliant without the rebates.

The flip side of that, Hogg pointed out, is that only about one-quarter of Iowans get their electricity from Alliant. So for the other three-fourths of the state’s electric customers, this expanded tax credit will be a gain.

‘Next year we’ll be back’

Hogg and Bolkcom expect to see more solar policy advancements during the 2015 legislative session. Given the overwhelming and bipartisan support for the tax credit bill – 46 to 0 in the Senate, and 90 to 4 in the House – Hogg thinks there’ll be support for more solar moves next year.

“Next year we’ll be back addressing the regulatory framework for solar,” he predicted. “The utilities need to find a way to make solar work for their customers.”

He’s spoken to the state’s major utilities, and believes they “are ready to embrace solar.”

Bolkcom, too, expects some further developments next year.

“We have some interim work to do, to see what it might look like,” he said. “There’s going to be some effort by utilities and advocates on how we can work together on building a renewables agenda.”

Hogg thinks that history could provide a way forward. About a decade ago, he said, wind was at the stage of development that solar is now. The legislature passed laws permitting utilities to own wind farms, and allowing for major changes in the way rates are set. As a result, he said, wind energy took off. It now generates about 27 percent of the power produced in Iowa.

“We made that work for everybody,” he said. “I think we can make solar work for everybody.”

Legislation Would Give Solar Power a Boost in Iowa

midwestenergynewsSolar energy, already on a roll in Iowa, could get another boost from three bills under consideration in the state legislature.

One bill, introduced on Wednesday, requires Iowa’s major investor-owned utilities to install 105 megawatts of solar power by the end of 2020, among other provisions.

Another would appropriate $18 million to the state’s three major universities, requiring each of them to install at least two megawatts of solar capacity by June 2017.

A third bill would double the money in the state’s tax credit fund for solar or other renewable energy systems. The fund was created in 2012 with $1.5 million in tax credits to be made available each year. Iowans collected about $620,000 in 2012, and claimed the full $1.5 million in 2013.

In fact, 94 applications in 2013 came in after the fund was depleted for the year, according to an Iowa Department of Revenue spokeswoman, and will be the first applications processed in 2014.

“I’d like to make sure all the projects applied for in 2014 get funded,” said state Sen. Rob Hogg.

At $1.5 million per year, state Sen. Joe Bolkcom said the fund “is still pretty meager. We’re going to try to make it more robust.”

He believes an expansion of the tax credit has a good shot at passing, considering the widespread – and bipartisan – support when it was initially approved in 2012. It passed on votes of 45 to 1 in the Senate and 82 to 14 in the House of Representatives.

“I’m hopeful we can make the case for job creation,” he said. “Like a lot of things in the energy sector, we provide incentives to get them going, so people can see the promise of solar.”

Read more at Midwest Energy News

 

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