Solar Energy in the United States U.S. Trade and Development Agency Business Center November 5, 2009...

Solar Energy in the United States

U.S. Trade and Development Agency Business CenterNovember 5, 2009

Scott Hennessey

Manager, Climate and Energy Markets

Solar Energy Industries Association

Introduction to SEIA

U.S. National Trade Association for Solar Companies• Over 1000 member companies

• Members include all solar technologies

• Represent over 80,000 people employed by solar

• 14 state and regional chapters

SEIA’s Mission• Expand Markets

• Remove Market Barriers

• Strengthen R&D

• Improve Education and Outreach

The Voice of Solar in U.S.

PV: Residential Retrofit - 6 kW

J&J Skillman, NJ – 505 kW

Source: SunPower

Solar Water Heating

CSP Dish System

CSP – Trough System

US PV Market - 2008

• PV market grew by 71%• On-grid PV grew by 81% • Off-grid PV grew by 21%• Residential +32%• Commercial +110%• Utility +97%• Domestic manufacturing

continues to grow

Tuesday, April 11, 2023 © 2009 SEIA 10

Domestic PV Cell Manufacturing (MWDC)

2007 2008p Growth

Production 271 414 53%

Capacity 415 685 65%Source: Greentech Media Research/Prometheus Institute

Grid-Tied PV Capacity Additions by Market Segment


Sources: IREC

Grid-Tied PV Capacity (MW) – State by StateState Installed in 2008 Cumulative

California 178.6 530.1

New Jersey 22.5 70.2

Colorado 21.6 35.7

Nevada 14.9 34.2

Hawaii 11.3 15.8

New York 7.0 21.9

Arizona 6.4 25.3

Connecticut 5.3 8.8

Oregon 4.7 7.5

North Carolina 4.0 4.7

Florida 0.9 3.0

Others 14.7 34.6

Total 292 791


Solar Water Heating Systems Installed in 2008


Source: SRCC

Solar Installation Forecasts


2008 Breakthrough Success

• Tax Credit Extension – after 17 Votes in Congress– Filibustered 9 times

• Bailout Bill – October 3– Extended investment tax credits for 8 years

• Additional Solar Legislation Introduced– SOLAR Act

Investment Tax Credit- SOLAR• History:

– EPAct 2005: • first residential tax credit in 20 years

– 30% capped at $2,000, only 2 years• Expands commercial credit

– 30%, no cap, only 2 years

– Fall 2006, ITC expanded an additional year

– Fall 2008- extended by 8 years and expanded


Investment Tax Credit- SOLARWhat We Got in 2008:

– 8-year extension of the 30% business ITC– 8-year extension of the 30% residential ITC– Total elimination of the residential $ cap for solar

electric property– Alternative Minimum Tax (AMT) relief for

commercial and residential– Elimination of the public utility exception– Authorized $800 million for clean energy bonds

for renewable energy generating facilities, including solar.


• 2008 was a Record Year• Last 3 Months Extremely Difficult• Good News

Creating a Solar President

Changes in Washington• Obama Administration

– Carol Browner – WH Energy and Climate Coordinator**– Dr. Steven Chu – Secretary of Energy– Nancy Sutley – Council on Environmental Quality– Lisa Jackson – Environmental Protection Agency– Cathy Zoi – Assistant Secretary EERE

• Congress– Waxman replaces Dingell Chairman of House Committee

on Energy & Commerce– Markey Subcommittee on Global Warming– Senate – Democrat majority increases, more difficult for

Republican filibuster

HR 1 American Recovery and Reinvestment Act

• 19 Provisions to Benefit Solar Companies– Improves existing tax credits

• Refundability• Remove subsidized energy financing penalty

– Improves loan guarantee program– Increases government procurement ($25 billion)– Creates new manufacturing tax credits– State energy program funding ($3.1 billion)– Expands CREBS funding ($1.6 billion)– Funds school repair and construction ($53.6 billion)– Funds water treatment repair and construction ($6 billion)– Supports construction of new transmission– Increases access to federal lands– Increases DOE solar appropriation– Improves tax credit for solar water heating – Funds worker training– Increases profile of solar with top political leaders

Understanding ARRA’s implementation

• Executive Implementation

• Tax code provisions effective upon enactment

• Enhanced funding for infrastructure and state programs

• Agency-specific appropriations


Treasury Grant Program

• Overview– Treasury program that monetizes commercial tax credit– Applicants receive 30% rebate on system costs when placed in

service– Projects must begin by 12/31/2010 and be complete by 1/1/2017

• Intelligence– Guidance was released by Treasury on July 9 regarding terms and

conditions of the program

• Treasury July 31 Announcement– The Treasury Department released full application instructions for

the 30-percent grant – Treasury will review and respond to applications within 60 days– Applicants will receive funds within 5 days of being approved


Loan Guarantee Program

• Overview– Expands existing EPAct title XVII Program

• Establishes a temporary loan guarantee program at DOE for renewable energy projects, manufacturing facilities, transmission

• Covers: solar electric and solar thermal, associated manufacturing, transmission projects that “commence construction” by 9/30/2011

– Appropriates $4 billion for credit subsidy cost– Streamline application and approval process

• Operational by Fall?

– Benefits• Lowers the cost of financing• Help compete for debt equity• Provides $60 billion in loan guarantees


Loan Guarantee Program• Intelligence

– Project construction must begin by 9/30/2011– Two application processes

• Pre-Qualified Lender Program (PQL) for projects that can be outsourced to private lenders, i.e. commercially proven technologies. (Solicitation at end of July)

• Direct DOE Process for projects that require direct DOE involvement (Process similar to 1703)

– Davis-Bacon Compliance– Most existing 1703 provisions still apply– 1703 may be allowed to switch to 1705– Under 1705, applicants not responsible for credit subsidy cost

• Latest Updates– July 29 expanded program and issued Innovative Technologies and

Commercial Transmission Project Solicitations


Manufacturing Tax Credit• Overview

– Covers new & expanded assets used to manufacture advanced energy property; projects certified by Treasury, in consultation with DOE, through competitive process

– Eligibility and weighting of criteria (commercial viability, direct & indirect job creation, geographic distribution, emission reductions) not defined

– Program efficacy evaluation not required until 4 years after enactment, early indicators point to OMB taking highly conservative approach


Manufacturing Tax Credit• Latest Updates

– August 13 The Advanced Energy Manufacturing Tax Credit (MTC) was authorized in Section 1302 of ARRA was authorized

– $2.3 billion in ARRA tax credits now available for renewable energy manufacturers

– Preliminary applications were due September 16, 2009

– Final applications due October 16, 2009.

– January 15, 2010: will have received notification of acceptance or rejection, and approved amount awarded.

• Credits allocated until the program funding ($2.3 billion) is exhausted.


DOE EERE Program Funding

• Overview– $16.8 billion provided

• R & D and Deployment activities account has $1.25B for unspecified technologies

– Solar Technology Program should be a major beneficiary

– Additional $ should leverage new R & D and work already underway

• State Energy Programs provided $3.1B for RE grants– This amount in addition to $3.2B for EE & Conservation Block

Grants

– DOE Solar Technology Program should issue guidance on favored / qualifying solar activities

• Context note: DOE Solar Program annual authorizations fluctuates between $150-200M


DOE EERE Program Funding• Results-to-date: $117.6 million in Recovery Act funding to

accelerate widespread commercialization of solar (additive to normal DOE solar program appropriations)

– Photovoltaic Technology Development ($51.5 Million)

DOE will expand investment in advanced photovoltaic concepts and high impact technologies, with the aim of making solar energy cost-competitive and strengthen domestic manufacturers

– Solar Energy Deployment ($40.5 Million)

Projects will focus on non-technical barriers to solar energy deployment, including grid connection, market barriers to solar energy adoption in cities, and shortage of trained solar energy installers

– Concentrating Solar Power Research and Development ($25.6 Million)

Work will focus on improving the reliability of concentrating solar power technologies and enhancing the capabilities of DOE National Laboratories to provide test and evaluation support to solar industry


DOE EERE Program Funding

• Results-to-date– States submitted plans for SEP grant spending May

12th

– Approval for many states is still pending– SEIA is tracking project announcements

• CA plan includes $20 million for green job training. Other funds will expand existing RE programs.

• NJ $15 million for competitive RE grants and $7 million for solar mortgages

• TN $62 million for 5 MW solar farm and Tennessee Solar Institute

• CO $7.8 million for rebates, Renewable Energy Financing Program

• FL $20 million for PV on schools


Solar on Federal Property

• Overview– Most projects funded by GSA were already “pre-selected”

• But still need to support President’s vision for a “clean energy future”

• Inclusion of solar in sub-contracts of currently selected GSA projects contemplated

• House Infrastructure Committee told by GSA that up to 70% of “high performance” facilities will include a solar

– March 31, GSA issued list of projects• $4.5 billion to convert federal properties to high-performing

green facilities

• $750 million to renovate federal buildings and courthouses

• $300 million to renovate land ports of entry



State RPS Policies

www.dsireusa.org / September 2009

State renewable portfolio standard

State renewable portfolio goal

Solar water heating eligible

Extra credit for solar or customer-sited renewables

Includes non-renewable alternative resources

WA: 15% by 2020*

☼ NV: 25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs)

10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)

10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015

SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

WI: Varies by utility;

10% by 2015 goal

MI: 10% + 1,100 MW by 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025☼ MA: 15% by

2020+ 1% annual increase(Class I Renewables)RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021

☼ PA: 18% by 2020†

☼ MD: 20% by 2022

☼ DE: 20% by 2019*

☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)

10% by 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales by

2012; (2) 20% RE & CHP by 2017

29 states & DC

have an RPS6 states have goals

KS: 20% by 2020

☼ OR: 25% by 2025 (large utilities)*

5% - 10% by 2025 (smaller utilities)

☼ IL: 25% by 2025

WV: 25% by 2025*†

http://www.dsireusa.org/

State RPS Policies with Solar/DG Provisions


State renewable portfolio standard with solar / distributed generation (DG) provision

State renewable portfolio goal with solar / distributed generation provision

Solar water heating counts toward solar provision

WA: double credit for DG

NV: 1.5% solar by 2025;

2.4 to 2.45 multiplier for PV

UT: 2.4 multiplierfor solarAZ: 4.5% DG by 2025

NM: 4% solar-electric by 2020

0.6% DG by 2020

TX: double credit for non-wind

(Non-wind goal: 500 MW)

CO: 0.8% solar-electric by 2020

MO: 0.3% solar-electric by 2021

MI: triple credit for solar

OH: 0.5% solar

by 2025

NC: 0.2% solar

by 2018

MD: 2% solar-electric in 2022 DC: 0.4% solar by 2020; 1.1 multiplier for solar

NY: 0.1312% customer-sited

by 2013

DE: 2.005% solar PV by 2019;

triple credit for PV

NH: 0.3% solar-electric by 2014

NJ: 2.12% solar-electric by 2021PA: 0.5% solar PV by 2020

MA: TBD

16 states & DC

have an RPS with solar/DG provisions

OR: 20 MW solar PV by 2020; double credit for PV

IL: 1.5% solar PV

by 2025WV:

various multipliers

www.dsireusa.org / September 2009

http://www.dsireusa.org/

US Market Strong in 2009

• California continues to be the dominant market but…

• More states adding incentives– Virginia adding incentive– Pennsylvania adding incentive– District of Columbia adding incentive– New York adding more incentives– Maryland providing more funding for incentives– Missouri new solar carve-out for RPS– Vermont feed-in tariff

• Federal incentives stronger than ever

2009 Energy Bills

• Comprehensive Energy Legislation– House passed legislation: American Clean

Energy and Security Act (ACES)• Renewable Electricity Standard• Carbon cap and trade program• Transmission legislation• And much more

– Senate refining legislation now (ACELA)• Senate Energy: RES and Transmission

• Senate EPW: Cap and Trade program

2009 Energy Bills

• “Clean Energy Jobs and American Power Act”

S. 1733 Kerry Boxer• Investments in Renewable Energy and Energy Efficiency:

For investing in energy efficiency and renewable energy, States will receive approx 10% of distributed allowances in 2012 the declining

• Investments in Advanced Energy Research and Development:

4% of distributed allowances in 2012 (then declining) will be allocated for research on advanced energy technologies, including funding for applied research at “Clean Energy Innovation Centers” at research universities and institutions.

• Agriculture, Forestry and Renewable Energy:

1% of allowances in 2012 (then declining) will be allocated for investments in agriculture and renewable energy.

• Building Codes:

0.50% of distributed allowances will be allocated to support implementation of codes to reduce emissions of greenhouse gases from buildings.

• Worker Assistance and Job Training:

1.5% of distributed allowances in 2012 (then declinging) will be allocated for worker assistance, and to train workers for jobs in the areas of energy efficiency and renewable energy.


2009 Energy Bills

Provision House (ACES) Senate (ACELA)

RES 6% in 2012, increasing to 20% by 2020 and through 2039

3% in 2011, increasing to 15% by 2021 and through 2039

Carbon Cap and Trade 10% of carbon allowances to renewables and EE

Approx 10% of allowances to renewables and EE. Additional allowances to deployment fund & agriculture

Transmission Not later than 1 year after enactment, FERC shall adopt rules for national electricity grid planning principles

Not later than 180 days after enactment, FERC shall publish a rule establishing planning principles for the development of transmission projects.

30 year PPA Authority for the federal gov

20 year PPA 30 year PPA

Clean Energy Bank Establishes a Clean Energy Deployment Administration

Establishes a Clean Energy Deployment Administration


2009 Energy Bills

Provision House (ACES) Senate (ACELA)

Green Worker Training Establishes an Energy Efficiency and Renewable Energy Worker Training Fund.

Establishes a grant program to award State educational agencies to create or expand energy career academies.

Green Buildings Establishes a goal to improve the overall energy productivity of the U.S. by at least 2.5% annually by 2012 and to maintain that annual rate of improvement.

Establishes a goal to improve the overall energy productivity by at least 2.5% annually by 2012 (measured in GDP per unit of energy input), and to maintain that annual rate of improvement till 2030.

Crystal Ball for the Fall and Next Year

• Energy bill: climate title, Senate floor

• National Renewable Electricity Standard

• Cap and Trade bill– Copenhagen


Thank You

WWW.SEIA.ORG

[email protected]

http://www.seia.org/

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