Energy Lawyer Blog

"These grants will help America's businesses launch clean energy projects, putting Americans back to work in good construction and manufacturing jobs. The initiative will help double our renewable energy capacity over the next few years and make sure America leads the world in creating the clean energy economy of the future." With these words, US Department of Energy Secretary Steven Chu today announced that the American Recovery and Reinvestment Act (ARRA) had completed its first round of funding. The amount for this first round totaled $502 million and was awarded to programs throughout the nation. Although no projects in California were funded with this first round, the ARRA program is designed to support approximately 5000 renewable energy production facilities in the United States.

The program provides cash assistance in lieu of the Investment Tax Credit (ITC) to energy production companies. The first round of funding that was announced today will, according to the Obama administration, create approximately 2,000 jobs in the renewable energy industry. Most of the job creation will be in the construction and manufacturing sector. The purpose of the program is to provide upfront capital for companies in the renewable energy industry.

The Obama administration intends to help companies move forward with projects that could not have been realized due to a lack of direct funding.

Pacific Gas and Electric Company (PG&E) announced earlier this year that it has entered in seven power purchase agreements for a total of 1,130 MW of solar power with BrightSource Energy, Inc. This announcement illustrates the positive effects of the California Renewable Portfolio Standard (RPS).

The California RPS requires utilities in California to increase their procurement from renewable energy sources by at least 1% of their annual electricity sales until a goal of 20% is reached by 2010. It is one of the nation's most ambitious goals. An executive order signed by California Governor Schwarzenegger establishes an even more ambitious goal of 33% by 2020.

The new agreements that PG&E has entered into are expected to deliver enough solar power to offset the consumption of about 530,000 average homes. This example demonstrates that RPSs can be an excellent tool to increase the chair of renewable energy in the State's energy mix. While California has been one of the nations role models in the RPS-arena many states are lacking similar standards.

While lots of European countries have made excellent experiences with the introduction of feed-in-tariffs (FiT) such a system has not been developed on a federal level in the U.S. However, several states (among them California) have thought about the benefits of a feed-in tariff option for renewable energy. The CPUC announced recently that it will invite international experts from Germany and Spain - the two countries leading the way with their feed-in tariff models in Europe - and experts from the U.S. and other countries for a panel discussion.

The panel discussion on feed-in tariffs will be held on August 27, 2009. International experts will discuss about their experiences with different feed-in tariff models and will talk about how to possible advance the development of renewable energy through the introduction of these models. The discussion will give an overview of the global solar markets and will also shed some light on California's role in facilitating wholesale renewable distributed generation.

The CPUC invites everyone who is interested in the issue to join the panel discussions from 1-2:30 PM at the CPUC Auditorium, 505 Van Ness Ave., San Francisco, CA.

Continue reading "California Public Utility Commission (CPUC) Panel on Feed-in Tariffs in San Francisco" »

Today the U.S. Department of Energy and the U.S. Department of the Treasury announced that it accepts applications for grants in lieu of investment tax credits (ITCs) or production tax credits (PTCs) not only for applicants in California but throughout the United States. With this announcement, the government is implementing section 1603 of the American Recovery and Investment Act of 2009 (ARRA) better known as the stimulus bill.

This provision allows applicants to claim a grant instead of ITCs and PTCs for certain renewable energy production facilities. With the direct payments ARRA aims at developing new jobs in the renewable energy sector as a means of helping the economy recover while advancing green energy development at the same time.

Renewable energy facilities that qualify for ITCs and PTCs are eligible for the ARRA grants. By allowing an immediate cash flow in form of a reimbursement of a portion of the renewable property expense instead of a tax credit, the ARRA acknowledges the lack of available financing for green energy projects. By accepting grants applicants forgo future tax credits which in the past covered parts of the cost for renewable energy projects.

Continue reading "Applications for California Project Grants in Lieu of ITCs and PTCs are Being Accepted " »