A Call for Multi-State Collaboration for Offshore Wind

Author: Lewis Milford, Clean Energy Group | Project: Offshore Wind Accelerator Project

Up-in-the-Air-featuredThe disappointing news that the Cape Wind Project might never be built highlights a stark conclusion: U.S. offshore wind policy isn’t working.

After nearly fifteen years of planning, policy making, and contentious debate, the 430 MW wind farm off the coast of Cape Cod was dealt a sharp blow this past January when National Grid and Northeast Utilities terminated their power purchase agreements. Cape Wind was the first offshore wind project proposed in the U.S., and it was poised to be the first built. But now that bold vision for harnessing a robust no-carbon energy resource has been derailed. How can we prevent other offshore wind projects in the United States from going the way of Cape Wind?

A report by Clean Energy Group and Navigant Consulting, Up in the Air: What the Northeast States Should Do Together on Offshore Wind, Before It’s Too Late, contends that the Cape Wind project’s difficulties serve to highlight a larger policy problem—it is almost impossible for any single state to jumpstart the entire U.S. offshore wind industry. The report recommends a multi-state collaboration to create stronger and consistent regional policies, financing actions, and permitting across the Northeast states.

If Northeast states want to reduce the costs of these projects and create offshore wind jobs, they must develop clear and consistent policies across the region, to give developers good reason to build projects here. If they don’t act together soon, they will lose this clean energy resource for decades to come, which will be bad for the economy and the environment.

These states must work together to develop mechanisms to overcome the major barriers associated with such projects, specifically, high capital costs, lack of infrastructure (e.g., transmission, ports) and regulatory issues, according to Bruce Hamilton, director with Navigant’s Global Energy Practice and one of the report’s co-authors.

The paper is a call to action and recommends states in the Northeast to consider seven multi-state policy areas for regional action.

  1. Regional Offshore Wind Target. The establishment of a practical regional target (or target range) for offshore wind capacity would produce meaningful economic development and environmental benefits by creating a clear demand signal to developers.
  2. Coordinated Policy Incentives. Individual state policy drivers, including any incentives for developers, should be consistent across the region to drive demand and produce cost reductions over time through scale up of the offshore wind resource.
  3. Financing. States should develop new, regional financing mechanisms for regional and single projects, including use of bonds and green bank financing.
  4. Procurement. States should jointly procure power from one or more large offshore wind projects to reduce costs and create a reliable pipeline of demand for project developers.
  5. Economic Development. Coordinated, multi-state, economic development strategies rather than purely competitive action would spur economic development activity in the region through the creation of clean energy jobs and potentially new manufacturing facilities.
  6. Transmission. States should develop joint public funding of regional transmission and interconnection facilities associated with regional projects.
  7. Permitting. It is essential to the success of the multi-state projects that the policies ultimately adopted for permitting these facilities be standardized.

The paper also recommends consideration of various implementing mechanisms for these policies to be adopted, including a multi-state buyers’ consortium, a state acting on behalf of other states as a bargaining agent, or an offshore wind authority.

New England governors have argued for joint procurement and investment in fossil fuels, natural gas infrastructure, and for more imports of Hydro-Quebec power from massive dams in Canada. But there has been no serious regional policy effort to support offshore wind.

Clean Energy Group hopes that the Northeastern states will soon begin a multi-year process to consider how to pursue these collaborative regional strategies and the resulting environmental and economic benefits, so that the offshore wind potential in this region will not be left up in the air.

The full report is available here.

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See also: Multi-state coordination needed to revive U.S. offshore wind industry, by Elizabeth Harball, Copyright 2015 E&E Publishing, LLC. This article was published in ClimateWire and re-posted with permission of E&E Publishing.

New CESA Guide Explains Options for Residential Solar Financing

Author: Maria Blais Costello | Project: Clean Energy States Alliance

blogphoto-Solar-Financing-Guide-Cover-with-borderThe number of residential solar PV installations has increased rapidly in recent years, due in part to the emergence of financial products that give homeowners the ability to spread out the costs of going solar over time. Coupled with state and federal incentives that help reduce the costs of PV systems, new financing approaches are helping homeowners to install solar at a remarkable rate.

According to a recent report by the Solar Energy Industries Association, nearly 600,000 homes and businesses have installed solar PV systems in the U.S. Since the end of 2010, the average price of a PV panel has dropped 63 percent. While this is good news for the potential solar purchaser, the increasing number of solar vendors and financing options can make homeowners’ choices more complicated.

There are two primary ownership models for solar PV: third-party ownership and homeowner ownership via direct purchase or a loan. (A story offering the perspectives from two homeowner’s on these models, “The Great Solar Panel Debate: To Lease or to Buy,” was recently aired on National Public Radio.)

Third-party ownership models–Solar Leases and Solar Power Purchase Agreements (PPAs)–allow homeowners to get the benefits of solar PV with no upfront costs, since the third-party developer owns the PV system and essentially “sells back” the power generated by the system to the homeowner. But with third-party ownership, there are questions that should be considered such as what are the buyout options for the system, what are the home ownership transfer provisions if the home is sold, and who has the responsibility for maintaining the system once it’s installed.

Solar loans are now available to help those who wish to own their PV system while paying for it gradually over time. Some questions to consider with loans are how to structure the repayment terms, what entities offer solar loans, and whether to purchase an extended warranty.

With these new financial products, many potential consumers for solar PV systems are not quite sure what the best way to finance a system is, and what the advantages and disadvantages are for each.

Clean Energy States Alliance has prepared “A Homeowner’s Guide to Solar Financing – Leases, Loans, and PPAs” that will assist homeowners in making the right decision as they weight the benefits of direct ownership versus third-party financing. This guide explains “What You Need to Know about Leases, PPAs, and Loans” as well as “Common Terms in Solar Financing.” It also provides a check list of questions that homeowners should consider when making their decision.

This free guide is available here.

It provides useful analysis to compare residential Solar Leases, PPAs, and Loans. The guide is an objective resource that should be helpful to homeowners who are considering how to finance solar PV on their homes or property.

Clean Energy Group Proposes Collaboration on Distributed Energy Storage Policies

Author: Clean Energy Group | Projects: Resilient Power Project, Energy Storage and Climate

Distributed-Energy-Storage-Concept-Paper-Feb2015-featuredClean Energy Group (CEG) has released a new report calling for more collaboration on policies to promote emerging distributed energy storage technologies. In Distributed Energy Storage: A Case for National and International Collaboration, CEG proposes the creation of both national and international networks of industry, policy makers and NGOS to advance new and effective policies for distributed energy storage technologies.

Distributed energy storage systems are advancing quickly and show great promise for a wide variety of applications and markets. But the markets are at an early stage, and policy makers have only begun to develop programs to help advance the technologies. A few states like California have developed targeted energy storage policies, but many states are likely to create policy programs. This early stage of the policy development on energy storage is the right time for more collaborative discussions on the best policy approaches to drive the technologies to scale.

Getting energy storage policies right is important for many reasons. Distributed energy storage is the clean, efficient, fast-scaling solution to a myriad of problems:

  • It can help to integrate renewables by providing fast ramping for variable generation resources and prevent overbuilding of fossil fuel peaker plants.
  • It can reduce energy costs when paired with solar PV, through load shifting and the reduction of demand charges.
  • It also can provide resilient power to keep the lights on when the grid goes down. It can help to avoid expensive grid investments.
  • And it can allow small distributed generators to access markets that would otherwise be inaccessible to them.

Distributed energy storage is the key enabling technology for renewables such as solar PV, and it is the key to grid modernization.

Distributed energy storage technologies have arrived but financing, markets, policies and regulations to support these technologies have not. CEG sees an opportunity for national and international networks to share knowledge and experience, accelerate the development of needed policies, and stimulate markets. Cooperation and collaboration can help us avoid the kinds of patchwork-quilt policies that have kept other promising new energy technologies from reaching scale quickly and efficiently.

These national and international collaboration networks would shape policy, advocate for regulatory advances, and aid the industry in accessing markets and financing.

As a first step, Clean Energy Group proposes the following specific efforts:

  • A Technology Exchange, to help participants keep abreast of advances in battery chemistries and inverters;
  • A Policy Exchange, to allow policymakers to share ideas and experience across state and national borders;
  • A Markets Watch, to keep participants up to date on the evolution of electricity pricing, ancillary services markets, installed systems costs, and related market developments;
  • Standards and Testing Protocols, to promote the development of a unified set of performance and safety standards, testing protocols, and other standards;
  • An International Program Database, to track distributed energy storage programs and deployment globally;
  • An International Industry Database, to list companies in the distributed storage and related industries;
  • A Distributed Storage Newsletter, to keep readers up to date on industry developments around the globe.

For more information about this project, contact Lewis Milford at LMilford@cleanegroup.org.

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This blog post was also published on Renewable Energy World.