A funny thing happened at the PV Industry Forum 2009.
Solar Policy Not Invented by the SEIA?
Legal challenges for state Feed-in Tariff policies.
At the PV Industry Forum held last week before Intersolar 2009, Solar Energy Industries Association (SEIA) President & CEO Rhone Resch presented “New and emerging developments in the US solar market” in Session 1: PV Markets.
|From PV Industry Forum 2009|
After his presentation, an attendee asked:
Would you tell me about the utility market in the United States at this moment?
Midway through his description of national solar developments in the evolving US utility market, Mr. Resch homed in on the Gainesville Regional Utilities (GRU) Solar Photovoltaic Feed-in Tariff (FiT) program (please see Feed-in Tariffs: Solar FiT for Gainesville, Florida!).
Mr. Resch said:
You are now seeing Gainesville Florida had the first Feed-in Tariff in the country. It was poorly designed; it will probably give Feed-in Tariffs a bit of a black eye in the US. But at least it was the first.
And so the same way in Germany where you saw a city develop a Feed-in Tariff. We are now having that occur in the United States. Very important policy development, although it is capped at only 4 MW (MegaWatts).
Session Chair Paula Mints said:
Rhone, would you care to expand on your statement about Gainesville? That it is poorly designed?
Mr. Resch said:
Sure, the structure is fine. I think the rigor in reviewing applications was not there. And so many applications were put in place and then accepted by project developers who have never developed projects in the past. Who may have some land, who might be a farmer, but at this point in time there is no infrastructure and no ability to get those project financed.
So until the bigger companies really start to take a role in this particular program and they are in the queue, but what you are going to find is the first tier of projects that have received acceptance probably won’t ever get constructed. So Gainesville after six months is going to have to say “alright fine you guys aren’t going to be able to get it done, let’s go to the second tier” and that’s where you start seeing the SunEdisons and the Conergys and those kinds of companies who will be able to actually build some of these projects.
So I think In the long run it will straighten itself out, but certainly there was minimal rigor in the beginning in evaluating those applications.
Upon inquiry, the SEIA claims they do support state and local FiT policies including the Gainesville program. The SEIA believes lessons can be learned from the submission of applications hitting the GRU 4 MW program cap days before the official program launch (“GRU Achieves First Year Target for Solar Program”).
I contacted the Vote Solar Initiative to get their feedback on the Gainesville FiT. Gwen Rose, Deputy Director of Vote Solar, observed Municipal Utilities (munis) have been the most innovative with solar policy and said:
What Gainesville is doing is quite exciting and is emblematic of what we see happening across the nation — munis all over the place are going forward with ambitious programs. San Francisco PUC signed a PPA contract for 5 MW of solar at 23.5 cents, and is planning another 40 MW, as well as a rebate program for customer-sited systems. Long Island Power Authority is doing 50 MW. Austin Energy has a contract before the city council for 30 MW at 16.5 cents. LADWP has a 1.3 GW plan for all kinds of solar. It’s all very exciting watching the number of these local developments!
In general, we think a suite of policies are necessary to support solar markets at different stages of development. We also think that having a diversity of incentive programs that target different markets will be more conducive to establishing a long-term stable solar industry (for example, performance-based incentives/rebates plus net metering for retail markets; wholesale markets supported by FiTs, standard offer contracts and competitive bids). Feed-in tariffs, when well-designed, are an important policy tool for setting up sales of wholesale power to a utility.
Despite the unkind Gainesville remarks, I heard from Rhone Resch himself at Intersolar about concerns over the legality of state Feed-in Tariffs, and SEIA efforts to clarify and enable them through legislation as required. Per the SEIA, “provisions in federal jurisdiction may preempt state setting rates, including FiT’s that set higher rates than the acceptable avoided wholesale rates. There are related legal cases pending in California, Hawaii and Iowa.”
Below is a Keyes & Fox LLP (a Seattle law firm focused on distributed-generation law) presentation summary of Feed-in Tariff regulatory challenges furnished by the SEIA. Keyes & Fox LLP co-founder and Partner, Jason Keyes, is also an American Solar Energy Society (ASES) Director.
- The U.S. Constitution grants Congress the power to preempt state regulation of an area of interstate commerce.
- The Federal Power Act (FPA) grants the Federal Energy Regulatory Commission (FERC) exclusive jurisdiction to regulate wholesale power sales in interstate commerce.
- The Public Utility Regulatory Policies Act of 1978 (PURPA) grants states a limited role in wholesale power markets by allowing states to set utility avoided cost rates for wholesale power purchased from FERC-designated qualifying facilities (QFs).
- FERC has issued several decisions stating that states are preempted from setting wholesale power rates that exceed utility avoided cost.
- It has been claimed in several venues that the FPA, PURPA and these FERC decisions preempt state attempts to establish feed-in tariffs.
There is a Feed-in Tariff session at the PV America conference next week on Monday, June 8, 2009:
11:00 a.m.-12:30 p.m.
Hasselhoff, Lederhosen, and Feed-In Tariffs: If It’s Good for Germany, Can It Work Here?
Having a fit over FITs? Come and hear the pros and cons.
Moderator: Richard Deutschmann, groSolar
Panelists: James Bradbury, Office of Representative Jay Inslee
Peter DeNapoli, SolarWorld
Wilson Rickerson, Rickerson Energy Strategies
I don’t know the reason for Mr. Resch’s strong remarks about the Gainesville Solar Feed-in Tariff Program in Munich. I don’t think they were a mistake but part of political and policy message to the European dominated audience. I’ll keep my gross speculations to myself for now.
In twitter time, it is impossible to tailor, deliver, and isolate a political message to a regional audience.
Please vote in the new PV Poll on the sidebar:
Is it unethical for a news site to distribute “marketing partner” PR via RSS or twitter?