After its swift progress through the state’s legislature, Governor Carney signed Senate Bill No. 33 (“SB 33”) on February 10. The bill extends and expands Delaware’s Renewable Portfolio Standard (“RPS”) and alters the previous statute’s RPS freeze requirements, which has long caused controversy at the Public Service Commission (“PSC”). While it encourages more renewables like solar in the future, some think it’s still not enough to catch up to Delaware’s East Coast neighboring states.
The bill, sponsored by State Senator Stephanie Hansen, extends the schedule under Title 26 of the Delaware Code which mandates that an increasing percentage of electrical energy sales must come from renewable energy sources each year. Prior to this bill, this percentage increased incrementally until 2025, plateauing at a goal of 25% renewable energy. SB 33 sets a goal of 40% renewable energy by 2035, increasing both the goal and the timeline.
As passed, solar energy accounts for a quarter of the total 2035 RPS’ solar carve-out, the solar energy specific portion of the renewable energy mandate, or 10%, reinforcing the need for a solar renewable energy certificate (“SREC”) program. Under the RPS, utilities must procure SRECs, which each represent 1 MWh of renewable energy generation, to comply with the solar carve-out requirement and avoid paying an Alternative Compliance Payment (“ACP”). SRECs are generated by registered residential and commercial solar energy systems in the state.
At this point, only Delmarva Power, the only state regulated utility with compliance obligations under the RPS, is required to purchase DE SRECs. SB 33 does not alter this. Although municipal utilities and rural cooperatives are encouraged to meet the renewable energy goals, they can elect to exempt themselves from the requirements by detailing an alternative approach to achieving a level of renewable energy penetration in their service area. Instead of paying the ACP, they will either contribute to the state’s Green Energy Fund or an independent fund.
Since SB 33 did not alter Delmarva’s position as the sole complier and as such, it is unlikely that the legislation will result in alterations to their SREC procurement structure, which relies on the annual SREC Delaware competitive solicitation for SRECs.
However, this annual solicitation did not occur in 2020. This is due to conflict over the previous RPS statute’s freeze provision at the PSC, which led Delmarva to hold off on a 2020 solicitation. SB 33 fixes the freeze language. Under the new law, an RPS freeze will go into place if more than 15% of the carve-out is met by ACPs rather than through the purchase of SRECs. With this alteration, the legislature added a layer of certainty and it is our hope that the alterations reduce the likelihood of another missed year of the SREC solicitation in Delaware.
We are thankful for SB 33 and its sponsors like State Senate Environmental & Energy Committee Chair Stephanie Hansen. We look forward to Delaware’s bright renewable future.
Why Maine Is Positioned to Lead in the Solar Energy Space
Policy |
By Anna Noucas
Just a short jaunt across the Piscataqua River from Kittery, my passion for renewable energy and environmental protection was born. Growing up on the Piscataqua fueled my dream of making a positive impact on the world and drove me to my now alma mater, Bowdoin College. Since then, and for the majority of the last decade, I dedicated my professional career to renewable energy development while working at Sol Systems – a job that I am proud to say allows me the opportunity to work toward my goal to leave a positive on-the-ground impact right here in Maine.
The Opportunity in Maine
In 2019, Governor Janet Mills signed legislation that set Maine on a path toward becoming a clean energy leader by expanding the state Renewable Portfolio Standard (“RPS”) with a target to meet 100% renewable electricity sales by 2050. In addition, Gov. Mills established the Net Energy Billing Program that provides local businesses, municipalities, schools, and residents the opportunity to benefit from solar and other renewable energy sources in a way that will not only save money on their electricity bills, but also help protect the environment.
Under the Net Energy Billing Program, customers can use Net Energy Billing Credits (“NEBC”) to offset their electricity bills. NEBCs are generated from the output of a solar energy project installation with a total system size of up to 5MW. Under the Net Energy Billing Program, a solar energy project can be located either on property owned by the customer (a rooftop, parking lot, field, etc.) or on a separate property so long as it is in the same utility territory – a critical detail that allows a greater number of customers to benefit from the program.
For example, a business with a shaded roof, a community college with inadequate space, or a municipality with a limited land-based footprint can still partake in the economic savings and other benefits provided by solar energy. Together with those individual customer savings and benefits, tens of millions of dollars will be invested directly into community-level projects, creating thousands of new renewable industry jobs and local opportunity.
The Next Step for Maine
While we commend Gov. Mills for taking a big step forward by committing to 100% renewable electricity sales by 2050, there is a lot of work left to do to implement the new NEBC program. As a state, Maine regulators can learn from the lessons learned in surrounding states who successfully developed and implemented similar programs. It is essential that businesses looking at building a permanent footprint in the Maine renewable energy market can operate in a consistent and predictable regulatory landscape.
On the financial side, solar and other renewable energy technologies offer a unique opportunity to begin to rebuild energy sector losses suffered amid this national pandemic. The renewable energy asset class in the United States, particularly solar and wind projects, have come to be seen by the project finance community as something of a safe-harbor. These projects provide steady dollar-denominated contracted cash flows, often with investment-grade counterparties, and are non-correlated to the stock market in one of the most volatile periods of its history.
The External Factors for Maine
Importantly, the renewable energy industry is not impervious to market changes and like many other industry sectors is facing its own gauntlet of challenges at the state and federal level. At the federal level, the solar industry is working to extend critical renewable energy federal investment tax credits (“ITC’) that will help to form the foundation to bring back hundreds of thousands of energy-sector jobs and spur the reconstruction of the renewable energy infrastructure across the US.
In addition to extending the ITC, the industry is working to defend against attack at the federal energy regulatory commission (“FERC”) on state autonomy over practical and cost-effective programs to incentivize local business and economic develop and better consumer protection. These programs are critical to Maine and include the Net Energy Billing Program and other net metering programs across the nation and should be left to the discretion of state governments – as been the case historically.
The Road Ahead
I look forward to helping to build renewable energy across Maine and lending my hand to make sure all Maine residents know that renewable energy, job creation and environmental protection are just element of “the way life should be!” I am proud of my history in the state and my opportunity to leave a positive impact on the communities I hold dear to my heart.
Lauren Miller Elected to MDV-SEIA Board of Directors
Company News |
By Claire Siwulec
On June 19th, MDV-SEIA members elected Lauren Miller, Senior Associate of Policy at Sol Systems, to the organization’s board of directors. The election took place on June 8-19 with 21 applicants vying to fill 8 seats on the member board.
MDV-SEIA is the overarching organization that promotes solar energy policy and growth through legislative and regulatory affairs in Maryland, DC, Delaware, and Virginia. As a board member, Lauren will provide guidance to staff at MDV-SEIA to promote renewable energy growth in state markets, as well as assist with fundraising goals to help the association move forward with overarching goals. Lauren hopes to continue solar growth in MDV-SEIA's primary markets with legislative and regulatory wins. These policies include interconnection in the District, net metering in Maryland, and the Virginia Clean Economy Act.
Lauren has been a part of the Sol System’s team for 5 years, beginning her career on the REC aggregation team. Through this role, Lauren had the opportunity to engage with thousands of Sol customers, help manage REC portfolios internally, and gain insight on how RPS policies function. In her current position as a Senior Policy Associate, Lauren oversees Sol Systems’ businesses’ relationships with industry associations, state public utility commissions, and legislatures across the country.
Lauren’s nomination to MDV-SEIA's board of directors continues Sol Systems’ focus on regulatory work in active markets with the opportunity to become more healthily engaged, especially within the Mid-Atlantic region.
Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.
Over the last ten years, Sol Systems has delivered 800 MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.
Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com
The Sol SOURCE is a quarterly journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains trends and observations gained through quarterly interviews with our team, and it incorporates news from a variety of industry resources.
Below, we have included excerpts from the Q2 2020 edition. To receive future Journals, please subscribe or email SOURCE@solsystems.com.
STATE MARKETS
New Jersey - On April 30, 2020 the New Jersey Solar Renewable Energy Credit (“SREC”) program closed and the New Jersey Board of Public Utilities (“BPU”) shifted solar projects to a temporary, transition incentive program (“TREC”). In the coming months, we expect the BPU to continue taking comments from the solar industry and other interested parties to ensure a smooth transition from the legacy SREC program to the new TREC program. Solar projects that did not receive PTO by April 30, 2020 will automatically rollover into the new TREC program, and new projects will be able to enter the transition program until a successor program is finalized.
While the transition program will provide short-term stability, the solar industry is still awaiting the BPU’s proposal of a long-term successor program. Sol, along with many others in the industry, continues to engage with other industry partners and with the BPU on the implementation of the TREC program and the proposal of a long-term successor program and will provide update and clarity as possible.
Massachusetts - On April 15, 2020, in response to the results of the 400 MW Review of the Solar Massachusetts Renewable Target (”SMART”) program, the Department of Energy Resources (“DOER”) issued an order both expanding the program to 3,200 MW and altering some important program features. While the expansion of SMART is great news, certain alterations have caused concern in the industry.
One of the most concerning revisions proposed by DOER is the 250% increase of the greenfield subtractor. This proposed change has many in the solar industry questioning if this too high of an increase, one that could impact project economics. An additional source of concern is the requirement that, unless otherwise exempted, all projects over 500 kW should include a storage component.
Overall, DOER’s proposed changes will alter how solar developers approach Massachusetts. The state held a virtual hearing on the proposed changes on May 22 and particular concerns should be shared with DOER through formal comment due June 1. Sol Systems will continue to engage and provide updates as the program revisions progress.
Illinois - For those active in the Illinois market, there is much to track. On the legislative side, the industry is working on a solution that would expand and provide additional funding for the Adjustable Block Program (“ABP”). Without an extension of the APB, new in-state solar projects could come to a halt.
On the regulatory side, Ameren filed a petition with the Illinois Commerce commission asserting that distributed solar capacity has reached three percent. However, many in the solar industry argue that Ameren’s calculation is flawed and have appealed the commission.
Specifically, if Ameren indeed reached the 3% threshold, it will trigger a review of their net metering compensation rate. Once net metered volume hits 5% the compensation rate will change. Sol will continue to track the Ameren proceeding and any legislative developments.
SOLAR CHATTER
The Solar Energy Industries Association (SEIA) has been hard at work finding federal solutions to COVID-19's impact on the industry, as well as working on the state level to ensure permitting, construction, and other essential activities continue to keep solar infrastructure projects moving forward. The organization has launched a COVID-19 resources webpage for solar companies.
In spite of efforts to retain renewables jobs during the COVID-19 crisis, an estimated 106,000 U.S. clean energy employees went out of work in March, with current predictions warning that the number could rise to as high as 500,000 by the end of June. These job losses come as the entire country and much of the world adapts to the drastic changes made in society to combat this virus.
There has been a measurable drop in carbon emissions from data recorded during mass stay-at-home orders, as many cars have been kept off the roads and planes out of the sky. Scientists have predicted a 6% global drop in energy demand for 2020, the equivalent of the energy demand of India.
As scientists have warned for years, the measures taken to combat climate change may need to be equally drastic in scope to those taken for COVID-19, and if the crisis has proven anything, it’s that the world is willing to make changes when convinced of a distinct and present danger. As we think ahead of what a post-COVID world may look like, the potential to institute massive change to turn the tides on climate change could emerge, if the climate change movement strikes while the iron is hot.
Although solar construction has been deemed essential in states like Illinois, much of the work needed to make progress on projects is halted by the absence of roles that have not been deemed essential, such as land surveyors. Our team has dug deep into the issue in a recent blog post.
Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.
Over the last ten years, Sol Systems has delivered 800 MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.
Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com
Uniting with Local Governments to Engage Communities During COVID-19c
Policy |
By Noelle Paige
While a typical news cycle may lead you to think otherwise, the executive branch is not the most impactful level of government for the average American citizen. Our daily lives are most affected by a handful of our neighbors making decisions right down the road: noise ordinances, parking regulations, and building codes. These decisions are the outcome of collaborative processes such as community surveys and neighborhood meetings.
So, when a pandemic hits, what becomes
of community engagement with these local governments? Civil servants who rely
on public input are now entering territory that can significantly distort
representation; switching to online surveys or video conferencing can
marginalize the group of senior citizens who regularly show up to council
meetings, while reminding twenty-somethings that they have a voice too (and that
no one appreciates electric scooters being dumped everywhere). The family-run
farm that supplies dairy and meat for the only grocer within 30 miles doesn’t
have Google Fiber that allows them to effortlessly dial in on Skype. Strong relationships
with local leadership are critical in keeping exurban and rural America
connected and heard.
Local governments are adapting how
they maintain transparency of their day-to-day work while observing physical
distancing guidelines. Even prior to stay-at-home orders, improving participation
in local elections, surveys, and other engagement was a feat. And, now
distancing is cultivating concerns that governments will lose connectivity with
constituents. Yes, executive orders and waivers can mitigate some issues like
in-person plan review requirements or neighborhood meetings for grant
compliance, but many small jurisdictions are already overwhelmed with
bureaucratic procedures. Drafting and completing these stop-gaps will be a huge
burden for municipal staffs with limited resources.
Working in utility-scale solar energy development, I became familiar with the small, rural counties of the United States and the challenges they face on a daily basis. Many jurisdictions have only part-time staff and employ planners that also work at neighboring towns. These communities prioritize efforts to keep their publics engaged and informed.
Public input is also a vital
component of development and construction, and the solar industry must welcome
involvement and earn trust from the citizens we respect so much. Solar developers
value the landowners that lease us their land without the guarantee that the
project will actually pencil and be built, the neighbors that tap us on the
shoulder when the subcontractors park on their lawn, and the people that show
up to public hearings about our projects to learn about what we do. It warms
our hearts to share the benefits of solar and help others navigate
misinformation. We love connecting with and learning from our neighbors.
While a lot of rural Americans do not have access to high speed internet, many do rely on their land-line telephones for communication. What if developers collaborate more closely with jurisdictions on appropriate notification ranges and work the phones to aid in collecting public input? We can help boost the capacity for government staff to stay connected with constituents about projects via telephone outreach and citizen network programs that proactively inform and invite feedback about proposals in each jurisdiction. Phone conversations have proven more effective in responsiveness compared to mailer campaigns. And, the two efforts combined offer the greatest chance for valuable, lines of communication directly to the companies proposing the projects. This approach can provide a comparable level of information sharing as public hearings while removing the obstacle of scheduling conflicts, and, of course, adhering social distancing guidelines.
It’s my dream that this challenge
can ultimately unite us across all sectors. Solar companies can only become
productive members of the communities they serve with public input and close collaboration
with local governments.
At Sol Systems, we have attended numerous local government meetings over the years to ensure our projects complement the values and goals in the communities we serve. Today, we must lead with empathy for both those directly impacted by the virus, and also for local government leaders working to keeping us all healthy, connected, and engaged as we navigate our current circumstances.
ABOUT SOL SYSTEMS
Sol Systems is a leading national solar energy firm with an established reputation for integrity and reliability across its development, infrastructure and environmental commodity businesses.To date, Sol has developed and/or financed over 850 MW of solar projects valued at more than $1 billion for Fortune 100 companies, municipalities, counties, utilities, universities and schools. The company also actively shapes and trades in environmental commodity and electricity markets throughout the United States. The company was founded in 2008, is based in Washington D.C, and is led by its founder. Sol Systems works with its team, partners, and clients to create a more sustainable future we can all believe in. For more information: www.solsystems.com
New Jersey’s Legacy SREC Program Reaches a Transition Point
Policy |
By Javier Chacon
New Jersey plans to
close its legacy Solar Renewable Energy Credit (“SREC”) program at the end of
April. However, the closure of the program is by no means the end to solar in
New Jersey.
Per the Clean Energy Act of 2018, New Jersey is required to close the current SREC incentive program once the New Jersey Board of Public Utilities (“BPU”) determines solar electricity generation equals 5.1% of the total state electricity generation load. Last week, just over a year later, the BPU announced that it will meet the 5.1% and will move forward to close the legacy program by May 1, 2020.
Importantly, solar projects that are already in the legacy program will remain eligible under the legacy program and will continue to generate SRECs for the term of their qualification life. However, moving forward the Clean Energy Act of 2018 tasked the BPU to develop a successor solar program.
While the design and structure of the successor program is not final, the BPU has proposed and finalized a new, temporary transition incentive program. Solar projects that have submitted a complete application to the legacy SREC registration program, but are not yet operational, will be eligible for this transition program and its new Transition Renewable Energy Credits (“TREC”) which, like the legacy SREC, a TREC will be generated on a per MWh production basis. This TREC program will officially open on May 1.
Under the new TREC program, a new solar project will be eligible for TRECs for 15 years and each TREC will have a two-year life. The TREC price is proposed at a fixed rate of $152 for the 15-year eligibility period. However, unlike the legacy program, the new price per TREC will be factored based on project type. The factors are as follows:
The incorporation of this factorization means the value of each TREC will differ based on project type. A project’s TREC value will be the base compensation rate of $152 times that project type’s factor. For a residential customer the TREC value is calculated by multiplying $152 by residential’s 0.6 factor, which yields a residential price of $91.20 per TREC for 15 years.
The intent of the new
TREC program is to ease the transition between the legacy SREC program and what
we hope will be a robust, long-term successor program.
It is essential for Sol Systems and other renewable energy companies to remain involved in the process as the BPU moves forward to design and implement the successor program. As of now, the BPU is holding discussions with stakeholders and actively requesting and accepting feedback. Solar energy is key to success of New Jersey’s competitive energy market and the continued growth of the industry is necessary to provide much needed job growth along with community economic and environmental health benefits.
ABOUT SOL SYSTEMS
Sol Systems is a leading national solar energy firm with an established reputation for integrity and reliability across its development, infrastructure and environmental commodity businesses.To date, Sol has developed and/or financed over 850 MW of solar projects valued at more than $1 billion for Fortune 100 companies, municipalities, counties, utilities, universities and schools. The company also actively shapes and trades in environmental commodity and electricity markets throughout the United States. The company was founded in 2008, is based in Washington D.C, and is led by its founder. Sol Systems works with its team, partners, and clients to create a more sustainable future we can all believe in. For more information: www.solsystems.com