On April 1st, 2013, Oregon will issue its seventh capacity release for its solar volumetric incentive rate (VIR) payment program, established in June of 2009. The last capacity release featured prices between $0.25/ kWh to $0.41/ kWh for residential and commercial systems, depending on geographic location and size.
Oregon’s VIR is different from other Feed-in-Tariffs (FITs) in that customers can consume the electricity they generate on-site and receive a production based incentive (PBI) for what they generate and consume. The Oregon Public Utility Comission (PUC), in accordance with annual system costs and annual energy output based on geographic regions, determines rates. Customers are paid for each kilowatt-hour (kWh) generated over 15 years.
The program is limited to 25 MW of PV solar spread over four years, with a maximum individual system size of 500 kW. Consumers within the geographic territories of the three investor owned utilities – Portland General Electric, Pacific Power, and Idaho Power – can subscribe to the program. Each utility has been delegated 14.9 MW, 9.8 MW and 0.4 MW of capacity, respectively.
This program favors small systems, as 75% of qualifying projects must be small systems. A “small system” means 10 kW or less for residential systems and between 10kW- 100 kW for small commercial projects. Systems bigger than 100 kW can enter competitive bidding for a portion of the 5 MW aggregate cap set aside specifically for larger systems. The program will be closed when the 25 MW cap is reached or on March 31, 2015, whichever comes first.
Systems equal to or smaller than 100kW are eligible to participate in net metering, whereas systems between 100kW and 500 kW can participate in the competitive bidding twice a year – on April 1st and October 1st – when utilities issue an RFP. Portland General Electric, Pacific Power, and Idaho Power are preparing for the April 1st capacity release. Proposed prices for the release fall between $0.18/kWh and $0.41/kWh for residential and commercial systems.
As of July 2012, the program has been instrumental in the installation of over 11 MW of solar capacity: 7.4 MW in PGE’s service territory, 3.5 MW in Pacific Corp’s, and 0.2 MW in Idaho Power’s service territory. Oregon currently ranks 14th in installed capacity, by state.
About Sol Systems
Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.
For more information, please visit www.solsystemscompany.com.