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Friday
Dec202013

Mixed Review for EDC's Solar Fund

By TIM FAULKNER/ecoRI News staff

PROVIDENCE — The state’s Renewable Energy Fund (REF) was recently reauthorized for three more years by the Rhode Island Economic Development Corporation (EDC). But, is the fund really working and why not model it after thriving programs, like those in Massachusetts?

In its first year, the REF awarded about 90 grants totaling $500,000 for mostly small, residential solar projects. Massachusetts by comparison authorized 3,700 small solar projects this year through its Solar Carve-Out Renewable Energy Certificates (SREC) program, which was launched in 2010.

The REF offers an upfront grant of 20 percent up to $10,000, which is higher than the rebate offered in Massachusetts. But, the Rhode Island program doesn’t have a long-term production-based incentive that pays for the energy produced, like the SREC program.

Providence-based solar installer Eric Beecher of Sol Power said financial incentives are 3.4 times greater in Massachusetts than in Rhode Island for small-scale solar, “which is why business is booming in Massachusetts and (the REF) can't spend (its) funding in Rhode Island."

Success has come relatively quickly in Massachusetts. The state set a goal of installing 250 megawatts of new solar energy by 2017. They reached the goal this year, four years early.

At a recent hearing for the REF, solar installers both praised and criticized the program. Beecher introduced the imbalance in financial incentives between Massachusetts and Rhode Island. Vito Buonomano of Northeast Solar & Wind Power said the payback on investment for small solar is too long to attract Rhode Island customers. He also wants the REF to imitate Massachusetts.

“There’s just so many things that need to be changed with this program,” Buonomano said.

Doug Sabetti, owner of Newport Solar, had the opposite experience, receiving 15 REF grants for new solar projects this year. “I enjoy working with it and it makes all the difference in the world to my business. My business wouldn’t exist without it in Rhode Island,” he said.

The EDC wouldn’t comment on whether Massachusetts' SREC program is worth imitating, only saying that any changes must come through the General Assembly. 

The EDC can tweak the REF, as it did Dec. 16, by voiding the requirement that all solar projects connect to the power grid. Block Island solar projects were also allowed to apply for the grants. Block Island was previously omitted because New Shoreham gets its electricity through Block Island Power Corporation and customers don’t pay a system benefit charge on their bills.

To complicate matters, two separate entities oversee Rhode Island’s two energy programs. The public-quasi EDC oversees the REF and the state Department of Administration runs the distributed generation contracts program, which generally helps larger solar energy projects. Both require legislative action to change. In Massachusetts, the Executive Office of Energy and Environmental Affairs oversees all renewable-energy programs. Current legislation seeks to give that office greater control ot its programs.

Massachusetts also offers a tax credit of up to $1,000, and projects are exempt from sales and property taxes. Many small-scale solar projects qualify for rebates through the Massachusetts Clean Energy Center.

Legislation failed this year to reinstate a tax credit in Rhode Island, as well as an effort to move the REF to the Department of Administration. The REF small-scale solar grant program, as well as programs for larger renewable-energy projects, are funded through the system benefit charge on electricity bills and payments made by power plants to comply with mandates.

The REF took in about $3 million in fiscal 2013. A minimum of 20 percent of the REF's annual income will be made available for the small-scale solar program in 2014. This amounts to a minimum of about $600,000. 

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Reader Comments (2)

I think that the EDC should have nothing to do with this program. Set up a fresh new agency that handles renewables such as Hydro , Solar and Geo Thermal.

And when you place the board members for this new agency please pick folk's that have the credentials in renewables and not who's politically connected such as was the case when the Governor appointed a member if the EDC who pushed off a total of $5.5 million dollars in fraudulent performance bonds at URI
December 25, 2013 | Unregistered CommenterJohn P. Gauvin
Local renewable energy makes the state more economically self-sufficient. Once the energy is here permanently, so is the use of that energy.

Rhode Island jobs, not Chinese full employment, should be targeted. The state should plan how each person is likely to get a career in the renewable energy field. If specific people aren't fitting in, if they have to move out of state to get a job, then perhaps something needs to be examined and fixed.

Rhode Island needs medium-term product development. Long-range theoretical breakthroughs may be too pie-in-the-sky and low on payoff, but mere short-range subsidizing of Chinese photovoltaic panels doesn't deliver that much bang for the buck. At least those subsidies pay the installers.

To grow a Rhode Island solar industry, we need a broad-spectrum of building blocks. We need engineers who can integrate robotic microprocessors with Droid apps. This means that we need subsidized university courses. We need a few engineer/businesspeople hybrid skill sets.

Just as the YMCA teaches kids to swim in the shallow end of the pool rather than tossing them into the deep end, we need a bit of hand-holding for people who have no idea how to start a business. Also, we should no more tax the brand new business with minimum corporate taxes than we should have a poll tax on rich and poor alike for the privilege of voting. Intelligent states don't tax their lemonade stands to death. Rather, states curb their avarice and let the lemonade stands flourish, in hopes that the proprietors learn something.

Next, the state should waive its fees on testing brand new renewable energy products. Let the state pay for its own engineering studies on innovative products created by tiny companies, rather than try and foist burdens onto the backs of the innovators.

The road into a free market should be paved by the state. Otherwise, the free market is only free for the very few.
December 26, 2013 | Unregistered CommenterPaul Klinkman

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