Renewable Energy Briefs

Monday, May 8, 2017

The Internal Revenue Service (IRS) published April 12 the inflation adjustment factor and reference prices for calendar year 2017. The inflation adjustment factor for calendar year 2017 for qualified energy resources and refined coal is 1.5792. The reference price for 2017 for facilities producing electricity from wind is 4.55 cents per kilowatt-hour. The reference prices for facilities producing electricity from closed-loop biomass, open-loop biomass, geothermal energy, small irrigation power, municipal solid waste, qualified hydropower production and marine and hydrokinetic renewable energy have not been determined for calendar year 2017. The 2017 inflation adjustment factor and reference prices are used in determining the availability of the credit for renewable electricity production under Section 45. A breakdown of the rates is available at www.energytaxcredits.com.

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The Iowa Department of Revenue (DOR) adopted Iowa Administrative Code Section 701–42.56, effective May 3. The adopted code establishes rules for the recently enacted renewable chemical production tax credit (PTC) program. The rules describe the DOR’s role in the program administered in coordination with the Economic Development Authority (EDA). The DOR rules cover application procedures for the credit, computation of the amount of credit, certificate issuance and how to claim the credit. The code also covers information required for the issuance of the tax credit certificate, the allocation to individual owners of the entity or beneficiaries of an estate or trust entitled to the credit, rules on rescission and recapture of the credit. The EDA rules cover eligibility requirements, the application process and application review, the required taxpayer agreement with the EDA before a credit could be issued, calculation of the tax credit, administration of the tax credit waitlist, the process for claiming the credit and the process to add additional building block chemicals by administrative rule.

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The Solar Energy Industries Association (SEIA) and Greentech Media Research (GTM Research) released March 9 its U.S. Solar Market Insight 2016 Year-in-Review report. The report states that 2016 was a record-breaking year, with the U.S. solar market nearly doubling its 2015 capacity by installing 14,800 megawatts (MW) of solar PV in 2016, reaching 42.4 gigawatts (GW) of total installed capacity. According to the report, 2016 was the first time solar ranked as the No. 1 source of new electric-generating capacity additions brought online on an annual basis at 39 percent. In 2016, 22 states each added more than 100 MW of solar PV. GTM Research forecasts that 13.2 GWdc of new PV installations will come online in 2017, and that utility PV is expected to account for 66 percent of that new capacity. The report stated that total installed U.S. solar PV capacity is expected to nearly triple over the next five years, and that by 2022, more than 18 GW of solar PV capacity will be installed annually.

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Navigant Consulting and the American Wind Energies Association (AWEA) released March 9 an analysis and white paper on the future of the wind industry. Navigant Consulting, in its report titled, “Economic Development Impacts of Wind Projects: Jobs and Economic Impacts Resulting From U.S. Wind Projects 2017-2020,” stated that the U.S. wind industry will support 865,000 job-years of employment (248,000 jobs in 2020 alone), and that total annual economic impact of U.S. wind energy will reach $24 billion in 2020, with $85 billion in economic impact from 2017 to 2020. AWEA’s accompanying white paper stated that there will be the development of around 35,000 megawatts (MW) of wind power capacity between 2017 and 2020. The white paper also states the U.S. wind industry is a major source of investment and economic development, with the industry having invested more than $143 billion in U.S. wind projects during the previous decade. According to Navigant Consulting, this growth is made possible, in part, by the multiyear extension of the wind energy production tax credit (PTC) in 2015, and that by 2019 wind will be the only major source of energy without a dedicated federal incentive.

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ALLETE Clean Energy announced March 16 plans to build, own and operate Clean Energy 1, a 100-megawatt (MW) wind farm in Morton and Mercer counties in North Dakota. Construction is expected to begin in 2018 and is scheduled for completion in 2019, though the 20-year power purchase agreement (PPA) is subject to regulatory approval. To qualify for federal renewable energy PTCs, the project may use a set of wind turbines acquired by the firm in 2016 which meet the standards for the tax credit safe harbor provision. When Clean Energy 1 is complete, ALLETE Clean Energy will own and operate about 640 megawatts of wind generation capacity in five states.

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The Solar Energy Industries Association (SEIA) advocated March 23 that lawmakers should raise statewide Massachusetts net metering caps. This declaration was made in relation to the Massachusetts Department of Energy Resources’ recently introduced plans to extend the state’s Solar Renewable Energy Credit 2 (SREC 2) program. The transferable credit of the program is designed to support the development of new solar photovoltaic capacity. The SREC 2 program helped develop more than 1,600 megawatts of solar development and supported thousands of local jobs, according to SEIA’s press release. There is no timeline on a long-term replacement. SEIA’s press release also offered statements from industry practitioners in support of the extension. More information is available at www.seia.org. 

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