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Renewable Energy Tax Credits News Briefs - November 2013

Louisiana H.B. 705 became effective July 1, 2013. Also known as Act 428, the bill repealed the income tax credit for the purchase and installation of wind energy systems and added component and installation requirements for solar energy systems. The changes narrow the category of eligible properties on which solar energy systems can be installed, reduce the credit amount for leased systems to $11,250 and implement a credit sunset date. H.B. 705 also clarifies that only one tax credit, up to the maximum credit amount, can be claimed per property for the purchase and installation of a solar energy system. The bill states that no tax credits shall be authorized, issued or granted for systems installed after Dec. 31, 2017. H.B. 705 also amended the definition for eligible solar energy system to include solar electric systems, solar thermal systems or any combination of components of these two system types. The bill is available at www.energytaxcredits.com.

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On Oct. 2, Rob Gramlich, senior vice president of public policy for the American Wind Energy Association (AWEA), testified before the House Oversight and Government Reform Subcommittee on Energy Policy, Healthcare and Entitlements regarding the oversight of the wind energy production tax credit (PTC). Gramlich said that the PTC has been a tremendous success, and that, with the credit in place, the U.S. wind industry was the number one source of new generation capacity last year. He also stated that wind energy is saving money for consumers across the country. In addition to these benefits, Gramlich stated that the PTC helps ensure that the nation maintains a diverse energy portfolio. He said the cost of wind energy has dropped by 43 percent in the last four years, but the PTC is still needed to prevent taxpayers from relying too heavily on any single fuel source. He closed by saying that the PTC is a wise investment and that allowing it to expire, as is scheduled to occur at the end of the year will take away opportunities for consumers to save money, will dampen domestic manufacturing and innovation and cause companies to hold off on investing in communities across the United States.

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New Generation Power Inc. received the last Multiple Award Task Order Contract (MATOC) for the alternative energy production for the Department of Defense (DOD) installations. The award was given to the Chicago, Ill. based company on Sept. 17. New Generation Power Inc. can now bid on future geothermal technology project task orders. Colonel Robert Ruch, commander of the U.S. Army Engineering and Support Center, Huntsville, said in a press release that they are expanding the pool of potential contractors for geothermal projects to include a small business. He added that including more potential contractors and small business allows competition to expand among qualified bidders and encourages the best value for renewable energy projects.

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On Sept. 20, Vestas Wind Systems A/S, a Danish manufacturer, seller, installer and servicer of wind turbines, received an order from affiliates of Renewable Energy Systems Americas Inc. (RES Americas) for 60 megawatts (MWs) to be used in projects throughout the United States. Each project will use the V100-2.0 MW turbine. In a press release, Chris Brown, president of Vestas’ sales and service division in the United States and Canada, said that transactions like this underscore the value delivered by the PTC and the importance of extending it beyond its current expiration at the end of 2013. Susan Reilly, RES Americas president and CEO, also said in the release that they are pleased to have finalized this agreement with Vestas, and that it is a great example of how the start-of-construction language in the current PTC for wind energy is generating increased spending and creating U.S. manufacturing jobs. Projects are expected to begin in 2014 and 2015.

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Last month the Tennessee Valley Authority (TVA) announced power generation from its dams has broken previous records. TVA reports that more electricity was generated from the 29 hydroelectric dams in fiscal year (FY) 2013 than any year in the agency’s 80-year history. The dams provided 18.5 million megawatt-hours (MWh) of clean, renewable energy, breaking the previous record set in 1973 by 122,000MWh. Hydroelectric power contributed about 13 percent of TVA’s generation mix in FY 2013. John McCormick, TVA vice president, river operations, said that in a typical year, conventional hydroelectric power makes up about 8 to 10 percent of TVA’s total electricity production.

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First Wind, an independent, U.S.-based renewable energy company, announced on Sept. 30 that it began construction on 17MW of solar projects in Massachusetts: a 3MW project in the city of Millbury and 14MW project at three sites in the town of Warren. This is the company’s first set of renewable energy projects in its home state and its first solar development. First Wind broke ground after securing financing and finalized a long-term power purchase agreement (PPA) with the University of Massachusetts. KeyBank provided a construction and term facility loan for the project and U.S. Bank provided the tax credit equity. Borrego Solar Systems Inc. is leading project construction and the project is expected to create nearly 85 construction-related jobs. Construction began in September and all four project sites should be completed and operating by June 2014.

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TCAM Asset Management announced on Oct. 8 that its parent company, QuietStream Financial, made an investment in Radian Generation LLC, a solar energy asset manager that provides services for owners of solar projects. Services include technical asset management, financial asset management, and advisory diligence and work out services for underperforming solar assets.

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The Interstate Renewable Energy Council Inc. (IREC) published, “Minimizing Overlap in PV System Approval Processes: Case Studies and Analysis” in October. In the paper, IREC explores the processes involved in the photovoltaic (PV) system approval and recommendations for reform. IREC also provides four case studies, one each in Florida, Hawaii, North Carolina and New York, which outline the process for PV systems in four cities. The case studies focus on the common routes for solar installers in each market. The paper includes such topics as identifying incentives and overlap, approving authorities’ perspective and installer staff, resources and customer management. Jane Weissman, IREC president and CEO, said that the paper identifies just some of the opportunities available for increasing sufficiency.

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First Solar Inc., a global provider of comprehensive PV solar systems, announced on Sept. 26 that it acquired the 250-MW Moapa project in Nevada from K Road Power Holdings LLC, an independent power developer. The Moapa solar project is located on the Moapa River Indian Reservation in Clark County, Nev. It is the first large-scale solar project approved to be built on tribal land in North America. The property is on a 2,000-acre area of the Moapa Band of the Paiutes tribal land. Construction could start as soon as the fourth quarter of 2013, and be completed by the end of 2015. The project has a 25-year PPA with the Los Angeles Department of Water and Power. The project is expected to create up to 400 construction jobs and roughly 10 permanent jobs. In the first year of operation, the Moapa Solar Project is anticipated to generate enough clean energy to power approximately 100,000 average homes. First Solar will design and build the project.

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On Oct. 3, the Solar Energy Industries Association (SEIA) released a comprehensive report outlining ways to create more than 50,000 new jobs and save more than $61 billion in future energy costs by expanding the use of innovative and cost-effective solar heating and cooling systems across the nation. The report, prepared by BEAM Engineering, a Boston-based consulting firm that focuses on energy system design and implementation, details ways to increase specific heat capacity (SHC) in the U.S. from 9 gigawatts (GW) thermal to 300GW thermal by 2050. The stated goal is to do this through the installation of 100 million new SHC solar panels across the nation.

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Renewable Energy Tax Credits

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