Policy - Federal Level

Americans Making Power Act Proposes National Net Metering

July 2010, Washington, D.C. - Rep. Jay Inslee (WA) has introduced the Americans Making Power Act, or AMP Act, which would establish a national standard for net metering. The legislation would allow Americans to feed back into the grid excess renewable power they generate through their homes, small businesses and even places of worship. This legislation would also improve reliability of the nation's electric grid by encouraging a more diffuse means of energy production.

“Our new clean energy economy can start right at home.”

—  Rep. Jay Inslee

The AMP Act (HR 5692) addresses two main issues associated with a robust net metering policy; namely the actual net metering standard and a policy component designed to allow for the connection of a renewable energy system to the electric grid, also known as "interconnection." The AMP Act would accomplish this by modifying section 113 of the Public Utility Regulatory Policies Act (PURPA) of 1978. While some 42 states have already adopted some form of net metering and/or interconnection standards, there are many variations in policy and some states have yet to adopt net metering language at all.

The AMP Act would set a minimum in standards and procedures for net-metering including a limit on the size of machine at 2MW, but would allow states to enact their own regulations over and above this minimum. As written, the owner-generator keeps all renewable energy credits generated by the machine. Additionally, the requirement to offer this program does not apply once the utility has reached a total of 6% of its peak load in net-metered projects (or 4% of it's peak by any one qualifying net-metered technology). This is re-calculated every 12 months. Customer-generators will receive a kwh credit on their bill for any excess generation. At the end of 12 months, if there is a net excess of generation, the customer-generator recieves a payment equal to the average wholesale rate for the previous 12-month period per net excess kwh.

“Our new clean energy economy can start right at home,” said Rep. Inslee. “By empowering Americans, this legislation can help build the clean energy economy of the 21st century while saving families money. Imagine getting a credit on your bill from your utility company every month because you generated more power than you use.”

Department of Energy Seeks Input on Wind Energy Workforce Development Roadmap

U.S. Department of Energy

Washington DC — The U.S. Department of Energy (DOE) has issued a Request For Information (RFI) to gain public input on the development of a Wind Energy Workforce Roadmap, which will provide details on the current workforce landscape in the wind industry as well as future steps necessary to train and develop a green workforce for the sector.

The purpose of the Roadmap is to establish the policy objectives and overall direction that workforce development efforts throughout the wind industry should assume as it moves forward. This RFI provides leaders from academia, industry, and government with the opportunity to provide insight and guidance to DOE as the nation ramps up its wind energy production. A draft Roadmap document has been developed, and the public may provide comments on the initial draft or may provide alternative or additional viewpoints.

This RFI does not constitute a request for specific project proposals. The information being sought under this RFI is intended to assist DOE and the wind industry in maximizing ongoing efforts to spark interest and skills development in the growing wind industry.

The information collected may be used for internal DOE planning and decision-making to align future activities under the Wind and Water Power Program with the Administration's goals for increased use of renewable energy and domestic job creation.

DOE will not reimburse costs associated with preparing any documents for this RFI, and there is no guarantee that a funding opportunity announcement will be issued subsequent to this RFI.

Comments must be provided by no later than July 30, 2010. View the full text of the RFI on the FedConnect website


Rural Summit on Capitol Hill Seeks Sustainable Solutions

“Local ownership through Community Wind development not only provides initial construction jobs, but more importantly it provides long-term economic activity.”
—Dan Juhl, Chairman and CEO, Juhl Wind, Inc.

Washington, D.C., April 28, 2010 - U.S. Senators Harry Reid, Blanche Lincoln, and Debbie Stabenow were joined by former president Bill Clinton and wind energy developer Dan Juhl as they hosted a Rural Summit at the capitol. The event brought together stakeholders from communities around the country to focus on revitalizing rural America through economic development and job creation, and preserving the rural way of life for future generations.

“Today was all about finding ways we can work together to create a sustainable rural economy,” said Senator Lincoln, Chair of Rural Outreach for the Senate Democratic Caucus. “I have worked diligently with my Senate colleagues over the last year and a half to pass historic legislation that will benefit rural America. From the Recovery Act...to working toward passage of the toughest financial reform legislation in our nation's history to put the needs of Main Street over the interests of Wall Street—I am working to make sure that rural America is strong and successful.”

Panel discussions focused on creating jobs in rural America through investments in infrastructure and critical services, along with building a sustainable rural economy through increasing small business access to capital, small business development and workforce development.

In his keynote speech Clinton offered a positive assessment of the job creation opportunities that exist for rural communities as the economy recovers and moves forward, particularly in creating new and sustainable sources of energy. “Manufacturing will make a comeback in this country, mark my words,” said Clinton. “It's going to be an enormous opportunity for small towns to get manufacturing jobs.”

Dan Juhl
Dan Juhl, Chairman and
CEO of Juhl Wind, Inc.

Dan Juhl, Chairman and CEO of Juhl Wind, Inc. represented the wind power industry and extolled the benefits of Community Wind. “Local ownership through Community Wind development not only provides initial construction jobs, but more importantly it provides the long-term economic activity for 20 plus years as our wind farms are owned and operated by our farmer partners,” said Juhl. “While it may cost $4 plus million to install one 2 megawatt turbine, there is only about $500,000 of local construction activity. However, that same turbine derives $500,000 a year in revenue—or $10 million over each 20 year period. That is why we are so committed to ensuring that our wind farms our owned by the people of rural America vs. larger utility conglomerates based hundreds of miles away—and sometimes from other countries.”

Vast Majority of Americans Want More Wind Power

“An overwhelming majority of American voters, on a bipartisan basis, want more wind power.”

—Bennett, Petts & Normington

"Increasing the amount of energy America gets from wind is a good idea," agree 89% of American voters, according to a new poll released by the American Wind Energy Association (AWEA). The poll shows that only clean energy sources incuding wind, solar, and natural gas receive a favorable opinion, while coal and oil are given unfavorable ratings, and nuclear energy has split ratings with no majority opinion.

“The poll's bottom line is clear: An overwhelming majority of American voters, on a bipartisan basis, want more wind power and support a national Renewable Energy Standard (RES) to increase its use,” said Anna Bennett and Neil Newhouse, partners respectively with Bennett, Petts & Normington and Public Opinion Strategies, the firms that conducted the poll.

Poll highlights include:

  • An overwhelming, bipartisan majority—89%—of American voters (including 84% of Republicans, 88% of Independents and 93% of Democrats)—believe increasing the amount of energy the nation gets from wind is a good idea.
  • A majority of Americans—56%—disapprove of the job Congress is doing on renewable energy and 67% believe Congress is not doing enoughto increase renewable energy sources such as wind.
  • A majority of Americans—82%—believe the nation's economy would be stronger (52%) or the same (30%) if we used more renewable energy sources like wind.
  • A majority of Americans—77%—support a national Renewable Electricity Standard. This support extends across party lines and includes 65% of Republicans, 69% of Independents, 92% of Democrats.

“Wind works for America and that is why voters want Congress to pass a strong national RES,” said AWEA CEO Denise Bode. “Americans understand that an RES will mean new manufacturing jobs, less dependence on imported energy, and more pure, clean, affordable energy for our country.”

The poll was conducted March 27-28 by Neil Newhouse of Public Opinion Strategies and Anna Bennett of Bennett, Petts & Normington. The poll sampled a national survey of 600 likely voters. The margin of error is plus or minus four percentage points.

Connecting Renewable Energy to a Smarter Grid

Transmission Linemen
Transmission Lineman
photo: mnorri, some rights reserved

There are many hurdles for connecting renewable energy projects to the existing electric power grid. Transmission lines already operate near full capacity. Substations may not handle new interconnections. Regulatory processes span state and federal authorities, and interconnection standards vary from state to state. Plus, it's not clear how to best allocate costs for infrastructure improvements between utilities, energy developers, and rate-payers.

The good news is that both industry and government groups have invested in research on how to better connect renewable energy projects to the grid and how to construct a smart grid that can support a clean energy future. While there is clearly need for technology improvements, much of the research points to improved policies, consistency in standards, and adoption of best practices. Here are recently released reports on these topics.

The sixth edition of the Interstate Renewable Energy Council's (IREC) Connecting to the Grid Guide provides a comprehensive introduction to a span of topics that relate to grid-tied renewable energy sources. The sixth edition has been revised to include information on IREC's recently updated model procedures, alternative billing arrangements for net metering, energy storage and several other emerging issues in the field. This guide is designed for state regulators and other policymakers, utilities, industry representatives and consumers interested in the development of state-level interconnection and net metering policies.

The National Energy Technology Laboratory (NETL), part of the U.S. Department of Energy (DOE) laboratory system, hosts a Modern Grid Strategy web site that regularly issues whitepapers. The Transmission Smart Grid Imperative outlines the technologies that are ready to be deployed while considering the complexities of building consensus for new transmission construction. Accomodates All Generation and Storage Options defines how a smart grid can be powered by small distributed energy resources (DER) which include both distributed generation and storage, as one of seven "Smart Grid Principal Characteristics" identifed by NETL.

Perspectives for Utilities & Others Implementing Smart Grids by The Smart Grid Stakeholder Roundtable Group represents the outcome of meetings with a range of stakeholders including state agencies, consumer groups, environmental groups, commercial and industrial consumers, utilities and public utility commissions. The report was sponsored by the Office of Electricity Delivery and Energy Reliability with the goal "to help utilities and other smart grid project developers better communicate how and why they think smart grid technologies will benefit consumers and the environment, as well as the overall electric system in general."

Under the Energy Independence and Security Act (EISA) of 2007, the National Institute of Standards and Technology (NIST), partnering with DOE and the Federal Energy Regulatory Commission (FERC), has "primary responsibility to coordinate development of a framework that includes protocols and model standards for information management to achieve interoperability of smart grid devices and systems..." The NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0 is a draft of a framework that includes protocols and model standards for information management to achieve interoperability of Smart Grid devices and systems. NIST has currently identified 16 initial standards and is considering an additional 46 potential standards. 

DOE Announces $22 Million for Community Renewable Energy Projects

Washington DC, July 15, 2009 - U.S. Department of Energy Secretary Steven Chu today announced plans to provide up to $22 million from the American Recovery and Reinvestment Act to support the planning and installation of utility-scale community renewable energy projects in up to four communities nationwide. This funding opportunity directly supports the Obama Administration's goals of developing clean, renewable energy supplies, and creating new jobs and economic opportunities.

Secretary of Energy Chu
Secretary of Energy Steven Chu

"American families and businesses are struggling in a recession and an increasingly competitive global economy. The Recovery Act was designed to rescue the economy from the immediate dangers it faces while rebuilding its fundamentals, with an eye toward new industry and opportunity," Secretary Chu said. "To help meet these challenges, the Recovery Act invests significant dollars to put people to work to spur a revolution in clean energy technologies."

The DOE Office of Energy Efficiency and Renewable Energy (EERE) will provide technical assistance to selected recipients, including concepts, best practices, planning, financial approaches, policy guidance, and recognition to help communities rapidly plan and deploy utility-scale renewable energy systems that provide clean, reliable and affordable energy supplies for their communities, while creating jobs and new economic development opportunities. The projects will demonstrate how multiple renewable energy technologies, including solar, wind, biomass and geothermal systems, can be deployed at scale to supply clean energy to communities.

DOE anticipates each project will leverage significant investment, including public and private sector investment in renewable energy systems.  The projects funded under this FOA are expected to create jobs and avoid 50,000 tons of carbon dioxide annually.

Up to $22 million in DOE funding is available for these awards in fiscal year 2010.  DOE anticipates making up to 4 awards totaling up to $21.45 million, and expects matching funds from public and private investment of $22 million or more.

Successful applicants will be awarded financial assistance to support the implementation of an integrated renewable energy deployment plan for a community, and the construction of renewable energy systems.

Completed applications are due September 3, 2009. DOE will select awardees by the end of November 2009.

To access the application form and the official funding opportunity announcement:

  1. Go to the FedConnect web site.
  2. Click the Search Public Opportunities link.
  3. Enter "DE-FOA-0000122" as the Search Criteria Title.
  4. Click Search.
  5. Click on the Title link of DE-FOA-0000122

Wind Energy Promotion Act Introduced in Congress

Washington, D.C. - U.S. Representative Tim Walz and House Agriculture Committee Chairman Collin Peterson have introduced the Wind Energy Promotion Act, which will make it easier for individuals and small groups to take advantage of tax incentives that encourage wind energy production. Walz, a freshman member of the Agriculture Committee, said he heard about the need for the legislation while he was holding a series of Farm Bill forums throughout southern Minnesota in February and April.

Rep. Walz visits the Bingham Lake Wind Farm to discuss energy policy.
Rep. Walz (4th from left) visits the Bingham Lake
Wind Farm to discuss energy policy.

"Raising capital for wind energy projects is difficult, because many residents of rural America do not qualify for the Renewable Energy Production Tax Credit (PTC), which is one of the major incentives to promote wind energy production," said Walz. "This legislation will expand renewable energy production by leveling the playing field for individuals in rural America who are looking to enter the industry. Everyone wins if we pass this legislation."

"We think it is unfortunate that our tax code makes it easy for corporations to receive the Production Tax Credit, but not for individuals in rural America who wish to do the same," said Chairman Peterson. "I'm pleased to join Congressman Walz in introducing this legislation to make our tax code fairer and to bring the benefits of renewable energy investments to more of our rural citizens."

Currently, the PTC provides a 1.9 cent-per-kilowatt-hour tax credit for individuals who invest in wind energy generation. However, only passive income—such as income from investments—may be offset by the PTC; someone who merely invests in a wind farm cannot receive the PTC unless they have other sources of passive income to offset.

The practical effect of this passive loss restriction is that currently, PTCs are only useful to corporations and to individuals with large amounts of taxable investment income. As a result, most wind energy investments today are made by foreign multi-national companies and not by groups of Americans who want to join together to produce renewable energy.

The Walz-Peterson Wind Energy Promotion Act would make it easier for Americans to invest in wind energy projects by expanding the eligibility of who can receive benefits from the Renewable Energy Production Tax Credit. This legislation would not limit the ability of the current beneficiaries of the PTCs to continue receiving them.

The Wind Energy Promotion Act would amend the tax code to allow up to $40,000 of the PTC to be used against ordinary income. This "passive loss exemption" is similar to a $25,000 passive loss exemption that currently exists to encourage investments in oil and gas development and real estate.

The Wind Energy Promotion Act also addresses the relationship of the PTC to the Alternative Minimum Tax (AMT). Because allowing the PTC to apply to ordinary income will force some middle-class taxpayers to file for the AMT, this legislation would change the tax law to eliminate the effect of the AMT on income derived from using the PTC.

Details of the Wind Energy Promotion Act are available in the document links below.

Department of Energy Announces $93 million to Support Wind Energy

Steven Chu discusses ARRA with President Barack Obama at DOE
DOE Secretary Steven Chu with President Barack Obama

WASHINGTON, D.C. - April 29, 2009 - Secretary of Energy Steven Chu announced that $93 million from the American Recovery and Reinvestment Act of 2009 (ARRA) will be used to support the development of wind energy projects. “Wind energy will be one of the most important contributors to meeting President Obama's target of generating 10 percent of our electricity from renewable sources by 2012,” according to Secretary Chu. “The projects funded by this opportunity will advance wind technology so that it can reliably supply a substantial portion of our nation's electricity. They will also help in creating more new jobs and expanding a clean energy economy.”

The funding will leverage the Department of Energy's national laboratories, universities, and the private sector to help improve reliability and overcome key technical challenges for the wind industry. These projects will create green jobs, promote economic recovery, and provide the investments needed to increase renewable energy generation.

The funding includes these allocations:

  • $45 million for wind turbine drivetrain research and development and testing of the performance and reliability of current and next generation wind turbine drivetrain systems. This project will improve the country's competitiveness in wind energy technology, lower capital costs of wind systems, and maintain a high level of wind energy capacity growth.
  • $14 million for technology development in the private sector. The aim is to improve the quality and use of advanced materials for turbine blades, towers and other components. This will also fund development in process controls for lamination, blade finishing, trimming, grind, painting, materials handling and inspection.
  • $24 million for wind power research and development among a consortia between universities and industry to focus on critical wind energy issues including advancing material design, performance measurements, analytical models, and improving power systems operations, maintenance and repair, and component manufacturing.
  • $10 million for the DOE National Wind Technology Center in Colorado to support testing current and next generation wind turbine technology and upgrades to the electrical distribution system.

Chu, who is a Nobel Prize-winning physicist and former director of the Lawrence Berkeley National Lab, made the announcement while touring the National Renewable Energy Laboratory (NREL) in Golden, Colorado. NREL will receive ARRA funding for a variety of other renewable energy research projects:

  • $68 million for a Research Support Facility to create the nation's most energy efficient office building at the same cost of low efficiency commercial construction today. It will achieve LEED Platinum and 50% energy use reduction over standard commercial office buildings.
  • $19.2 million for Renewable Energy and Site Infrastructure to use solar and potentially geothermal and fuel cells to replace power currently purchased from utilities and reduce our carbon use.
  • $13.5 million for upgrades to the Integrated Biorefinery Research Facility to create a continuous process research and development capability to develop commercial scale cellulose to ethanol technologies.

Read the full press release from the Department of Energy.

PTC, ITC or Cash Grant? Which Should a Developer Use?

Lawrence Berkely National Laboratory (LBNL) and the National Renewable Energy Laboratory (NREL) have released a combined report that may help wind project developers understand which federal incentives will be most economical: PTC, ITC, or Cash Grant? An Analysis of the Choice Facing Renewable Power Projects in the United States.

The report takes a close look at key provisions in the recent American Recovery and Reinvestment Act of 2009. These key provisions could have a significant impact on how renewable energy projects are financed in the near future.

Included in these provisions is an extension of the federal production tax credit (PTC). Another provision allows for projects that are eligible for the PTC to elect to receive a 30% investment tax credit (ITC) instead of the PTC. An even more intriguing provisions allows for a project that qualifies for the ITC (or the PTC but elects to receive the ITC) to receive the value of that credit as a cash grant from the Treasury.

The authors analyzed a number of technologies in the report including wind, open- and closed-loop biomass, geothermal and landfill gas projects. The purpose of the analysis is to both quantitatively and qualitatively analyze the choice between the PTC and ITC (or cash grant) from the project developer perspective. Only two technologies showed a clear preference for one incentive over the other: open-loop biomass gets more value from the ITC across the board, while geothermal gets more value from the PTC.

For wind energy, the authors looked at a range of installed costs from $1.500/kW to $2,500/kW and a range of capacity factors from 25% to 45%. They did not include the potential influence on project costs due to nameplate capacity in the presence of economies of scale. These quantitative results showed the PTC provided more value in approximately 2/3 of the cases analyzed.

The authors also looked at qualitative factors that can also influence the decision of which incentive a developer wants to use. These factors include: the option to elect the cash grant; performance risk; tax credit appetite; liquidity; subsidized energy financing; power sale requirement; and the owner/operator requirement. Combining the quantitative and qualitative considerations, the authors found that most wind projects may benefit more from the ITC than they will from the PTC.

As the report concludes, whether a particular project chooses the PTC or ITC or cash grant will depend on any number of factors that will be weighed by each project according to their priorities, and the fact that these choices for federal incentives now exist (temporarily) is a step in the right direction to broaden the participation base in renewable energy.

Click here to download and read the full report (19 pages)

How Will Stimulus Bill Help Community Wind?

American Recovery and Reinvestment Act

Obama signs stimulus bill
President Obama signs American
Recovery and Reinvestment Act

Now that Congress has passed and President Obama has signed the American Recovery and Reinvestment Act of 2009, how will this help to stimulate Community Wind projects? According to Denise Bode, American Wind Energy Association CEO, "the stimulus bill contains a number of provisions aimed at helping our industry continue the very strong growth in new installations and new jobs we have seen over the past few years." Some of the provisions include:

  • 3-year extension of the federal wind energy production tax credit (PTC)
  • Option for a 30% investment tax credit (ITC) instead of the PTC
  • Option to convert the ITC into a grant for projects placed in service before 2013
  • Additional loan guarantees, bonds, and tax incentives

President Obama's goal with the stimulus package is to create a wide variety of initiatives to jumpstart the American economy. This opens up new sources of funding for renewable energy at a time when the Wind Energy industry is set for even more growth despite  being stalled by the economic downturn. These programs will allow Community Wind projects to take advantage of more funding opportunities.

“Over the next two years, this plan will save or create 3.5 million jobs. More than 90 percent of these jobs will be in the private sector, jobs rebuilding our roads and bridges, constructing wind turbines...”

President Barack Obama
Presidential Address to Congress
February 24, 2009

Wind facilities that qualify for the PTC can now make an irrevocable decision to take a 30% ITC in lieu of the PTC. In order to do so the project must be placed into service by December 31, 2012, and the PTC will no longer be available for the project. This has the potential to attract more investors who may not have enough passive activity income to realize the PTC. Which credit a taxpayer uses will depend upon an analysis of the project revenue and cost projections as well as analysis of the investor tax appetite. 

Further, if the project qualifies for the PTC or the ITC and is placed into service between 2009-2010 (or it begins construction at that time and is placed into service before 2013) the project can choose to apply to the Treasury Department for a cash grant that is equal to 30% of the qualified costs of the project. This cash grant is in lieu of both the PTC and ITC. This means the value of the ITC can be realized, even if the taxpayer cannot take advantage of the credit. The rules and application guidelines for this program have not been finalized yet.  

There are other provisions that address renewable energy financing on other levels. The Act removes the $4,000 cap on the small wind credit so taxpayers can now take the full 30% credit for a qualified small wind system.

The Act also provides for an additional $1.6 billion for Clean Renewable Energy Bonds (CREBs) that are used to finance renewable energy. There have been no announcements yet that applications are being accepted for these new allocations, and no guidance has been given on how the program will operate. Previously, these bonds have been given at 0% interest rate, and the bondholder receives a tax credit in lieu of bond interest. 

The Department of Energy received an extension of their authority to provide loan guarantees for qualified technologies under Title XVII of the federal Energy Policy Act of 2005 and an additional $6 billion for this program. Eligible technologies include electricity-generating renewable energy projects.   

Read more on the American Recovery and Reinvestment Act of 2009 Wind Energy Provisions at the Fredrikson & Byron P.A. web site and read how The Geniuses at DSIRE Translate the Energy Parts of the Stimulus Package via the Interstate Renewable Energy Council web site.

Along with this important step forward to make wind power and other renewables a catalyst for America’s economic recovery, the American Wind Energy Association has launched an effort to enact a national renewable electricity standard (RES) and to make progress toward construction of the Green Power Superhighway, a new transmission system needed to fully develop America’s immense wind resources. Read more about the AWEA New Wind Agenda.


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