Solar Power Alive and Well in Oregon
Posted on August 6, 2008 by oregoncub
Tags, Climate and Conservation
Solar power—and wind power, too—is alive and well in Oregon after a decision last week from the Oregon Public Utility Commission. At stake was the future of about 13 MW of solar power projects, or more than double the solar capacity that Oregon currently has. These projects are under a deadline imposed by the possible termination of federal tax credits as of Dec. 31, 2008. The projects were being held up by questions raised by Pacific Power, the second largest provider of electric utility service in Oregon, as to the status of solar power investors under state regulation. The hold placed on solar projects while the matter was being considered by the PUC has now been released, and solar construction is once more underway.
Pacific Power questioned whether state regulatory requirements designed to apply to energy companies that sell power to large commercial and industrial customers should be applied to entities which finance the construction of large commercial-scale solar power projects (in the 100-2000 kw range). But the companies don’t sell power to anyone else besides the customer on whose building the solar array sits, and regulating them as if they did would have put a damper on solar construction. The real issue was which law applies to these projects: Oregon’s “net metering” law, which regulates how solar on homes and businesses interacts with the local utility, or the State’s “direct access” law, which allows large utility customers to purchase electricity from someone other than their local utility. The PUC got it right.
This is important, since wind and solar power constitute a burgeoning green economic engine for Oregon and are helping us address the serious consequences of global warming pollution here in the Pacific Northwest. Oregon is one of the top ten states in the nation for solar development, with about 80% of that development relying on a third-party investor. All of that third-party investor development was at risk throughout June and July.
The way it works now: a third-party investor who pays to build the solar array owns that system, benefits from any tax credits associated with its construction (currently, there are federal and state tax credits available, as well as Energy Trust incentives for many projects in PGE and Pacific Power territory), and contracts to sell the resulting power to the “host” organization who owns the building. Because the host organization, usually a non-profit such as a community college or government entity such as a city, often cannot take advantage of tax credits because of their own tax-exempt status, they would not be able to afford the solar projects without the third-party financing. Once the solar panels are up and running they can supply a good portion—up to 18%—of the host organization’s electricity, and can even put power back onto the electrical grid when they produce more than the organization is consuming; this process is called net metering.
The timing on all of this has been hugely important and somewhat of a nail-biter. In mid-June, Pacific Power filed at the PUC (filing jointly with one of the state’s largest third-party solar investors, Honeywell, Inc.) a request for a declaratory ruling on the status of solar investors under regulatory law. Meanwhile, a few dozen solar projects were placed on hold, with participants knowing the projects might never happen at all if they couldn’t be finished by the end of this year, when federal tax credits could end.
The PUC recognized that clarity and speed were of the utmost importance and they released their decision July 31st, which is somewhere between rocket launch and warp speed. We applaud the PUC’s ability to move this issue through so quickly. We also regard the PUC’s decision itself as being well done; it balanced a fine reading of the law with a clear, pragmatic look at the needs of the solar industry and the State.
The PUC’s decision comes almost simultaneously with an announcement from MIT of a new technology for storing solar power, which could make the renewable power source more practicable for more houses and businesses than ever before. So it’s August, and finally we can say, in a couple of different ways, “Now we’re cookin’ with sun!”
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03/10/17 | 0 Comments | Solar Power Alive and Well in Oregon