Update from DSIRE: Solar Policy News & Trends

1. Update from DSIRE:Solar Policy News & Trends Susan Gouchoe North Carolina Solar Center IREC Annual Meeting Long Beach, California September 24, 2007

2. Focusing on… • Solar Portfolio Standards • Rebates & Other Direct Incentives • New & Expanded Tax Credits • Solar Access Laws

3. The Year of the RPS • New RPS Mandates • New RP Goals • Existing RPS Expanded and/or Increased • RPS Policies with Solar Set-Asides 5 3 7 + D.C. 11

4. DSIRE: www.dsireusa.org September 2007 *NEW* Renewables PortfolioStandards & Goals WA: 15% by 2020 ND: 10% by 2015 double credit for DG NH: 23.8% in 2025 0.3% solar electric by 2014 33 MW OR: 25% by 2025 (lg. utilities) 5% - 10% by 2025 (sm. utilities) IL: 25% by 2025 VA: 12% by 2022 MO: 11% by 2020 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) 0.2% solar by 2018 300 MW 300 MW State RPS State Goal

5. DSIRE: www.dsireusa.org September 2007 Increased/Expanded RPS Policies MN: 25% by 2025 (Xcel: 30% by 2020) CT: 23% by 2020 CO: 20% by 2020 (IOUs) 10% by 2020 (co-ops & large munis) MD: 9.5% in 2022 180 MW 0.8% solar electric 2% solar electric 1500 MW DE: 20% by 2019 AZ: 15% by 2025 2% solar PV 175 MW 4.5% DG 1250 MW NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) 4% solar electric by 2020; 0.6% DG by 2015 500 MW

6. DSIRE: www.dsireusa.org September 2007 Solar/DG Provisions in RPS Policies [~6,000 MW solar capacity] WA: double credit for DG NH: 0.3% solar electric by 2014 NY: 0.1542% customer-sited by 2013 NV: 1% solar by 2015; 2.4 to 2.45 multiplier for PV NJ: 2.12% solar electric by 2021 CO: 0.8% solar electric by 2020 PA: 0.5% solar PV in 2020 MD: 2% solar electric in 2022 DE: 2.005% solar PV by 2019 Triple credit for PV AZ: 4.5% DG by 2025 DC: 0.386% solar electric by 2022 NC: 0.2% solar by 2018 NM: 4% solar electric by 2020 0.6% DG by 2015 Solar thermal counts towards solar set-aside DG: Distributed Generation

7. Promoting Solar through RPS Policies • Increasing support of solar in RPS policies • Favoring set-asides rather than multipliers (MD, NM, DE) • Separate requirements for IOUs and munis/co-ops • Non-electric solar thermal is RPS-eligible in 10 states • Eligible for set-aside in 3 states • Potential solar capacity from solar set-asides: ~6,000 MW

8. DSIRE: www.dsireusa.org September 2007 Renewables PortfolioStandards MN: 25% by 2025 (Xcel: 30% by 2020) ME: 30% by 2000 10% by 2017 - new RE VT: RE meets load growth by 2012 *WA: 15% by 2020 ND: 10% by 2015 • NH: 23.8% in 2025 WI: requirement varies by utility; 10% by 2015 goal MA: 4% by 2009 + 1% annual increase MT: 15% by 2015 OR: 25% by 2025(large utilities) 5% - 10% by 2025 (smaller utilities) RI: 16% by 2020 CT: 23% by 2020 • *NV: 20% by 2015 IA: 105 MW • NY: 24% by 2013 • CO: 20% by 2020(IOUs) *10% by 2020 (co-ops & large munis) IL: 25% by 2025 • NJ: 22.5% by 2021 CA: 20% by 2010 • PA: 18%¹ by 2020 MO: 11% by 2020 • MD: 9.5% in 2022 • NC: 12.5% by 2021(IOUs) 10% by 2018 (co-ops & munis) • AZ: 15% by 2025 • *DE: 20% by 2019 • DC: 11% by 2022 • NM: 20% by 2020(IOUs) • 10% by 2020 (co-ops) *VA: 12% by 2022 TX: 5,880 MW by 2015 HI: 20% by 2020 State RPS State Goal • Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE • ¹PA: 8% Tier I / 10% Tier II (includes non-renewables) Solar water heating eligible

9. DSIRE: www.dsireusa.org September 1997 Renewables PortfolioStandards ME: 30% by 2000 MN: 425 MW by 2002 MA: Not Yet Determined NV: 1% by 2009 IA: 105 MW by 1999 AZ: 1.1% by 2007 State RPS

10. Solar PV - Direct Incentives • 22 “state” programs • (includes CO, NV, AZ – • RPS-inspired U programs) • No new states w/ rebates • NJ, CA transitions • ~ 55 utilities/non-profits in 20 states • New utility PV programs • Rocky Mtn Power (UT) • Columbia W&L (MO) • Gainesville RU (FL) 15 - 54¢/kWh VT: $1.75-3.50/W U $2/W $3.50/W U U NY: $4-5/W MA: $2+/W $1 – $2.25/W $1.50-$2/kWh-1 yr. U U CT: $5/W U U 50% U NJ: RECs U $3.50/W $3-5/W DE: 50% 30% U $2-4/W MD: 20% $5/W $2-4.50/W U $1.90-$2.95/W 26-46¢/kWh, 5 yrs. U 18¢/kWh 40% 13¢/kWh $2-4/W U U $4/W = Utility Program $/W = State Program

11. www.dsireusa.org September 1997 Solar PV - Direct Incentives 10-20% up to $75K 50% up to $10K Varies by project $2K - $10K $10K - $50K $60K - $1M

12. DSIRE: www.dsireusa.org September 2007 Solar PV Tax Credits $500 (R) 15% 35% (C) $3/W (R) 50% (C) MA: 15% (R) 25% (R) 100% Deduct. (R) RI: 25% (R) 25% (R) 10% (C) varies 35% 25% (R) • Tax Credits in 13 States • Range 10% - 50% • FL, IA, NE, OK have small PTCs –> PV eligible • ~10 states proposed new credits in past year 30% (Non-Corp.) ~2.7¢/kWh 10 yrs. (C) 10% (NR) 50% (R) 35% (R) Residential; (C) Commercial; (NR) Non-Residential

13. New Solar Tax Credits Louisiana – Residential Solar/Wind Tax Credit • 50% up to $12,500 for installations beginning 1/1/2008 • Homes and apartment buildings eligible • Eligible solar: PV, space heating, space cooling, or water heating Kentucky – Incentives for Energy Independence • Variety of tax incentives for alt fuels and RE facilities • Solar Electric: ≥ $1M investment; >50 kW; electricity sold to 3rd party • Combination of tax incentives may offset up to 50% of capital expenditures • 100% reimbursement of sales tax on equipment, etc. purchased during construction • Up to 100% tax credit on KY income tax / limited liability entity tax owed • Wage assessment of up to 4% of employee gross wages; employee claims tax credit • Specific tax incentive package is negotiated - KY Econ. Devel. Finance Authority • Kentucky Alternative Fuel and Renewable Energy Fund created to promote R&D

14. States Expanding Solar Tax Credits Oregon - Business Energy Tax Credit • Increased business credit from 35% to 50% w/ $10M max. • Homebuilders now eligible - up to $9K for PV; $12K for high-performance home; 60¢/kWh 1-yr. savings + $3K for SWH • Note: UT, RI also have homebuilder provision Arizona - Non-Residential Solar & Wind Tax Credit • Extends commercial credit to all non-residential applications, including tax-exempt organizations. • A third party that finances, installs or manufactures a system for a non-residential (e.g., non-profit, government) installation can claim the credit; Retroactive to 1/1/06 North Carolina – Renewable Energy Tax Credit • Taxpayer who donates money to a tax-exempt nonprofit to help fund RE project can claim 35% tax credit on amount donated.

15. D.C. Solar Access Laws • Solar easements allow for the rights to existing solar access on the part of one property owner to be secured from an owner whose property could be developed in such a way as to restrict that resource.Transferred with property title. • 13 states limit or prohibit restrictions that neighborhood covenants and/or local ordinances can impose on the use of solar equipment.

16. New & Improved Solar Access Laws • At least eight states proposed measures this past year to create or strengthen solar access protections for homeowners New laws - North Carolina, New Jersey • New Jersey: Limits HOA authority to adopt/enforce rules that would: • increase the solar installation or maintenance costs by >10% of total cost • inhibits the system from functioning at intended max. efficiency. Enhanced Laws - New Mexico, Arizona • Arizona: Limits HOA authority to adopt rules that would: • prevent installation, adversely affect cost/efficiency, restrict use, impair function • courts must award attorney fees and cost of litigation to prevailing party

17. Susan Gouchoe susan_gouchoe@ncsu.edu 919-513-3078 Rusty Haynes rusty_haynes@ncsu.edu 919-513-0445 www.dsireusa.org dsireinfo@ncsu.edu