Incentives Target Solar Projects

A new study this month suggests solar energy in Rhode Island is saving electricity ratepayers money. Solar companies think there are more savings and business to be had — especially on the commercial side — with the rollout of a new state incentive program that could pump an estimated 160 megawatts into the grid over the next five years. The study, conducted by the nonprofit Acadia Center, looked at six solar-energy systems in Rhode Island and estimated solar power in the grid saves ratepayers between 19 and 25 cents per kilowatt hour, largely because it produces an alternative energy resource during hours of peak demand…

Energy Efficiency Winning Out in Rhode Island

The Rhode Island General Assembly has demonstrated its long-standing commitment to reducing the state’s energy costs through smart and economic investments in low-cost energy efficiency. This spring, the legislature approved a 5- year extension of Least Cost Procurement (LCP), the state’s policy of investing in as much low-cost energy efficiency as possible, and created the Rhode Island Infrastructure Bank, a new clean energy financing tool.

Least Cost Procurement, first implemented 8 years ago, is largely responsible for Rhode Island’s tie with Massachusetts for #1 state in the country for utility-sector energy efficiency programs and policies in the American Council for an Energy Efficiency Economy (ACEEE)’s 2014 State Scorecard. Investing in low-cost energy efficiency instead of expensive electricity and natural gas helps Rhode Islanders lower their energy bills and spurs economic growth. Lower utility bills means that Rhode Islanders have more money left at the end of the month to spend on other things, and most of that spending happens locally. Since 2008, Rhode Island has invested $558 million in energy efficiency and consumers have realized $1.99 billion in economic benefits.

The state’s investments in energy efficiency from last year alone are expected to generate 3,607 job years of employment, increase personal income by $244 million, and increase state tax revenue by $15 million over the next thirteen years.

The Rhode Island Infrastructure Bank (RIIB) will work to increase those benefits by utilizing loan-based financing to enhance the state’s energy efficiency programs and make energy efficiency projects more accessible for RI municipalities, residents, and businesses. The Efficient Buildings Fund at RIIB will provide energy efficiency financing to municipalities for upgrades to public buildings and facilities. RIIB will also administer Property Assessed Clean Energy (PACE) financing for residential and commercial property-owners. PACE allows property owners to borrow money for clean energy upgrades and repay the loan on their property tax bill.

As the RIIB was developed, Acadia Center provided input to policymakers and key stakeholders and shared lessons learned from other states’ experience with clean energy financing. Going forward we will work with stakeholders as they implement RIIB and provide that same support. Acadia Center will continue to represent environmental interests on the Energy Efficiency and Resource Management Council to ensure that Rhode Island consumers benefit from the low cost, low risk energy efficiency resource.

Download Rhode Island’s Legislative Wrap-Up here.

Abigail Anthony leads Acadia Center’s Grid Modernization and Utility Reform initiative, focusing on changing regulatory and economic incentives in order to achieve a sustainable and consumer-friendly energy system. A Rhode Island native, Abigail is director of the Providence office and has played a leading role in advancing the state’s energy efficiency procurement policies.

What is the Value of Solar Power in Rhode Island? A New Study

A new study released this week by Acadia Center quantifies the grid and societal benefits of solar photovoltaic systems (solar PV) in Rhode Island. Establishing the value of distributed resources like rooftop solar is increasingly important as states explore ways to meet energy needs and deploy clean energy resources.

Acadia Center assessed the grid and societal value of six solar PV systems to better understand the overall value that solar PV provides in Rhode Island. The analysis determined that the value of solar to the grid – and ratepayers connected to the grid – ranges from 19-25 cents/kWh. These values derive from solar PV’s ability to reduce energy demand and provide power during peak periods, thus avoiding generation and related emissions from conventional power plants. The overall grid value of solar is the sum total of these different benefits.

The study also finds that solar PV provides broader societal advantages (such as environmental benefits from avoided greenhouse gas emissions) valued at approximately 7 cents/kWh. This additional value should be considered when assessing costs and benefits and determining additional incentives for solar producers.

One of the key findings is that west-facing solar PV systems in particular are not being adequately compensated under existing programs – like net-metering- which provide a single level of compensation and encourage south-facing installations that maximize kWh output. These programs do not fully account for the value that west-facing systems provide in mitigating costs driven by afternoon peak demand (see Table 1 in the report). Incentives should be designed to maximize the value that solar PV provides to system owners and ratepayer rather than simply encouraging system owners to maximize kWh output. This will help ensure that incentives are fair and optimize grid support.

In fact, the value of west-facing systems is already coming into play in Rhode Island where the Office of Energy Resources has procured 250 kW of peak load reduction – with additional incentives for west-facing solar systems – in the Tiverton and Little Compton area. This is being done in conjunction with National Grid’s “DemandLink” pilot, which is using targeted efficiency and demand response to avoid a new substation feeder in the area; ultimately deferring approximately $2.9 million in new distribution-related costs.

While not included in Acadia Center’s analysis, locational values are important to maximize the savings in distribution costs that solar can bring to ratepayers. Appropriate incentives can ensure that solar PV, energy efficiency, and other customer-side resources are targeted to defer or avoid the need for new infrastructure spending.

This study comes at a particularly interesting time as new solar programs and businesses are being introduced in the state. The Renewable Energy Growth Program, launched this June, gives Rhode Islanders the chance to offset their electricity bills and sell their excess electricity from distributed resources to National Grid through a long-term tariff at a guaranteed fixed price. Programs like these are expected to facilitate a bigger shift toward solar and other distributed generation in the state. As a first step in response to this new trend, the RI Public Utility Commission has opened a docket to assess distribution rate design and cost allocation. Having a better understanding of the value that solar provides to the grid and ratepayers will help inform this proceeding, which could be precedent setting for other jurisdictions.

Leslie Malone is a Senior Analyst at Acadia Center based in the Providence office. Leslie is involved in research and analysis of energy efficiency and clean energy, specifically solar.

Acadia Center’s June Newsletter

A look at Acadia Center’s work in June. This newsletter includes information about our events in Providence and Boston, our 2014 annual report, and our work seeking alternatives to expanding natural gas infrastructure.

Acadia Center Releases Study Showing Value of Solar in R.I.

The Acadia Center has released a study showing the value of solar projects in Rhode Island. Acadia Center said it assessed the grid and “societal value” of six solar photovoltaic systems to understand the value that they provide to the grid. It found that the value of solar to the grid – and ratepayers connected to the grid – ranges from savings of 19 to 25 cents per kilowatt hour, with additional societal values of 7 cents per kilowatt hour.

New Study Shows Value of Solar in Rhode Island

Acadia Center today released a study that quantifies the grid and societal benefits of solar photovoltaic systems (solar PV) in Rhode Island. Establishing the value of distributed resources is increasingly important as states explore ways to meet energy needs and deploy clean energy resources. Acadia Center has also released Value of Solar studies for Massachusetts and Connecticut, and Maine’s Public Utilities Commission recently completed a similar type of analysis to inform decision making processes in that state.

Acadia Center assessed the grid and societal value of six solar PV systems to better understand the overall value that solar PV provides to the grid. By evaluating an array of configurations, this analysis determines that the value of solar to the grid—and ratepayers connected to the grid—ranges from 19-25 cents/kWh, with additional societal values of 7 cents/kWh.

“Solar generation is a valuable local energy resource that provides significant benefits to ratepayers,” said Abigail Anthony, Director of Acadia Center’s Grid Modernization Initiative and Rhode Island Office. Solar PV provides unique value to the electric grid by reducing energy demand, providing power during peak periods, and avoiding generation and related emissions charges from conventional power plants. The overall grid value of solar is the sum total of these different benefits.

In addition to the value that solar provides to the grid, Acadia Center’s study finds that solar PV provides broader societal benefits, including environmental gains from reduced or avoided greenhouse gas emissions and other pollutants. “Societal benefits should be included when assessing the overall costs and benefits of solar PV and determining additional incentives,” said Leslie Malone, Acadia Center Senior Analyst and an author of the report.

“The avoided costs and benefits add up and justify the compensation and incentives that solar PV receives through programs like the Renewable Energy Growth Program,” said Malone. Under the Renewable Energy Growth Program—which was launched in June 2015—National Grid will purchase electricity from eligible distributed generation projects in Rhode Island through a long-term contract at a guaranteed fixed price. Rhode Island also has retail rate net-metering for distributed generation, and the grid value alone supports this level of compensation.

In light of net-metering and in anticipation of the increasing amount of distributed generation in the electric system, the RI Public Utility Commission has opened a docket to assess distribution rate design and cost allocation. “We hope that having a better understanding of the value that solar provides to the grid and ratepayers will help inform this proceeding, which could be precedent-setting for other jurisdictions,” said Malone.

For more information and methodology see: http://acadiacenter.org/document/value-of-distributed-generation-solar-pv-in-ri

Contact:
Leslie Malone, Senior Analyst
(401) 276-0600, lmalone@acadiacenter.org

Emily Avery-Miller, External Relations Director
(617) 742-0054 x100, eavery-miller@acadiacenter.org

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Acadia Center is a non-profit, research and advocacy organization committed to advancing the clean energy future. Acadia Center is at the forefront of efforts to build clean, low-carbon and consumer-friendly economies. Acadia Center provides accurate and reliable information, and offers a real-world and comprehensive approach to problem solving through innovation and collaboration.

AG’s Office to Study New England’s Energy Needs

…“This important step by Attorney General Maura Healey reflects the changing nature of our energy system, where diverse clean-energy resources can compete with fossil fuels,” said Daniel Sosland, Acadia Center president. “Massachusetts consumers deserve this full and fair analysis before they are called upon to pay for expensive new energy projects whose need has not been determined yet.”…

Envisioning the Energy Future for Rhode Island: Event Recap

On June 26, Acadia Center hosted UtilityVision: A Discussion about the Clean Energy Future for Rhode Island at The Rhode Island Foundation in Providence. The objective was to provide an in-depth look at what the clean energy future could be for Rhode Island and beyond, as well as engage diverse stakeholders to work through the various challenges to implementation. Acadia Center’s presentation described a practical and positive pathway to achieving Rhode Island’s climate change goals and recommendations for reforming the way the energy system is paid for and planned.

The meeting brought together a diverse group of Rhode Islanders who are thinking about the future of the state’s energy system. Attendees included representatives from clean energy companies, universities, state and federal policy makers, consumer and environmental advocates, state environmental agencies, and the media.

Following the presentations, attendees enthusiastically participated in discussion groups led by Acadia Center staff. The discussion groups each focused on: investments in big infrastructure like pipelines and their impact on Rhode Island’s clean energy future; the changes necessary to fully benefit from new clean energy technology; the reforms needed to align utility incentives with consumer and environmental goals; and the challenges energy efficiency programs face.

These topics sparked lively dialogue and some insights including:

• Rhode Island has nation-leading energy efficiency programs, but there are still hard-to-reach sectors like renters that struggle to benefit from them. If municipalities require landlords to share past energy bills with prospective tenants or create a minimum energy standard for all rental housing, it could ensure that all renters are protected from burdensome energy bills.
• Rhode Islanders need to make sure the right questions are being asked about proposals to publicly finance expanded natural gas pipelines that could lock the state into an outdated energy system for the next half-century. Decision-makers should ask more questions about potential lower risk, lower cost, and cleaner solutions.
• New electric technologies, like electric vehicles (EVs) and battery storage, have the potential to help Rhode Island meet its climate change goals. However, there are barriers to consumer adoption of EVs in the region, including reluctance by auto dealers to market them due to the need for more time spent educating the consumer and lower future revenue potential from vehicle maintenance. Utilities may need different financial incentives in order to be full partners in promoting electric vehicles and help overcome these barriers.

In the coming months Acadia Center will address many of these concerns by participating in the development of the state’s 2016 Energy Efficiency and System Reliability Program Plan, and in the RI Public Utilities Commission’s proceeding on reforming electric distribution rates in light of a changing energy system. We hope to stay connected with those who joined the event to provide updates and coordinated support for progress toward a clean energy future.

Abigail Anthony leads Acadia Center’s Grid Modernization and Utility Reform initiative, focusing on changing regulatory and economic incentives in order to achieve a sustainable and consumer-friendly energy system. A Rhode Island native, Abigail is director of the Providence office and has played a leading role in advancing the state’s energy efficiency procurement policies.

Region’s Cap and Trade Program Draws Interest

…The regional cap-and-trade program is regarded as a success because it has demonstrated that a price can be established for carbon without crippling the economy or driving electricity prices sky-high. Since 2008, when RGGI was launched, electricity prices across the nine states have fallen an average of 8 percent and the state economies have grown faster than the nation as a whole, according to Acadia Center, a clean energy advocacy group. A total of 28 carbon allowance auctions have been held since September 2008, generating more than $2 billion in revenue for the participating states. Massachusetts’s share of the total is $345 million…

Massachusetts Attorney General’s Evaluation of Gas Pipeline Alternatives Will Contribute Needed Consumer, Cost and Environmental Information

Boston, MA – Massachusetts Attorney General Maura Healey yesterday announced that her office will lead a study of New England’s energy needs in order to evaluate options for cost-effectively meeting demand for electricity and natural gas while at the same time achieving necessary reductions in carbon pollution. The study will be completed by October, and the Attorney General’s office has called for restraint in certifying new pipeline capacity contracts until the results of the analysis are available.

“This important step by Attorney General Maura Healey reflects the changing nature of our energy system, where diverse clean energy resources can compete with fossil fuels.” said Daniel L. Sosland, Acadia Center President. “Massachusetts consumers deserve this full and fair analysis before they are called upon to pay for expensive new energy projects whose need has not been determined yet. Acadia Center has been calling for this sort of analysis for over a year, and we are glad to see true leadership from the Attorney General’s Office.”

In an analysis series recently published in Commonwealth Magazine, Acadia Center described how proposals to spend up to $8 billion in ratepayers funds on new pipelines could:

• Cause billions in stranded expenditures if natural gas prices shift
• Lead to large-scale natural gas exports, forcing New England to compete with buyers in more expensive markets and potentially causing regional gas prices to increase by up to 45%
• Cause the region to exceed legally required carbon pollution reductions by over 100%

Acadia Center’s analysis series also describes how the performance of the regional energy system through last winter’s record cold demonstrates the logic of prioritizing low-risk steps such as utilizing liquefied natural (LNG) gas, tweaking energy market rules, and investing in energy efficiency. Additionally, prices for LNG and oil – both of which can substitute for gas during periods of peak winter demand – have tumbled over the last year, making prior economic justifications of expanding pipeline capacity obsolete.

“With billions of dollars and billions of tons of carbon pollution on the line, we have to get the analysis right,” said Peter Shattuck, Massachusetts Director for Acadia Center. “As an advocate for ratepayers, Maura Healey is ensuring that investments benefits consumers and minimize risks of tying us to an overpriced and outdated energy system.”