NH BUSINESS REVIEW

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January 6 - 19. 2006 I 11

NEWS&ANALYSIS

Renewable energy projects pick up steam around U.S.

UTILITIES WATCH By Doug Patch Spurred in part by tax credits included in the Energy Policy Act of 2005, investment in renewable e n e r ^ continues to grow nationwide. While the recently passed federal energy bill contains tax incentives for solar installations, those incentives are set to expire in two years. Nevertheless, solar power's annual growth rate has averaged about 25 percent over the past 15 years, and last year it was 70 pereent. Investor interest in alternative-energy companies has risen along with the prices of oil and natural gas. Solar power becomes more economically viable as the prices of fossil fuel rises. In California, for example, the consulting firm UtiliPoint reported recently that California policymakers are looking to solar power to help ease their electric supply problems. One proposal before the California Public Utilities Commission calls for the installation of install 3.,000 megawatts of solar generation over the next 11 years. being invested the industry has increased its annual production capability to nearly 800 MW, and that is likely to continue to grow. The California Solar Initiative will offer more than $3.2 billion in rebates over the 11year period. The plan's aim is to install solar panels on 1 million homes and public buildings. Other projects are eligible as well, including funding for solar water heating. All projects must be between 1 kilowatt and a megawatt in size. California currently offers $400 million in solar rebates through programs ftrnded by a surcharge on consumer utility bills. The new initiative would increase that surcharge starting in 2006. Connecticut also offers homeowners up to a $25,000 contribution toward a solar installation. The contribution amount is capped at $5 per rated watt, and the system can be no larger than 5 kilowatts. A typical home photovoltaic generation system costs in the $8-to-$12 per-watt range, meaning that if you were to install a 2 kW system in Connecticut at a cost of $20,000 ($10 per watt), Connecticut will rebate you $ 10,000 toward the cost of the system.

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The Hartford Courant reports that electric plants driven by wind, biomass and fuel cells were the first three projects to win approval under a Connecticut program designed to Meanwhile, government mandates, subsidies boost the amount of "clean" electrical power and tax breaks for solar power are growing generated. worldwide. UtiliPoint cites Suntech Power The plants the first of which could begin Holdings Co., a Chinese solar cell manufactur- operation as soon as this year would genering company, which recently raised nearly ate a combined 34 megawatts of electricity, $400 million by issuing 26.38 million shares enough to power 25,000 homes, according to on the New Yoik Stock Exchange at an initial the Connecticut Clean Energy Fund, which public offering price of $ 15 per share, and the administers the program, known as Project 100. November 2005 IPO of SunPower Corp., a The pnDJects include a 15-megawatt wind Califomia-based solar cell maker, was $18. project proposed by enXeo LLC, which is The stock is now trading around the $28 mark. developing a wind-power plant known as With backing from the individual commis- Hoosac Wind in Florida, Mass., a 4-megawatt sioners and the govemor, the 3,000 MW solar fuel-cell project planned for Wallingford by energy proposal is almost certain to be adopt- PPL Eneigy Services, working in eonjuncdon ed in January 2006. The proposal represents with Danbury-based FuelCell Energy, and a about 6 percent of California's peak electric 15-megawatt biomass plant by GDI demand and is roughly the total amount of the Renewable Power in Watertown. The biomass solar cell installations {also known as "photo- plant would run on gas derived from wood and voltarcs") in the world today. With coital other biological materials. In New Hampshire a renewable energy study eommittee recently completed its work and has come up with some proposed legislation on geothermal e n e i ^ and the taxation of renewable energy. There also is some proposed legislation for the upcoming session that would establish minimum renewable standards for energy portfolios and another bill that would further study renewable energy portfolio standards. There are also some proposed wind power projects in New Hampshire at their initial stages.
Doug Patch, former chairman of the New Hampshire Public Utilities Commission, is with the Concord law firm af Orr and Reno.

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Giving credit

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The recently passed federal energy bill contains increases in tax credits for solar installations at commercial facilities and gives homeowners their first federal tax credits for solar installations in 20 years. The tax credits are scheduled to last two years, but they could be renewed on two-year cycles, as has been done for the wind industry. Businesses can claim a federal tax credit of 30 percent of the solar equipment cost with no dollar limit on the credit. DP

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