Updated Web­-Based Tool Examines Best Use of Incentive Dollars for On­site Wind

New York and Massachusetts increase rank while California and Vermont scale back

Comparing the combined impact of state and federal policies for small‐scale wind is now easier thanks to a recent facelift of the Distributed Wind Policy Comparison Tool, available at www.windpolicytool.org. Oregon, New York, and Massachusetts show the most favorable net cost of energy (COE) for small wind projects, while recent changes to incentives in California and Vermont have worsened those states’ market environment.

First released in 2011, the Policy Tool is a one‐stop shop for information related to the cost, policies, incentives and other details associated with smaller, consumer‐owned wind power generation. Data is pooled from various sources and the numbers are crunched to determine key financial results for each state, including the number of years to simple payback, the cost of energy (COE), the internal rate of return, and net present value. The Policy Tool was created to help policymakers, industry representatives and advocates better understand the key differences that exist between states’ distributed wind policies and keep tabs on the complex, ever‐changing landscape.

In the newly released Policy Tool Version 2.0, data are updated to better reflect the current state of affairs across the U.S. And now the Policy Tool has more user‐friendly features, such as a slider bar to adjust the Annual Energy Production (AEP) and pop‐up windows that define various acronyms and terms for quick reference.

State Ranking Reveals Shifting Landscape

Using the output for COE, based on the updated default policy, financial, and economic variables per state, the Tool’s User Guide includes a re‐ranking of the states in order to identify favorable market opportunities for distributed wind growth as well as those places ripe for improvement.

While Oregon retained its top‐ranking position with the lowest COE for the residential wind sector, Vermont moved from second place to seventh due to a reduction in its wind incentive levels, and California – the nation’s historical leading small wind market – dropped dramatically below the top 10 with the abrupt ending of its Emerging Renewables Program (ERP) this summer. All technologies previously eligible for California’s ERP are now eligible for its Small Generation Incentive Program, but at a rate of only $1.25/watt, less than half of what was provided under ERP. In addition, a new deadline of July 2013 was added to California’s Feed‐In Tariff (FIT) legislation along with directives for establishing rates.

The ranking exercise is a moving target as state incentives are often in the process of change. For example, in late September the Illinois program began accepting applications for FY2013 funding, which expires in April (Illinois’ limited funding typically gets fully allocated within a month or two). In addition, the New Jersey and Nevada programs are currently on hold, pending program revisions, which effectively lowers their ranking to the bottom of all states. And while Vermont’s program re‐opened in September based on a hybrid model designed to emphasize performance and well‐sited projects, its structure and funding beyond early 2013 is uncertain.

Additionally, the Policy Tool’s default ranking does not take into account all market factors. While Oregon’s policies pencil out favorably, the distributed wind industry continues to face challenges due to costly and complex permitting processes as well as siting constraints in the investor‐owned utility service areas eligible for Energy Trust of Oregon rebates.

Nonetheless, distributed wind economics remain attractive in much of Oregon, New York, Massachusetts, Hawaii, Vermont, Maryland, New Hampshire, California, Rhode Island, Maine, Montana and several other states. The great (and challenging) thing about distributed wind markets is they are continuously evolving, and the Policy Tool is designed to stay up‐to‐ date to reflect current conditions.

The Distributed Wind Policy Comparison Tool was developed with the support of the Department of Energy’s Wind and Water Power Program as a collaborative project of eFormative Options, the National Renewable Energy Laboratory, the Pacific Northwest National Laboratory (PNNL) and the North Carolina Solar Center (NCSC). With additional DOE funding, eFormative Options, NCSC, PNNL, and Keyes, Fox & Wiedman LLP completed the 2012 updates to maintain the Policy Tool.

Source: ASES

 

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