Issue Briefs - 2012 Overview
Policy Briefs are also available in PDF format below.
Expanding Market Access
1A Third Party Power Purchase Agreements (PPA's)
1B Voluntary Renewable Energy Credits Markets
Economics of Renewable Energy
2A The Renewable Energy Incentives Puzzle
Regulatory Environment of Renewable Energy
3A Wind Siting
Towards Community Energy
4B RPS standards for compliance RECs
Economics of Renewable Energy:
The Renewable Energy Incentives Puzzle
PROBLEM: Incentives for
renewable energy systems have been substantially removed from Wisconsin’s
marketplace. The majority of utility advanced renewable tariffs (ARTs)
are fully subscribed and We Energies’ $6 million/year renewable energy
development program is now shut down. Moreover, Focus on Energy has removed
incentives for renewables from current program offerings, nearly all within
the last 12 to 24 months. As one might easily imagine, the market for
customer-driven renewable energy systems is contracting without incentives,
which are needed to overcome a utility market structure that discounts the
value of local, renewable generation. Indeed, it should be noted that
traditional sources of energy thrive with their own hidden incentives, which
are not accounted for in the comparison of costs comparing renewable energy
to traditional energy sources. The outcome is a highly skewed
marketplace that favors traditional energy sources and market actors.
POLICY NEED: Components that make up the incentive puzzle can help drive a
vibrant renewable energy marketplace. These policies are: 1)
performance-based incentives (e.g. ARTs), 2) state income tax incentives
(e.g. tax credits for purchasing renewables), 3) sales tax incentives (e.g.
sales exemptions for renewables), 4) rebate programs for buying WI
manufactured products, 5) loan programs (e.g. utility and State Energy
Office), 6) grants for installing renewables (e.g. Focus, utilities and
State Energy Office), 7) business tax incentives (e.g. WI PTC) and 8)
Wisconsin manufacturing incentives for renewables.
BENEFICIARIES: Residential,
agricultural, commercial and industrial energy customers, nonprofit energy
users, municipalities, farmers, renewable equipment manufacturers, local
installers and contractors.
PROGNOSIS: Each policy
option presents its own challenges and opportunities. Indeed, some
policy options may require linkages with other policies to ensure success,
while others may be better framed not as energy policies, but general
business policies. Securing policy changes that require specific new
financial outlays for renewable energy may be challenging with the current
Legislature, though incentives with a broad implication beyond renewables or
that don’t require specific new funding may be able to gain more traction.
Focus on Energy incentive policies will not require a legislative change per
se, but will require an effort on the part of program policy makers and
administrators to shift from the current situation.
Links:
Update on Focus on Energy Funding for Renewables
A PSC ruling sets the boundaries for resuming Focus on Energy renewable energy incentives in the future. That decision is summarized in an order (5GF-191 released 10/27/11). It may be a step forward, but the decision will need to be translated into an incentive structure going forward.
Renewable Energy is inherently deemed to be non-cost-effective:
Review criteria in Attachement A to determine how different renewables will be judged.
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