A relatively new program for installing alternative energy systems increases financial incentives for municipalities, industries and commercial users across the Ocean State.
Dubbed a “distributed-generation standard contract,” the state law passed in 2011 has created a system where power users can construct an alternative energy system and sell the power to National Grid at a price higher than the going rate.
For at least one project, the law’s passage was crucial.
Over the last 18 months, East Providence has been executing a plan to build a solar array over the defunct Forbes Street landfill, a project that has piqued the interest of towns across the state. Eight-foot-tall panels would be installed across 70 acres, generating 3.71 megawatts of energy.
“We have been trying to do something with this property for a long time,” said Jeanne Boyle, city planner.
Planning for the array actually began before the legislation was passed, Boyle said.
“We knew its passage would take a little time and we saw the regulations as they were being developed in [the General Assembly]. Those changes were certainly instrumental in making this project go forward,” she said.
CME Energy of Boston will do all the work and lease the property from the city; in exchange, they will run the operation and sell the power to National Grid. The city will also benefit from a payment in lieu of taxes. Boyle said the system should be running this spring.
“CME will be working on it in several phases called projects,” she said. “Their base rent is $40,000 per year for the first project. … If they continue to build additional projects there, they could generate about 9 megawatts, which would triple the money,” she said.
Because of the 2011 law, the state now requires National Grid to purchase 100 percent of the energy made from renewable sources. The purchase price must be a premium rate, as opposed to a commercial rate.
“It’s a pretty big incentive for a company to install renewable energy,” said Dennis McCarthy, RENEW Energy Initiative president and CEO.
RENEW is an international business association centered in Rhode Island, working to promote the growth of alternative energy and energy-efficiency in the region. It is a collection of professionals and organizations working to improve the growth of alternative energy businesses by providing them with access to legal advice, technical expertise and support.
Richard Lallo, a project manager at Colonial Printing in Warwick, heads the RENEW Energy Initiative’s training program. “We want to increase the number of renewable energy investments in the region. We also want to educate small business on renewable energy options, federal and state tax incentives and credits, introduce them to vendors and resources that could help them.”
With a distributed-generation standard contract, the installing owner does not use any of the renewable energy it generates. They continue to pay their bill and try to conserve energy. The energy generated by a wind turbine, for example, or a solar array would be connected through a separate meter to National Grid, which must then buy the power at a rate higher than the one charged to the business, thus the incentive.
McCarthy said that the cost of power from National Grid currently equates to about 8 cents per kilowatt-hour. On the other hand, companies could sell their renewable energy to National Grid at a rate as high as 33 cents per kilowatt-hour.
Prior to the 2011 legislation, perhaps the biggest motivator to construct an alternative energy system was the state’s net-metering law, where the owner receives retail credit for at least a portion of the generated electricity.
Energy consultant Seth H. Handy, of Handy Law LLC in Providence, closely tracks renewable energy legislation and regulatory programs in Rhode Island. “Net metering isn’t always enough to get an alternative energy project built,” he said. “This [distributed-generation] program is doing well. It’s definitely generated interest in project development.
“It’s for projects that are tied into the distribution grid,” said Handy. “This program helps us to deliver that energy locally rather than from sources such as hydroelectric power from Maine or Quebec.” •
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