Renewable program 2.0 looks to grow industry in R.I.

Rhode Island is turning up the dial on its renewable energy program.
State lawmakers last month approved a new, expanded version of the “distributed generation” program that should more than triple the electricity produced by renewable sources annually over the next five years.
Distributed generation, the system that directs utilities to purchase power produced by customers, was first launched as a pilot program in Rhode Island in 2011.
Over the last four years, state officials say the system has worked, but acknowledge it hasn’t operated on a scale that measures up to other states or would result in a thriving local renewable energy industry.
Within the growing American solar industry and businesses that work with it, Rhode Island is known as something of an also-ran because of comparatively modest incentives.
With the pilot program expiring this year, Rhode Island needed to settle on a new energy strategy and in the bill approved by the General Assembly, decided on a larger version of a mostly similar system.
While the current distributed generation program required utility National Grid to procure 40 megawatts of electricity from renewable sources between 2011 and 2014, the new program calls for an additional 160 megawatts of power from those sources between 2015 and 2019 on top of the current renewable portfolio.
The types of renewable energy eligible for the program remain the same – solar, wind, small-scale hydroelectric and anaerobic digestion.
Residential projects, which aren’t included in the current program, will qualify in the new system, potentially providing a major boost to people interested in putting solar arrays on their houses.
Along with another bill passed this session that loosens some of the licensing restrictions on who can perform solar installation work, state officials hope the change gets the Rhode Island renewable industry moving.
“We expect a much larger renewable energy business presence in the state,” said Chris Kearns, program development chief at the R.I. Office of Energy Resources. “Massachusetts, Connecticut and Vermont have robust renewable energy markets, and this will allow significantly more projects to compete here.” Legislation that allows homes, businesses or cities with renewable energy equipment to sell into the power grid is one way states encouraged renewable production, with direct incentives, such as tax credits, being another.
While Rhode Island does not have its own direct incentives, aside from the federal tax credits available in all states, Connecticut has state tax credits and the Mass. Clean Energy Center provides homeowner rebates for solar projects under its Commonwealth Solar program.
Under distributed generation, a prospective renewable producer, such as a business looking to put solar panels on the roof of its building, bids for a long-term contract from National Grid to generate and supply some of the electricity to the utility under the program’s renewable goal. The lowest qualified bidder is chosen and the contract is then used by the company as an asset to secure financing.
But many in the solar business say the amount of capacity up for grabs in the expiring regime was so small, potential developers were reluctant to make the investment necessary to try.
Despite lagging behind in incentives, Janet Besser, vice president of policy at the New England Clean Energy Council, which worked on the Rhode Island bill, said Rhode Island’s distributed generation format has actually been seen as one of the more effective in the region.
“I think this program is putting Rhode Island in front of other states – there is legislation in Massachusetts that would make that program look more like Rhode Island,” Besser said. “Having a competitive bidding component … can drive down costs for ratepayers and provide incentives for solar to be as efficient as possible.”
Encouraging renewable energy has positives and negatives.
A report by consultants the Brattle Group analyzing the distributed generation program for the state estimated that buying renewable electricity instead of the cheapest available would cost ratepayers $17.2 million annually, while at the same time creating 246 new full-time-equivalent jobs and putting $30.7 million of new spending into the economy. That’s not including the environmental benefits and being able to diversify the state’s sources of electrical generation. New England energy officials have warned that the region’s reliance on natural gas could make it susceptible to price spikes and supply disruptions.
“National Grid has long supported renewable energy to create a diversified source of clean energy for our customers,” said spokesman David Graves in a statement.
The first year of the new renewable program doesn’t start until April, and before then a special commission will decide how much of the additional capacity will be set aside for each segment of the market.
While the price paid to large-scale projects for power will continue to be determined by the competitive bidding process, regulators also will set a fixed price for small-scale and residential producers.
Christopher Warfel, president of Entech Engineering, a renewable energy installer and designer on Block Island, said the new program is a step in the right direction, but probably not enough to be transformative.
One problem remains that consumers remain relatively uninformed about the solar energy and currently there isn’t a system in place in Rhode Island to change that.
“It definitely makes it more acceptable to installers,” Warfel said about the new program. “Hopefully that would translate into more consumer action. However, one thing I am not seeing is big outreach and education to the consumer.”
Doug Sabetti, owner of Newport Solar, who had been lobbying to ease the solar installation licensing restrictions for years, said the combination of the two renewable bills would help get Rhode Island back in the game.
“I don’t think we will necessarily be on par with other states, but we will be doing a lot better and getting a lot closer,” Sabetti said. “On the distributed generation side we will be on par, but overall … we are not there yet.” •

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