By Pablo N. Garcia Rodriguez Nowadays renewable energies are a popular topic due to the benefits that they provide for our environment and our health. Moreover, 15 years ago, a new mechanism was implemented in the United States which enables people to get money from using alternative ways of energy. This is Net Metering. Its first implementation was in 2003 but, as it was a new technology, it was not allowed in several states. Today, considering that this system has improved people’s lives economically, new regulations allow its use in 38 states plus D.C. The chart below shows Net Metering increasing since 2003 to 2010. Chart from Eia.Gov, 2018, https://www.eia.gov/todayinenergy/detail.php?id=6270. The following presentation is to provide an understanding of the basics of Net Metering and to present some existing policies that regulate this mechanism in the states of Delaware, Maryland, New Jersey and Washington D.C.
By Margaret M. Welsh According to Ernst and Young’s Renewable Energy Attractiveness Index, the United States has one of the most attractive renewable energy markets in the world. In February 2012, Ernst and Young released its quarterly report and listed the renewable energy market in the United States second only to China. The Report tracks the attractiveness of forty countries and ranks countries based on the development of their renewable energy infrastructure and their suitability for individual technologies. China maintained the number one position; however, the Report indicates that China’s renewable energy market growth could slow down because of a reduction in solar cell company investments by foreign countries. The Report also predicts a decrease in renewable energy markets for more developed countries, including countries in Europe. This is spurred by Europe’s financial uncertainty. The United States remains at the top of the renewable energy market attractiveness list. Yet, the Report based its ranking on the assumption that the wind
By Margaret M. Welsh As many are aware, the wind energy production tax credit which is set to expire at the end of this year was not extended in the payroll tax legislation as many renewable enthusiasts had hoped. The renewable energy production tax credit was originally enacted by the Energy Policy Act of 1992 and has been extended over the years. The production tax credit generally provides a per-kilowatt hour tax credit for electricity generated by qualified energy resources. Qualified energy resources now include wind, closed-loop biomass, open-loop biomass, geothermal, landfill gas, municipal solid waste, some hydroelectric, and larger-scale marine and hydrokinetic power. The credit for all the qualified energy sources listed above expires in 2013, except for wind energy which expires at the end of this year. Currently, the wind energy production tax credit provides a 2.2 cents/kilowatt-hour tax credit for electricity generated from utility-scale wind turbines. This credit has been instrumental in lowering the cost of electricity
By Margaret M. Welsh Last month, Maryland Governor, Martin O’Malley reintroduced state legislation to promote offshore wind power in Maryland. The Maryland Offshore Wind Energy Act of 2012 is an updated version of his 2011 bill. This bill now establishes an offshore wind renewable energy credit (“OREC”) system, similar to the system enacted in New Jersey last summer by Governor Chris Christie. Under the OREC model, one renewable energy credit is equivalent to a certain amount of kilowatt hours of clean electricity generated. The credits are then sold in advance to electricity suppliers to help them meet the renewable energy portfolio requirements of the state. The OREC system potentially establishes a commodities market for wind farm electricity to be sold at competitive prices. Industry specialists suggest that a credit could be contracted for approximately $300, similar to the price for a solar energy credit. In 2008, Maryland committed to a Renewable Portfolio Standard which required twenty percent of electricity purchased
On January 26, 2012, Ener1 Inc., an owner of EnerDel—a battery manufacturer located inIndianawhich received $118.5 million in federal stimulus dollars—filed Chapter 11 bankruptcy. Recently we posted a blog regarding President Obama’s call for more federal funding for clean technology companies to helpAmericacompete with foreign countries. Skeptics of federal funding for clean technologies suggest that Ener1 Inc.’s bankruptcy filing is similar to the Solyndra collapse (the bankruptcy of a solar energy company after receiving federal grant money). On the other hand, some battery industry experts note that Ener1 is not a complete failure because the technology and knowledge base of Ener1 is still secure. The value of the federal government’s investment in Ener1 will likely unfold as the company tries to restructure its debt and climb out of bankruptcy. Regardless, Ener1 officers recognize that a contributing factor to the company’s bankruptcy filing was fierce competition from Asian firms that had lower manufacturing costs. Solar industry experts also cited foreign competition
By Margaret M. Welsh On January 1, 2012, the European Union Emissions Trade Scheme (“ETS”) went into effect which requires airlines flying in and out of the European Union to buy carbon emission allowances. Recently, the Civil Aviation Administration of China issued a directive banning all Chinese domestic airlines from complying with the European Union ETS. China’s opposition is supported by other countries worldwide, including the United States where strong objections have come from Congress and officials in the Obama Administration. In December, the U.S.’s Air Transport Association of America and the International Air Transport Association unsuccessfully challenged the legality of ETS in the Court of Justice of the European Union (CJEU). In response to this failure, Congress is expected to pass a bill formally opposing this charge on aircraft carbon emissions. In October 2011, the U.S. House of Representatives passed a billed titled, the European Union Emissions Trading Scheme Prohibition Act of 2011 (H.R. 2594) which prohibits U.S. carriers
By Margaret M. Welsh and Michael D. Stein During President Obama’s 2012 State of the Union Address—An America Built to Last, Mr. President addressed the need for continued federal investments in clean energy technologies in the United States. He alluded to the infamous Solyndra loan controversy by declaring: [P]ayoffs on these public investments don’t always come right away. Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy. . . . I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. As most people know by now, Solyndra, a solar energy start-up, received $535 million in loan guarantees from the federal government. On September 1, 2011, Solyndra declared bankruptcy. One reason speculated for Solyndra’s failure was the decrease in price and market infiltration from China of a solar panel technology not manufactured by Solyndra. Solyndra’s failure