Community solar investors could qualify for federal tax credits, IRS ruling indicates

Posted by Laura Arnold  /   September 03, 2015  /   Posted in solar, Solar Energy Industries Association (SEIA)  /   No Comments

Community solar investors could qualify for federal tax credits, IRS ruling indicates

By | September 3, 2015

Dive Brief:

  • The Internal Revenue Service has allowed a Vermont man to take a 30% credit on an investment made in a community solar project, the first indication that the credit can be applied when residents buy into larger, shared solar arrays, rather than just rooftop systems.
  • While the decision is specific to Roland Marx, who made a $8,700 investment in the Boardman Hill Solar Farm, advocates say it is an indication of how the IRS mght rule in the future on similar credit requests.
  • The community shared solar sector, designed to give those unable to place panels on their home access to cleaner energy, is booming across the country. But so far, the investment tax credit has not been applied to the programs.

Dive Insight:

The IRS last month issued a “Private Letter Ruling” determining that Marx can take a tax credit reducing his investment by about $2,700. While the decision cannot be used as precedent by other taxpayers, solar advocates hailed the decision as an indication of how the agency will rule on future, similar requests.

“Community-shared solar has led to remarkable growth in residential solar because it allows those without roof space or solar access to participate in the solar market,” Rhone Resch, president and CEO of the Solar Energy Industries Association, said in a statement hailing the decision. “This ruling helps pave the way for even more growth under the widely successful federal investment tax credit.”

Clean Energy States Alliance, along with attorneys from Boston-based Foley Hoag, helped Marx secure the ruling.

“It makes a big difference, a very big difference,” Marx told the Concord Monitor. He had filed for an extension of his 2014 taxes, but is now prepared to file.

“This letter ruling fills an important gap,” Attorney Adam Wade said. “It adds a previously unavailable written resource to the growing body of authority which can be used by courts, IRS personnel, and practitioners in structuring community shared solar projects.”

While the letter cannot be cited as precedent, Wade said that in generat letter rulings can be used by the IRS for its own internal interpretations. Several cases have also acknowledged that a private letter ruling can be used as “persuasive authority” or an “instructive tool,” he said.

The potential extension of tax credits to community solar arrays could add fuel to a market that’s already on fire. Earlier this summer, GTM Research estimated that community shared solar would grow 500% this year, adding about 115 MW, a huge increase on the 21 MW installed in 2014. The firm expects 1,800 MW will be added by 2020, but access to tax credits and growing utility enthusiasm for shared solar could boost that number even more.

Recommended Reading

Concord Monitor: Group says IRS ruling could promote community solar projects

Kendallville gas station installs solar energy system

Posted by Laura Arnold  /   September 03, 2015  /   Posted in solar, Uncategorized  /   No Comments

Solar-powered savings

The Hometown Marathon gas station and convenience store is owned by the Stephens family, including from left, Tracy Wright, Stephanie Stephens, Steve Stephens, Linda Stephens and Brian Stephens.
 
Marathon's Solar Project_Kendallville_SUN grant

Solar-powered savings

Gas station installs renewable energy system

Posted: Saturday, August 29, 2015 11:00 pm

KENDALLVILLE — The irony isn’t lost on Steve Stephens that the most recent investment in his business — a solar energy system capable of generating 20 kilowatts of power — is being used to, in part, pump gasoline into customers’ cars.

In fact, he’s one of the first to acknowledge it.

But business is business, and costs are costs. The more you can do to cut down on your costs, the more you increase the odds of your business being successful.

That’s why in recent months the Stephens family-owned Hometown Marathon gas station and convenience store, 830 W. North St., has invested in energy-efficient heating and cooling systems, and new LED lighting.

And now it has 81 solar panels occupying most of its roof.

“There are certain things in business that are called ‘controlled expenses,’” Steve Stephens said. “If we can control some of our utility expenses by doing certain things, we’re always going to do that.”

Stephens said he got the idea for installing a solar energy system after reading a news story about a Steuben County pottery business that was using solar energy primarily to power its kilns.

So he called Eric Hesher, owner of Renewable Energy Systems LLC in Avilla and a fellow Green Township resident. It was Hesher’s company that installed the solar energy system at the Steuben County pottery business, and it has worked on a number of other renewable energy projects in northeast Indiana, including a planned solar carport at the University of Saint Francis in Fort Wayne.

“This is our first gas station,” Hesher said of the Hometown Marathon project during a recent event marking the start of the system producing power. “We’re hoping there’s going to be more. Steve’s kind of leading the path through the woods on this.”

It took about four weeks for Renewable Energy Systems to design the project and another four weeks to install it. The 81 solar panels on the roof — each of which can generate 250 watts — are tilted 15 degrees to best capture sunlight, and to prevent accumulation of rain and snow.

The panels sit in brackets and are raised 10 inches above the roof.

“That’s the beauty of these. There’s really no maintenance to them,” Hesher said of the solar panels.

The panels are tied to an energy converter, and a display installed inside the convenience store allows staff and customers to see how much energy is being produced. The system also can be monitored via a smartphone app.

Hesher said the solar energy system installed at Hometown Marathon typically will cover a little more than half of the business’ daily energy needs. On cooler days, however, when the business’ energy use is much less, the system could potentially provide all the power to the business.

At its peak, if all conditions are perfect, the panels can produce a total of 20 kilowatts. Hesher said on a normal day, they’ll generate 15 to 16 kilowatts. Any excess energy generated is sold back to Indiana Michigan Power.

The roughly $70,000 solar energy system is designed to last about 30 years, and it should pay for itself in less than five years through lower utility costs.

Since it’s a renewable energy project, the system installed at Hometown Marathon qualifies for a 30 percent federal tax credit, and it received a grant covering 25 percent of the installation cost through a U.S. Department of Agriculture Rural Development program.

“We can provide grant funding for any rural small businesses, rural producers, that are looking to do renewable energy projects,” said Anthony Kirkland, business program director for northern Indiana at the USDA Rural Development office in Columbia City.

The grant, the tax credit, the cost savings — it all adds up for Stephens.

He said of the business: “You miss 100 percent of the shots you don’t take. We take a lot of shots. We think this is a hit.”

Stephens also said he hopes the project raises awareness of the potential of renewable energy — and the display inside Hometown Marathon showing how much energy is being produced by the solar panels could help generate some discussions with customers.

“I think we’re going to see people come in here who have a little bit of an (interest in) solar,” he said.


 

Indy LWV Municipal Candidate Forums; Are there candidate forums in your community?

Posted by Laura Arnold  /   August 31, 2015  /   Posted in Uncategorized  /   No Comments

League of Women Voters of Indianapolis

The League of Women Voters of Indianapolis is hosting candidate forums this fall for the City County Council races.Use the link on the right to locate your district. The dates, locations and districts for each candidate forum are all listed below.

Please forward this email to friends, coworkers, other organizations – or anyone else who would be interested in attending this free and informative event!

Want to volunteer at a candidate forum or have a question? Contact Membership@LWVIndy.org.

The district boundaries for the City County Council have changed. Find your new district. 
Districts 9, 12, 13, 14, 18 and 19September 8, 2015, 7 – 8:30 p.m.
John H. Boner Community Center, 2236 E. 10th St., Indianapolis, IN 46201

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Districts 1, 2, 3, 4, 5 and 7

September 9, 2015, 7 – 8:30 p.m.
Marquette Manor, 8140 Township Line Rd, Indianapolis, IN 46260

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Districts 6, 8, 10, 11, 15 and 16

September 15, 2015, 7 – 8:30 p.m.
Marian University, 3200 Cold Springs Rd, Indianapolis, IN 46222

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Districts 17, 20, 21, 22, 23, 24 and 25

September 16, 2015, 7 – 8:30 p.m.
University of Indianapolis, 1400 E. Hanna Ave, Indianapolis, IN 46227

Follow us on Facebook to receive updates on the candidate forums! 

 

 

Shunned by Duke Energy, N.C. solar installers turn to religious leaders for support

Posted by Laura Arnold  /   August 31, 2015  /   Posted in Duke Energy, solar  /   No Comments

Shunned by big utility, N.C. solar installers turn to religious leaders for support

Updated

After failing to get support from the North Carolina’s largest public utility, a group of residential solar installers has appealed to a higher power in their effort to convince state lawmakers to extend the 35 percent renewable energy tax credit that is set to expire at the end of the year.

The solar installers have teamed with representatives of the religious community to continue making their case that without the tax credit, the companies will lose out on hundreds of installation jobs – and millions of dollars in revenue. They are calling on the General Assembly to pass a two-year extension to the tax credit that steps it down over time.

On the solar industry side, the new coalition includes top executives from Baker Renewable Energy, Southern Energy Management, Sundance Power Systems and Yes! Solar Solutions. They are joined by religious leaders from Kehillah Synagogue and the United Church of Chapel Hill and from the N.C. Interfaith Power and Light, a nonprofit organization that works on behalf of religious groups on climate change issues.

Susannah Tuttle, executive director of N.C. Interfaith Power and Light, says her group decided to join with the solar installers because it wants to show lawmakers what the renewable energy tax credit means to an often overlooked customer base with access to large roofs that are perfect for solar panels.

“The tax credit is a huge reason that so many houses of worship have been able to install solar panels on their roofs,” Tuttle says. “It’s taken years for many of them to get to the point where they are ready to move forward with installation. But if the tax credits are not continued, those projects will just stop.”

Tuttle says it is often more difficult for religious organizations to get the money together for a large solar installation project because of their nonprofit status. For tax reasons, many congregations have had to form L.L.C.s to pool donations, a process that often takes years to complete, or go after a single donor who is willing to fund the project. “Without the tax credit, the inventive to donate goes away,” Tuttle says. “But these projects are important because the money saved on energy costs can be put back into the faith organization’s mission to serve the community.”

Rabbi Jen Feldman of Kehillah Synagogue says her congregation raised $106,000 to install solar panels on the synagogue’s roof. The project took several years to come together. Once complete, it is expected to reduce the synagogue’s energy costs by 75 percent. She credits the renewable energy tax credit with helping to secure donations.

“We came at this from a place of faith,” Feldman says. “Climate change is such a huge, intractable problem that you can be stunned into doing nothing. That’s not a Jewish value. We have a big sunny roof and wanted to do something with it.”

The partnership between the religious organizations and the solar installers grew out of conversations about the tax credit’s role in getting rooftop projects going on places of worship, says Yes! Solar CEO Kathy Miller. “Everyone is talking about the solar farms and what will happen to them. But we thought it was important to highlight what the tax credit means to the end user.”

As part of their campaign to extend the tax credit, the solar installers wrote an open letter to Duke (NYSE: DUK) President and CEO Lynn Good, calling on the company to throw the company’s weight behind the effort. Duke declined the invitation, saying through a spokesman that the company is “neutral” on whether the tax credit is extended.

It is unclear how receptive the General Assembly is to extending the tax credit. The House included an extension in its budget proposal, but the Senate did not. With the two chambers still working out a long-overdue compromise, it remains to be seen whether the tax credit is included in whatever deal is reached.

Iowa electric co-op withdraws proposed additional $57.50 fee for solar customers

Posted by Laura Arnold  /   August 28, 2015  /   Posted in Net Metering, solar  /   No Comments
solar roof

Iowa co-op withdraws proposed fee for solar customers

PHOTO BY

A rural electric cooperative in Iowa has backed away from a plan to impose an additional $57.50 monthly fee on customers with solar panels.

On Thursday afternoon, Pella Cooperative Electric informed the Iowa Utilities Board that it was withdrawing the tariff it filed earlier this summer.

“It kinda made my day,” said Bryce Engbers, a hog farmer living outside of Grinnell. Engbers has arrays on his house and on each of two confinement barns, and had said he’d sooner remove the arrays than pay the higher fee.

“There are a lot of eyes on this, and I think it was a great move by [Pella], and I appreciate it,” Engbers said.

In June, Pella Cooperative Electric sent a letter to its approximately 3,000 members telling them that anyone installing solar panels after Aug. 15 would be charged the higher monthly fee.

Residential customers now pay a $27.50 monthly fixed fee. The additional charge would have meant an $85 monthly fixed fee for those with solar panels. Members with solar panels installed and operational before that date would not have to pay the higher fee for another five years.

The co-op’s management had commissioned a routine cost-of-service study earlier this year to determine whether any class of customers was not paying its fair share towards maintenance of the power system.

John Smith, the utility’s chief executive officer, said the study made clear that customers with their own solar generation — because they use less power — would as a consequence not pay their share of fixed costs.

The fee hike irked a couple of co-op members enough that they met with the co-op’s board of directors and asked to see the cost-of-service study. The utility’s management refused and then, apparently, relented.

“They gave us something,” Engbers said. “I don’t know if it was a cost-of-service study, but that’s what they said it was.”

The Environmental Law & Policy Center then got involved, and filed a petition to intervene before the utilities board. The center said that a fee levied only on customers with distributed generation facilities ran counter to two provisions in Iowa law.

The state’s Office of Consumer Advocate, concerned that the fee might have constituted discrimination against solar customers, also weighed in. It told the utility it wanted to see the cost-of-service study and any other documents used to calculate and justify the monthly charge.

Smith had previously declined a request from Midwest Energy News to review the study, saying it is “confidential” and “not subject to distribution.” He could not be reached Thursday afternoon for comment.

The co-op issued a press release that said, in part: “The proposed revision in the facility charge has drawn significant attention and has portrayed the Cooperative as discriminatory in establishing a different facility charge for those members who elect to install and maintain on-site generation which will provide some, but not all, the electrical energy needed to supply their needs. That claim is incorrect.

“The Cooperative has a long history of developing rates that collect sufficient and fair cost recovery; simply put, the cost causer must be the cost payer,” Smith stated. “It is unfair to the rest of the membership who would have to pay more so that another rate class can pay less.”

“… we have decided to withdraw the proposed increase on the facility charge for members who own or lease distributed generation until such time that we can better educate our members and the community as to the fair and equitable recovery of fixed costs.”

Josh Mandelbaum, an Environmental Law & Policy Center lawyer who represented two co-op members as well as a few environmental and solar organizations in the matter before the utilities board, said he suspected that when Pella decided to hike the fee for its tiny number of solar customers, the utility “didn’t have a sense of how that might impact members, and the concerns that members would raise. When that was provided, to their credit, they revisited the issue and withdrew the tariff.”

Although the Pella proposal likely would have affected only a small number of customers, Mandelbaum said, “The concern that we have is that although each individual co-op or muni might be a small entity in itself, between co-ops and munis they serve collectively about 30 percent of Iowa customers.

“We want to stop barriers from going up (for those customers), and this was a particularly egregious example of that barrier. The $85 charge was larger than anything we’ve ever seen — not just in Iowa, but around the country. The Minnesota commission just in the last week or two rejected a co-op that tried to impose a $5 charge.”

The debate over whether self-generating customers are being subsidized by the rest of a utility’s ratepayers is playing out across the country.

In the Midwest, Wisconsin utilities got approval for similar fixed rate charges to be imposed on solar customers.

Michigan utilities, on the other hand, are pushing to eliminate the state’s net metering law in favor of a system in which solar generators buy all of their power from the utility at retail and sell back excess power at wholesale. Utility officials say this accomplishes the same goal as imposing a monthly fixed rate.

Mandelbaum said he hopes other utilities will take note of Pella’s experience. He pointed to the Farmer’s Electric Co-op in Kalona, Iowa, which has been in the forefront of embracing and fostering renewable and distributed generation.

“There are other ways this can be done, and hopefully Pella revisting its decision is a sign that they’re willing to work with members to look at other ways this can be done. Hopefully other co-ops will do the same.”

One thought on “Iowa co-op withdraws proposed fee for solar customers”

  1. “… we have decided to withdraw the proposed increase on the facility charge for members who own or lease distributed generation until such time that we can better educate our members and the community as to the fair and equitable recovery of fixed costs.”
    Man… educate yourselves, while you’re at it, Pella… a fee of over $50, penalizing customers for reducing energy use via solar doesn’t make sense in any rational universe. Will they also charge Energy Star homes? A per-LED lamp fee perhaps? A special line-item for low-energy-consumption widows? Give me a break.
    If someone puts in a big enough system to seriously back-feed the grid, negotiations may be in order, if this has a measurable effect on grid equipment. But a catch-all “you have solar; pay up” is quite obviously nothing but punitive.

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