Iowa Supreme Court rules in favor of Eagle Point Solar and third party solar PV PPAs

Posted by Laura Arnold / July 14, 2014 / Posted in solar / No Comments

Iowa Supreme Court rules in favor of third party solar

Posted on 07/11/2014 by Karen Uhlenhuth

Rooftop solar panels, photo via Creative Commons.

The Iowa Supreme Court ruled July 11 that a solar installation atop a municipal services center in Dubuque does not violate Iowa law, a decision experts called potentially ground-breaking for the spread of rooftop solar power.

“This is a great win for Iowa,” said Brad Klein, a senior attorney with the Environmental Law and Policy Center (ELPC) who represented a collective of renewable energy advocates from Iowa and across the country. Given the thoroughness of court’s decision, and the lack of any other high court rulings in this arena, Klein said he expects the Iowa court’s ruling to be “very influential” in future legal decisions nationwide, as well as “a great guidepost for conversation across the country.”

Joe Bolkcom, an Iowa state senator who has worked hard to advance renewable energy, called the ruling “a very positive decision for the advancement of solar in Iowa. I hope it provides a rationale for the Iowa Utilities Board to make some good decisions about distributed generation.”

The board early this year solicited feedback about the future of rooftop solar and other forms of distributed renewable energy. It recently requested additional comments, and now is mulling over its next move.

Policy implications

Bolkcom predicted that today’s ruling could encourage Iowa legislators to take a more supportive position towards renewable energy.

“If there’s more deployment of solar in Iowa, [legislators] are going to be more inclined to make policy that advances distributed generation,” he said.

Eagle Point Solar, based in Dubuque, installed a 175-kilowatt system on top of the Dubuque city building in 2011. Alliant Energy, the electric utility that serves the city, appealed to Dubuque’s city council, then to the state’s utility regulator, claiming that the project would violate the law. Alliant argued that Eagle Point would be functioning as a utility, and thus impinging on the utility’s legal monopoly over electrical service in Dubuque.

The Iowa Utilities Board ruled that Eagle Point was, in fact, functioning as an illegal utility. The ELPC and other renewables advocates appealed to the Polk County District Court, which in 2013 reversed the regulator’s ruling. The Iowa Supreme Court then opted to review the case.

Eagle Point’s president and CEO, Barry Shear, was busy hosting out-of-town visitors on Friday. He found just enough time to say, “There’s nothing not to like about this ruling unless you’re a coal miner in Virginia or a utility in Iowa.”

Third party financing

The case basically turned on a funding mechanism known as third party financing. It allows a party other than the solar installer or provider to finance, own and operate a solar installation on another entity’s property, providing energy to the property through a power purchase agreement.

Entities without any tax liability – governments, non-profit institutions, some hospitals and schools, for example – cannot collect tax credits for renewable energy. Hence such third party power purchase agreements are often crucial to making the finances of rooftop solar work.

Meanwhile even many people or institutions who can collect tax credits have trouble coming up with capital to install solar panels. Tim Dwight, a solar developer in Iowa, said that the typical residential solar installation now costs in the neighborhood of $16,000. Although almost half of that could be covered by the federal and Iowa state government credits, the remaining funds can be a barrier for homeowners or business owners; and banks are often reluctant to make loans for solar installations. Hence third party financing can be crucial for a wide range of solar and other renewable applications.

Dwight predicted that today’s ruling will help turn small-scale renewable energy projects into an attractive investment opportunity for insurance companies, banks and even individual investors.

Klein predicted that the court ruling “will open up [solar] to a broader set of Iowans. It’s been very successful in opening up solar in other states. I think this is one of those baseline policies that lays the ground for solar growth.”

The big picture

The ruling came on the heels of a recent tripling of the state’s renewables tax credit; and renewable advocates also hope the utility board’s ongoing inquiry into distributed generation will yield positive results.

“All of these things collectively in Iowa are going to give the industry the boost it needs,” said Klein. “We expect great things in Iowa.”

Officials at Alliant Energy, which has lost nearly 600,000 kilowatt hours in sales to the City of Dubuque since the solar panels started producing in 2012, have mixed feelings about today’s ruling, according to spokesman Justin Foss. “It’s been painted that this is a fight between the utility and renewable energy,” he said. “It’s anything but the truth.”

Foss said Alliant maintains “unwavering” support for renewables, and for integrating them into the utility’s distribution system. There are now about 670 renewable energy generators on Alliant’s system in Iowa, “and more people asking to connect to the grid every day,” Foss said. He added that customers will still be reliant on power provided by Alliant when the sun isn’t shining or the wind isn’t blowing.

“We have a financing model that hasn’t changed,” he said. “If nobody’s buying energy, in the middle of the night, there’s no one to pay for the power plant. We have two sets of generation. The problem is, there are lots of costs involved. What wi

ll be the impact on our customers? And how will this affect their costs?”

Klein acknowledged that the growth of distributed generation raises tough issues for utilities.

“One of the important aspects of the case is that it says that the purpose of utility regulation is to protect the public, not the utility industry,” he said. Generating one’s own power “behind the meter” — meaning it doesn’t move through a utility’s distribution system – is a private transaction and should not be subject to interference by a utility, Klein said.

Even so, he said this ruling clarifies the need for utilities and the renewable energy advocates to collaborate.

“We can’t have policies that single out customer generation and try to kill it,” Klein said.

On the East Coast, he added, “There are conversations beginning on how the electric utility industry transitions to a system that’s more decentralized. We want to see these conversations happen in Iowa and the Midwest. We want to work with Alliant on approaches that are win-win.”

How Indianapolis (of All Places) Became a Solar Powerhouse; HINT: It’s the voluntary feed-in tariff or VFIT.

Posted by Laura Arnold / July 12, 2014 / Posted in Feed-in Tariffs (FiT), IPL Rate REP, solar / No Comments

How Indianapolis (of All Places) Became a Solar Powerhouse

By PETE DANKO on July 10, 2014 at 12:00 PM

Photo Credit: SunWize Technologies

There’s an unlikely name among the usual suspects that populate a recently released list [PDF] of leading U.S. solar cities. There’s Los Angeles, San Diego, Phoenix, San Jose, Honolulu, San Antonio and then … Indianapolis?

Yep. And the city just got even more solar, with the official opening last week of a 9 megawatt array on a patch of land adjacent to the Indianapolis Motor Speedway. The speedway said it’s the “largest solar farm at any sporting facility in the world.”

A lot of factors can drive solar adoption. A state portfolio standard requiring utilities to source renewables is one of the most common. High electricity prices can help, too, by making relatively expensive renewables more attractive. And while Germany has proven that it’s not required, above average sunshine, which boosts capacity factors, can also play a role, as the list of leading cities suggests.

But Indianapolis has none of those things going for it. Not really. In 2011, Indiana did enact something called the Clean Energy Portfolio Standard, but its call for 10 percent renewables by 2025 is modest (California is targeting 33 percent by 2020). Besides, it’s voluntary. As for electricity prices, Indiana’s, at 11.91 cents per kilowatt-hour, are about a half-cent below the national average, according to the most recent data. And central Indiana is not particularly sunny, but you knew that.

So what brought Indianapolis into the solar big-time? Simple: A generous feed-in tariff offered by the local utility company, Indianapolis Power & Light, a subsidiary of AES Corporation that serves some 470,000 customers in and around Indiana’s capital city. And as Laura Arnold, president of the Indiana Distributed Energy Alliance pointed out in an interview, “The most remarkable thing is, IPL did it voluntarily.”

IPL surfaced the program in December 2008, in the wake of President Obama’s first election win. In early 2010, a three-year pilot program offering 24 cents per kilowatt-hour to facilities between 20 and 100 kilowatts in size, and 20 cents/kWh for bigger installations, was approved by regulators. The queue for the approximately 100 megawatts of solar up for grabs – equal to about 1 percent of IPL’s retail electricity sales – filled up. But as often happens with proposed projects, actual construction was slower to follow. IPL and regulators also found themselves working through technical issues in implementing the program.

Arnold and other solar supporters last year expressed fear that, with the program closed to new projects, some of the unbuilt projects might fail to be built, leaving a long line of viable projects that didn’t make it into the queue out in the cold. But a tally recently provided to Arnold by IPL showed that as of the end of May, more 53.4 MW was operating under Rate REP, and another 12.3 was under construction. In an email, IPL spokeswoman Brandi Davis-Handy said no projects had fallen through, and that “IPL still expects the remainder of the projects to be completed by the end of 2014.”

Along with the big Speedway project, the IPL feed-in tariff has yielded a couple of other landmark solar installations: the first utility-scale farm on a Superfund site, and the nation’s largest airport-located installation, at Indianapolis International.

Assuming the remaining 33 megawatts of solar on the Rate REP list get built, Indianapolis should maintain its spot among top solar cities for at least another year. But what happens thereafter is uncertain. Solar advocates would love to see IPL revive the feed-in tariff, and are hopeful that proposed federal carbon emissions reductions – though fairly modest for coal-friendly Indiana – might be an inducement.

For its part, IPL isn’t committing to anything. However, the company did make an interesting discovery as it worked through the bumpy process of implementing the feed-in tariff. For complicated reasons, it ended up holding a reverse auction for 30 megawatts in the program. That process revealed that developers, with the cost of solar falling, were willing to build at a far lower guaranteed price for their power – around 10 cents/kWh – than the program originally offered.

“The reverse auction demonstrated the pricing dynamics and would be a better vehicle than a standing offer,” Davis-Handy said. “Another option would be a self-build/ownership structure.”

Will Iowa Supreme Court Eagle Point Solar decision help other states get third party solar PV PPAs?

Posted by Laura Arnold / July 11, 2014 / Posted in solar / No Comments

This photo taken Jan. 20, 2014, shows Barry Shear, president of Eagle Point Solar, with one of his company's solar panels inside their Dubuque, Iowa, office. Eagle Point Solar is involved in a case over solar power going to the Iowa Supreme Court.

THE DES MOINES REGISTER, CHRISTOPHER GANNON / AP PHOTO

Read more here: http://www.miamiherald.com/2014/07/11/4230352/iowa-supreme-court-to-decide-solar.html#storylink=cpy

Iowa ruling gives boost to solar energy expansion

BY RYAN J. FOLEY

ASSOCIATED PRESS

IOWA CITY, Iowa -- Solar energy companies can legally sell power directly to customers, the Iowa Supreme Court ruled Friday in a boost to the small but growing source of renewable energy.

The ruling will likely expedite the adoption of rooftop solar power generating systems — particularly by cities, schools and nonprofit groups — that can reduce users' energy costs and their impact on the environment. It also puts Iowa in line with about two dozen other states that allow so-called power purchase agreements, at a time when state leaders are hoping to expand solar energy production.

"This is an important milestone for solar energy in Iowa," said Rhone Resch, president of the Solar Energy Industries Association in Washington. "It undoubtedly will help to jump-start solar installations across the state."

At issue was whether Eagle Point Solar could enter into an agreement with Dubuque to install solar panels at a city building. Under the arrangement, the city would purchase power generated from its rooftop from Eagle Point, which would own and maintain the panels for a period of time before the city gained ownership.

Such agreements allow entities that don't pay taxes — including governments and nonprofits — to take advantage of generous federal tax breaks designed to promote solar energy. They allow users to avoid the expensive initial costs of installation, and let solar companies recoup their investments by bringing in revenue from energy sales. Dubuque-based Eagle Point and other companies plan to market similar agreements statewide after Friday's ruling.

Alliant Energy and other utilities had argued that the agreements were illegal. They claimed solar companies could not sell power to customers under Iowa law, which grants regulated utilities the exclusive right to customers in their service territories in exchange for providing affordable electricity to all. Allowing such agreements, the companies warned, could lead to higher rates for customers to make up for lost business.

The Iowa Utilities Board, which regulates utilities, agreed. The board had ruled that Eagle Point Solar would be acting as a "public utility" by selling power to Dubuque, which wasn't allowed, and could take away customers from Alliant. Eagle Point and other solar advocates appealed, and a judge overturned the board's decision last year.

In the Supreme Court's 4-2 decision, Justice Brent Appel wrote that agreements such as the one proposed for Dubuque do not have enough "public interest" to justify treating the solar company as a regulated utility. He said demand for electricity from utilities could drop if the solar movement "gets legs in Iowa," but there was no evidence offered about the potential impact. He noted that in states that allow purchase agreements, "there was no suggestion that the integrity of the grid or economic health of regulated providers has been adversely affected."

Appel noted the "countervailing positive impacts" of solar energy.

"Behind-the-meter solar facilities tend to generate electricity during peak hours when the grid is under the greatest pressure," he wrote, adding that Iowa law also requires utilities to promote renewable energy.

Dissenting Justice Edward Mansfield said the court was improperly acting "as experts on the delivery of electrical energy" and should have deferred to the Iowa Utilities Board decision.

A spokesman said the board would factor the ruling into its ongoing review of self-generation of solar and wind energy, which could lead to rule-making or recommendations to lawmakers. Mark Douglas, president of the Iowa Utility Association, said utilities were studying the "broad implications" the ruling could have on customers and service.

Iowa has the 16th most potential for solar energy production, according to an Iowa Environmental Council report. Gov. Terry Branstad signed a law earlier this year expanding state tax credits for solar energy projects.

Read more here: http://www.miamiherald.com/2014/07/11/4230352/iowa-supreme-court-to-decide-solar.html#storylink=cpy

Iowa Supreme Court ruling clears way for third-party rooftop solar agreements

Friday, July 11, 2014 10:35 AM

The Iowa Supreme Court issued a ruling this morning that a Dubuque solar energy company did not act as a public utility when it attempted to enter into a third-party power purchase agreement with the city of Dubuque, the Dubuque Telegraph Herald reported.

In a split decision, the court ruled, 4-2, with one abstention, in favor of Eagle Point Solar in the case filed against the Iowa Utilities Board. The ruling is expected to clear the way for additional municipalities or nonprofits, which cannot directly claim solar tax credits, to buy solar energy from non-utility third parties and take advantage of the credits.

"It's a big deal for small business," Ralph Rosenberg, executive director of the Iowa Environmental Council, told the Business Record. "I know there are a lot of people in the solar industry who are really happy about how this is going to promote solar energy."

Third party power purchase agreements are an important tool for expanding renewable energy in the state, along with tax incentives, loans, grants and other financing vehicles, he said.

The court found that the power purchase agreement didn't infringe on Alliant Energy Corp.'s exclusive operating area. The city had planned to have Eagle Point Solar install solar panels on a city-owned building. Energy harvested through the panels would be sold to the city, through a third party, and used to supply some of the building's electricity.

Though the solar-generated electricity would not have passed through Alliant meters, Alliant officials claimed the agreement violated terms of its exclusive operating rights agreement.

What consumers need to know before committing to solar PV on their roof

Posted by Laura Arnold / July 04, 2014 / Posted in solar / No Comments

The Rise of the Residential Solar PV Customer

And how a business model threatens to derail the U.S. solar revolution.

Paula Mints, SPV Market Research
July 02, 2014 | 5 Comments

Residential solar is booming in the U.S., driven primarily by the lease/power buying business model. This model appeals to the energy consumer’s desire for a degree of independence from utility rate hikes and allows the consumer to continue renting electricity instead of making the shift to owning the means of electricity production.

Understanding what it means, i.e, the relative independence of owning the means of electricity production, has always been a lot to ask of electricity consumers in the U.S. The educational effort required to help consumers make this change is expensive, complex and tough going as it requires a paradigm shift in outlook. When you throw in the generally held impression that a residential PV system is expensive, the task can seem insurmountable. When you add a lack of available low interest (or zero interest) financing, well … the task takes on a pushing-a-boulder-uphill aspect.

Germany’s first PV innovation was offering zero interest financing to encourage homeowners to install PV systems on their roofs – this mid-1990s program was rapidly oversubscribed. The lesson, evident also by the lease/power buying model, is that giving consumers a way to afford a PV system on their roof breaks down the too-expensive barrier and does so rapidly.

Asking consumers, or anyone for that matter, to change behavior as well as altering their expectations is a difficult proposition, and the word “difficult” understates the task. In the U.S. electricity consumers generally rent their electricity and heat from a utility paying by the kilowatt-hour for electricity consumption. In exchange for this rent, the utility maintains the system by which electricity is generated and delivered. Consumers have been used to flipping the light switch and turning on the TV without worrying too much about the machinery and method of delivery http://www.renewableenergyworld.com/rea/blog/post/2014/01/which-is-more-effective-marketing-solar-with-anxiety-or-inspiration unless, of course, their utility increases its rates.

Current research indicates that residential PV lease/power buyers want the least expensive way to choose solar (no money down), the least complicated way to go solar, to save money and for someone else to handle repairs — in other words, again, to continue habitual electricity renting habits. Many do not want to learn how the system operates.

As owning/leasing/buying power from a PV system that is installed on a residential roof means going through the installation process, which does make changes to a home, as well as having an electricity generating PV system on their roof, whether the consumer wants an education or not, one should be provided.

Consumers should understand what the technology on their roof will or will not provide, how to know if it is functioning or not, what will happen in a utility blackout and what will happen if their system underperforms (will they have a surprise bill from the utility at the end of the year?) or, in the case of power buyers specifically, should the system "overperform" will they pay for only the electricity they use or all of the electricity the system generates?

During the sales qualification process potential customers should be asked to present six months (at least) of electricity bills so that an assessment can be made as to a) whether they are a candidate and b) what size system will cover most or all of their electricity. They should know what they are currently paying on average for electricity by the kilowatt-hour and if they do not know what a kilowatt-hour is, it should be explained.

If the consumer is sold a system, or is leasing/buying power based on the number of panels, s/he should understand what this means in kilowatts and kilowatt-hours. As the consumer will have electricity generating machinery on his roof, he needs to understand how the inverter and panels work together to generate this electricity. Potential customers need to be told of all incentives available to them in order to make an informed decision about whether to buy a system or lease/buy power from a system on their roof and they need to informed about whether or not there is an escalation charge on their lease and what this means.

Lessees and power buyers, who are typically promised that all repairs will be covered, should clearly understand who to call and how long repairs will take if necessary. After all, when utility power goes out there is a response, it may be slow, but it is a response. It should be clearly explained to consumers that though an owned PV system may well be an asset, a leased system, or, a system from which electricity is purchased by the kilowatt-hour may not be an asset in a sale. In fact, a recent report shows that it may be the opposite of an asset in a sale.

Prospective customers should be encouraged to ask questions because a happy, educated customer is an asset, while an unhappy, uneducated customer who assumed that leasing or buying power from a PV system installed on their roof would be roughly the same as continuing to rent electricity from the utility may be an extremely unhappy customer if expectations and assumptions are not met. The responsibility in this regard is with the leasing/power selling company not with the customer. Things your potential customer should do before committing to having a PV system on the roof include:

1. Before you buy, lease or sign a contract to buy power: Do an audit of your annual electricity usage (your utility will have the records).

2. Before you buy, lease or sign a contract to buy power: Know what you are paying on average per kilowatt-hour (your tier if applicable).

3. Have your own energy audit and make changes.

4. After your audit wait six months and see the difference in your electricity usage.

5. Have your roof inspected.

6. Have your electrical inspected.

7. Understand the basics of what to expect from solar as well as the terminology.

8. Call a few real estate agents and ask if owning a solar system is an asset or a liability and if the same holds true for leasing or buying electricity from a system that is on your roof and that you do not own.

Disappointed Customers Could Have a Very Bad impact on a Fragile Industry

Despite an almost annual prediction of their demise, in the U.S. the small to medium PV installer is still the backbone of the industry. These small businesspeople have for decades been the face of solar in the U.S. They have built their businesses from the backs of trucks and their garages usually on the basis of customer service and referrals. They take customer service, including after service, seriously. They are often the subcontractors used by larger firms to install the systems that are leased or from which the customer buys power. These small business people have been the forefront of the U.S. solar revolution for decades and they built the platform on which today’s residential solar industry currently stands on their belief in solar and on shoestring budgets.

The solar lease/power buying model is not inherently bad, but it does need a tune up before there is a customer backlash. Aspects of these models that could use attention include customer qualification, customer education (if the customer does not want to be educated, maybe it’s the wrong customer) and a clearly written list of what the lease/power buying customer should expect in the way of repairs and customer service along with timelines and who to call, an estimation of what the system will provide and what happens in the case of excess production or underproduction.

Recently in the news are extreme examples of what happens when corporations do not keep their word, or put profit above customer care. There are also many examples of companies that are committed to putting the customer first — you can find many of these examples among the small to medium PV installers, who remain, again, the backbone of U.S. Solar.

Juwi Wind abandones plans for 150 MW Prairie Breeze Wind Farm in Tipton County (IN); BZA imposed impossible conditions

Posted by Laura Arnold / July 03, 2014 / Posted in wind / No Comments

filed: July 3, 2014 • Indiana, Press releases

Juwi Wind abandons plans for Prairie Breeze wind project; continues lawsuit against Tipton County Board of Zoning Appeals

Credit: Juwi Wind ~~

Tipton – Juwi Wind announced today that it no longer plans to pursue the development of the Prairie Breeze Wind Farm, a wind energy project in Tipton County, Indiana, that would have had a nameplate capacity of approximately 150 megawatts. “Withdrawing from a late-stage development project is always a difficult decision,” said Mike Martin, president of Juwi Wind, “especially when the development work has complied with all substantive and procedural regulations, and Juwi has had the support of dedicated and civic-minded landowners and other community members who championed the merits of this project.”

A key reason that Juwi originally identified Tipton County as a desirable site for the Prairie Breeze Wind Farm was the clear regulatory guidelines concerning wind projects because a straightforward local regulatory scheme typically reduces development risk. However, the permitting authority that issued the principal permit for the project, the Tipton County Board of Zoning Appeals (BZA), imposed conditions that Juwi believes were outside of its administrative authority and which effectively rendered the project impossible to build.

Consequently, Juwi and a group of landowners in support of the project jointly initiated a lawsuit against the BZA to reform the conditions of the permit. Juwi strongly believes in the merits of the litigation and believes the ultimate outcome of the lawsuit would allow the Prairie Breeze Wind Farm to be constructed. But, the continuing litigation costs and indefinite time period associated with pursuing the permits through litigation no longer make sense for the company.

Juwi officials noted that although the company has decided to withdraw from the project, there are other plaintiffs involved in the lawsuit who may choose to continue pursuing their claims against the BZA. To facilitate these efforts, Juwi has already begun the process of notifying the landowners and appropriate officials of its decision.

For more information, contact: Chad Thompson (765) 513-1031 thompson@juwi.com

Source: Juwi Wind