Cherrytree Group LLC Blog

Wind power is facing a make-or-break moment in Congress, with renewable-energy firms' projects on hold as lawmakers debate whether to extend subsidies for new wind farms this month.

Currently U.S. tax credits are available only for facilities that come online before the end of 2012. Iberdrola Renewables, the second-largest U.S. wind operator, has suspended work on new U.S. projects for "anything we can't build in 2012," said Rich Glick, vice president of government affairs for the unit of Spain's Iberdrola SA.

Industry players see two main chances for Congress to act this year. One comes in February, when the wind subsidies could be tacked on to an extension of payroll-tax cuts. The other would come in the lame-duck session after November elections, when lawmakers must address the expiration of tax cuts from 2001.

The tax credit has helped bring down the cost of wind power, making it more competitive with rival producers, but wind's backers say they need a few more years to build out a U.S. supply chain. The sharp fall in U.S. natural-gas prices has made this a particularly sensitive moment for wind energy by giving gas-fired power plants an extra cost advantage.

Previous delays in extending the wind-farm tax credit have led to drop-off in wind installations. The credit, designed to help level the playing field with coal and other fossil fuels, is worth 2.2 cents per kilowatt-hour of electricity produced during the first 10 years a wind farm is in operation.

A delay could also stunt efforts to bring down the cost of wind-power technology. "We face the loss of domestic expertise and the momentum to build a strong domestic supply base," said Luis Miguel Fernandez, chief corporate officer for the North American arm of Spain's Gamesa Corp., which has a factory in Pennsylvania.

Last month, Vestas Wind Systems said it will cut 1,600 U.S. workers if the tax credit isn't renewed, on top of 2,300 jobs it is already shedding world-wide. An industry-backed study by Navigant Consulting said in December that thousands of additional job cuts could occur if the credit expires.

About 6.8 gigawatts of wind power were installed in the U.S. in 2011, bringing the total nationwide capacity to nearly 47 gigawatts, enough to power about 12 million homes at any given time, according to the American Wind Energy Association. That is about 3% of total U.S. generating capacity.
 
Without the wind tax credit in place, Navigant said, about two additional gigawatts of wind capacity would be installed in 2013, as opposed to more than eight gigawatts expected to be added in 2012, when the tax credit will still be in place.
 
Other predictions are more dire. Iberdrola's Mr. Glick said there would be "close to zero" gigawatts of wind capacity installed next year without an extension soon.

Some in Congress say it is time to end subsidies for renewable energy. The wind industry "simply cannot continue to rely on the American taxpayer," said Rep. Mike Pompeo (R., Kan.), who has a bill that would cut many energy-related credits from the tax code. "Each time it comes up to a year of expiration, they say, 'If we just get a few more years our technology will mature and we will become more competitive.' It's time for them to figure out how to do that."

The industry's supporters argue that Chinese manufacturers also get government support, and they say companies need more time to build a U.S. supply chain and drive down costs.

Denise Bode, president of the American Wind Energy Association, said that in several years' time "we will not need" the tax credit but losing it now could stunt efforts to attract new investment.

Some U.S. facilities may keep going without the credit, thanks to foreign demand and mandates in many states for utilities to buy increasing amounts of renewable power.

Twenty-three governors have backed a bill that would extend the tax credit by four years. Senate Majority Leader Harry Reid (D., Nev.) said late last month the credit is "extremely important" and suggested it should be included with the extension of the payroll-tax break.

Some House Republicans have supported the four-year extension. But Rep. Dave Camp, a Michigan Republican and lead House negotiator on the payroll-tax bill, has said energy tax credits shouldn't be part of the payroll-tax discussions.

Original Article – Wall Street Journal

In a Hertford County field where rows of corn once grew, rows of solar panels now stand - 20,000 panels that will soon convert sunshine into enough electricity to power a small town.

When finished next month, Duke Energy Renewables' project on 37 acres will be one of the state's largest.

About 40 miles to the southeast, on a 100-acre field in Perquimans County, a Charlotte company plans to build another solar farm, this one consisting of 83,000 panels. It would stand out as the largest in North Carolina.

With the two solar farms and at least three major wind farms in development, northeastern North Carolina has become a hot bed for renewable energy.

The region has plenty of open land, and a sunny, breezy coastal climate. It also has a major power transmission line running through it with ties to the PJM Interconnection, the largest competitive wholesale electricity market in the world.

"Alternative energy is one of our main economic niches now," said Vann Rogerson, president of North Carolina's Northeast Commission, which recruits industry to the region. "The big players know where northeastern North Carolina is now."

Rogerson is working on additional renewable energy development projects with at least two other green-energy companies.

Much of the surge in green energy ventures stems from North Carolina's 2007 mandate requiring utility companies to produce 12.5% of their power from renewable resources by 2021, said Julie Robinson, spokeswoman for the North Carolina Sustainable Energy Association. Utilities are actually ahead of schedule, especially in the solar field, she said.

"Solar energy in North Carolina has grown dramatically over the last few years," she said.

The more capacity in megawatts that a green project has, the closer that utilities get to reaching the state mandate, and the bigger the reputation gets within the industry.

Duke Energy Renewable's Murfreesboro Solar Project is expected to carry a 6.4 megawatt capacity and be able to power 700 homes. The North Carolina Electric Membership Corp. will buy the electricity.

The Perquimans project, built by Solar Green Development of Charlotte, plans to have a capacity of 20 megawatts, enough to provide electricity to nearly 3,000 homes - more than half of all the households in the county. It is expected to connect to Dominion Power.

The solar projects would complement the wind farms that have found their way to the region.

Iberdrola Renewables plans to build a wind farm with 150 turbines on 20,000 acres. In Camden County, Invenergy is seeking permits to erect 100 turbines on thousands of acres of open farmland. Together, the projects could power about 100,000 homes. Each wind farm is projected to involve a $600 million investment and would be among the largest in the nation.

Down in Beaufort County, Invenergy has announced plans to build a wind farm valued at $160 million that would power about 15,000 homes.

The northeastern corner of the state has plenty of inexpensive, open land, a sparse population, and officials who are receptive. The proximity of the major transmission line is also a big draw.

"When that wind is really blowing, then there is a lot of power coming out of those turbines, and you need a place to send it," Ellis said.

The Perquimans County solar farm will have a capital investment of $85 million.

Given that kind of investment, tax breaks are a major motivator. Among other state and federal tax breaks, North Carolina allows local governments to collect 20% of the property tax value from land on which renewable-energy projects are built.

"Twenty percent of $85 million is a good-sized tax boost," said Bobby Darden, Perquimans County manager.

Original article – Hamptonroads.com

...by Warren Kirshenbaum

The pilot program of Solarize Massachusetts will come to Scituate this month, as part of the statewide initiative to bring solar energy into the lives, homes, and businesses of South Shore residents.

Chosen as one of four communities throughout Massachusetts to participate, Scituate will host numerous presentations on the solar initiatives available to residents with the hopes that the coastal community will become greener than ever.

“We first started The Commonwealth Solar Rebate Program a number of years ago, and we’ve seen impressive numbers in terms of the number of solar systems installed in Massachusetts homes and businesses since then,” said Kate Plourd, the press representative for Mass CEC.

Scituate opted into the program early this year and was chosen at random to be the pilot town for this region.
Plourd hopes that the program’s success will dictate how else to deploy solar initiatives in other communities throughout Massachusetts, bringing more and more residents and businesses on board with the cleaner, greener, energy.

There has been significant growth of solar power in Massachusetts. This program is intended to educate homeowners and business owners about the ease of installing a solar system and the  financial benefits, both in utility bills and tax credits.

As part of the program, Scituate hosted a “Solar 101” meeting to discuss solar rebates, installation, and renewable energy tax credits.

There are three basic kinds of rebates available to locals – the Commonwealth Solar Rebate Program, the state tax credit, and the federal tax credit.

“Solarize Scituate” isn’t the only clean-energy initiative the town has its hands on right now.

With the soon-to-be-implemented Stretch Code mandates, which require more stringent, energy-efficient guidelines for new construction; a wind turbine to be installed in the fall; and with a large solar array being placed on the town’s capped landfill, Scituate will be relying on clean energy in no time.

“Between [all] those things … things are looking very green around Scituate,” she said.

Original article By Jessica Bartlett-Boston.com

...by Warren Kirshenbaum

The top state energy official in Massachusetts marked Earth Day this week by announcing a new solar power initiative. The pilot program is aimed at bringing the power of the sun to the masses.

A grassroots marketing effort will attempt to sell solar power house by house and business by business and through volume discount pricing attempting to overcome a chief drawback, the high cost of installing solar power systems. Richard Sullivan, Secretary of the Massachusetts Executive Office of Energy and Environmental Affairs says the program called “Solarize Massachusetts” introduces a new business model for small scale solar projects for homes and businesses.

It is a way to aggregate and drive down the cost of installation.

Proponents of the program hope it will take solar energy in Massachusetts beyond the early adopters and reduce the need for substantial government rebates for solar. Sullivan says Massachusetts has one of the most ambitious clean energy programs in the country, but 80 percent of the roughly 22 billion dollars spent on energy annually in Massachusetts goes out of the state, most of it out of the country.

Since 2006, incentive programs have helped increase solar power by 20 fold in Massachusetts. The state has 45 megawatts of solar power installed and another 40 megawatts under contract for installation. By statute, 250 megawatts of solar power is to be installed by 2017.

The effort to increase adoption of solar power will begin this year in four pilot communities Hatfield, Harvard, Scituate and Winchester. These were selected at random from geographic regions and each meets certain criteria under the state's Green Communities Program.

The Massachusetts Clean Energy Center, partnering with the state to run the pilot program, is seeking bids from companies willing to provide homeowners and businesses with a turnkey solar power system on a tiered price schedule that lowers the costs for multiple installations. Existing state and federal renewable energy credits would also be available for purchasing the solar power systems.

The director for the Massachusetts Clean Energy Center says funding is available for up to 400 projects.

Funding for the solarization pilot project comes from a clean energy surcharge on Massachusetts utility bills and from the sale of renewable energy credits.

Original news story can be seen and heard WAMC Northeast Public Radio - Paul Tuthill

...by Warren Kirshenbaum

California Governor signs 33% renewable energy standard into law; Iowa approves solar, wind tax credits; CO passes hydro bill; NY announces fuel cell incentives; Oregon mandates 5% biodiesel.

California Governor Jerry Brown today signed into law a bill that raises the bar on the state's renewable energy standard (RES).

The bill requires the state's pubicly-owned utilities to produce or purchase 33% renewable energy by 2020. Previously, the mandate was 20% by 2010.

This new RES is the most ambitious in the US by far. It was signed into law today at the opening of a new SunPower/Flextronics solar manufacturing facility in California. The facility is expected to create more than 100 renewable energy jobs.  

Iowa Senate Approves Solar, Wind Tax Credits

Solar and wind energy tax credits passed through the Iowa Senate this month. The credits equal 30% of the cost of construction or installation, subject to a maximum credit of $15,000 for commercial or agricultural construction.
If signed into law, the tax credits would be refundable or alternatively applied against tax liabilities for the following tax year. They will also be retroactive to Jan. 1.

According to a recent American Wind Energy Association report, Iowa now leads the US in wind power production. The state produces roughly 15% of its electricity with windpower, up from 7% in 2008. 

Colorado Passes Bipartisan Hydro Bill
 
The Colorado House by a 65-0 vote passed an amended version of a hydroelectric power bill (HB1083), which now moves to Gov. John Hickenlooper's desk awaiting his signature to become law.

It passed unanimously through two committee hearings, two votes in the House and a vote in the Senate - more than 180 votes cast, and not one in opposition. The bill adds hydroelectric and pumped-hydro operations to the list of new energy technologies that the Public Utilities Commission can consider.

The bill is seen as a first step in bringing an $800 million pumped hydro project to Colorado. TransCanada is considering building the project, known as South Slope. 

New York Announces Fuel Cell Incentives

The New York State Energy Research and Development Authority (NYSERDA) announced an incentive program for businesses, hospitals or other large power consumers interested in installing fuel cells.

The technology allows users to generate some of their own power from clean energy, using less energy from the electric grid.

NYSERDA's Customer-Sited Tier Fuel Cell Program will provide up to $21.6 million through 2015. The program provides an incentive toward the cost of fuel cell installation, plus payments over the first three years of operation based on power produced.

Companies can collect a total payment of up to $1 million for fuel cells, based on the size of the project. Funding is awarded to applications received on a first-come, first-serve basis.
 
Oregon Mandates 5% Biodiesel Blend

On April 1, Oregon became the second US state to require that most diesel fuel contain at least 5% biodiesel (B5).
 
The state already had a 2% biodiesel (B2) requirement. Oregon's B5 requirement was scheduled to be triggered when the in-state production capacity reached 15 million gallons annually, which the biodiesel plants recently accomplished. The requirement will generate about 25 million gallons of biodiesel demand annually.

Minnesota was the first state to pass a B2 biodiesel requirement, which has since increased to B5. The state's required volume of biodiesel is scheduled to rise to B10 by 2012, and B20 by 2015.

Washington and Pennsylvania both have a B2 requirement in effect. Connecticut, Louisiana, Massachusetts and New Mexico have all passed similar legislation that hasn't yet taken effect.


Original article can be seen on SustainableBusiness.com News

...by Warren Kirshenbaum

The Emergency Economic Stabilization Act of 2008 is legislation which contains a number of tax incentives designed to encourage businesses to make investments in solar energy, including extensions of the business solar investment tax credit (ITC). The following is a brief summary of the provisions directly and indirectly benefiting the solar industry.

Provisions Directly Benefitting the Solar Industry:

The Business Solar Investment Tax Credit bill extends the 30% Income Tax Credit for solar energy properties for eight years through December 31, 2016. The bill allows the Tax Credit to be used to offset both regular and alternative minimum taxes and permits public utilities to directly invest in solar facilities and claim the Income Tax Credit. The five-year accelerated depreciation allowance for solar property is permanent and unaffected by the passage of the eight-year extension of the solar ITC.

Provisions Indirectly Benefiting the Solar Industry:

Extension of Energy-Efficient Buildings Deduction. Current law allows taxpayers to deduct the cost of energy-efficient property installed in commercial buildings. The amount deductible is up to $1.80 per square foot of building floor area for property installed in commercial buildings as part of:

•   Interior lighting systems,
•   Heating, cooling, ventilation, and hot water systems,
•   The building envelope.

Expenditures must be certified as being installed as part of a plan designed to reduce the total annual energy and power costs with respect to the interior lighting systems, heating, cooling, ventilation, and hot water systems of the building by 50 percent or more in comparison to certain established standards. The bill extends the energy efficient commercial buildings deduction through December 31, 2013. (This is section 179D in the Internal Revenue Code).

Qualified Energy Conservation Bonds. The bill creates a new category of tax credit bonds, "Qualified Energy Conservation Bonds" to finance State and local government initiatives designed to reduce greenhouse emissions. QECBs can be issued to finance capital expenditures incurred for:

•   Reducing energy consumption by at least 20%;
•   Implementing green community programs;
•   Rural development involving the production of electricity from renewable resources.

The bonds can also be used to finance research facilities and provide research grants for, among other things, technologies to reduce peak use of electricity. There is a national limitation of $800 million, allocated to States, local and tribal governments.

...by Warren Kirshenbaum


There are numerous cities across the United States which can be considered "cleantech capitals." With a large array of renewable resources, a dedication by businesses and homeowners to become more energy efficient, and a large hub for research and development, a lot can be accomplished when it comes to creating new, efficient and sustainable clean technologies. There are many factors that make up a "capital for cleantech," and although there are more than ten cities around the nation that are involved in clean technologies, here are six of the top cities.

1) Boston, Massachusetts. Boston is said to enjoy some of the most supportive policies in the United States for energy efficiency and renewable energy. After California, Boston is second in clean technology venture capital investments. With an environment that is ripe for cleantech startups, numerous companies are moving their business to Boston. The MIT Clean Energy Prize is a venture and innovation creation competition that encourages clean energy innovation. Its objective is to provide educational opportunities and supply incentives to ventures demonstrating the clean energy affordability. As well, the development of MIT's cleantech incubator will provide Boston with more access to cleantech flow, increasing the demands for all future building to be constructed in accordance to LEED standards set up by the U.S. Green Building Council.

2) San Jose, California. San Jose, part of California's Silicon Valley, has been very productive in clean technologies. The city has expanded a number of clean technology investments and because of the research and development institutions in the area, many cleantech companies are coming to make their home in San Jose. San Jose's, "Long-time leadership in engineering know-how, combined with semi-conductor, nanotechnology and optics R&D gives it a leg up in renewable energy development, particularly in solar energy applications." San Jose is also home to the Environmental Business Cluster, a non-profit technology commercialization center assisting startup cleantech companies developing goods and services to positively impact the environment.

3) Austin, Texas. Austin has long been Texas' hub for solar, wind, geothermal, and biomass power, as well as fuel cell technologies. Its commitment to the environment and sustainability has made it not only a national cleantech player, but a global one as well. Austin is home to some of the largest cleantech companies on a global level. A large research and development hub, the University of Texas at Austin has created several research expenditures to elevate research into energy efficiency and renewable energy. This includes a project by the College of Natural Sciences to create biofuel from blue-green algae and hybrid-electric automobile programs developed by The Center for Electromechanics.

4) San Francisco, California. California is one of the top cleantech states in the United States and it is cities like San Francisco that makes it happen. Currently, San Francisco is well on its way to becoming the first city to be completely run by renewable energy by the year 2020. With projects like Sunset Reservoir Solar Project, which is the largest municipal solar facility in the state, and a new $250,000 grant to increase renewable energy capabilities.
 
5) Seattle, Washington. Seattle has been leaving its mark in cleantech society by increasing the need for green standards. The Green Building Sustainable Communities Program, for example, creates city projects that meet sustainable outcomes. Tax breaks and loans are provided to businesses and residences that utilize green practices. Seattle has been a leader in using their garbage to get electricity. They have invested into electricity from garbage landfills.
 
6) Chicago, Illinois. Over 20 percent of total power in Chicago is coming from renewable sources. Due to the increase in the need for renewable energy and energy efficiency, Chicago has been able to create numerous job opportunities while, at the same time, increasing solar power and saving on CO2 emissions. Chicago is also becoming one of the major investment locations for international businesses. Chicago also has a number of green initiatives, including the Chicago Green Office Challenge.

Kirshenbaum Law and Cherrytree Group LLC can help you structure your tax credit transaction. Let us guide you through the process of applying for and securing renewable energy tax credits. These transactions typically require a lawyer, a consultant, and a syndicator, and Cherrytree Group and Kirshenbaum law can act in all three capacities, saving you time and money on your transaction.

The original article was written by Shawn Lesser, and can be seen at http://www.reuters.com/article/2011/03 /28/idUS317857292020110328

State Auditor Suzanne Bump intends to review public subsidies for Evergreen Solar, the energy company that recently announced plans to shutter its Devens plant and move more 800 jobs elsewhere despite receiving millions of dollars in public funds, as part of a broader review of the state’s entire system of tax incentives.

With the Patrick administration saying it could recoup $13 million of the $31 million the state invested in Evergreen Solar, the News Service asked Bump if she was considering an examination of the public subsidies in the company.

Bump’s press secretary Christopher Thompson responded with a statement noting that before she took office, Bump had described reviewing the state’s broad system of tax incentives as a priority.

“She has developed an internal team and a strategy to evaluate these investments with a focus on accountability and tax payer [sic] benefit,” Thompson said. “The Auditor’s review will take a broad look at many different tax incentives, and the tax incentives granted to Evergreen Solar will be reviewed in this broader context.”

On the campaign trail last year, Bump talked up plans to examine tax incentives, saying they should be measured by the benefits provided to Massachusetts citizens and taxpayers and that accountability for public investments “must be built into state government.”

As a candidate, Bump said that all state tax incentives and credits should be reviewed for effectiveness and that she would begin with economic development tax incentives. She estimated state government would forego $1.7 billion in fiscal 2011 due to tax incentives and credits.

Bump also pledged to conduct audits of agencies charged with providing or documenting tax incentives to determine whether agency managers used appropriate procedures, provided objective analysis, measured outcomes as intended, and held recipients accountable for performance.

State Housing and Economic Development Secretary Greg Bialecki said last week that Evergreen had received $21 million in cash grants - $20 million to help build its facility and $1 million for workforce training - $7.5 million in investment tax credits and a long-term lease on state land valued at $2.7 million.

Evergreen has received other forms of public aid, but Bialecki said he did not count in his estimate $13 million in state grants used to build road and utilities infrastructure at Devens and some state taxes the company avoided when paying for equipment.

Bialecki estimated the state can recoup $13 million, including the $7.5 million investment tax credit, which he said won’t be claimed, $3 million in state grants that were tied to a job creation formula, and land costs.

"We’re looking very carefully at what happened here and what lessons can be learned," Bialecki said last week. "This wasn’t so much an investment in Evergreen Solar as it was in the clean energy sector. The purpose wasn’t to benefit a company but to grow an industry and the investment really put us on the map."

In announcing its Devens plant closing plans, Evergreen Solar President Michael El-Hillow said the firm’s production costs in Devens were “much higher than those of our low cost competitors in China.”

“Solar manufacturers in China have received considerable government and financial support and, together with their low manufacturing costs, have become price leaders within the industry,” El-Hillow said in a statement. “While the United States and other western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint.”

MassGOP Chairman Jennifer Nassour has called the state’s investments in Evergreen “reckless policy” and urged the Patrick administration to offer a more broad-based approach to economic incentives for companies.

House Minority Leader Brad Jones has said that the Evergreen case should serve as a “lesson to Governor Patrick that throwing money at companies in industries he approves of won’t necessarily translate into success.” Jones said Patrick and Lt. Gov. Tim Murray “should turn their attention to creating an economic climate where all businesses can succeed and thrive.”

Gov. Deval Patrick has defended his administration in light of the Evergreen controversy, saying the process of doling out incentives to individual companies or industries "works well."

"I am disappointed that we are losing these manufacturing jobs to China, but Evergreen produced over 900 jobs for each of the years in question (two or three times what they promised) and that was good for the workers who got those jobs," Patrick said during a recent online chat.

"Evergreen did not use about half of the benefits that were offered to them and we have recovered or will recover most of the rest. Beyond that, we need to ask ourselves whether we are serious about competing for jobs on the same playing field as other states. Far more often than not, we win in a competition. But we have to compete to win."

Senate President Therese Murray told WCVB-TV Sunday that Evergreen “paid us back” $11 million based on an initial state investment of $2.5 million. “I think that’s pretty good,” Murray said.

But Murray added, “Probably their five or ten-year plan was a little aggressive . . . It’s still a loss. There should have been a bit more due diligence. I would have had a bigger clawback - that if the jobs left that the money came back.”

Murray said she’s been told that “solar doesn’t make a profit,” adding, “I’m still grappling with that.”

House Speaker Robert DeLeo, who has also called into question the Evergreen investments, on Wednesday reiterated his support for tax incentives aimed at stimulating film industry business. DeLeo noted that “The Social Network,” “The Town” and “The Fighter,” which all have a Massachusetts connection, tallied 16 Oscar nominations this week.

“These movies, filmed right here in Massachusetts, are a good reminder of how important the film tax credit has been to our state’s economy in these challenging times,” DeLeo said in a statement, referencing House votes from nearly a year ago to block efforts to reduce incentives available to the film industry.

A Department of Revenue report released this month found that the film tax credit cost the state $82.4 million for productions filmed in 2009 and generated $319 million in spending, of which $104 million was spent in Massachusetts. Of the $215 million spent outside of Massachusetts, $82 million paid salaries of $1 million or more to actors, according to the report.

Over the four years in which the tax credit program has been on the books, the total credit-eligible spending for 449 productions claiming the tax credit was $1.047 billion, with 32 percent or $335.5 million paid to Massachusetts residents and 68 percent or $712.3 million paid to non-residents or out-of-state businesses, according to the Department of Revenue.

On Wednesday, Patrick said his newly unveiled budget proposal included a continuation of the film tax credit program.