Cherrytree Group LLC Blog

The U.S. Department of Defense plans to open up 16 million acres of its land for renewable energy development, which it hopes will create a boom of solar, wind and geothermal projects and provide clean power to military bases.

Defense Secretary Leon Panetta and the Interior Secretary Ken Salazar signed a memorandum of understanding to work together on promoting renewable energy generation projects on public land that has historically been restricted for military uses. About 13 million of those 16 million acres are located in western U.S., where a lot of solar, wind and geothermal power development already has been taking place on private and other types of public land.

The administration has been making a strong push for renewable energy development by funding both technology research and power generation projects. The administration wants to accomplish two goals by supporting renewable energy: creating jobs and finding alternative, cleaner and more abundant power sources domestically.

Last month, Salazar unveiled a roadmap for speeding up solar power project development on 285,000 acres of public land in six western states. 

The government support for renewable energy has indeed propelled the development of advanced materials and equipment and the construction of some of the largest solar power plants in the country.

The Monday announcement by the Defense and Interior departments involved not only land set aside for the military but also offshore locations near military installations. The goal is to promote onshore and offshore energy projects, such as erecting wind turbines in the sea.

The military has been vocal about its support of renewable energy, from electricity to transportation fuels, that it says will help it become more self-sufficient and reduce its vulnerabilities in the battle fields.

“Renewable energy will allow a military base to maintain critical operations for weeks or months if an electric power grid goes down,” she said.

The military wants to attract developers and private investments for building solar, wind and other renewable electricity power projects on its land. It plans to lease the land to developers and buy some or all of the power from each project for its own use, and any unused power will be sold local utilities, Robyn said. Each of the military services plans on getting 1 gigawatt of renewable energy installed near its bases by 2025.

For information on renewable energy development or renewable energy tax credits, contact The Cherrytree Group.

Forbes Magazine

More and more businesses are searching for options to support sustainability goals and initiatives, and one viable solution is through a company’s purchase of renewable energy credits (RECs). RECs give developers of renewable energy a market-based, financial incentive to build wind, solar and other forms of renewable energy, and provide businesses with the opportunity to support greener practices. However, many businesses don’t realize that these opportunities exist and don’t necessarily understand how to capitalize on them.

NREI (National Real Estate Investor) talked about how RECs work and how businesses can take advantage of these credits with Warren Kirshenbaum, founder of The Cherrytree Group, a Needham, Mass.-based consultant, tax credit broker and syndicator that specializes in brownfields tax credits, solar energy credits, low-income tax credits and historic rehabilitation credits.

An edited transcript of that interview follows:
 
NREI: How do renewable energy credits, or RECs, work?

Warren Kirshenbaum: Renewable energy credits are a corporate tax credit. They are a per-kilowatt-hour (KWH) tax credit for electricity generated by a qualified producer and sold to an unrelated person in a given tax year. RECs are available to specific renewable technologies, such as biomass, hydroelectric and wind, to name a few. The credit allows a certain payment per KWH for a number of years based upon the particular technology, such as 2.2 cents per KWH for wind, geothermal and closed loop biomass and 1.1 cent per KWH for other technologies.
 
The tax credits are for either a five-year period (such as open-loop biomass) or a 10-year period (such as wind or closed-loop biomass). Usually a producer of the renewable energy can sell the RECs after they have been issued. Buyers will pay less than face value for them, using the credit against taxes for the full value of the credit. It is also possible to pre-sell the credits by calculating a credit flow stream based upon the output of the facility, the nature of the renewable energy and the amount of the credit, and by selling the RECs not yet received at a further discount with the obligation that they will be delivered to the buyer once earned and received.

NREI: How does purchasing RECs affect taxes?

Warren Kirshenbaum:The idea behind RECs is that they are transferable to buyers in a stable marketplace, and the buyers who will pay less than the face value of the REC will be able to use the face value of the REC to offset a portion of their tax obligation using the RECs. The purchased RECs can be used all in a single tax year, if that is possible, based upon the taxpayer’s tax situation, or unused credits may be carried forward for up to 20 years or carried back one year if the taxpayer files an amended return.

NREI: How does a business go about purchasing renewable energy credits?

Warren Kirshenbaum: Businesses can purchase RECs from power companies, brokers or syndicators. When buying a REC, the purchaser should be sure that they will receive the full value of the REC. Also, the REC is a federal credit. There are state credits as well, but these differ from state to state.

NREI: Are renewable energy credits growing in popularity since they first came into use?

Warren Kirshenbaum: I think they are growing in popularity as more people and companies become educated about their use. I would think that the popularity of RECs would be tempered because, as with most tax credit programs there is a sunset date by which the facilities must be placed in service (currently 12/31/2016), after which time there will not be the ability to earn new RECs (i.e. for new facilities).

NREI: What forms of renewable energy are most popular?

Warren Kirshenbaum: I would say that solar is the most popular because the cost of panels has been decreasing due to Chinese manufacturing. Also, there are no real permitting issues—they can be installed on residential or commercial rooftops, there are mobile systems, etc. There are also many companies that offer lease-back deals, or deals that involve very little owner cash needed so long as the RECs are assigned to the installer and a long-term power purchase agreement is signed. The regions in which solar energy is most active are the obvious ones where there is the most sun, such as California, Arizona and Hawaii. States like Massachusetts are active despite less sun because our subsidy programs are well advanced and lucrative.

NREI: How else can a company benefit from RECs, besides becoming more sustainable and saving on taxes?

Warren Kirshenbaum: In addition to supporting and meeting sustainability goals and initiatives within the company, there is certainly value in the external community understanding that a company is supporting efforts toward greener practices in this way. And the company that sells the renewable energy credits is able to attain additional funding without having to take out more loans.

For information on how Warren can assist you in applying for, syndicating, or brokering RECs, contact The Cherrytree Group.

In order to become more green and to implement greener business practices, more and more businesses are buying Renewable Energy Credits (RECs).

Businesses can buy renewable energy credits, or RECs from power companies who supply power, natural gas and energy products for homes and businesses.

The RECs are Green-e® Energy Certified and sourced from wind energy. The RECs give developers of renewable energy a market-based, financial incentive to build wind, solar and other forms of renewable energy. One Renewable Energy Credit is created for each megawatt-hour of renewable power that is delivered to the electric grid. Once an REC is sold, it is retired, ensuring that each REC is only used once.

More and more companies are searching for options to support sustainability goals and initiatives. The Cherrytree Group represents green developers and businesses that using green products such as renewable energy certificates as well as solar and load response options.

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

...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