Legislators expand distributed generation program

Growth would bring green jobs as well as clean energy

STATE HOUSE – The General Assembly gave final passage to legislation sponsored by Rep. Deborah Ruggiero and Sen. V. Susan Sosnowski to expand a program that encourages the development of renewable energy projects around the state.

The expansion, supported by environmentalist, potential developers and the state’s main electric utility, would lead to the development of more wind turbines, solar panel arrays and other small-scale renewable energy generation projects around the state, supplying Rhode Island with clean energy as well as jobs and economic development.

“Distributed generation is a win for small businesses, municipalities and homeowners in Rhode Island.  Producing electricity in Rhode Island from solar, hydro and wind not only reduces our reliance on fossil fuels, but it also creates jobs and allows homeowner to put solar panels on their rooftops. This is as much a success for local jobs, the economy and tax revenue as it is for the environment,” said Representative Ruggiero (D-Dist. 74, Jamestown, Middletown), who introduced this year’s legislation, as well as the bill that created the pilot program in 2011.

Said Senator Sosnowski (D-Dist. 37, South Kingstown, New Shoreham), “Massachusetts and Connecticut have a similar program, and it created green jobs by establishing a robust residential solar industry there, as it will for Rhode Island. Opening up the program to residential projects will mean interested Rhode Islanders can make an investment in their property and the environment and reap the financial rewards of being a renewable energy producer. Meanwhile, the construction will help employ their neighbors, the increased availability will reduce the costs of renewable energy, and we’ll use less non-renewable energy.”

The pilot program allowed small-scale energy producers to attach to the electric grid and sell their energy to National Grid, with a standard 15-year contract and a set price. The practice is called “distributed generation” because it involves power generation that is spread around the grid, instead of only at large power plants. 

Larger-scale distributed generation projects would compete, using the standard contract, but using the set price as a ceiling to ensure price competition. The pilot program, which expires this year, has been oversubscribed, with more than 71 applications for the 24 renewable energy projects awarded.

The legislation approved today (2014-H 7727Aaa, 2014-S 2960Aaa) extends the program, which is set to expire this year, and gradually expands the current total target of 40 megawatts over four years to a total of 160 megawatts of distributed generation power over five years. 

Under the bill, potential developers can enter 15- or 20-year standard agreements with National Grid that give them a guaranteed income to help them obtain financing for building their projects. 

Or, if they prefer, they may “net meter,” which would allow them to receive payment at the retail rate for energy they generate in excess of what they use. While the pilot program was aimed at commercial projects, the expansion in this legislation opens it up to residential projects as well, which the sponsors expect will give rise to a boom in residential solar arrays.

The Rhode Island Commerce Corporation issued a report in May estimated the expansion will create nearly 250 jobs and an average $30 million annual boost to the state’s economy.

The bill benefits ratepayers by encouraging the continuing downward trend in renewable energy prices  It does this by using a competitive bidding process for large and commercial-scale projects and by reducing developers’ financing costs through a guaranteed long-term revenue stream. Under the 2011 pilot program, there was a steady and significant decline in the prices of renewable energy in the state, including a 50-percent drop in solar energy prices in the program’s first two years.

It benefits Rhode Island’s economy by reducing the costs of renewables, and by enabling the growth of the small-scale residential solar generation industry. Under the pilot program, Rhode Island’s total solar generation capacity grew from 1.2 MW in 2011 to 21.65 MW including all projects that were at least under contract by the end of 2012. And as more projects are built, jobs are added. The number of jobs in the state’s solar industry grew from 210 in 2012 to 360 in 2013.