PROVIDENCE — Residents and small businesses may soon have new options for going solar.
Come March, a renewable-energy funding program geared for large wind and solar projects will likely expand its classifications to include small-scale solar.
Come March, a renewable-energy funding program geared for large wind and solar projects will likely expand its classifications to include small-scale solar.
The change will give property owners and solar businesses
more financing options and even open the door for leasing solar panels.
The program, known as distributed generation (DG) requires
National Grid to buy electricity for a fixed rate from the owner of the solar
panels for a period of 15 or 20 years. The rate is capped well above the
current standard market rate for electricity, allowing the owner of the solar
panels to receive income from the electricity it generates and sells to the
utility.
By offering fixed pricing to small-scale solar arrays, it would
give solar installers the option of leasing panels to property owners. Lease
programs in Connecticut and Massachusetts allow property owners to receive
solar energy without an up-front payment for the panels.
The average new solar
system for a home costs between $20,000-$30,000 before incentives. Third-party
ownership allows a solar company to receive the financial incentives while the
home or business owner usually receives a discount on their monthly electric
bill.
After the Rhode Island Distributed Generation Board approved the
new program Dec. 15, at least one local solar installer said he expects the
expanded DG platform to unleash pent-up demand for small-scale solar projects.
“It’s tremendous. It offers a broader range of options to go
solar and it makes Rhode Island much more comparable (with other states) than we’ve
been in the past,” said Ben Swanson of solar-panel developer RGS Energy.
Michael Daley of the International Brotherhood of Electric
Workers Local 99 congratulated the board for approving the program. Rhode
Island, he said, has new growth potential for renewable energy and construction
jobs. “Our neighboring states are way ahead of us,” he said.
The new program must be approved by the state Public Utilities
Commission (PUC). The PUC is expected to vote on the new program by the end of
March.
The new small-scale solar program is part of a significant
expansion of the DG program. It was launched in 2011 as a pilot system with an
allotment of 40 megawatts of power. Renewable-energy advocates regarded the
program as a success, prompting the General Assembly to expand the energy
allotment to 160 megawatts across five years. The new DG program is available
to five solar-energy categories, two for wind power, two for anaerobic
digesters and two for small-scale hydropower.
While the enhanced DG offering would open the way for more
solar-energy projects, it would offer a smaller share of the annual electricity
allocation to wind energy. DG board chairman Kenneth Payne said the initial
optimism for wind turbines in 2011 died down after local resistance intensified,
especially for proposed projects in pricy coastal areas.
“And the reality was we were getting very little interest and
sometimes outright hostility in regards to such locations," he said.
The North Kingstown wind turbine was the only turbine financed
through the pilot DG program, compared to more than 20 solar installations.
Proposals for wind turbines were turned down or withdrawn in Charlestown,
Jamestown, Middletown, Newport, Tiverton and Westerly.
To encourage wind development, the ceiling price, or the top
price a developer can bid for a 20-year fixed contract, was increased from
previous DG allotments.
The expanded DG program would join several state incentives for
small-scale solar projects. The Renewable Energy Fund offers grants that cover about 25
percent of the cost of such a project. The group-purchase discount program Solarize Rhode
Island launched a
pilot program in North Smithfield in October. A federal tax credit of 30
percent also is available.
Here is the list of recommended ceiling prices for the 2015 DG
program:
- Small solar owner financed 15-year term: 41.35 cents per kWh/20-year term 37.75 cents
- Small solar third-party financed: 32.95 cents per kWh for 20-year term
- Medium solar: 24.40 cents per kWh for 20-year term
- Commercial solar: 20.95 cents per kWh for 20-year term
- Large solar: 16.70 cents per kWh for 20-year term
- Wind I: 22.75 cents per kWh for 20-year term
- Wind II: 22.35 cents per kWh for 20-year term
- Anaerobic digestion: 20.60 cents per kWh for 20-year term
- Small-scale hydro I: 21.35 cents per kWh for 20-year term
- Small-scale hydro II: 20.10 cents per kWh for 20-year term