A major piece of legislation is in the state senate. Just about a month ago the Senate met to discuss Senate File 225 which would set the amount Iowans get paid for Small Wind and Solar PV Panels, the same way the utilities get their rates set instead of getting “avoided cost” or just Net Billing.
“The bill specifies that standard offer contracts shall be calculated on a kilowatt=hour basis, and shall be based on each utility’s cost, inclusive of its required rate of return, for the new development of each form of technology and project size, varying by the type of alternate and renewable energy production facility involved. For photovoltaic facilities, the bill provides that separate standard offer contracts shall be calculated for facilities of between zero and 20 kilowatts, and for facilities larger than 20 kilowatts.
Finally, the bill states that standard offer contracts shall be in lieu of alternate and renewable energy rates otherwise determined by the board pursuant to Code section 476.43,and that an unsuccessful applicant, or an alternate energy production facility with larger than 20 megawatts of nameplate generating capacity, shall be governed by the Code section 476.43 rates. Further, the bill requires the board to submit a report to the general assembly by January 1 annually regarding program participation levels and results.”
The proposal is modest. It limits the amount of new capacity under the program to half of retail load growth. Even though it not a proposal encouraging local ownership specifically, SF 225 does limit program participation specifically to projects with a majority of ownership within.
This proposal is important because it directly relates to Feed in Tarriffs (FITs). It helps to truly outline a group of public policies and utility practices that help The Iowan to fully realize the financial benefit the development of solar power offers. FITs provide an incentive price or incentive rate paid for each kilowatt-hour of renewable energy delivered to the grid, for a set period of time. Rates paid in Iowa today are regularly accused of being artificially low. FIT incentive rates provide a price that fairly energy delivered to the grid and accounts for its many benefits. FIT incentive rates are legal and can be created without risk of federal preemption. Utilities can offer FIT incentive rates voluntarily, and, indeed, many utilities in the U.S. are doing so today. FIT incentive rates can be established with no rate impact or with a minimal rate impact. There are many options for creating FIT incentive rate programs. If utilities or policymakers are concerned about potential rate impacts, there are ways to create FIT programs with little or no rate impact. For example, some utilities successfully fund their FIT incentive rate programs with optional green power purchase programs. Other utilities that are already building renewable energy systems can proffer a FIT program for a similar cost. Most all Iowa utilities use some ratepayer monies to offer incentives for energy efficiency and demand reduction programs; some of these monies could be used for a FIT incentive rate that promotes smaller-scale, customer-sited renewable energy.
This of course directly relates to money available to the potential customer for a residential solar energy system in Iowa.
A recent report by the Iowa Policy Project in Iowa City projected more than 2,500 jobs would be created if the state enacted incentives promoting the development and installation of 300 megawatts of solar energy over a five-year period. This can be nothing but exciting to Iowan economists.
Seeing this growth coming, Kirkwood Community College has already taken the step in late 2010 to create a formal energy sector worker training program. Kirkwood Community College was awarded a State Energy Sector Partnership grant for $464,726 to train 130 workers for jobs in wind and solar energy. Their plan was to have graduated 90 students and 40 people to be working in wind and solar energy and have been armed with more than a dozen required industry and federal safety regulations. This program has already been lauded by the US government.
Compared to just a decade ago, there has been a huge bulge in the renewable energy technologies installed in both urban and rural Iowa. The state has only barely begun to tap the enormous potential promise of renewable energy. As these resources are developed with solar photovoltaic panels, solar hot water systems, wind turbines, and other technologies, the considerable economic and environmental benefits will only grow. Now with guidelines, the consumer would have a better feel for the return on investment as they work hand in hand with the utilities. Although utilities are generally required to buy energy from small or independent producers under federal law, they naturally attempt to pay an extremely low price for that power. This price is known as the avoided cost rate and often referred to as a buyback rate.
Hopefully, with these new guidelines perhaps Iowa will see FIT to see the light.
You can start using Solar Power in Iowa – visit the NASS Solar Store in Iowa