Three Things to Know about the Investment Tax Credit
Three Things to Know About the Solar Investment Tax Credit extension
On December 18, 2015, Congress approved the long-sought extension to the Solar Investment Tax Credit. Here are three things to know about the Investment Tax Credit:
Thing to Know #1: It provides for a 30% tax credit based on the installed cost of investment in residential and commercial solar installations. The Solar Investment Tax Credit extension is modeled to spur 20 GW in annual solar development. This is 50% more solar than if the credit had not been extended. The extension lasts five years until the end of 2019. After that, it gradually ramps down to a permanent 10% tax credit for commercial installations and to zero for residential in 2022. Other renewable technologies including marine energy, small hydro and geothermal received a one year extension on the tax credit. Grants for energy efficiency were provided. The Production Tax Credit for wind development of 2.3 ct/kWh was extended for one year.
Thing to Know #2: GTM Research predicts that the biggest winner from the Investment Tax Credit will be the utility-scale solar sector, with a 73% increase in deployments between now and 2020. That’s helpful given utility requirements to comply with the Clean Power Plan.
Things to Know #3: Modeling predicts that utility scale solar will soon see installed costs of 4ct/kWh — competitive with wind and even fossil generation.
The conservative investment magazine Forbes pointed out that long-term growth in the solar sector didn’t depend on the ITC extension, citing evidence of the maturity of the solar market. Panel costs have fallen 60% in the last five years. Furthermore, the “soft costs” of installation and permitting also getting cheaper. Finally, low interest financing and alternative business models are both mobilizing more deployments today. Forbes concludes that even rooftop solar will be competitive with fossil fuels in the near term. Some analysts believe that solar already has arrived.
Single Most Impactful Climate Agreement Ratified
UN Climate Conference in Paris
Keep global temperature rise below 2°C, demand transparency in emissions, and hold all nations to some degree of legal accountability — these top the list of outcomes from the 2015 UN Climate Conference. The Summit concluded Saturday in Paris, but not without a heart-pounding race to the finish that included a daylong extension to the 14-day effort. The world now has its “first truly international plan to address climate change.” The Paris Agreement will certainly impact, and positively shape, Alaska’s clean energy economy in the years to come. The carbon reduction goals demanded will stoke investments that create jobs and opportunity.
Here are the highlights of the agreement, according to US Special Envoy for Climate Change, Todd Stern:
- The architecture has fundamentally changed from previous Conference Of Parties (COP) summits. Now, standards apply to both developing and developed nations. This matters, since previous protocols were hampered by disagreement on the premise that developed and developing economies should have different standards. Now, the standards are equal for all.
- The ambitious goal to keep global mean temperature change below 2°C (if not striving for 1.5 °C) was adopted.
- All 195 signatory nations will revisit these targets every five years, making adjustments to it as necessary.
- Nations committed to tracking carbon emissions transparently. This is the primary clause that legally binds countries. Nations are not however bound to achieve the emissions targets established. Countries shall perform carbon inventories subject to expert and peer review on the progress toward their targets.
- Enhanced focus on adaptation.
- Secretary John Kerry has so far committed the US to provide $800M for the adaptation fund.
- A “path of high ambition” toward carbon neutrality in the course of this century.
Whether critics think that the agreement goes too far, or that elements are insufficient, one inarguable point is that the accord is historic: this is the single most unified and legally binding global agreement on climate the world has ever seen.
Katherine Hamilton of 38 North Solutions, and a commentator on the Energy Gang podcast, noted that COP21 enjoyed unprecedented support from the business community, specifically calling out We Mean Business. “They are trying to put their money where their mouths are to be sure that everyone is brought along in a way the corporate world is bought in to.” Indeed major firms like Nike, Ikea, Unilever, Starbucks, HP, not to mention Shell, BP, Statoil, Total and others within the Oil and Gas Climate Initiative all seek clear regulation of carbon.
Leaving the sausage-making nature of a carbon treaty aside, let’s recall that “adaptation” indicates serious threats to most of the world’s poor: rising sea levels, increased likelihood of infestations, and violent storms are inescapable for this vulnerable population. Sun Edison founder and clean energy investor Jigar Shah quipped that that “those of us who live with luxury — with air conditioning and access to a car — already have built in adaptation yet a lot of folks around the world don’t.”
Major Decision for Renewable Access to Alaska’s Electricity Grid
The Regulatory Commission of Alaska voted four to one on November 18th to adopt regulations that standardize the way in which Alaska’s utility companies may calculate the costs of bringing new generation — often renewable generation — onto the electric grid. Prior to the Regulatory Commission’s decision, there was not a standard method by which to calculate “avoided cost.” This is the measurement by which utilities calculate their budget to buy power from renewable or traditional sources offered by energy developers, like wind farms. This effort was forwarded by the Alaska Independent Power Producers Association.
Read more coverage of the decision at Alaska Dispatch News.
The 2016 Rural Energy Conference will be held April 26-28, 2016 at the Westmark Hotel in Fairbanks, Alaska.
The 2014 conference in Fairbanks attracted almost 500 people from over 75 villages and towns in Alaska and beyond. The Alaska Rural Energy Conference is a three day event offering a large variety of technical sessions covering new and ongoing energy projects in Alaska, as well as new technologies and needs for Alaska’s remote communities.
Information at: www.akruralenergy.org
Or contact Max Frey
THANK YOU for another great Renewable Energy Fair
REAP’s 11th annual Renewable Energy Fair, although smaller than in the past, was still a great success. Instead of our usual event on the Park Strip, we combined the event with the Fairview Block party on July 25.
Many thanks to our sponsors: ConocoPhillips, Chugach Electric, and CIRI.
Thanks also to our volunteers, our workshop speakers, and everyone who helped organize the event,and who stopped by during the day.
Shop for Clean Energy
Did you know you can help promote renewable energy development in Alaska just by shopping with your Fred Meyer Rewards Card?
Fred Meyer is donating $2.5 million a year to non-profits in Alaska, Idaho, Oregon, and Washington, based on where their customers tell them to give. Here’s how the program works:
- Sign up for the Community Rewards program by linking your Fred Meyer Rewards Card to REAP HERE
- You can search for us by name or by our non-profit number 87406
- Then, every time you shop and use your Rewards Card, you are helping REAP earn a donation from Fred Meyer!
- Nothing is deducted from your points. You still earn your Rewards Points, Fuel Points, and Rebates, just as you do today.
Click HERE for more information about this and other ways you can support REAP and a clean energy future for Alaska!
Thanks to everyone who has contributed to REAP through the 2015 Pick.Click.Give. program!
110 individuals donated $6,100 to REAP as of the March 31 deadline for filing your PFD online.
Did you know that you can still Pick. Click. Give. a portion of your dividend until August?
Learn more about the Pick.Click.Give. program and how your donations help REAP accomplish its mission!
Who we are
Renewable Energy Alaska Project is a coalition of energy stakeholders working to facilitate the development of renewable energy in Alaska through collaboration, education, training, and advocacy.