Renewable Energy Fund could use some tweaks

Mixed Review for EDC's Solar Fund

By TIM FAULKNER/ecoRI.org News staff

PROVIDENCE — The state’s Renewable Energy Fund (REF) was recently reauthorized for three more years by the Rhode Island Economic Development Corporation (EDC). But, is the fund really working and why not model it after thriving programs, like those in Massachusetts?

In its first year, the REF awarded about 90 grants totaling $500,000 for mostly small, residential solar projects. Massachusetts by comparison authorized 3,700 small solar projects this year through its Solar Carve-Out Renewable Energy Certificates (SREC) program, which was launched in 2010.

The REF offers an upfront grant of 20 percent up to $10,000, which is higher than the rebate offered in Massachusetts. But, the Rhode Island program doesn’t have a long-term production-based incentive that pays for the energy produced, like the SREC program.

Providence-based solar installer Eric Beecher of Sol Power said financial incentives are 3.4 times greater in Massachusetts than in Rhode Island for small-scale solar, “which is why business is booming in Massachusetts and (the REF) can't spend (its) funding in Rhode Island."

Success has come relatively quickly in Massachusetts. The state set a goal of installing 250 megawatts of new solar energy by 2017. They reached the goal this year, four years early.

At a recent hearing for the REF, solar installers both praised and criticized the program. Beecher introduced the imbalance in financial incentives between Massachusetts and Rhode Island. Vito Buonomano of Northeast Solar & Wind Power said the payback on investment for small solar is too long to attract Rhode Island customers. He also wants the REF to imitate Massachusetts.

“There’s just so many things that need to be changed with this program,” Buonomano said.

Doug Sabetti, owner of Newport Solar, had the opposite experience, receiving 15 REF grants for new solar projects this year. “I enjoy working with it and it makes all the difference in the world to my business. My business wouldn’t exist without it in Rhode Island,” he said.

The EDC wouldn’t comment on whether Massachusetts' SREC program is worth imitating, only saying that any changes must come through the General Assembly.

The EDC can tweak the REF, as it did Dec. 16, by voiding the requirement that all solar projects connect to the power grid. Block Island solar projects were also allowed to apply for the grants. Block Island was previously omitted because New Shoreham gets its electricity through Block Island Power Corporation and customers don’t pay a system benefit charge on their bills.

To complicate matters, two separate agencies oversee Rhode Island’s two energy programs. The public-quasi EDC oversees the REF and the state Department of Administration runs the distributed generation contracts program, which generally helps larger solar energy projects. Both require legislative action to change. In Massachusetts, the Executive Office of Energy and Environmental Affairs oversees all renewable-energy programs. Current legislation seeks to give that office more influence with its programs.

Massachusetts also offers a tax credit of up to $1,000, and projects are exempt from sales and property taxes.

Legislation failed this year to reinstate a tax credit in Rhode Island, as well as an effort to move the REF to the Department of Administration. The REF small-scale solar grant program, as well as programs for larger renewable-energy projects, are funded through the system benefit charge on electricity bills and payments made by power plants to comply with mandates.

The REF took in about $3 million in fiscal 2013. A minimum of 20 percent of the REF's annual income will be made available for the small-scale solar program in 2014. This amounts to a minimum of about $600,000.