Energy Law Wisconsin Blog

Topic: Energy Presentations

Notes from Solar Power International’s 2014 Conference

Wednesday, November 12th, 2014

solar-raysEnergy Law Wisconsin was in attendance at Solar Power International, the country’s largest solar conference and trade show held in in Las Vegas October 20-23, 2014. Highlights of the conference included presentations by then-Senate Majority Leader Harry Reid, Department of Energy Secretary Ernest Moniz and many industry leaders.

One of the items that jumped out: Wisconsin is figuring increasingly prominently in national discussion for solar, both as a potential market and a cautionary tale due to the utility rate-making proceedings that are ongoing for several of Wisconsin’s investor-owned utilities.

Solar industry leaders, such as Lyndon Rive, CEO of SolarCity, who recently weighed in on the We Energies rate case, Ed Peo of Coronal Management, LLC, an active solar developer on behalf of Panasonic Corporation (who spoke to the author of this blog about the circumstances under which his company would be interested in developing solar in Wisconsin), and others offered insight on many issues that are currently quite fluid.

There were also presentations by a variety of investor-owned utilities, indicating that one size does not fit all when it comes to utility involvement in solar.

Finally, there was a considerable amount of conversation as to what might happen if and when the energy Investment Tax Credit is reduced from 30% to 10% at the start of 2017.

If you have specific issues you’d like to receive an update on that were discussed at the conference, please contact us.

ELW in the Community – Spring Happenings

Tuesday, June 17th, 2014

Once we at Energy Law Wisconsin shook off the last of the snow from our historic winter, we were off and running. Here is a sampling of some of the events we’ve been involved with this spring:

RENEW Wisconsin Windspread Retreat

On April 22, Michael Allen celebrated Earth Day by attending RENEW Wisconsin’s Strategic Planning Session at Wingspread in Racine, Wisconsin. Michael and the rest of the RENEW Board met with thought leaders in the renewable energy community to develop and fine tune RENEW’s strategic vision for 2014 and beyond.  RENEW Wisconsin continues to advance renewable energy policies for Wisconsin through advocacy, education, and collaborative initiatives in its 23rd year. Michael is completing his sixth year as a RENEW Board member. For more information and 2014 updates, click here.

Midwest Solar Expo

The Midwest Solar Expo  took place May 16 in Minneapolis, Minnesota, and Michael Allen joined other solar industry professionals to hear the latest in developments in our neighboring state. Jigar Shah (founder of SunEdison and CEO of the Carbon War Room) gave the keynote speech. Mr. Shah is also the author of “Creating Climate Wealth: Unlocking the Impact Economy”, a combination of memoir and guide to solar business principles. Mr. Shah discussed how local solar installers can survive by leveraging their ability to target local markets and their marketing advantages in local solar projects. He offered advice on how to compete effectively, bringing down soft costs, developing customer relationships to promote cross sales, and the future of federal and state solar policy.

Leadership Sun Prairie Graduation

Paralegal Colleen Wenos graduated from Leadership Sun Prairie Class XVII on May 21. The group was started in 1997 by a group of business professionals, including Michael Allen, and Colleen recaptured some of her experiences on this blog. The class project, developing bike map kiosks for Carriage Hills Estates, Orfan and West Sheehan parks in Sun Prairie, will be installed later this summer.

Sun Prairie High School DECA Awards Banquet

Energy Law Wisconsin is a business partner for Sun Prairie High School’s DECA chapter, and Michael Allen spoke on the subject entrepreneurship at the June 4 year-end lunch banquet at Sun Prairie High School. He drew on his own experience as an “accidental entrepreneur”, setting up a law firm after 20 years in large law firms and on his experience working closely with startup companies, including Idle Free Systems, a maker of fuel saving idle elimination systems in Watertown, Wisconsin.

Farm Technology Days – It Takes a Village to Build a City

Thursday, January 23rd, 2014

Wisconsin Farm Technology Days 2015 (FTD) will be in my home community of Sun Prairie, Wisconsin, so when my good friend and forward-thinking farmer Jamie Derr of Solarmass, LLC asked me if I would serve on the Utilities Committee for this event, I readily agreed. Based upon my past committee service, I assumed I would be attending a few meetings, perhaps making a few introductions to people in the energy community, and maybe thinking up a creative demonstration or two relating to distributed generation in agriculture. Well – not exactly.

It turns out that Farm Technology Days is the equivalent of building a city for 30,000-50,000 visitors who will inhabit the host area over a three day period to demonstrate and view the latest and greatest in farm technology. To make the event the best it can be requires reliable support with electric service, wireless internet and cell phone service. This task is made more challenging by the fact that the Farm Technology Days site is typically hosted on a farm (in 2015, the Statz Family have graciously agreed to host) and located a significant distance away from the closest electric interconnection points and cellular and wireless towers.

Fortunately, the folks who organize Farm Technology Days have the organizational process down to a science, as demonstrated by the impressive gathering of more than 100 people this past December to share lessons learned from the event in Barron County on August 2013 and plan upcoming and future Farm Technology Days on August 12-14, August 12-14, 2014 in Portage County at  Blue Top Farms and Feltz Family Farms and at the Statz Farm in August, 2015. We gathered to discuss discuss and troubleshoot issues necessary to make the event a success. We are also fortunate to have experienced electrical and wireless contractors to support us in our efforts.

Even so, the 2015 event will require a lot of hands-on attention from people who know far more than I do about providing utility service (as opposed to understanding the legal basis and contracts for utility service). If there is anyone out there who reads this and is interested in joining the Farm Days 2015 Utilities Committee, drop me a line. We’d be glad to welcome you to our “Village”.

Allen to Speak at Upcoming American Planning Association Webinar

Monday, September 3rd, 2012

 

On September 18, 2012, the American Planning Association (APA) will be hosting a webinar titled “Balancing Solar and Other Potential Competing Interests in Communities”. The webinar is one of the activities that the APA has undertaken as a participant in the SunShot Solar Outreach Partnership, an initiative of the United States Department of Energy.

The webinar will focus on community planning decisions when other interests compete with solar energy development. The two competing interests that will be addressed are tree preservation, which will be addressed by Michael Allen, and historic preservation, which will be addressed by Kim Kooles, policy analyst with the North Carolina Solar Center.

The webinar will take place from noon-1 p.m. CST on September 18, 2012. Registration for the webinar is free.

AWEA’s Jeff Anthony Outlines the State of Wind Power

Thursday, May 31st, 2012

The Wind Power Happy Hour met at Sun Prairie’s Cannery Grill on Monday, May 21. The guest speaker was Jeff Anthony, Director of Business Development for the American Wind Energy Association (AWEA). Anthony noted that the wind energy industry offered terrific opportunities for Wisconsin manufacturers and showed a series of slides to illustrate his point. In particular, Anthony observed that as of 2005, only 30% of the content in wind turbines was made by U.S. manufacturers, but as of 2010, the American-made content had risen to 60% and in 2012, it is anticipated to be almost 70%.

Wisconsin has a number of successful companies in the wind turbine manufacturing supply chain, including Ingeteam in Milwaukee and Gearbox Express in Mukwonago. Even states that have poor quality wind resources, such as those located in the Southeastern United States, have significant opportunities to become manufacturing partners in the U.S. wind industry. To underscore this point, AWEA is holding its Windpower 2012 Conference & Exhibition in Atlanta, Georgia this year.

Anthony noted how closely wind development was tied to policy and currently wind dvelopers and manufacturers are sitting on their edge of their seat, wondering if Congress will renew the Production Tax Credit, which expires at the end of 2012. He showed a chart with illustrations of what had happened in past year when Congress delayed renewing the tax credit and each time this happened, there was a sharp drop-off in wind energy development the following year, due to the uncertainty in the marketplace as to whether the credit would be renewed.

Anthony noted that back-and-forth policy does not exist for the oil and gas industry or the nuclear industry. Both industries are the beneficiaries of very substantial incentives that are permanently built into tax code. In contrast, wind must ask Congress to renew its policy supporting wind from year to year, which puts it at a disadvantage to the other industries.

During the Q&A session, Anthony addressed questions about the impact that the 18 month delay in implementation of the wind siting rules might have had on Wisconsin. Mr. Anthony said that the suspension of the rules very clearly had a harmful effect on Wisconsin’s wind construction industry, as more than $1 billion of projects were cancelled or postponed during the prolonged uncertainty that followed suspension of the rules. Mr. Anthony was less certain about the impact of the rules suspension on manufacturing jobs. He said to his knowledge no plants had closed own and any manufacturing impact was more likely in the form of lost opportunities to add new plants and manufacturing jobs in Wisconsin. He also offered attention-catching figures that showed the during the time the rules were suspended, Wisconsin’s neighboring states put up roughly 50-100 times the amount of wind capacity as did Wisconsin.

Anthony was less certain about the impact of the rules suspension on manufacturing jobs. He was not aware of any plants that had closed down; he said if there was an impact, it more likely would be in the form of “lost opportunities”.

With the final wind siting rules now in place, the current challenge for Wisconsin is to regain the momentum it previously had in wind energy manufacturing and construction and once become a leader in the manufacturing of wind turbine components. Mr. Anthony put up slides illustrating the fact that there are hundreds of different components in a modern wind turbine. Many facilities in Wisconsin and other industrial states that formerly produced components for industries such as the auto industry, have been retooled to provide these components.

To conclude, Mr. Anthony addressed a question about the relationship between the natural gas industry, which is seeing record low prices, and the wind industry. Wind and natural gas are currently the lowest cost sources of energy when all costs are included and are therefore natural competitors. But, he added, wind generation facilities and natural gas generation facilities can be operated very effectively in tandem to meet energy needs, so they are also natural allies. Mr. Anthony noted that the U.S. Chamber of Commerce, which is a proponent of low-cost natural gas, is also a proponent of the extension of the Production Tax Credit for wind.

People who wish more about this issue can see Jeff Anthony’s slides from his presentation here: Wind Power Happy Hour Slides.

Photosynthesis vs. Photovoltaics

Monday, February 6th, 2012

When Urban Foresters Meet Wisconsin’s Solar Access Law

Questions about solar access and urban forestry conflicts are becoming increasingly frequent in my renewable energy practice. After going through 20 years with no calls regarding such conflicts, I have encountered five such conflicts since the start of 2011. Conflicts arise because trees and solar energy systems are competing for the same resource – access to the sun. But the needs of trees and solar energy systems can be harmonized if appropriate planning and legal systems are in place.

On January 31, at the 2012 Wisconsin Arborist Association/Wisconsin Department of Natural Resources Annual Conference in Green Bay, I dove further into this subject. My presentation was entitled “Solar Access and Urban Forestry in Wisconsin: Laws, Conflicts and Potential Solutions.” The audience primarily comprised of urban forestry professionals and state and local governmental officials. It included the City Forester for the City of Madison, the City of Milwaukee, the City of Oak Creek, and others. They asked very good questions, and some audience members had encountered these conflicts in their professional experiences.

Competing interests of urban forestry and solar energy development can, on occasion, lead to conflict. Shading of solar energy systems has a different impact on solar photovoltaic (PV) systems than it does on solar thermal (aka, solar hot water) systems. The adverse impact on PV systems is much more severe, but both can be significantly impacted by shading.

Wisconsin’s solar and wind access laws are quite comprehensive and probably the most protective of solar access of any such state laws in the entire country. Some members of the audience were surprised to learn that “vegetative growth that occurs” and impairs solar access to a solar energy system, can be considered a “private nuisance,” even if the growth occurs after the solar energy system is installed. There is no automatic grandfathering for trees that are planted first.

Solar-Tree conflicts can create specific problems that affect the day-to-day job functions of Urban Foresters, including:

– Reconciling their municipality’s mixed policy messages – promoting energy efficiency gained from tree shading while simultaneously promoting renewable energy generation from solar energy systems.

– The difficulty of performing their jobs without making somebody upset – in complying with the solar access law, they may be creating unhappy neighbors who don’t want their favorite local tree to be pruned.

– The difficulty of picking appropriate trees for medians and rights-of-way, knowing that those trees may or may not be someday be adjacent to solar energy systems.

– Knowing what to do if a mature tree that shades an area desirable for solar has to be removed due to disease and replaced by another healthy tree. Does the replacement forfeit any pre-existing “growth rights” that its predecessor may have had?

Don’t despair – Potential solutions exist that can enable sensible urban forestry policy and sensible solar energy promotion to live side-by-side. Potential solutions for mitigating current conflicts include:

– Better-coordinated urban planning

– Using planning software that minimizes solar-tree conflict by providing relevant data reflecting growth and shading

– Community education and local solar advisory committees

– Borrowing from innovative local ordinances in other states

– Possibly making modest changes to the Wisconsin solar access law to better accommodate urban forestry concerns

The best solution will protect investments in both solar energy systems and trees and offer predictability and certainty in the planning process. A copy of the slides from the presentation is available here: WAA Annual Conference Presentation (1-30-12 Final.pdf)

Finish 2011 on Target (Part 2)

Thursday, November 3rd, 2011

Last Minute Solar Projects Need to Be Aware of Critical Treasury Department Guidance

Required Formal Disclaimer:  Since this entry involves some discussion of legal principles, there is at least a theoretical possibility that one of you out there may read this blog entry and conclude that: (a) you and I have entered into an attorney client relationship; or (b) I am offering you specific legal advice for your specific legal situation.  In the unlikely event you reach either conclusion, I must inform you that sadly, it is not true.  Persons accessing this site are encouraged to seek independent counsel for advice regarding their individual legal issues.

In Part 1 of this topic, I discussed the Treasury Department’s guidance on whether the applicant for a Section 1603 Payment has “begun construction” in 2011.  In Part 2, I will focus on Treasury guidance recently issued on how the Treasury Department evaluates Section 1603
applications for solar photovoltaic (aka PV or solar electric) projects.

Treasury Guidance Regarding Solar Electric costs

The Treasury Department recently published guidance titled “Evaluating Cost Basis for Solar Photovoltaic Properties” (referred to in this post as “The PV Cost Guidance”) indicating how it will evaluate the claimed cost basis for solar PV projects applications for Section 1603 payments to reimburse eligible costs of solar electric projects. The PV Cost Guidance establishes benchmarks for average costs per
watt for solar PV projects. The guidance includes the following table:

 

Residential

Residential/

Small Commercial

 Commercial

Large Commercial/

Utility

Size Range < 10 kW     10 – 100 kW 100 – 1000 kW           > 1 MW
Typical Size 5 kW

25 kW

250 kW

2 MW

Turnkey Price per W +/- $7

+/- $6

+/- $5

+/- $4

 

The PV Cost Guidance indicates that solar electric projects whose claimed cost basis exceeds the benchmarks above will receive closer scrutiny. This doesn’t necessarily mean that costs above the benchmarks will be disqualified. However, there must be a good reason for applicants to exceed the benchmarks.

Finally, Treasury guidance discloses that Treasury views certain other types of situations, including related party transactions (i.e. where two parties in the project are related to one another) as deserving close scrutiny. Treasury’s concern is that if a transaction is not between two
parties negotiating it at arm’s length, the cost for which reimbursement is applied may be inflated. The Treasury guidance concludes by detailing the approaches that Treasury uses to determine fair market value of projects.

If you have specific questions about The PV Cost Guidance, you can go on to the Department of Treasury’s 1603 website to review it yourself. You are also welcome to email me with any questions or comments.

Finish 2011 on Target (Part 1)

Monday, October 31st, 2011

Last Minute Solar Projects Need to Be Aware of Critical Treasury Department Guidance

Required Formal Disclaimer:  Since this entry involves some discussion of legal principles, there is at least a theoretical possibility that one of you out there may read this blog entry and conclude that: (a) you and I have entered into an attorney client relationship; or (b) I am offering you specific legal advice for your specific legal situation.  In the unlikely event you reach either conclusion, I must inform you that sadly, it is not true.  Persons accessing this site are encouraged to seek independent counsel for advice regarding their individual legal issues.

As the Section 1603 payment program draws to a close, solar project developers and owners need to pay attention to two critical sources of guidance issued by the United States Department of Treasury.

The first is the “begun construction” guidance, advice regarding the steps applicants must take to ensure that their project will qualify for federal reimbursement funding, if it is not placed in service by the end of the Section 1603 program on December 31, 2011.

The second type of guidance addresses situations in which Treasury will scrutinize reimbursement requests from solar PV projects.

I addressed both types of guidance at the Solar Wisconsin Fall Conference held at the Monona Terrace Convention Center on October 25. A copy of my presentation outline is here: (Section 1603 Guidance Presentation). I will address the first of these types of guidance in this entry and the second type in another entry that I will post in a few days.

 

Begun Construction Guidance

Under a document titled “Frequently Asked Questions and Answers Begun Construction” (the “Begun Construction Guidance”), the Treasury Department has indicated that if a Section 1603 applicant wants its renewable energy project to be eligible to receive a Section 1603 reimbursement payment equal to up to 30 percent of the eligible cost basis, and cannot place it in service (i.e., have it commissioned
and, if applicable, connected to the grid) by the end of 2011, then the applicant must meet one of the two Treasury “begun construction” tests:

Commence actual physical work on the project. This means actual work at the site or actual work by a project contractor on renewable energy project components that are being made specifically for the project.  Items taken out of existing inventory will
not qualify.  Nor will preliminary activities such as site clearing, demolishing existing structures or money spent to obtain financing or secure permits.

5% Safe Harbor Rule. To qualify for the safe harbor, the applicant must have paid (if a cash-basis taxpayer) or incurred (if an accrual basis taxpayer) an amount equal to 5% of the eligible cost-basis of the renewable energy system. Whether or not an expense has been incurred is determined by reference by a multi-part test established under earlier Treasury regulations.  It is important that the monies be spent under a contract that is enforceable under state law and and one that does not limit damages, in the event of breach by the applicant to less than 5% of the total contract price.

 

There are advantages and disadvantages to either approach. If an applicant opts for the physical onsite work approach, there is no established minimum amount of work that must be done. However, once work is begun, it must be continuous. On the other hand, the 5% test does not include the continuous work requirement, only that the threshold amount of money be spent. The 5% Safe Harbor test is not without its own risks: If the applicant spends 5% of the eligible cost basis, as it appears to be in 2011, but if in 2012, the project costs increases so that with 20/20 hindsight the money spent turns out to be less than 5% of the final eligible cost basis, the applicant will fail the 5% Safe Harbor Test.

The requirements in the Begun Construction Guidance are detailed, and require applicants to look carefully at the scheduling of their projects and even the contracts they enter into to create their project, to be sure that they can pass the applicable tests. If you have specific questions about the Begun Construction Guidance, you can go on to the Department of Treasury’s 1603 Program website to  review the guidance. You are also welcome to email me with any questions or comments.

ELW in the Community: Support for UW-Madison Urban & Regional Planning Course

Thursday, October 27th, 2011

On October 21, I spoke as part of a panel and worked with the graduate students in the 2011 Planning Workshop in the UW-Madison Department of Urban and Regional Planning. In this course, which is part of the master’s program and financed by a U.S. Department of Housing and Urban Development (HUD) Sustainable Communities Grant, the students are hard at work developing a regional energy plan examining renewable energy opportunities in nine counties in Southwest Wisconsin.

I spoke as part of a panel that included presentations from Sara Walling, Bioenergy Advisor for the Office of the Secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection, Gregory Nemet, Professor at the La Follette School of Public Affairs and Bill Johnson, a bioenergy consultant and former Manager of Biofuel Development for Alliant Energy.

I addressed legal issues involved in the planning process, from the perspective of counsel to developers and utilities involved in establishing renewable energy facilities.  I also drew on my past experience as a city attorney and as counsel for municipalities and local landowners in communities where large-sized renewable energy projects were being developed.

I addressed the differing interests of stakeholders (developers, utilities, municipalities, host land owners and neighbors) that must be taken into account when developing rural energy facilities. The challenge for municipalities is to balance the interests of these stakeholders fairly in making their planning and zoning decisions.  An approach that goes too far to protecting the rights of non-hosting land owners, risks discouraging economic development and depriving potential facility hosts from fully developing the potential of their property. On the other hand, a regulatory approach that is too lax risks subjecting the community to environmental harm or placing unwarranted costs on the community and land owners, when such costs should fairly be borne by the developer or others who will be directly benefiting from the project.

A copy of the slides from the presentation is available here:

Presentation Outline

Taking on Risk at the Small Wind Conference

Thursday, July 7th, 2011

Michael Allen at Wind ConferenceOn June 14, I presented “How to Limit Your Risk in a Small Wind Business” at the Small Wind Installers Conference in Stevens Point. There were about 250 attendees, including installers, manufacturers, utility representatives, environmental groups and government agency representatives.

I was part of a panel titled “Reality Check: Legal and Insurance Issues,” where I joined two small wind installers who had faced liability concerns in New York and New Jersey.  The situations they described were especially difficult for wind installers as they appear to have been the subject of claims for liability, even though by all accounts there were not defects in their installation efforts.  Insurance agent Alan Virgil also spoke on how to insure a small wind business.

During my presentation about how to manage risk in the small wind industry, I gave the audience suggestions on how minimize risk generally, providing two fundamental risk management principles and five risk management “commandments” to help keep them out of trouble.  If you would like a copy of the overheads from this talk, just e-mail me at mallen@energylawwisconsin.com.

The heart of my message was that up-front planning is critically important when forming a business and entering into a wind project contract to ensure risks are allocated fairly and that wind energy entrepreneurs don’t expose themselves to unwarranted amounts of liability.

The Small Wind Installers Conference was a great opportunity to talk to leading national players in the small wind industry and discuss the latest developments in state and federal renewable energy policy.