Energy Law Wisconsin Blog

Topic: Finance & Incentives

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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.

Soccket to Me!

Thursday, January 16th, 2014

 

With apologies to Rowan & Martin’s Laugh-In for the title above (and apologies to any of you under the age of 45 who won’t get this 1960s television reference, see here), our office was fortunate enough to receive earlier this month two Socckets (pictured here) from the first shipment of this invention to the general public. The Soccket is essentially a soccer ball with an internal induction coil that converts kinetic energy generated by kicking the ball into stored electric energy that can be used to power a reading lamp. Its intended users are the 25% of children in the world who love soccer but lack access to electricity at home for activities we take for granted, such as reading their homework at night. The story of the development of the Soccket is a great story of creativity and entrepreneurship. Here is a link to more information about this story provided by Jessica Mathews, one of the co-inventors of the Soccket.

Our first experience with the Soccket was very positive.  It couldn’t be easier to assemble and use – all you do is kick it, and then plug in the light when you are ready. In addition, we were amazed to see that one of the Socckets greatly out-performed the officially-promised performance of three hours LED reading light from 15 minutes of kicking use.  After only two or three minutes of kicking the Soccket around the confines of my small law office, I plugged in the light and, more than 24 hours later – it is still shining!

In addition, I took a Soccket to the RENEW Energy Policy Summit last Friday as a show and tell exhibit for crowdfunding, which financed part of the development of the Soccket. It got a very positive reaction. I think this is because the Soccket is a great ambassador for the renewable energy community for at least two reasons.

First, it shows what can be accomplished through the ingenuity of a handful of dedicated people. More importantly, Uncharted Play has figured out a way to make renewable electricity through joyful activity. This is a winning combination.

Time Sure Flies! Energy Law Wisconsin Celebrates 10th Anniversary in Business

Thursday, January 9th, 2014

Energy Law Wisconsin celebrated its 10th Anniversary in business on January 1, 2014. For the past decade, we’ve pursued our passion by offering advice on energy development and financing, including solar, wind, cogeneration, biomass, biogas and natural gas projects, and worked with schools, utilities and municipalities on energy savings projects. We’ve helped start-up companies grow, helped mature businesses stay on course, and in our spare time assisted with real estate transactions. We are grateful for the support of the local and professional communities in which we reside and have attempted to give back to them whenever possible. We’ve hired legal interns to give them a chance to be exposed to the world of energy law. Our first paralegal, Colleen Wenos, hired in 2011, is now actively involved in the Sun Prairie Leadership Program. We have also served for years on the Boards of Directors of organizations such as the American Red Cross, the Sun Prairie Chamber of Commerce, RENEW Wisconsin and the Sun Prairie Library Foundation. We are the richer for these experiences.

Somehow in the midst of all of this excitement (or perhaps because of it), we neglected to put up a street sign for our business to let friends and clients know where we are. To celebrate our 10th Anniversary, we have finally, to paraphrase astronaut Neil Armstrong, taken “one small step” by putting up a sign on Main Street, shown above. We invite you to celebrate our 10th Anniversary with us by following our Energy Law Wisconsin LinkedIn page, which will allow you to join us as we publish periodic reports on timely energy news topics and other relevant legal and business information. You will not receive e-mails from us, but directly through LinkedIn’s notification program. Linking is simple:

– With an existing LinkedIn account, visit http://www.linkedin.com/company/energy-law-wisconsin. Log in and click “Follow Company”.

– As a new user, visit http://www.linkedin.com/company/energy-law-wisconsin and click the yellow button at the upper right, “Join Now”. After you’ve established an individual profile, you’ll be able to “Follow Company”.

We thank you for your support during the last 10 years.

New Options for Investing in Renewable Energy and Clean Infrastructure

Tuesday, December 17th, 2013

Note: Although this entry discusses emerging investment opportunities, it is not intended as and should not be misunderstood as investment advice or a recommendation for any particular investment. 

I have been trying for some time to write an ELW blog entry about the rapid emergence of new and varied options for investors, large and small, to invest in renewable energy and other sustainable infrastructure development.  Unfortunately, every time I update my draft, the marketplace advances and I have to edit it again.  To ensure that I actually post something before I retire, I have decided to take a short cut and use this entry to introduce you to several emerging investment models that are becoming available, but I will draw on the work of others, when it is more current than my own.

According to one of the panelists at the recent GTM Solar Market Insight Conference, roughly 25% of U.S rooftops are suitable for standard solar. This leaves the owners of 75% of US roofs unable to host this type of solar energy system. However, the owners of the other 75% could still participate in the solar energy through one or more of the following emerging investment options:

Community Funding and Crowdsourcing. A helpful article on several of the leaders in this area can be found here:  Democratizing Solar Power With Community Funding.  I am familiar with the account interface and statements for one of the companies in the article, Solar Mosaic, who issues solar notes to persons who invest in its solar projects.  The Solar Mosaic system is user friendly and it is about as straightforward and easy to invest in and track an investment made in Solar Mosaic as it is to make an investment in and track the performance of a typical mutual fund. Any prospective investor should be sure to carefully read the prospectus for any project they wish to invest in to adequately understand the risks. Solar Mosaic’s solar notes are available in increments as small as $25.  However, they are currently available only to investors in California and accredited investors elsewhere, but Solar Mosaic has indicated it has plans to expand. 

Hannon Armstrong Sustainable Infrastructure’s REITHannon Armstrong Sustainable Infrastructure Capital, Inc. provides debt and equity financing for what it refers to as “sustainable infrastructure projects”, which include energy efficiency projects, clean energy projects (solar, wind, geothermal, biomass and natural gas projects), and other sustainable infrastructure projects that reduce energy consumption, positively impact the environment or make more efficient use of natural resources.

Hannon Armstrong (NYSE Ticker Symbol HASI) is able to operate as a Real Estate Investment Trust (REIT) because in financing its sustainable infrastructure projects its owns and operates income producing real estate or real estate-related assets.   So long as a REIT complies with applicable Internal Revenue Code requirements, it is able to avoid the double taxation treatment to which publicly traded corporations are subject.  HASI shares went public at $12.50 a share in April of this year and as of the date this entry was posted were trading at close to that price and paying a dividend of approximately 4.5%.

Yield Cos.   A “Yield Co” is a publicly-traded company that is formed to own operating assets that produce cash flow. The cash is distributed to investors as dividends.  The Chabourne & Parke LLP law firm has recently come out with an excellent article profiling several Yield Cos that have already gone public or about to do so, including one that I was preparing to write about.  The article, by attorney Keith Martin, who is a nationally respected authority on renewable energy development and finance, starts on page 7.

Renewable Energy MLPs around the Corner?  For several years, members of the U.S. Congress have proposed legislation that would put renewables on equal footing with oil and gas investments in one important respect, by giving developers of renewables the opportunity to utilize the Master Limited Partnership (MLP).  The MLP is an investment vehicle that offers the tax advantages of a partnership combined with the ease of trading advantages of a publicly traded corporation.  More information about the proposed MLP Parity Act is available from the website of Senator Christopher Coons, who has been a champion of such legislation.  When the MLP was made available for use by the oil & gas industry, it resulted in a tremendous influx of capital into that industry.  The proponents of the MLP Parity Act hope it will have the same effect on the renewables industry.

Finally, a word of caution.  Just because an investment is easy to make, doesn’t mean it is prudent.  All of the investment options discussed in this post involve risk.  Anyone who is interested in exploring them should be just as careful doing their research before invest as they would be (or they ought to be) when investing elsewhere.  This includes, among other things, reading the latest financials and the prospectus that was prepared in connection with the investment offering.

 

APA and Green Communities Research Center Release Solar Briefing Papers

Thursday, February 14th, 2013

Over the past year, The American Planning Association, working with the International City/County Management Association (ICMA), the National Association of Regional Councils (NARC), and alongside ICLEI – Local Governments for Sustainability on the SunShot Solar Outreach Partnership, an initiative of the U.S. Department of Energy (DOE), has developed a set of briefing papers covering the following subjects.

Solar Community Engagement Strategies for Planners

Solar Mapping

Integrating Solar Energy into Local Plans

Integrating Solar Energy into Local Development Regulations

Balancing Solar Energy Use with Potential Competing Interests

Recycling Land for Solar Energy Development

Energy Law Wisconsin was privileged to be part of the team that provided input on the briefing paper “Balancing Solar Energy Use with Competing Interests” and was part of an APA webinar last fall on this topic.

The APA website has a wealth of resources on solar planning and other APA research.  We encourage you to visit the website and take a look around.

Crowdfunding in the Energy Arena: A Child of Necessity

Monday, July 9th, 2012

“Necessity is the Mother of Invention” – Unknown

If “Necessity is the Mother of Invention”, then crowdfunding could be considered one of Necessity’s healthy and growing offspring. Generally speaking, “crowdfunding” refers to a growing phenomenon through which people who wish to individually provide relatively modest amounts of financial support for a creative project can pool their resources and collectively raise a significant amount to permit the project to go forward.  These pooled funds are used to finance the creative endeavors of artists, musicians, and inventors, among others, with projects ranging from concert tours, to independent films, to inventions and recently to renewable energy projects, such as installing solar panels on the home office of a non-profit organization.

How does Crowdfunding work? Crowdfunding comes in different varieties of business models.  Some crowdfunding efforts are limited to donations in support of a project.  Others involve pre-purchases of products and some involve the sale of securities to investors.  This last variety of crowdfunding and persons who promote it as intermediaries will be receiving attention from the Securities and Exchange Commission in the coming months, as discussed in greater detail below.

Crowdfunding is typically accomplished over the Internet and a growing number of internet sites provide a forum for interested patrons to pool their resources in support of projects they deem worthy. One well known crowdfunding site is Kickstarter. It is important to remember, however, that not all crowdfunding sites operate by the same rules. Some require that a project seeking funding obtain its full funding target before the money is released to the project developer; others will turn over whatever is raised regardless of whether the targeted funding level is achieved.

Crowdfunding in the Energy Arena.  A recent example of crowdfunding success in the energy arena is the tPOD1 developed by Tellurix. The tPOD1 is a device that converts thermal electricity from a small source, such as a tea candle, to an electric current, which is then used through a charger to repower small mobile electric devices, such as cell phones, iPods, etc. One of the possible applications of this invention would be for outdoor enthusiasts, who might need to recharge a mobile device to make an emergency phone call or send a text message. Tellurix sought to raise $85,000 via Kickstarter. It met its goal on June 22, 2012 and as of July 15, 2012, had raised $111,697.

Another forum for crowdfunding in the energy arena is the New Generation Energy website. This site limits fundraising to non-profits and allows the public to donate to “green energy projects” at nonprofits nationwide.  On a recent visit to the site, I saw requests for projects that included high-efficiency lighting and HVAC equipment, solar PV systems, and a geothermal energy system.

While not crowdfunding in the strict use of the word, a new company in Oakland, California, Mosaic, Inc., is in the process of raising $2.5 million to fund a crowdfunding-like platform specifically for solar projects.  Mosaic, Inc.’s website says that it is currently in a “quiet period” following its April 24, 2012 filing with the SEC to offer “Solar Power Notes” to investors. In response to my initial online request for more information, Mosaic, Inc. informed me that the initial launch of its platform will not include Wisconsin. Additionally, Mosiac, Inc’s services do not constitute “crowdfunding” as described in Title III of the Jumpstart Our Business Startups Act (JOBS Act), according to their website.

How might Crowdfunding be Helpful for Renewable Energy Projects in Wisconsin?  Crowdfunding offers renewable energy projects developers, particularly solar projects undertaken by nonprofits, a source of funding that can be well-suited to their needs.  Crowdfunding can address one of the biggest barriers to project development: the high initial capital cost of a project.  Moreover, single building solar PV projects are often in the price range (10s to 100s of thousands of dollars) where crowdfunding business models and platforms may be able to help in raising funds without expenses that are disproportionately large relative to the size of the project.

Crowdfunding may turn out to be particularly helpful for Wisconsin nonprofits, who currently face daunting project development barriers in that they cannot: (a) directly take advantage of the benefits of tax credits and depreciation to assist in financing a project; and (b) indirectly take advantage of such tax benefits through leases and power purchase agreements with third parties without the third party risking being deemed as acting as a unregulated public utility.

Legal Issues with Crowdfunding.  From a legal perspective, crowdfunding is a new phenomenon and is getting increasing regulatory attention, particularly where the sale of securities is involved. In the JOBS Act signed into law of April of this year, Congress amended Section 4 of the Securities Act of 1933 to create a new exemption for offerings of “crowdfunded securities”.

According to FAQs about Crowdfunding Intermediaries published by the SEC in May 2012, the exemption would apply to issuers of such securities when they offer and sell when they offer and sell up to $1 million in securities, provided that individual investments do not exceed certain thresholds and the issuer satisfies other conditions in the JOBS Act, some of which will require rulemaking  by the SEC”. It is important to remember that the exemption will not be available until after the SEC has adopted rules creating the new exemption.

Crowdfunding has already had a significant impact on the entrepreneurial marketplace.  A news article from May 2012 estimated that crowdfunding raised $1.2 billion globally in 2011. It is likely to receive additional attention in the future.

Early commentators are split on whether by the time the SEC issues its final crowdfunding rules, crowdfunding will remain a viable avenue to raise funds from small investors or whether it will be choked by onerous disclosure requirements and red tape. It will be interesting to see the requirements that the final SEC crowdfunding intermediary regulations establish for such intermediaries and future crowdfunding portals.

Community Solar: Finding the Model That’s Right for You

Tuesday, June 26th, 2012

An example of a community solar project: Convergence Energy Solar Farm in  Walworth County, Wisconsin.

Required Formal Disclaimer: Since what follows 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.

 

I have attended a number of public presentations over the past several weeks about community solar. What I have taken away from these presentations: First, there is a high degree of interest in promoting community solar in Wisconsin. Second, the legal underpinnings of community solar are not well understood by the general population. This blog post is an attempt to shed a little light on this area.

The term “Community Solar” is not a universally understood term with the same meaning in every context. Rather, it is a general expression used with different meanings at different times, like the word “green” when referring to environmental and sustainability benefits. In my own usage, the term “Community Solar” has a broad and a narrow meaning:

Broad Definition: An effort by a group of people (or community) to promote the development of solar energy through a collective effort, frequently when some or all of the members of the group lack the ability or financial resources to own and operate a solar energy system on their own property.

Used in this sense, community solar can include utility and other green power programs and renewable energy credit (REC) aggregation efforts in which individuals make contributions, municipal utility “adopt a solar panel” programs, as well as all organizational structures and models for community investment in solar that are included in the narrower definition. It could even include “crowdfunding” to support a solar project. (ELW will address crowdfunding in an upcoming blog post.)

Narrow Definition: This narrower concept means a collective effort by a group of investors (this could include equity investors and/or lenders) to develop an entity or organization to own and operate a solar energy system and make a financial return on their investment. Examples of this would include all of the following, among others:

– A group of homeowners who can’t individually afford the entire up-front cost of a solar energy system or whose roofs are too shaded to permit effective production of solar power, pool their funds to purchase interests in a limited liability company that owns a solar energy system.

– A group of tenants within a building who wish to put solar on the roof get the rights to lease the roof of the building to install a solar energy system and create a co-op in which each of them is a member, getting the use of the solar power produced by the solar energy system and furnished to the building.

– A homeowner or business owner who has most of the funds necessary to purchase a solar energy system, but needs to borrow funds that it cannot get a loan for from the bank enters into a series of loan agreements with friends or investors, each of whom will lend a portion of the money necessary to get the system owner “over the top” in financing the system. In return, the system owner guarantees them a fixed interest repayment over the loan term.

Which Type of Community Solar is the Best? This is a question that is complex and requires careful consideration of all of the following before the project is commenced:

– The regulatory scheme of your state, and, if you are in a regulated utility market, what business models are permitted without being deemed to be acting as a regulated utility.

– The buyback rate (if any) and tariffs offered by the local utility who may be the power purchaser.

– Whether the primary use of the system will be to self-serve, act as an independent power producer (selling the electricity to a utility), or to serve other third parties.

– Whether the project can be set up to take advantage of federal tax incentives, including the Investment Tax Credit and accelerated depreciation.

– The rate of return that has to be offered to investors to get them to participate and whether the business structure necessary to secure such participation requires compliance with state and federal securities laws.

While answering these questions may seem daunting, the good news is that there are a growing number of people, the author of this blog included, who are devoting their time to developing community solar business models and the supporting documents to implement them. There is also a lot of room for creativity to meet the specific needs of individuals who wish to participate in community solar. Also, there are an increasing number of resources being developed by government agencies, utilities and others to assist people in finding the resources they need to develop community solar projects.

U.S. DOE Debuts Solar 3.0 to Reduce Soft Costs of Solar PV

Thursday, June 21st, 2012

This spring the U.S. Department of Energy launched Solar 3.0, as part of the SunShot initiative, which initiative aims to dramatically decrease the total costs of solar energy systems by 75% before the end of the decade and make solar energy cost-competitive with conventional forms of electricity without subsidies. Solar 3.0 aims to reduce “soft costs” (i.e., non-equipment and hardware costs) of solar photovoltaic (PV) by 50% by 2014. It is designed to adapt to the needs of major U.S. cities and addresses certain community challenges that slow solar PV development, including permitting rooftop systems and training. Solar 3.0 works by promoting regulatory innovation, rather than technological innovation.

Solar 3.0 is managed by SolarTech, which is a consortium of stakeholders in the solar industry.  One hundred initial cities will be targeted in S2012’s initial stage. Eligible communities will receive a resource tool kit with curriculum, metrics, and information about continuing education.

Wisconsin is one of the 2012 Target States for the Solar 3.0 program, and in fact is the only such target state in the Midwest.

How can you keep pace with the new initiative? Visit www.solar30.org to keep informed by signing up to receive e-news or follow Solar 3.0 on LinkedIn.com.

Notes from the Focus on Energy Trade Ally Expo

Wednesday, May 16th, 2012

There has been a great deal of excitement (and controversy) in the past year over Wisconsin’s Focus on Energy program. Issues receiving attention include funding levels, allocation of resources between energy efficiency versus renewables and the processing of applications. I’d like to provide a brief report from a program I attended on May 15, 2012, the first Focus on Energy Trade Ally Expo, held at Crowne Plaza Hotel Madison in Madison, Wisconsin.

The Expo focused entirely on energy efficiency incentives, other than a quick mention that new renewable incentives for residential owners will become available on July 1, 2012. Specific bits of information I jotted down that may be of interest include the following:

TRADE ALLY BENEFITS

– Anyone who wants to be a Trade Ally must apply here even if you were previously working with Focus on Energy as a Trade Ally.

– The Focus on Energy program is in the process of creating Trade Ally working groups through which it will obtain feedback about
its programs. If you want to be part of such a group, now is the time to express interest.

– According to the Focus on Energy reps I spoke with, all investor-owned utilities, all municipal utilities, and most Wisconsin co-ops are now in the Focus on Energy program. At this point, there are only a handful of cooperatives in the northwestern corner of the state that are not participating in the program.

– Focus on Energy is offering bonuses to Trade Allies for submitting complete and accurate applications for incentives. These completion bonuses go to the trade allies, not the customers. In other words, if you complete your application accurately and fully the first time, you can get a cash bonus that is yours to keep. Until June 30, these rules governing these application bonuses will allow the applicant to correct and re-submit the application. After July 1, you must do it properly the first time around.

– Focus on Energy will have a community outreach program. Its contours are not fully defined yet, but Focus on Energy representatives will make themselves available to meet with large energy users, eligible customers (such as condominium associations) and perhaps even community groups.

INCENTIVES CATEGORIES

Within the incentives there are several categories that are noteworthy:

Chain Stores and Franchises. This program focuses on owners of retail establishments that have five or more facilities in the State of Wisconsin. The stated Focus goal is to leverage a connection with one or two key decision makers in the business that make energy efficiency decisions for multiple facilities across the state. The eventual goal is to make Wisconsin a blueprint for the entire nation in demand-side management.

Large Energy Customers.This Focus on Energy incentive program is aimed at energy-users who have an energy demand of at least 1,000 kw of electricity per month or a demand of at least 10,000 decatherms of natural gas per month or a combined electric bill of $60,000 per month in one utility’s service territory. Note: If you have a combined utility bill of $60,000 in multiple electric utility service territories, you would not qualify, but you would be eligible for the business incentives program. Typical Large Energy Customers would be pulp and paper mills, metal casters, food processors, hospitals, universities, ethanol biofuel and biomass producers, water and wastewater facilities.

Business Incentive Program. This program serves business customers that are not served by the Large Energy Users or Chain Stores and Franchises program. It includes agricultural facilities, schools and governmental buildings, small industrial users, commercial space, and independent groceries and retailers. A typical Business Incentive Program customer would have electric demand of 100-1,000 kw
per month.

Multi-Family Energy Savings Program. This program is eligible to multi-family residence owners with four units and above. It includes apartment buildings and may include condominiums. Condominiums are included if they are interested in reducing energy demand in the common areas or if four or more users gather together to make energy-efficiency improvements. If a single condo unit owner wishes to make an improvement, that unit owner would be directed to the Residential Incentives Program.

Residential Incentives Program. There are two programs available to owners of 1-3 unit homes: Home Performance With Energy Star® and Assisted Home Performance with Energy Star®. The Assisted Home Performance with Energy Star® program offers increased awards for households with income between 60-80% of the State Median Income.

FOR MORE INFORMATION

Persons who are eligible for the current categories of programs could benefit greatly. The Focus on Energy Trade Ally Expo is traveling Wisconsin in May to spread the news:

Thursday, May 17 – Rothschild

Friday, May 18 – Onalaska

Tuesday, May 22 – Brookfield

Wednesday, May 23 – Kimberly

Thursday, May 24 – Eau Claire

Also, you can find Focus on Energy at the Wisconsin Association of School Board Officials Meeting in Wisconsin Dells May 22-25 and the Midwest Renewable Energy Association Energy Fair June 15-17.

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.

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