"Feed-in tariff report highlights solar funding gap"
by Lee van der Voo
Sustainable Business Oregon
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A first review of Oregon's pilot feed-in-tariff program was issued by the Oregon Public Utility Commission last week, part of required biannual reporting that indicates the program will continue for another two years, unchanged.
That's a win for solar enthusiasts who want more exploration of solar's potential in Oregon, and more results from a program that is essentially teasing out the prices that the consumer market for solar will bear.
Looking ahead, however, the program needs more information about the impact of the feed-in tariff on utility rates — impacts that so far surpass forecasts initially put forth by utilities and could threaten the program. Also an open question is whether Oregon will develop an incentive program that fosters development of large solar systems, considered by some to be essential to driving down costs across the solar industry.
"There's a funding gap there and neither the feed-in tarrif nor the (Business Energy Tax Credit), in its current form, are really satisfying," said Glenn Montgomery, executive director of the Oregon Solar Energy Industries Association.
The Oregon Legislature authorized the feed-in tariff in 2009 as a five-year pilot program. It's intended to promote solar development by offering payments for solar power, made by participating utilities to the owners of new solar energy systems.
So far, the program has proved popular with consumers. Now offering rates between 47 cents and 58 cents per kilowatt-hour, it has subscribed capacity to 570 new solar systems to date. All but three were smaller than 100 kilowatts in capacity.
Yet, according to Montgomery, it will be large solar installations that will drive the costs of solar installations down market wide.
Solar advocates argued for support of large installations when the feed-in-tariff program was created. But at that time, the program was considered a complement to the BETC, then available to incentivize bigger projects. As changes to the BETC have hampered its ability to finance large installations, it remains unclear how Oregon will galvanize large solar development through policy, if at all.
As the program moves forward, Montgomery expressed concern the issue would remain unresolved. Meanwhile news about the program's higher-than-expected rate impacts have potential to bring about talk of curtailment.
The feed-in tariff had peak annual rate impacts that ranged as high as 1.33 percent of customer-required revenue at its three participating utilities: Portland General Electric (.48 percent in 2013), PacifiCorp (.45 percent in 2013) and Idaho Power (1.33 percent in 2011). Those rate impacts are substantially higher than the .25 percent forecast. Montgomery said solar advocates want more information about how those rate impacts were assessed.
A public hearing on the report is set for Tuesday at 9:30 a.m. at the Main Hearing Room at 550 Capitol St. N.E., Salem.