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"Oregon’s Solar Pilot Program: Snapshot of October 2011 Capacity Allocation"

OrOn Oct. 3, the investor-owned utilities began accepting applications for installations under the solar pilot program with several changes from previous capacity allocations. The PUC reduced the volumetric incentive rate (VIR) by 20% from the April 2011 allotment (down to 37.4¢/kWh) and applicants were awarded capacity through a lottery process, rather than first-come, first-served. Additionally, applicants who received allocations of capacity through the lottery were required to pay a $500 non-refundable deposit.

"Oregon’s Solar Pilot Program:  Snapshot of October 2011 Capacity Allocation"

The PUC reduced the volumetric incentive rate (VIR) by 20% from the April 2011 allotment (down to 37.4¢/kWh) and applicants were awarded capacity through a lottery process, rather than first-come, first-served.

By Mark Pengilly
Oregonians For Renewable Energy Policy

On Oct. 3, the investor-owned utilities began accepting applications for installations under the solar pilot program with several changes from previous capacity allocations.  The PUC reduced the volumetric incentive rate (VIR) by 20% from the April 2011 allotment (down to 37.4¢/kWh) and applicants were awarded capacity through a lottery process, rather than first-come, first-served.  Additionally, applicants who received allocations of capacity through the lottery were required to pay a $500 non-refundable deposit.

 

The result of these changes was a dramatic decrease in demand for the program.  Whereas earlier allocations of capacity were snapped up in minutes, this time capacity was left on the table.


A week after the allocation date, PGE reported that in the <10kW category about 70% of the available capacity had been awarded, but that many successful applicants replied that they were instead opting for the RETC/ETO incentive package.  PGE estimated that, while it was still receiving applications, it expected that only about 45% of the available capacity would ultimately be utilized.

 

Pacific Power reported that about 80% of its <10kW capacity had been awarded and that it was still receiving applications.  Not all of the successful applicants had paid their $500 deposit and Pacific Power was still in the process of vetting applications.  It reported that average system size had increased to about 8 kW, and that many schools, farms and small businesses had applied for <10 kW systems.

 

In the 10-100 kW category bids were submitted this time, rather than applications for a guaranteed pricing structure.  PGE's capacity was fully subscribed.  It received bids for 200% of its available capacity.  Bids ranged from about 21¢ to 31¢ per kWh.  Pacific Power received twenty bids; five were awarded capacity.  Their bids ranged from 20¢ per kWh to 33¢ per kWh.  Pacific Power reported more bids from southern Oregon for this allocation.

 

Not all of the capacity awarded in the 2010 reservation windows has been built.  At least 33% of the Pacific Power capacity reserved was not utilized.  The main reason seems to be inability of projects to get financing, even though projects with the initial VIR should have had sufficient revenue from generation to service the debt for the photovoltaic system.  It seems that lenders look at the underlying property, the debt load, and credit rating of the borrower, but do not consider the economics of the system itself.

 

 
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