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"Oregon's solar industry stumbles"

"Oregon's solar industry stumbles"

Henninsen Solar Installation

By Lee van der Voo
Sustainable Business Oregon
>>click here for original article

Large, or utility-scale, solar projects seem to be stalling out in Oregon, according to three industry experts who spoke Wednesday to members of the Northwest Environmental Business Council.

The experts expressed frustration over mixed signals from the state, a tax incentive system weighted toward other types of renewable energy development and a pilot feed-in-tariff that leaves little room for utility-scale projects. They said there are ways to galvanize the flagging industry, but not without support from Oregon's government and the renewable energy community.

The presentation was led by Glenn Montgomery, executive director of the Oregon Solar Energy Industries Association; David Brown, senior principal and co-founder of Obsidian Finance Group LLC; and Sandra Walden, president of Real Energy Solutions.

They spoke to a group of about 40 people who gathered at 111 S.W. Columbia in St. in Portland for the program.

Topping concerns was that no utility-scale projects were built in 2010 in Oregon, yet a dozen or more were conceived. Those projects, which would sell power to utilities, are still languishing in pre-permit planning, in tax-credit limbo or unable to capitalize.

While small-scale solar installations have increased four-fold, and programs seem to be pumping life into the residential solar market, utility-scale projects are sputtering.

David Brown, Obsidian Finance Group

David Brown, Obsidian Finance Group

A variety of challenges are to blame, summarized by Brown, who said, "The counties are having their authority reduced, the state is moving with less efficiency, and we don't have any leadership."

Those issues all stem from a central problem: Utility-scale solar is in its youth and it's been slow to gain position. According to the presenters, though 13 percent of power generated in Oregon comes from wind and solar, solar makes up less than one percent of the mix, or less than one tenth of one percent of the state's total energy picture. With its technology still evolving and its foothold loose, utility-scale solar is more expensive than other types of renewable energy. Getting the projects built has proved challenging.

Another major issue is that channels for permitting and installing utility-scale solar are still being carved out. Last year, solar developers asked the Oregon Department of Land Conservation and Development to help streamline complex permitting on low-production farmland. DLCD began a public process, one that now appears to be leading to more restrictive rules. Though proposed rules support projects of up to 10 megawatts, those projects will be too small to be commercially viable, Brown said, which are now pegged at closer to 30 megawatts.

Also at issue is that utility-scale solar has fared badly in recent competition for Oregon's Business Energy Tax Credits, particularly as evolving criteria favor low-cost projects that employ the most people. In recent awards, utility-scale solar was aced out of competition by hydro and biomass.

Walden, whose company helps customers acquire land and permits for large renewable energy projects, said investors want to know you have a BETC and a building permit before diving in, yet the BETC program requires a firm commitment from an investor for a tax credit.

"I have clients who have spent $45,000 to apply and then not received a BETC and really not had an alternative," she said.

solar modules

Other issues for utility-scale solar cited by the panel incude:

• A pilot feed-in-tariff program that offers limited capacity for projects larger than 100 kilowatts.

• Unclear tax assessments for utility-scale solar.

• A move at the Bonneville Power Administration to slow transmission approval for new energy projects.

As Gov. John Kitzhaber's administration takes hold, it's also unclear how renewable energy development will take shape and which types of energy generation, besides biomass, will see the most support.

Kitzhaber has yet to name a permanent director to the Oregon Department of Energy, which has had three directors in 14 months, Walden said. The flux in leadership has led to steady changes in regulations and procedures, particularly for the BETC. A bill in the legislature proposes dismantling the agency altogether, and if its BETC program does not survive or receive funding, utility-scale solar could suffer further.

Noting the wide range of issues, Walden said, "We’ve lost an enormous amount of expertise and businesses that employ people because of this."

"The bright star for Oregon is renewable energy brings jobs. Solar has been looked at as an industry that doesn't necessarily produce jobs… solar does produce jobs," Walden said, from providing work to attorneys to CPAs to panel washers.

Pointing to available investment and bond money, lease opportunities for large projects, declining costs, and recent federal decisions predicted to open more feed-in-tariff programs nationally, the speakers said there's reason to be optimistic about utility-scale solar, provided Oregon continues its support and proponents find ways around current obstacles.

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