Strategies for Gaining a Level Playing Field Strategies for Gaining a Level Playing Field Where We...
-
date post
19-Dec-2015 -
Category
Documents
-
view
216 -
download
0
Transcript of Strategies for Gaining a Level Playing Field Strategies for Gaining a Level Playing Field Where We...
Strategies for Strategies for Gaining a Gaining a
Level Playing Level Playing FieldField
Where We Are; What’s Working &
What’s Not
Mike BergeyAWEA Small Wind Committee
Bergey Windpower [email protected]
People Want Energy AlternativesPeople Want Energy Alternatives
Coal is too dirty, natural gas is too volatile, nuclear is too dangerous, and consumers feel trapped
$0
$2
$4
$6
$8
$10
$12
$14
$16
Jan-
1989
Apr-1
990
Jul-1
991
Oct
-199
2
Jan-
1994
Apr-1
995
Jul-1
996
Oct
-199
7
Jan-
1999
Apr-2
000
Jul-2
001
Oct
-200
2
Jan-
2004
CA ResidentialNatural Gas
People Want Energy AlternativesPeople Want Energy Alternatives
“Please give me something that will lower my electric bills, will help the environment and that I can afford”
87-90% of Americans support increased use of wind and solar energy
Yale Center for Environmental LawAnd Policy, June 9, 2005
Residential Wind Turbine MarketResidential Wind Turbine Market
Utility bill reduction, no back-up capabilities
1+ acre lot size (with few exceptions) DOE Class 3 wind
resource or better(over 30% ofinhabited U.S.)
State or utility subsidy program
~ $ 10 millionmarket in 2005
Broader Market PossibleBroader Market Possible
Smaller lot sizes DOE Class 2 wind
resource or better(over 50% of the “inhabited” U.S.)
No or minimal subsidy
Holy Grail:Monthly payment for wind system ~ equal to utility bill savings
U.S. Market Potential: U.S. Market Potential: It’s Big!It’s Big! Residential Electricity Consumption
Exceeds Either Commercial or Industrial (35% of U.S. Sales in 1998)
20.6 Million Homes have 1 Acre or More
30.4 Million Homes have ½ Acre or More
4.6 Million Commercial Buildings
Estimated 50%+ are in Class 2 Winds or better
Arthur D. Little, 1981:3.8 Million Units
Market Potential: Units (~ $120
B)
4 - 8 Million
U.S. Market Today: U.S. Market Today: It’s Small!It’s Small!
Residential Wind: ~ $10 M
Residential Solar: ~ $ 300 M
Commercial Wind: ~ $3,000 M
Why so Small ?Why so Small ?
Why so Small ?Why so Small ? Is it: Is it:
1. Products: Need more and better
2. Lack of Capital / Investment
3. Product Certification
4. Lack of Subsidies
5. Zoning / Permitting Obstacles
Why Aren’t There More Small Turbines
Equipment Costs too Much! (Low Production Volumes & Shortage of Subsidies)
Zoning / Permits: 35’ Height Restrictions in Residential Zones
New Technology is Lowering CostsNew Technology is Lowering Costs
Advanced Airfoils
“Super-Magnet” Generators
Low Cost Manufacturing
Smart Power Electronics
Stealth: Very Low Noise
US-DOE Advanced Small Wind US-DOE Advanced Small Wind Turbine Program + Industry Turbine Program + Industry Funded R&DFunded R&D
3D Solid Modeling
Southwest 1.8 kW Bergey 50 kW
Volume Production will Drive Volume Production will Drive Costs Down SignificantlyCosts Down Significantly
Production Economies
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
Cumulative Production, No. of Units
Fa
cto
ry N
et
Pri
ce
(Tu
rbin
e O
nly
) -9%-16%
-23%
-30% -35%-41%
Current Situation
Example: When production reaches 8,200 units (82 MW), the production cost willbe 35% lower than the current cost.
Small Wind as a New-Age Home Appliance …Small Wind as a New-Age Home Appliance … “ a ceiling fan on steroids”“ a ceiling fan on steroids”
The Chicken and Egg Dilemma: The Chicken and Egg Dilemma:
More people would buy small wind More people would buy small wind turbines if they cost less, but they turbines if they cost less, but they won’t cost less until more people won’t cost less until more people buy thembuy them
Rebates and Tax Credits !Rebates and Tax Credits !
91% of Americans support tax incentives for renewable energy
CNN/USA Today Poll, May 9, 2001Gallup Poll, Nov. 27, 2001
AWEA Federal Policy Priorities AWEA Federal Policy Priorities
1. Tax Credit of 30%2. Small Projects Set-aside for
USDA 9006 Rural Grants Program
3. Dept. of Energy Small Wind R&D Funding
4. National Annualized Net Metering
5. Tower Height Deregulation
Proposed Federal Tax CreditProposed Federal Tax Credit No federal credit for small wind since 1985 Production Tax Credit (Section 45) doesn’t
apply to, or help, small wind customers Solar had permanent 10% Investment Tax
Credit New Credit Proposed in 108th Congress: HR
790, Cole and S 759, Durbin – Now Expired 30% tax credit for residential and business
installations of wind turbines up to 75 kW, no spending limits (790) or $1,000/kW (759)
Not included in HR 6, House Energy Bill In 2003 and 2004 Senate Bills
2005 Energy Bill2005 Energy Bill
2005 Senate Energy Tax Incentive Bill: PTC extended, no reduction in terms 30% Residential Solar Credit, Capped at $2,000 30% Residential Fuel Cell Credit, Capped at
$500/0.5 kW 30% Business Solar and Fuel Cell Credit, No
Caps
Nothing for Small Wind! $2,000 residential tax credit cap is severe
limitation … won’t leverage a $40,000 home / farm system
2006 Federal Tax Credit Effort2006 Federal Tax Credit Effort
H.R. 4716 (Cole): 30%, Residential & Business, up to 100 kW, No Caps, 5 Years
S. 2571 (Conrad): Multi-Faceted Bill, 30%, $1,000/kW Cap, 5 Years
Solar has bills (eg., HR 5206) to extend 30% credit to 2015 and raise cap on residential to $2,000/kW – wide support
2006 Federal Tax Credit Effort2006 Federal Tax Credit Effort
Focused AWEA Legislative Effort Underwritten by 3 Firms: Bergey Windpower, Earth Turbines, & Southwest Windpower AWEA hiring dedicated, full-time Small Wind
Legislative Assistant
Senate Finance Cmte Ag Energy Bill Expected ~ August 2006
Federal Tax Credits for Japanese Solar Federal Tax Credits for Japanese Solar Modules, But Not for American Small Modules, But Not for American Small Wind Turbines - That’s Wrong !!!Wind Turbines - That’s Wrong !!!
AWEA State Policy Priorities AWEA State Policy Priorities
1. Rebate (Preferred) or Tax Credit of ~ 50%
2. Sales Tax Exemption
3. Property Tax Exemption
4. Annualized Net Metering
5. Tower Height Deregulation
State LeadershipState Leadership
California: $2.50/W to 7,500 W – then $1.50/W; Rebate decline reversed in 2006 after heavy lobbying
Massachusetts: New rebates at $2.25 - $3.75/W; fast growth
Vermont: Grants of ~ $2.00/W; Limited funding
New York: Rebates of 50% (higher for farms and schools); Heavily bureaucratic
State LeadershipState Leadership
Pennsylvania: DEP and Energy Harvest Program
New Jersey: 60% rebate; Suitable sites are rare & solar subsidies much higher
Pending: Arizona: EPS Distributed PowerOklahoma: 40% tax creditNY, Long Island: Grant program
Playing Field is NOT LevelPlaying Field is NOT Level Large Wind: Federal PTC equivalent to ~
40% tax credit, for 12 of last 13 years
Solar: Federal tax credit, plus ~ 25 state, city, and utility programs that are “solar only” (eg., CO, ME, NM, NY, OR, IL, CT, CA (CSI))
Working with the Solar Working with the Solar Industry Hasn’t WorkedIndustry Hasn’t Worked
The solar industry cares primarily about the solar industry
Politically, they don’t need us
Adding small wind raises the costs of their initiatives
Solar looks at large wind and says “wind has gotten enough”
The wind industry proponents of this “synergy” haven’t spent time in the political trenches
What Does Work ?What Does Work ?
Piggybacking on solar initiatives – with separate lobbying
Duplicating solar incentives – “we should subsidize both technologies and let the market decide”
Energizing farm lobbying base
Finding legislative champions
What’s NeededWhat’s Needed
A Robust AWEA Small Wind Committee
A Windustry organized farmer / rural grassroots advocacy program
Small wind support from wind’s regional advocacy programs (eg, Western Resource Advocates)
State Legislative Monitoring Program
Small Wind Could be a Major New Small Wind Could be a Major New American IndustryAmerican Industry
American companies lead in small wind technology and market share
Danes lead in large wind, Japanese lead in solar – because those governments created robust domestic markets