proactive policies for the development of louisiana’s

Proactive Policies for the Development of Louisiana’s Solar Power Industry

April 2009

A White Paper by the Louisiana Solar Action Committee

Table of ContentsExecutive Summary p 2

Solar Energy Primer p 4

The State of Solar Power in Louisiana p 8

Policy Recommendations p 10

1 Establishing a Renewable Energy/Energy-Effi ciency Financing District p 10

2 Establishing a Tax Credit for Photovoltaic Installations for Commercial Taxpayers p 12

3 Establishing a Renewable Energy Feed-in Tariff for Solar Power p 14

4 Tax Credit Transferability for Photovoltaic System Owners p 16

5 Revisions to Current Net Metering Regulations p 18

6 Solar Leasing p 20

7 Streamlining the Permitting Process p 22

8 Remote / Displaced Solar Power Generation p 24

Conclusions p 26

Glossary of Terms p 27

Proactive Policies for the Development of Louisiana’s Solar Power Industry page 1 of 28

“A green, renewable energy economy isn’t some pie-in-the-sky, far-off future- it is now. It is creating jobs- now. It is providing cheap alternatives to $140-per-barrel oil- now. And it can create millions of additional jobs, an entire new industry, if we act- now.”

-President Barack Obama

The Louisiana Solar Action Committee’s “Proactive Policies” report is the driver of the Louisiana solar industry’s proposed agenda for 2009. The intention of this report is to present industry-specifi c re-search to the State Legislature, Governor’s offi ce, Louisiana Public Service Commission, and local

municipalities across the state. It is our hope that this will lead to increased support for the development of key policies crucial to expanding the solar industry in Louisiana, and the transformation of our market for this source of energy. Our increasing energy requirements demand a broad spectrum energy policy. Such a policy will offer a clear path to a more secure and prosperous future and a more liveable world. Increased use of renewable en-ergy sources such as the sun, wind and ocean tides will spur economic growth, create high-quality American jobs, enhance our national security, protect consumers from price spikes or supply shortages associated with global fuel markets, and dramatically reduce the pollution that is warming our planet.

Solar energy is one of the fastest growing sectors of energy production. Intensive research and develop-ment in solar energy technology guarantees a future in which these systems will become more effi cient and cost-effective. In the interim, current solar power technology is certainly worthy of our investment and com-mitment. Solar electric and solar thermal systems are safe; they are competitive with traditional fuel costs over the long-term; they can withstand hurricane conditions; they can provide non-grid-source energy in the event of an emergency; and they are environmentally friendly. However, this technology will require some government assistance to ensure a market transformation: it will require supportive government programs that refl ect a long-term commitment to clean, home-grown renewable energy as a signifi cant component of our energy portfolio. Louisiana has been a leader in the energy sector for decades. We cannot afford to fall be-hind the rest of the United States in adopting innovative technologies in developing energy markets. We have a burgeoning industry and a constituency that is increasingly concerned with economic, environmental and geo-political repercussions of our current dependence on fossil fuels. The stage is set for the advancement of solar power in Louisiana.

Despite these factors, the barriers to developing a robust solar industry in the state remain high. Solar energy systems carry high front-end costs that create a barrier to their affordability. Though proven, the technology is new and unfamiliar to many. Non-profi t groups such as schools, universities and churches are currently excluded from government incentives for solar energy, and State law currently limits transferability of the solar residential tax credit. Inspectors and permit offi ces are untrained in solar systems and are poorly equipped to assess whether these systems have been properly installed. Technical colleges across the state have just begun to develop green jobs training programs. Net-metering is limited to small systems, whose limited production capacity renders them economically irrelevant. And fi nally, there is no state-level public commitment to developing a market for solar energy through campaigns, press releases or mandates.

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Executive Summary


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This paper addresses all of the aforementioned challenges to solar energy use, discussing viable policy options to overcome current hurdles and providing case studies illustrating how other states and cities have overcome these challenges in their efforts to promote solar energy. There is no need for Louisiana to reinvent the wheel. There are myriad policy options being pursued across the world to create a viable solar energy market, and in this report we highlight proven initiatives that are best suited and most easily implemented in the State of Louisiana.

All of these issues must be tackled now. The Federal Government has signaled the beginning of a new era of unprecedented levels of investment in renewable energy, along with direct spending provisions and tax incentives. State and Local governments that stay ahead of policy and market changes will be able to optimize the position of their communities in this growing industry.

Making solar work is possible, but it will take commitment and effort. State and local governments, resi-dents, business owners, and solar advocacy groups can take a multifaceted approach to promoting solar energy by purchasing solar energy systems directly, creating policies that streamline local regulations, and developing programs that increase demand and reduce the cost of solar energy. We ask the State of Louisiana to carefully consider implementing the policies recommended here to expand the application of solar power in our state.

Paper Overview

The “Solar Energy Primer” provides an introduction to solar power and solar energy systems, outlining the basic system types, components, and applications. “The State of Solar Power in Louisiana” provides a brief history of solar energy in our state, as well as an overview of our current solar power industry. “Policy Recommendations” consists of eight recommended policy initiatives for the advancement of the solar indus-try. This section is followed by a brief conclusion and a glossary of terms used in the paper. •••


For over one hundred years, energy in Louisiana has been synonymous with oil and natural gas. This is no longer acceptable. Our current climate for energy production demonstrates a reliance on polluting and unrenewable fossil fuels, an inadequate power supply, high fuel surcharges, and an aging sup-

ply network still recovering from the effects of natural disaster. Louisiana is blessed with many energy-rich natural resources aside from fossil fuels, and if we are to build a sustainable future for our state we must look to other options, and take every opportunity available to us.

Chief among our state’s available natural resources are our sunlight, moving water, and offshore winds. These can all be captured to produce fuel and electricity. These energy resources have the added benefi t of being renewable, carbon-neutral, clean, and locally produced. Many of the key technologies that can unlock the power of these renewable resources are already on the market today. Policy changes like those contained in the American Recovery and Reinvestment Act (ARRA, commonly referred to as the “Stimulus Package”), combined with declining prices as the technologies continue to mature, will serve to increase their demand and market viability.

About solar technologies

Solar power is simply energy generated by the sun. Essentially, all life on Earth runs on solar power. Humans have merely created the technology to capture solar energy to do our bidding. We have developed two basic ways of doing this. Solar electricity, or photovoltaics (PV), refers to electricity produced from solar energy, specifi cally photons originating from the sun. The conversion of solar energy to electricity that occurs in shiny, sleek solar cell encasements is naturally silent and emission free. Electricity from the sun is a ver-satile technology that can be used for applications from the very small to the very large, from grid-connected systems to grid-independent systems, and power plants. Increasingly, in a competitive market, the U.S. elec-trical grid will come to rely on distributed energy resources. The modular nature of the technology enables us to construct distributed electricity-generating systems in increments as demands grow, to improve supply reli-ability, and to moderate distribution and transmission costs. In addition, many regions of the United States are becoming limited by transmission capacities and local emission controls, but solar electric power systems can be easily sited at the point of use with no environmental impact. And because sunlight is widely available, we can build geographically diverse solar electric systems that are less vulnerable to international energy politics, volatile fossil-fuel-based markets, and transmission failures.

Solar module arrays vary in power generation capacity (measured in watts) and price. Most residential systems vary in size from 2-6 kW, at a cost of $25-$60,000, and are under warranty for 25 years. The largest commercial solar farm to date is 45 MW (megawatts). In some very sunny regions, the cost of constructing large-scale PV installations is now competitive with more traditional power pro-duction facilities such as nuclear and coal.

Solar thermal power refers to solar energy captured as heat, and usually applied to space and industrial pro-cess heating as well as residential hot-water heating. Solar-powered hot water systems displace the need for oil, natural gas, or electricity to heat water, and have enormous potential for both industrial and residential applications.

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Solar Energy Primer


A typical family of four uses 80 gallons of hot water per day using electricity or natural gas. Accommo-dating solar thermal systems cost $5000 - $10,000, but have no accompanying fuel costs. Such systems are commercially available, under warranty for 10-15 years, and are extremely safe, regulating pressure from thermal expansion and using freeze protection technology.

The dual application of solar energy in Louisiana --to create electricity and heat water-- has enormous potential. Louisiana receives a great deal of sunlight --5 peak hours everyday, during which solar radiance is 1000 watts/meter2. This is substantially more sunlight than that experienced in Germany, currently the most advanced solar market in the world. Both PV and solar thermal systems --whether mounted to a roof, a pole, or the ground-- are rated for hurricane wind speeds up to 130 miles per hour. After a storm, these systems can be up and running long before the utility company comes to fi x damaged utility lines. The sun’s energy is free- there is never a fuel charge, and never price volatility. Solar energy technology is safe, effective, sus-tainable, and can be a powerful tool for promoting local economic growth.

Sunny Economic Forecasts

The solar energy industry, which encompasses technology, research, manufacturing, train-ing, and installation, has a direct impact on many facets of U.S. commerce. In 2007, the national market was worth about $2 billion. The current U.S. solar industry employs some 20,000 men and women in high-value, high-tech jobs, representing about 300 companies, universities, and utilities. And by 2020, the industry is expected to grow toward a workforce of 150,000. Jobs associated with the solar energy industry are in engineering, science, management, architecture, construction, planning, education, sales, skilled labor, fi nance, and design. They are permanent, and cannot be outsourced. And the steady decrease in the costs of the technology has private investors and entrepreneurs perking up their ears as well.

(source: US DOE Energy Effi ciency and Renewable Energy Solar Energy Technologies Program,

http://www1.eere.energy.gov/solar/printable_versions/to_economy.html)

page 5 of 28Proactive Policies for the Development of Louisiana’s Solar Power Industry

Direct and indirect Solar Industry jobs over a period of 20 years(Source: Solar Electric Power: The U.S. Photovoltaic Industry Roadmap.

January 2003. Golden, CO: National Renewable Energy Laboratory)

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About the Louisiana Solar Action Committee

The Louisiana Solar Action Committee is a consortium of representatives from the solar industry, non profi t organizations, and the City of New Orleans (represented due to its designation as a DOE Solar City), who all share a special interest in the expansion of solar energy applications in Louisiana. We meet collective-ly once a month, and often hold special “break-out” sessions on specifi c topics such as upcoming legislation, workforce development, and solar tax credits that merit more intense discussion or further research. Our par-ticipants represent all regions of Louisiana, including New Orleans, Baton Rouge, Lafayette and Shreveport.

Our participants are as committed as they are diverse. On the industry side, meetings are regularly at-tended by solar electric installers, solar thermal installers, solar integrators, solar distributors, real estate developers, contractors, and clean technology investors. Our meetings also attract those involved in workforce development, including representatives of the Louisiana Technical Colleges and independent trainers. Non-profi t membership organizations such as our host, the Alliance for Affordable Energy, the Louisiana Clean-Tech Network, and Global Green assist in policy advocacy, outreach, and education. On the government side, there has been regular attendance by members of the New Orleans Energy Offi ce and Department of Safety and Permits. We are also proud to have had such distinguished guest participants as Chairman of the Louisi-ana Public Service Commission Lambert C. Boissiere, III and State Senator Austin Badon.

This whitepaper presents our best ideas for the transformation of Louisiana in to a national leader in solar energy. The members of the Louisiana Solar Action Committee have the capacity and desire to provide a breadth of technical assistance and knowledge wherever necessary, and we hope to serve as a resource for policy makers and investors as we move toward a renewable energy economy.

Our meetings are open to the public, and interested parties are encouraged to attend. We meet the fi rst Wednesday of every month at the Alliance for Affordable Energy’s BuildSmart Center, located at 1001 S. Broad Street, Suite 119 in New Orleans, LA. Our meetings begin at 6pm. •••

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The State of Solar Power in Louisiana

In the near future, Louisiana residents may reminisce about the year 2008: the year when it fi nally became politically palatable to subsidize non-fossil fueled energy; the year when workforce training programs be-gan to supply highly qualifi ed labor to meet demand for a new household energy source; the year when the

State’s solar industry organized to set a baseline for accelerated growth in the solar industry; the year when nostalgia in the city of New Orleans began to extend beyond the ironwork on its front porches to the solar panels on its rooftops.

Tax Incentives

On January 1st, 2008, Louisiana Senate Bill-90 enacted a non-expiring 50% residential tax credit, capped at $25,000 per claim. Stacked with a 30% federal tax credit renewed through 2016, Louisiana residents can now purchase a photovoltaic system at 66% lower than market cost.

New Orleans: A U.S. Department of Energy Solar America City On June 20th, 2007, New Orleans, Louisiana was distinguished by the DOE as a Solar City, one of 25 cities in the United States recognized for their commitment to signifi cant growth in solar generation. The grant awarded $200,000 to the City of New Orleans, along with tech-nical assistance from national labs and experts.

As a result of the Solar Cities grant, •Two workforce development programs were initiated by the Florida Solar En-ergy Center and the Louisiana Clean Tech Network

•The website www.solarpowernola.com was developed and taken online as a re-source for New Orleans residents and contractors interested in developing solar

•A forum for solar businesses and advocates was created called “The Solar Roundtable” to establish a unifi ed agenda to expand solar energy applications in Louisiana

•4 solar workshop sessions were run at the 2008 New Orleans Home and Garden show, each with over 100 people in attendance

•Large media coverage in broadcast and print was achieved on businesses pro-viding solar services and the solar workshops available to residents and con-tractors

•A full time staff position was added to the City of New Orleans to streamline the solar pv and solar thermal permitting process

•A solar training course was formed and offered for building code offi cials, in-cluded attendance by the head of the Offi ce of Safety and Permits Reviews


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The Permitting Process

Through funds provided by the DOE Solar Cities grant, the City of New Orleans has established a full time staff position to oversee permitting for solar energy systems. Due to the current complexity of the permitting process for these systems, this move represents a temporary --but necessary-- fi x to the larger problem of pro-hibitively complex and costly permits. Responding to signifi cant numbers of installations across the State, the Louisiana State Uniform Construction Code Council is addressing issues of permitting and inspection, includ-ing the provision of training for code offi cials at no cost to individual municipalities or to the State.

Workforce Development

Various municipalities and organizations in Louisiana have mobilized of late to create a skilled solar en-ergy workforce. Since early 2008 The Louisiana Clean Tech Network has offered NABCEP (North American Board of Certifi ed Energy Practitioners) -approved solar electric installer training programs in New Orleans and Lafayette, and has aided many of the more than 120 attendees in passing the NABCEP entry exam to become a certifi ed solar installer. The LCTN has also developed four new courses within the Louisiana Community and Technical College System in the Acadiana Region, which will form the bulk of a certifi cate-granting curriculum in solar installation. They will be offering similar courses in Baton Rouge beginning in the Fall of 2009. Additionally, the City of New Orleans will be working with global contractor CH2M Hill to attract solar manufacturing companies to Orleans Parish, to ensure that job training coincides with job cre-ation at a local level.

The ARRA Stimulus Funds: A Historic Opportunity

As part of the American Recovery and Reinvestment Act of 2009, 80 billion dollars of funds have been allocated toward renewable energy. Soon the landscape of how those funds will be utilized locally for solar energy in particular will be clear, and the solar industry in Louisiana stands primed to build on its momentum with this unprecedented level of investment in renewable energy.

Progress:In the State of Louisiana there is now 300 kW in total installed and operational photovoltaic power generation capacity.

Senate Bill 90

Senate Bill 90 has provided the biggest incentive for solar power in Louisiana to date. As part of the bill, in order to receive the state’s tax credit a developer must utilize a contractor licensed by the Louisiana Licens-ing Board of Contractors for solar installations. At the start of 2008 there were only 2 contractors certifi ed by the Louisiana Licensing Board of Contractors to perform solar installations. In March of 2009, that number increased to 39. This is but one indication of the business and economic development that we expect to enjoy over the coming years in the solar industry. •••


Establishing a Renewable Energy/Energy-Effi ciency Financing District

The establishment of a Renewable Energy and Energy-effi ciency fi nancing program at the state level will be one of the most signifi cant steps to making solar energy affordable in Louisiana. The purpose of this legislation is to help interested property owners overcome the high up-front costs associated with install-

ing Solar Energy systems and making other energy-effi ciency improvements. When implemented, this legisla-tion will allow property owners who make such improvements to their buildings to pay for the cost over 20 years through an annual special tax on their property bills. This program will be available for the owners of buildings housing commercial, residential, non-profi t and academic functions. In this way the costs of these improvements become manageable for property owners of moderate or even low-income levels. In the long run, participants will see signifi cant savings in their utility bills, which offset the costs of their improvements.

This policy is especially attractive because it will facilitate the purchase of solar energy systems by groups that currently have fi nancial challenges in meeting the front-end costs associated with these systems, such as schools, non-profi t organizations, health care facilities, churches and low-income homeowners and business-es. The State of Louisiana need only enact the proper legislation allowing individual municipalities/parishes to issue bonds to pay for the initial up-front costs of these fi nancing programs. The programs themselves will be managed on a local level, and will result in the rapid growth of our local renewable energy industry and signifi cant energy-saving infrastructure improvements.

How it Works

This legislation in the State of Louisiana makes up-front funding available to property owners by allow-ing cities/parishes to issue municipal bonds that serve as a pool of money to fi nance these renewable energy systems. The bonds are then repaid through a new line-item placed on the property tax bill of participating property owners over twenty years. Only those who voluntarily opt into the program will pay for the cost of their project (including interest) and fees to administer the program.

The program is specifi cally designed to avoid any on-going State of Louisiana subsidy or exposure to the State’s general fund. Individual property owners would contract directly with approved, qualifi ed private solar installers and contractors for energy-effi ciency and solar projects. Property owners are protected due to the fact that if the property is sold prior to the end of the repayment period, the new owner must take over the remaining assessment as part of the property’s annual tax bill. The State of Louisiana can be confi dent in the prospect of selling the related bonds, because generally such bonds—which fund projects constructed for the public good—are exempt from federal income tax and are therefore more fi nancially attractive to investors. Additionally, the incremental tax payments are fi xed for 20 years at reasonable interest rates. Finally, unlike taking out an equity line of credit, this fi nancing program does not rely upon—or draw down—a property owner’s available credit line or credit score.

Scope

The State of Louisiana establishes a fi nancing district that will originally contain no participants. Property owners can then elect to annex in to the district on a competitive basis. The amount of installed solar systems and/or energy improvements made using this fi nancing option depends on the size of the bond issue. Given the substantial renewable energy tax credit offered in the State of Louisiana for solar systems, as well the availability of additional federal tax credits, this legislation has the potential to have a much greater net effect on solar systems and energy improvements here than in other states, because the money made available will go much further.

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Policy Recommendation 1


Case Study

Berkeley, California was the fi rst municipality in America to implement such a program, beginning in No-vember, 2008. The City of Austin, Texas and the State of Colorado have followed its lead. Berkeley’s program has been extremely successful and has received international attention. Applicants for the fi rst $1.5 million Pilot Program round of the Berkeley fi nancing initiative “sold out” nine minutes after the project period opened. The City of Berkeley is looking to issue a second round of bonds in the near future, allowing more property owners to participate.

Salt Lake City, UT and New York City have established similar initiatives. In Salt Lake City the munici-pal government has created a Renewable Energy Zone, where it is testing several types of incentives includ-ing forgiving property taxes and State income taxes and establishing a revolving loan fund. In New York City the municipal government now offers a property tax abatement equal to 35% of a solar system’s installed cost, to be spread out over four years and capped at $250,000 total. In both of these cities, offi cials expect the decreased tax revenues to be offset by job creation and other collateral benefi ts.

With the implementation of a statewide fi nancing district for renewable energy and energy-effi ciency products, the installation and use of these technologies in Louisiana will no longer be limited to the wealthy. If passed during this 2009 legislative session, the program can be easily implemented within one calendar year, and results will be evident soon after. The benefi ts will be an improved local economy, cleaner air, and more affordable energy for Louisiana residents and businesses at all economic levels. •••


Establishing a Tax Credit for Photovoltaic Installations for Commercial Taxpayers

In this year’s upcoming legislative session the State Legislature will have the chance to pass a bill creating a commercial tax credit for renewable energy systems. The passage of this bill will create unprecedented growth in the State’s renewable energy industries, facilitating an economy of scale for distributed energy

generation statewide. Chief among the technologies targeted by this legislation is photovoltaic power sys-tems, in addition to solar thermal water heating systems and wind energy systems. The passage of this bill will jump-start the renewable energy industry statewide.

How It Works

Under the proposed bill, the State will allow for a tax credit to a commercial taxpayer’s income tax and corporation franchise tax, for the installation of qualifi ed renewable energy improvements. The taxpayer must install a qualifying renewable energy system and put the system in to service. They must provide the State with an audited cost report issued by a public accountant that details the costs of system, and evidence that the system has been put in to service by a qualifi ed provider. Upon review and approval of the system, the State issues a tax credit certifi cate to the taxpayer valued at 25% of the total cost of the system installed, for any single qualifi ed energy resource not exceeding $3,750,000. This tax credit will be rolled forward up to fi ve years if so desired by the taxpayer so as not to signifi cantly burden the state’s budget in any given fi scal year. Upon receipt of the certifi cate, the taxpayer claims the amount indicated on their tax return. If so desired, the credit certifi cate can be distributed among multiple shareholders, members or partners of the taxpaying entity.

The bill will also allow for the transfer or sale of these tax credits to another tax-paying party, providing that both parties submit a notifi cation of transfer to the State Department of Revenue within 30 days after the transaction takes place. This will expand opportunities for fi nancial fi rms that specialize in purchasing tax credits, such as those that now profi t from Louisiana’s tax credit for the fi lm industry.

Scope

The tax credit takes effect at the end of the fi rst year that the system is activated and proof of activation is received by the State, making this legislation both potent and fast-acting. It will draw applicants Statewide. Because commercial installers generally have much more capital to invest than residential installers, and because businesses can more easily assume fi nancial risks than homeowners, this bill will be a much more powerful agent of change than legislation that targets only residential renewable energy system installations.

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Case Study

Multiple states have adopted commercial tax credits for renewable energy systems, but the proposed bill would provide the country’s most lucrative commercial tax credit program offered to date, cementing Louisi-ana’s position as a national leader in solar policy innovation. Currently the State of Utah offers a credit equal to 10% of the cost of an installed renewable energy system, applicable to a company’s commercial investment tax liability, to a maximum of $50,000. This rate applies to systems under a 600 kilowatt production capac-ity. Above this level, systems are eligible for a production tax credit of .35 cents per kilowatt hour of power produced. Florida provides a corporate income tax credit equal to one cent per kilowatt hour of electricity produced from renewable energy systems, with a $5,000,000 cap on the benefi ts. The programs in Utah and Florida apply to photovoltaic energy systems as well as wind, geothermal, biomass and other renewable tech-nologies. Arizona provides an income tax credit equal to 10% of the installed cost of a solar energy system, not to exceed $25,000 in credits for each building per year and $50,000 in total credit for each business per year. There is a $1,000,000 cap on the program statewide, limiting the breadth of the program’s effect state-wide.

This bill has already been drafted, and the underwriters have received input from investors, fi nancial fi rms and solar industry leaders to ensure its potency and applicability. A commercial tax credit for renewable energy systems as outlined above will have widespread positive effects statewide, including the facilitation of growth in the green technology sector, the attraction of related capital investment and new jobs, the diversifi -cation of the State economy, the reduction of our carbon footprint, the reduction of our dependence on non-renewable resources, and the drastic reduction of electricity bills statewide. •••


Establishing a Renewable Energy Feed-In Tariff for Solar Power

Renewable Energy Feed-in Tariffs have possibly the greatest potential for success among the current portfolio of policy measures being implemented worldwide to promote solar power, and Louisiana stands to benefi t from them greatly. At present Louisiana residents and businesses pay some of the

highest electricity rates in the country. The establishment of Renewable Energy Feed-in Tariff (FiT) by the State of Louisiana will stabilize unpredictable and often erratic electricity rates caused by fuel price volatility. Through its stable and long-term policy structure, FiT payments guarantee stable revenue streams to renew-able energy developers, which helps reduce the risks of investing in renewable energy while reducing the overall costs of renewable energy fi nancing. The FiT is designed to work in conjunction with other existing and proposed policies, and it helps to provide the market conditions necessary for the outgrowth of a green power industry.

How It Works

A Feed-in Tariff is a standard contractual agreement for the purchase of power over a long period of time, often ranging from 15-20 years. When implemented, a FiT governs the terms under which power from renewable energy technology is purchased. A FiT is distinctly different from a Power Purchase Agreement, which designates the terms by which conventional electricity is purchased between two parties, and is often limited to a bilateral agreement between a utility and an independent power producer. In contrast, an FiT pro-vides non-discriminatory access for any power developer irregardless of size (a citizen, municipality, farmer, business, utility, or any other interested party), to supply electricity to the grid under terms of a transparent, standardized contract. It is this fl exibility that makes the FiT such a viable strategy for encouraging distrib-uted renewable energy production.

The FiT is a policy that specifi cally targets electricity generation, as opposed to net metering, which deals with load-reduction. For a FiT to work the individual customer must have separate meters to measure power produced on site and power consumed on site, although such a system can coexist with a net metering system. The owner of the renewable energy technology is awarded cash payments at a premium rate for the electricity it supplies to the power grid.

Each FiT design may have a unique cost structure methodology. The most successfully demonstrated has been the “cost based” approach, which is much like the conventional “rate of return” approach used with non-renewable energy generation by investor-owned utilities. In this design, rates are established based upon the cost of generating the electricity plus a fi xed rate of return. The FiT strategy has proven to be the most cost-effi cient renewable energy policy in terms of the average cost-per-kilowatt hour paid.

Scope

This report recommends that Louisiana establish a statewide FiT, which can be applied to solar photovol-taic energy production as well as any other renewable energy production methods that the State deems viable. By establishing a statewide FiT, it is predicted that Louisiana can cost-effectively increase the total number of renewable energy installations in the state by more than 1000% over the course of a 15-20 year agreement, up to a predefi ned capacity.

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Case Studies

Europe has the largest concentration of FiT policies, and the greatest breadth of experience with their implementation. These policies are largely responsible for the rise of Germany and Spain as world leaders in total renewable energy generation, and have resulted in total electricity rate reductions in Spain and stabilized electricity prices in Germany, while United States ratepayers have continued to see their rates rise.

In America various states and municipalities have begun to adopt FiT policies, although at a smaller scale and with greater limitations than their European counterparts. California, Oregon, Washington, Wisconsin, Vermont and Florida have all adopted some sort of Feed-in Tariff, with many more in the works. Gainesville, Florida has enacted the most progressive policy, which was tailored specifi cally for photovoltaic systems. On March 1, 2009 the municipality, in conjunction with the local utility, set a precedent by implementing the fi rst FiT based on a levelized cost of generating solar electricity, plus a fi xed 5% rate of return. This program will enable residents served by the local utility to install solar photovoltaic systems and sell their electricity di-rectly to the utility for a fi xed price contract of $0.32 per kilowatt hour for systems smaller than 25 kilowatts, and $0.26 per kilowatt hour for larger systems. This payment scale will decrease slightly over the course of the policy’s 20 year timeframe. The program includes an annual program cap such that no more than 4 megawatts of new installed solar capacity will be installed in any year—a cap limit that is sized in proportion to the geographic growth potential in the municipality. The program has already been a success, with the 4 megawatt cap being reached within days of the program’s launch.

Today many Louisiana residents are demanding affordable green energy. The creation of a Feed-in Tariff requires no expense from the State budget, and has been shown to benefi t utility companies and individual power customers alike. This policy can be a powerful tool for encouraging the development of green power at any level. •••


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Tax Credit Transferability for Photovoltaic System Owners

Due to the recent passage of a 50% tax credit for photovoltaic systems by the State legislature, Loui-siana has one of the most attractive fi nancial climates in the country for the development of the solar energy industry. Louisiana-based solar power users can reap fi nancial rewards above and beyond

their reduced utility bills. However, one problem with the existing tax credit is that many potential solar in-stallers fall outside the bounds of eligibility. Non-tax-paying bodies such as public school districts, religious institutions, businesses located on Native American reservations, and military bases have no way to earn extra fi nancial benefi ts from systems that they have installed. This has no doubt deterred many from installing photovoltaic systems. Enacting legislation to permit tax credit transfers will rectify this problem, doing full justice to the original tax credit legislation, and allowing it to take full effect statewide.

How it Works

For this concept to take effect, the State need only make a small change to existing tax laws, develop and make available a simple application form, and designate a staff member for review of the submitted applica-tions.

A non-tax-paying entity begins by installing a photovoltaic system. They must then fi nd a transfer partner who has a tax liability and is interested in purchasing their tax credits. Both parties must fi ll out the applica-tion form, providing proof of the system’s installation, documentation of the system’s power generating ca-pacity, and information regarding their taxpaying status. They must submit the application to the State, whose staff determines whether the system qualifi es, whether the partnership is valid, and if so, the value of the tax write-off per year. Current precedents in other states have called for a case-specifi c set value per year for tax write-offs, with a set maximum for the number of years in which the write-off can occur.

When approved, the tax-liable party purchases the tax credits from the non-tax-liable party in cash. In this way the non-tax-liable party takes advantage of the State tax credit, and the tax-liable party reduces their tax burden.

Scope

This legislation can be implemented at a statewide level quickly and easily. The State will no doubt see applications submitted within the fi rst year of passage. The resulting increase in photovoltaic installations statewide, with its corresponding increase in jobs, profi ts and industry growth, will more than compensate for the state’s loss of tax revenue due to these tax credit transfers.


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Case Study

In 2001 the State of Oregon enacted their “Pass-Through Option” program, which allows renewable energy tax credits to be transferred between non-tax-liable and tax-liable parties. This program built upon the state’s long history of ground-breaking clean energy legislation.

In Oregon an owner of a photovoltaic system can currently earn a tax credit of up to $1500 per for four years, for a total maximum of $6000 credit. The actual amount of credit is determined by the particular sys-tem’s peak power generation, based on a rate of $3 credit for each peak watt of installed capacity. To qualify for the Pass-Through Option a non-tax-liable party must fi nd a tax-liable partner interested in purchasing their tax credits. The two parties must submit an application form to the state that outlines the power generating ca-pacity of the system. The State then determines the amount of tax credit earned by the system, and distributes a tax credit certifi cate to the tax-liable party. The certifi cates are worth 95% of the total tax credit amount. Tax credits not taken in a given fi scal year may be carried forward up to fi ve years. •••


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Revisions to Current Net Metering Regulations

Net metering is among the most easily implemented strategies available for increasing Louisiana’s re-newable energy market, and will cost the State nothing to implement. A net metering program allows customers who generate more solar energy than they consume to feed this energy in to the local power

grid, and sell this excess electricity back to their local utililty. In essence, the utility bills of grid-tied solar energy providers refl ect the net power consumption between the energy produced by the customer and the energy that is supplied to the house by the utility company under the conventional power distribution system.

In 2005, the US Energy Policy Act began to require all US energy providers serving more than 5000 customers to allow their customers to implement net metering with photovoltaic systems. This was a positive step, but unfortunately the bill set a very low maximum value for the amount of power that an individual cus-tomer could feed back in to the grid. The State of Louisiana has since passed legislation raising the maximum contribution per customer to 300 kWh per month, but even this rate is prohibitively low. We recommend that the limit be raised to 1 MWh per month, per customer. This will ensure the cost viability of installing pho-tovoltaic systems with net metering at individual homes and businesses, and will ensure that this renewable energy production has signifi cant positive effect on our local economy.

How it Works

Traditionally, each building connected to a power grid has a meter that keeps track of the amount of elec-tricity being taken from the grid for use within the building. In a net metering system, an improved meter is installed that allows the dial to move in two directions. If a building has a photovoltaic system installed, this system links directly in to the power grid. When power is generated by the photovoltaic system it feeds in to the grid, reversing the direction of the meter according to the quantity of power created. The customer and the utility company thus establish a symbiotic relationship, in which the customer relies on the grid’s energy during the night and during overcast days, and the grid takes excess energy from the customer during sunny days. If at the end of the month the meter indicates that the customer’s photovoltaic system provided more electricity to the grid than the customer’s house used, the utility compensates the customer by providing a credit on their next utility bill. If after a year’s time there is still a net positive reading on the meter, the utility company compensates the customer in cash, the amount being determined by using an average electricity rate for the year in question.

This single-meter system also works to equalize the relationship between customer and utility in terms of rates. Since the meter measures only the net difference between in-fl owing and out-fl owing electricity, the rates for both directions will be the same. This ensures that the utility company cannot establish a lower rate for their purchase of customer-produced power than that paid by the customer for utility-produced power.

In addition to allowing the consumer to capitalize fi nancially on their investment in a photovoltaic system, set metering saves the consumer money by not requiring a battery backup. In PV systems that are not linked to the power grid, the customer must purchase a battery to store the excess generated energy until it can be used. This battery often comprises a signifi cant percentage of the total system cost.


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Scope

The State of Louisiana would pass legislation raising the maximum allowable amount of net-metered electricity to 1 megawatt per month. This legislation would affect all investor-owned and municipally-owned power suppliers in the state, and would apply to all private customers in the state, including residential, com-mercial and industrial customers. There shall not be an aggregate limit on net metering statewide, which would potentially limit the effectiveness of this legislation. The utility companies shall provide customers with dual-direction meters if they do not have them already.

Case Study

In March 2008, the State of Colorado passed House Bill 08-1160, legislation providing for enhanced net metering for residential, commercial and industrial utility customers across the state. When combined with previously-passed state legislation, this bill raises the limit for net metering to 2 megawatts per customer. Any customer net excess power generation within a particular month is applied as a credit to the next month’s bill. If during an entire calendar year the customer’s power generation still exceeds their consumption, the util-ity must reimburse the customer at the utility’s determined average hourly incremental electricity cost for the year in question.

This legislation benefi ts both customer and utility provider. Colorado State law requires that public utilities provide 4% of their annual energy production through solar power, with 2% coming directly from customer-owned systems. This house bill helps utility companies to satisfy this requirement. In addition, all renewable energy credits (REC’s) generated by net metering become the property of the utility. On the cus-tomer side, the legislation allows individual customers to be compensated greatly for their use of photovoltaic systems.

Raising the maximum amount of net-metered electricity is a signifi cant step to making solar power a viable option for individual residents and businesses across the state. Because it encourages the growth of many small-scale, decentralized power production centers, in the form of individual buildings, it is one of the best safeguards to widespread power shortages in the event that a natural disaster affects our local power generation plants. Net metering helps to diffuse the volatility of energy costs, by decreasing the power grid’s reliance on fossil fuels and their inherently variable costs. This strategy is cost-neutral to the State and to the utility companies, and requires no signifi cant capital improvements to the power grid. And fi nally, increasing the existing limits on net metering will support the health and development of a grassroots-based clean energy industry for decades to come. •••


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Solar Leasing

Solar leasing is a concept developed in recent years to circumvent one of the primary obstacles to the development of solar power: its high up-front cost. It is common knowledge that homeowners can see signifi cant fi nancial benefi ts from installing a photovoltaic system. However, under existing market

conditions the return on investment may not be realized for over a decade, sometimes as long as 20 years. With a solar leasing program, an outside company owns and installs photovoltaic systems on others’ homes, with the homeowners paying a monthly fee for the system over the course of the lease. In this way, the up-front costs of installing a system are eliminated.

At present, solar leasing programs are disincentivized in Louisiana due to a requirement within the current State residential tax credit that photovoltaic systems on homes must be owned and operated by the hom-eowner. With a simple modifi cation of the existing laws to allow outside ownership of PV systems installed on homes, the State of Louisiana could enable Solar Leasing programs to develop and take effect. This would benefi t the State in myriad ways, including the creation of green jobs, the reduction of utility bill costs for low- and middle-income families, and an increase in renewable energy use.

How it Works

A Solar Lease is a type of Power Purchase Agreement (PPA). In this particular type of PPA a building owner signs a multi-year lease with a solar leasing company. The company then supplies and installs an array of photovoltaic panels on the roof of the building, and connects the system to both the building and the local power grid. During daylight hours the panels convert collected sunlight in to electricity. This electricity is used to power the building. Any excess electricity is fed back in to the local power grid via net metering, and the building owner is compensated by the utility provider. During overcast or nighttime hours the building is powered from the grid, by traditional means.

The homeowner pays the solar leasing company a monthly fee for the system in addition to their monthly electric bill. However, depending on the amount of power generated by the PV system, this combined sum will often be lower than their previous electricity bills. Depending on the size of the system, the homeowner could potentially generate all of their necessary electricity from their solar array, and therefore only need to pay the solar lease amount each month.

These systems create Renewable Energy Credits (REC’s), which are virtual units of renewable energy. In many areas utility companies are required by their state governments to purchase a certain quantity of REC’s each year, meaning that the REC’s hold monetary value. In most Solar Leasing programs the leasing company holds ownership of them, but once a building owner’s system produces enough REC’s the leasing company uses the money they have earned from their sales to provide the building owner with out-of-warran-tee repairs to the PV system. In some programs the homeowner can put money from REC sales towards the eventual purchase of the system, after their original lease period has expired.

There is normally zero down payment on these systems, and the building owner will see fi nancial gain immediately upon installation. There is little or no risk for the building owner, because the system is owned by the solar leasing company.


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Scope

Upon modifying the existing legislation to allow for solar leasing, the State will most likely see the rapid development of one or more solar leasing companies. In states such as Connecticut, Arizona and California where these programs have already taken effect, numerous companies have established themselves as state-wide entities, as opposed to confi ning themselves to individual municipalities. This allows these companies to achieve an economy of scale, allowing them to keep lease payments low.

Case Study

Instituted in August 2008, Connecticut Solar Leasing is establishing itself statewide as a viable option for low- and middle-income homeowners who want to power their homes with solar energy. The company offers its systems to any homeowner earning less than 150% of the median income in their municipality. The sys-tems are zero-money-down, and cost an average of $97 per month for the 15-year lease term. At that point the homeowner can remove the system or choose to keep it intact and purchase it for an additional fee of $3000. This fee can be lowered substantially through CSL’s Solar Dividends program, in which the company sells the renewable energy credits produced by the homeowner’s system to the regional utility provider, and gives part of the proceeds to the homeowner as credit towards purchasing the system. This program is virtually cost-neutral for the State of Connecticut, and it is mutually benefi cial to the homeowner, the system provider, and the local utility company.

Soon the Federal Government will issue its Renewable Portfolio Standard, a regulatory policy requiring the increased production of energy from renewable sources. This legislation, which has been in development for some time, will affect power providers across the country. By promoting solar leasing in Louisiana, the State will give its local solar industry a head start towards achieving the levels of renewable energy production that may soon be required by Washington, DC. •••


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Streamlining the Permitting Process

There are many barriers affecting the growth of the solar industry in Louisiana. The permitting proce-dures that are currently in place for both PV and solar thermal systems rank high on the list of imped-ances. The permits currently required for solar equipment are confusing and expensive. Since solar

technologies are heavily reliant on subsidies to begin with, any unnecessary added cost should be avoided. Whether the additional cost is of monetary value or loss of productivity due to multiple trips to the permitting department, a confusing and unclear permitting process can spell doom for any project. Without a coherent and straightforward permitting process many contractors may opt out of fi ling permits. This is not in the best interest of either the municipality or the consumer. We recognize that permits are a necessity--they ensure a high level of safety and craftsmanship, and are meant to protect the consumer physically and fi nancially. However, it is possible to create a permitting process that accomplishes all of the above while requiring only one trip to the permitting offi ce, one simple form, one inspector, and one reasonable fee. This must be our goal.

How it works / Scope

Since building codes differ from region to region and state to state, it is important to understand that there is no silver bullet for the successful streamlining of a city’s or state’s permitting process. Photovoltaic systems are usually housed in the electrical department of the permitting department. Solar thermal systems tend to be housed in the plumbing department but in some jurisdictions they are found in the mechanical department. It is also not uncommon for solar projects to require a building permit, because the required plan reviews assure that the structural integrity of the building is not compromised and that wind loading and other requirements are met.

The best place to start is to fully understand the permitting process and then identify the major barriers to solar technology within the permitting process. A very common barrier, especially to municipalities who have little experience with solar technologies, is the lack of the building inspectors’ familiarities with solar projects. In addition, even when training programs are in place it is often the case that inspectors and installers use differing programs, leading to misunderstandings. A solid training program for both inspectors and install-ers is certainly a key ingredient to a successful solar industry. The City of New Orleans has begun to develop a training program for solar energy system inspectors in conjunction with the International Association of Mechanical and Plumbing Offi cials (IAMPO), but this is only a fi rst step towards ensuring proper inspec-tion processes statewide. It is imperative that Louisiana establish programs whose reach extends statewide. If the installers are not on the same page as the inspectors or vice versa, many systems will fail inspection. It is very important when organizing a training program that both the inspectors and installers are using similar programs. Florida Solar Energy Center (FSEC), Solar Energy Institute (SEI) and the North American Board of Certifi ed Energy Practitioners (NABCEP) are great organizations to gather ideas for training programs for both inspectors and installers.

The problem of high and inconsistent permitting fees can be solved by instituting a fl at fee for all permits associated with PV system installation. This is in contrast to the cost-based fee structure widely used today in Louisiana and elsewhere in the country.


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Louisiana can reduce the complexity and time involved in permit reviews by offering an “over the coun-ter” building permit if the project uses standardized systems that are easily analyzed. The State should also explore the possibility of developing a permit specifi cally for photovoltaic systems, bypassing the myriad permits currently required.

In states such as Louisiana in which multiple utility companies exist, multiple interconnection stan-dards can exist. This can make it diffi cult for installers to determine the way in which they must install a PV system. Louisiana can establish a statewide interconnection agreement, which will help installations cross jurisdictions much more effectively. The IEEE, UL and NEC are nationally-recognized organizations special-izing in electrical safety, and have worked to establish such universal agreements.

Zoning issues also can complicate the permitting process. The State should formulate and distribute literature that clearly explains the rights of property owners, making it clear that historic commissions and neighborhood covenants cannot legally block the installation of a PV system for aesthetic reasons. Setting these laws in stone will avoid potentially irrelevant reviews by ancillary local committees.

Case Studies

Several states and municipalities have enacted legislation to expedite the permitting process for PV and solar thermal systems. In Oregon, the State has facilitated over-the-counter permitting, allowing permit submis-sion, review and issuance to occur within a single day. In Berkeley, CA the city has waived zoning reviews and design reviews for solar energy systems, and offers free, same-day permits for residential installations.

A reorganization of the permitting process for PV and solar thermal systems statewide is crucial to the de-velopment of related industries in Louisiana. Some jurisdictions such as Orleans Parish have already begun to take steps in this direction, consolidating forms, simplifying review processes and streamlining interconnec-tion agreements between utility companies. These efforts should be replicated and expanded upon statewide as a jumping-off point for this initiative. •••


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Remote/Displaced Solar Power Generation

The concept of Remote/Displaced Generation is in effect an easement of current restrictions on the installation of photovoltaic power systems. As it stands, the State of Louisiana restricts the purchase, installation and use of a given photovoltaic system to a single building owner by limiting the scope of

the current residential solar power tax credit. Changing this policy would encourage creativity and freedom in the use of these systems, and would allow a far greater range of parties to participate.

How it Works / Scope

Remote/displaced generation is one of the best ways of making solar power a viable option for potential investors statewide. By simply changing the wording of several laws governing the use of photovoltaic sys-tems, the State will enable the following to occur:

Landlords will be allowed to install photovoltaic systems on multi-unit buildings and lease or sell parts of the system to their tenants for their use in generating their own electrical power. This rectifi es the present reality, in which landlords have no incentive to provide their tenants with renewable energy systems because it is the tenants’ responsibility to pay for their own electricity. As it stands now, landlords would not see any of the benefi ts of on-site power production, and conversely would have to pay the up-front costs for system-related capital improvements.

Homeowners will be allowed to install photovoltaic systems on their own properties and rent or sell all or part of the system to a remote party, for the supply of their electrical power. This reduces the risk of invest-ment for the homeowner, because it offers them a “way out” if an unforeseen change in their lifestyle results in a drastic decrease in their power use.

Investors will be allowed to install a system on a remote property. For parties who desire solar power but occupy buildings that are not well suited for effi cient solar arrays, these legislative changes will enable them to successfully invest. With remote/displaced generation legislation in place they could purchase and install a system on a nearby building that offers more ideal height, orientation or building structure, in exchange for an arranged monthly payment to the building owner or provision of an agreed-upon quantity of power.

An allowance for remote/displaced generation statewide will allow investors the freedom to design a sys-tem that is guaranteed to provide them an excellent return on their investment. It will allow for the growth of distributed photovoltaic power sources beyond the traditional small-scale single-family system to larger sys-tems, on a myriad of building types and sizes, which can achieve a true economy of scale. With the passage of these legislative changes we will soon see photovoltaic systems on previously unaffected building types such as housing complexes, warehouses and schools, increased investment in single-family homes and vacant land, and increased community-based collective solar projects.


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Case Study

The city of San Francisco has paved the way for the “GoSolarSF” program, in which a private company provides and installs solar systems and the city in turn provides a rebate check to the building owner. These rebates range from $4,000 to $10,000, and are available to residential, commercial, non-profi t and multi-fam-ily buildings. The city has calculated that the Go Solar program has resulted in 7.2 megawatts of solar energy being created by distributed generation, and 5 additional megawatts generated by Power Purchase Agree-ments. •••


Conclusions

page 26 of 28

The preceding guide to enacting new legislation for solar power refl ects the optimism that permeates the local industry, while remaining grounded in the realities of local and state politics and focusing on precedents as learning tools. All of the strategies presented here can be implemented with minimal fi -

nancial commitment from the State. Implementation of these policies will result in widespread benefi ts for the Louisiana economy, creating jobs and businesses and attracting federal funds, foundational grants, and private investment. With an increase in solar energy production we will also drastically reduce our state’s carbon footprint.

We must begin to lay the groundwork now for “shovel-ready” solar energy projects, in order to attract funds available through the American Reinvestment and Recover Act. The Federal Government is poised to provide massive aid to states and municipalities in order to stimulate our economy, and they have indicated that newly developing green industries are their preferred vehicle of change. But we need to get the ball rolling, setting realistic goals, translating these goals in to legislation, and staying in front of other regions in terms of our thinking and planning.

By implementing the legislative changes described here, the State of Louisiana will build on its base as a center of sustainable energy. This will complement our long-standing prominence in the fossil fuel industries while neutralizing the price volatility of traditional power sources. The proposed legislation will also help to increase public awareness of climate change, clean energy options, and public responsibility for environmen-tal issues. All told, the preceding policy recommendations will help to assure both short-term and long-term energy independence and prosperity for our region. •••


Carbon footprintThe total amount of greenhouse gas emissions produced either directly or indirectly by an individual, organization, event or product.

Carbon neutralRefers to achieving net aero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered or offset.

Distributed generationAlso referred to as on-site generation, this refers to the generation of electricity by many small energy sources. This is in contrast to the prevailing situation in the United States today, in which the majority of our electrical power comes from large, centralized, and often fossil fuel burning or nuclear power genera-tors.

Feed-in Tariff (FiT)Similar to a power purchase agreement, an FiT is normally implemented to govern the terms under which power from renewable energy sources are purchased by a local utility. In contrast to a PPA, an FiT often sets power purchase rates for any sized power producer to supply electricity back to the grid, in a non-discriminatory and transparent fashion.

Kilowatt hourA unit of energy, normally the preferred unit of measuring electrical energy delivered by utilities. It is derived from the watt, a unit that measures a rate of energy conversion equal to one joule of energy per second. A kilowatt is equal to 1000 watts, and a kilowatt hour is the product of a given power in kilowatts multiplied by time in hours.

Megawatt hourA unit of energy, normally the preferred unit of measurement for electrical energy delivered by large-scale power production facilities. One megawatt hour is equal to 1000 kilowatt hours.

Net meteringA policy in which a single meter is installed at a power customer’s building to measure the fl ow of elec-tricity in and out of the building. It allows the coexistence of site-produced power, usually by means of photovoltaic or wind powered systems, and grid-supplied power from the local utility company, measur-ing only the net gain/loss of electric power between the building and the grid.

Peak consumption periodIn the context of photovoltaic power systems, this term refers to the time of day at which electric power consumption is at its peak, typically between 9am and 5pm in the United States. This period also typical-ly coincides with the time of day at which photovoltaic panels absorb the most solar energy and therefore produce the most electricity.

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Glossary of Terms


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Peak sun hours (psh)The number of hours per day during which the solar radiation striking a surface at a particular time and place equals 1000 watts per square meter. In Louisiana, we have an average of 5 peak sun hours per day. This is in comparison to Las Vegas (6.4 psh), Miami (5.5 psh), New York (4.6 psh) and Seattle (3.6 psh).

Photovoltaic (PV) systemA system that uses solar cells to convert light from the sun in to electricity. The system is comprised of photovoltaic modules (usually in the form of a fl at panel fi lled with many individual solar cells), electrical connection lines, a converter that modifi es the electrical power output from the cells to a usable form, and at times a battery to store the electricity created.

Power gridAlso referred to as an electrical grid, this is an interconnected network of wires, transformers and other equipment that functions to distribute and deliver electricity from suppliers to consumers, linking power generating facilities with power-consuming facilities.

Power purchase agreement (PPA)A contractual agreement between two parties, governing the purchase of power over a set period of time. Normally a PPA establishes the rate at which a power customer purchases electrical power from a local producer.

Remote/displaced generationRefers to the generation of electrical power at a facility remote from the point of power consumption. This term is normally used in the framework of a distributed generation network.

Renewable EnergyEnergy generated from natural resources that the planet replenishes on its own. Examples include solar (photovoltaic), wind, hydroelectric, biomass, tidal, and geothermal power sources.

Renewable Energy Certifi cate (REC)Also known as Green Tags or Tradable Renewable Certifi cates, REC’s are abstract commodities in the United States that each represent proof that 1 megawatt hour of electricity was generated by an eligible renewable energy source. These certifi cates can be sold and traded by individual power producers, utility companies, and government bodies.

Renewable Portfolio Standard (RPS)A regulatory policy that requires utilities serving the public to produce a certain percentage of their power from renewable sources. Utilities can purchase Renewable Energy Certifi cates to help satisfy RPS re-quirements.

Solar thermal systemA system by which the sun’s energy is used to heat water. It most frequently takes the form of a fl at plate that collects and channels sunlight to its interior. Water or another substance passes through the plate and is heated. The liquid then either passes directly in to a building’s hot water system or it passes through a water storage tank, where it indirectly heats the water contained within.


Information written, compiled and presented by the Louisiana Solar Action Committee. Participating member organizations include the Alliance for Affordable Energy, The Louisiana CleanTech Net-work, FutureProof, South Coast Solar, and GlobalGreen.

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