During our 2010 business planning we’ve been speculating on trends that may affect our corporate customers (positively or negatively) in the coming 12 months. In 2009 Groom Energy delivered projects in 25 states and Puerto Rico. What’s stunning is how much time we spent confirming the incentives available in these states, through utilities, regional ISO’s and Clean Energy trusts. 2010 promises to introduce even great complexity to this already challenging game – in this regard here are four areas we think are worth watching:
1. PACE rollout across the US – this emerging energy tech financing program, which started in Berkeley, CA as a residential solar PV financing program, has now grown into a much more powerful concept. PACE (or Property Assessed Clean Energy) financing has broadened, becoming the poster child for enabling both residential and commercial property owners to invest more easily in renewable and energy efficiency upgrades. Legislation for PACE like programs has now been “enabled” in 17 states, but the devil will be in the details as to how each rolls out their own version, delivering low cost tax exempt debt to property owners. Regardless, in a market where commercial lending has ground to a standstill, PACE programs have the chance to catalyze lots of projects, providing significant energy and carbon savings – it remains to be seen how fast these programs can be rolled out in a scalable way.
2. The continued fragmentation of state level PV incentives - While for the past few years CA, NJ, MA and CT have led the nation with developed PV incentive programs, each state has had their formulas for distributing these incentives, and each has experienced intermittent funding for their programs, both for policy and economic reasons. 2010 will bring another level of complication, as incentive programs in several new states will become available. In these newer programs, confirming incentive formulas will part of the story – continued funding for these programs is a new risk to assess. As the economics for PV breaks without heavy state incentives, incentive commitment letters for these “approved” projects will be critical.
3. Carbon Cap’nTrade – Post Copenhagen it’s pretty clear we won’t see 2010 US Federal policy that has immediate economic consequences for Corporate America. What we’ll be watching is whether Federal policy institutes a “grandfather” clause which encourages action while the policy debate continues in the Senate and the House. (This grandfather concept was implemented successfully within the energy efficiency code in the EPAct2005). So in 2010, it could be that state policy overrides lack of Federal policy and defines carbon pricing with vehicles such as RGGI for pricing, although CA will likely not see their program live until 2012. Guidance for emitters at below the 25MW power plant level might also be forthcoming…
4. Utility and Trust sponsored Energy Efficiency rebate programs: While New England and CA have had consistent energy efficiency programs for a number of years, new states and utilities are rolling out more programs in 2010. Considering we’re still in the Great Recession, free money supporting fast returning energy efficiency investments is clearly worth studying on a state by state level.
So there you have it – maybe next year we can look back on this post and give ourselves a report card on our predictions 