Legislation to Extend ITC to Stand-Alone Storage Re-Introduced

Legislation to extend the Investment Tax Credit (ITC) to energy storage was re-introduced yesterday by Senators Martin Heinrich of New Mexico and Cory Gardner of Colorado, along with 10 cosponsors. For storage, the ITC currently only applies if paired with renewable forms of energy production (subject to limitations based on charging). As a result, when renewable energy is not being produced, utility companies have limited options, and may be forced to rely on traditional forms of energy production to meet their customers’ energy needs. Energy storage allows the energy that is produced via a renewable source, such as solar and wind, to be stored and released later when production slows.

Legislation of this nature has been introduced before, but this bill is gaining momentum according to the Solar Energy Industries Association (SEIA). Earlier this week, Representative Mike Doyle of Pennsylvania introduced a companion bill to the House. In addition to these bills, more than 100 members of the House signed a letter addressed to the Chairman of the Ways and Means Committee, seeking to “clarify the tax code for energy storage technologies, which are critical for the continued deployment and expansion of intermittent, clean energy technologies, such as wind and solar, and help modernizing the electric grid to make it more efficient and resilient.”

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ITC Investigates JinkoSolar, LONGi Solar and REC Group for Patent Infringement

The U.S. International Trade Commission (“ITC”) has launched a trade investigation against JinkoSolar, LONGi Solar and REC Group on the heels of a complaint filed on March 4th by Hanwha Q CELLS USA Inc. of Dalton, GA, and Hanwha Q CELLS & Advanced Materials Corporation of Seoul, Republic of Korea (“Hanwha”) for patent infringement. Hanwha has accused its three competitors of violating Section 337 of the Tariff Act of 1930 by unlawfully implementing Hanwha’s patented passivation technology in their own photovoltaic cells, and importing those cells for sale in the United States.

The investigation (337-TA-1151) is underway, but the ITC has yet to make any determinations. After the case is assigned to an administrative law judge, the judge will hold an evidentiary hearing and make an initial determination. The initial determination will be subject to review by the ITC. The ITC will then make a “final determination in the investigation at the earliest practicable time.” The ITC will set a target date for completing the investigation within 45 days of the institution of the investigation. Any remedial order issued by the ITC will become effective at the time of issuance, and will become final 60 days later if not disapproved by the U.S. Trade Representative.

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NYSERDA Bulk Storage Incentive Program Aims to Jumpstart Utility Transition Following New York Storage Order

On March 11, the New York State Energy Research and Development Authority (“NYSERDA”) filed its proposed Implementation Plan to administer its Energy Storage Market Acceleration Bridge Incentive Program and support the ambitious New York Public Service Commission (“PSC”) order issued in December 2018 requiring 1.5 GW of energy storage in New York by 2025 and 3 GW by 2030 (the “Storage Order”). The Implementation Plan breaks down the state’s incentive strategy primarily between “Retail Storage Incentives” and “Bulk Storage Incentives,” and provides essential preliminary details for sponsors, investors, and lenders considering energy storage projects in the state. Both programs will officially launch in Q2 2019. This article summarizes the key attributes of the Bulk Storage Incentives program (the “Bulk Storage Program”) and associated NYSERDA Bulk Storage Incentive Program Manual (the “Program Manual”). A prior article focuses on New York’s incentive strategy more generally and Retail Storage Incentives (see NYSERDA Unveils $350/kWh Retail Energy Storage Incentive in Implementation Plan and Program Manual).

Bulk Storage Funding and Scope

The Storage Order authorized a $310 million investment in energy storage deployment to be administered by NYSERDA, in addition to $40 million previously made available solely to energy storage paired with solar projects. The Implementation Plan preliminarily allocates $150 million to Bulk Storage Incentives. The Implementation Plan notes that an additional $53 million in Regional Greenhouse Gas Initiative (“RGGI”) funds will later be made available for Retail and Bulk Storage projects specifically located on Long Island.

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NYSERDA Unveils $350/kWh Retail Energy Storage Incentive in Implementation Plan and Program Manual

On March 11, the New York State Energy Research and Development Authority (“NYSERDA”) filed its proposed Implementation Plan to administer its Energy Storage Market Acceleration Bridge Incentive Program and support the ambitious New York Public Service Commission (“PSC”) order requiring 1.5 GW of energy storage in New York by 2025 and 3 GW by 2030 (the “Storage Order”). The Implementation Plan breaks down the state’s incentive strategy primarily between “Retail Storage Incentives” and “Bulk Storage Incentives,” and provides essential preliminary details for sponsors, investors, and lenders considering energy storage projects in the state. Both programs will officially launch in Q2 2019. This article summarizes the program framework generally but focuses on the key attributes of the Retail Storage Incentives program (the “Retail Program”) and associated NYSERDA Retail Energy Storage Incentive Program Manual (the “Program Manual”). A subsequent article will address the Implementation Plan’s Bulk Storage Incentives and associated program manual.

Retail Program Funding and Scope

The Storage Order authorized a $310 million investment in energy storage deployment to be administered by NYSERDA, in addition to $40 million previously made available solely to energy storage paired with solar projects. The Implementation Plan preliminarily allocates $130 million to Retail Storage Incentives and $150 million to Bulk Storage Incentives. The Implementation Plan notes that an additional $53 million in Regional Greenhouse Gas Initiative (“RGGI”) funds will later be made available for retail and bulk storage projects specifically located on Long Island.

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Commercial & Industrial Solar Due Diligence Review Manual for Tax Equity Transactions

U.S. Department of Commerce Sets Stage for New Countervailing Duties on Chinese Solar Panels

In addition to our work on a large variety of energy project financings, the Foley Energy Team has financed hundreds of C&I solar projects and together our team has experience with mostly all forms of C&I project documents in the market.  In an industry that boasts over 60 different forms of PPA, some much better than others, knowing how to make your project documents financeable is of paramount importance.  We know that all companies face challenges with internal legal and compliance training and decided that sharing a Manual that can be used as an ongoing reference tool would be far more useful to our clients than a one-hour seminar.  We are therefore sharing this Commercial & Industrial Solar Due Diligence Review Manual for Tax Equity Transactions with you to help your legal and business teams ensure that you do not have to make costly and frustrating amendments when it comes time to finance your projects.

This Manual highlights what financing parties look for when they undertake due diligence, explains what provisions to include in project documentation and why such provisions are important.  It contains guidelines to keep in mind while reviewing or negotiating a set of C&I solar project documents, followed in each section by a “checklist” of items to confirm you have evaluated the key aspects of the applicable document.  We have included a sample “Due Diligence Summary” that we provide to financing party clients for each C&I solar project – it’s a handy reference tool that contains the most basic document terms and a section on highlighted issues (Financing Party Notes).  If developers provided something like this to financing parties upfront, together with a well-organized dataroom, then diligence costs would most definitely go down.

Most of us who work in the solar market landed here not just because we enjoy projects, but also because we believe that solar is the future.  The better the project documents, the smoother the financing, and the more projects get done – and then suddenly, the future is brighter.

Click here to download the full manual.