California Expands Renewable Portfolio Standard to 50% by 2030


Governor Jerry Brown recently signed into law SB 350, a landmark bill designed to promote greater implementation of renewable energy technologies over the next fifteen years. The new law will: (1) increase the state’s renewable portfolio standard to fifty percent by 2030; and (2) increase building energy efficiency in the state by fifty percent by 2030. During the signing ceremony, Governor Brown emphasized that “[a] decarbonized future is the reason we’re here.”

Currently, California’s three investor-owned utilities are on track to meet the state’s thirty-three percent renewable energy goal by 2020. Utility officials and renewable energy analysts note that these companies should not have a problem meeting SB 350’s fifty percent threshold, and all three investor-owned utilities publicly supported the bill. Gary Stern, senior director of energy policy for Southern California Edison, said the bill would assure “safe, reliable and affordable” power for the utilities’ five million ratepayers.

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IRS Releases Favorable Guidance for Individual Investors in Community Solar to Claim Section 25D Tax Credit


The IRS recently issued a Private Letter Ruling (PLR) clarifying that an individual investor in a net-meted community solar project may claim the federal residential Investment Tax Credit (ITC) under Section 25D of the Internal Revenue Code. (A copy of the PLR is available here.) The PLR is also significant because it appears to eliminate a number of contractual requirements that the utility and taxpayer needed to agree to regarding the tracking and ownership of the power produced by the solar project to be eligible for the credit.

Section 25D Tax Credit and Prior IRS Guidance

Just like the Section 48 ITC, the Section 25D ITC permits an owner of solar and other renewable energy property installed before January 1, 2017 to receive a 30% tax credit against federal income taxes. However, in order to claim the credit the property must “generate electricity for use in a dwelling … used as a residence by the taxpayer.” Some tax practitioners interpreted that to meant the credit was limited to solar projects on or adjacent to the taxpayer’s residence. A few years ago, the IRS provided some guidance in Notice 2013-70 (at Q&A Nos. 26 and 27) that taxpayers could in fact claim the credit for off-site solar projects. However, the fact pattern in the Notice described an off-site net-metered project that was owned by the taxpayer, so questions remained whether taxpayers could claim the credit for investments in co-owned community solar projects. Further, the IRS limited the Notice so that it only applied to net-metering arrangements whereby the taxpayer specifically contracts with its local utility to track “the amount of electricity produced by the taxpayer’s solar panels and transmitted to the grid and the amount of electricity used by the taxpayer’s residence and drawn from the grid” as well as stipulate in the contract that the taxpayer holds title to the energy until it is delivered to the taxpayer’s residence. These requirements were problematic because they were often at odds with utility tariffs and state net-metering laws.

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Arizona Rooftop Solar Regulations Highlight Distributed Generation Debate


Sunny Arizona is again in the middle of a nationwide debate between solar companies and utilities. Legislation adopted in March 2015, and which goes into effect on January 1, 2016, mandate certain disclosures and formats for leases used by rooftop solar companies, such as disclosure of the total lifetime cost of the system and the use of ten point typeface.

Proponents support the new rules as consumer protection legislation. Opponents have viewed the rules as unnecessary and as an additional burden aimed at generating fears and discouraging solar rooftop adoption.

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White House Plan to Further Expand Renewable Energy Use


President Barack Obama announced on August 24, 2015, additional steps taken to increase the adoption of renewable energy.

Among other things, the set of executive actions announced on Monday include making $1 billion in additional loan guarantee authority available and announcing new guidelines for distributed energy projects utilizing innovative technology and states looking to access this financing. The additional loan guarantee authority supplements the Department of Energy’s current loan guarantee solicitations, which total more than $10 billion in loan guarantee authority, to invite applications for distributed energy projects.

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New Report on Renewable Energy as an Airport Revenue Source

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

The Airport Cooperative Research Program (ACRP) has recently published a guidebook on Renewable Energy as an Airport Revenue Source. The link to the guidebook on the ACRP website is here. Foley partner David Bannard is a co-author of the guidebook, for which the lead authors were Stephen Barrett and Philip DeVita of HMMH.

Airports are exploring non-traditional revenue sources and cost-saving measures. Airports also present a unique and often accommodating environment for siting renewable energy facilities, from solar photovoltaics (PV) to thermal, geothermal, wind, biomass and other sources of renewable energy. Although the guidebook focuses on the financial benefits of renewable energy to airports, it also notes other business and public policy benefits that can accrue from use of renewable energy at airports.

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