On October 1, 2012, the Public Service Commission of Utah approved Rocky Mountain Power's Solar Incentive Program, which will support 60 MW of new distributed solar PV resources in Utah over the next five years (2013-2017).
The program will provide approximately $50 million in incentives and will support 60 MW of new distributed solar resources, allocated among three sectors: Residential (systems up to 4 kW), Small Non-Residential (systems up to 25 kW), and Large Non-Residential (systems up to 1,000 kW). Rocky Mountain Power will start accepting applications in January 2013 for the first program year.
A Cost-Effective Solar Incentive Program
Utah favors an economic approach known as the Utility Cost Test in evaluating utility energy efficiency programs and distributed solar. The approval of this program may be largely attributed to the fact that it was designed to be cost-effective – providing net benefits to both the utility and the ratepayers (not to mention the economy and the environment). The cost-effectivity analysis of the program reportedly showed that for every $1 invested in the program, ratepayers get a $1.65 benefit.
Under the program, Residential and Small Non-Residential projects will get an upfront incentive, paid upon project completion. Large Non-Residential project incentives will be paid in five annual installments.
Projects are required to produce 85% of expected output during the first year. If the project produces less than 85% of the output, the annual installments will be reduced by the difference between 85% and the percentage the project is producing.
Click here to see table.
Rocky Mountain Power will use a lottery to accept applications across all three sectors (Residential, Small Non-Residential and Large Non-Residential). If the available capacity for the year is over-subscribed, additional applicants will be placed on a waiting list in the order selected. If available capacity for the year is under-subscribed after the lottery, additional applications will be accepted on a first-come, first-served basis.
Based on their positions in the lottery queue, and depending on the remaining available capacity, projects will receive capacity reservations. Residential and Small Non-Residential systems will have 12 months from receipt of a capacity reservation to interconnect to Rocky Mountain's distribution system. Large Non-Residential systems will have 18 months to interconnect. If the project does not complete interconnection within the appropriate timeline, the capacity reservation will expire, and the application deposit will be forfeited.
Renewable Energy Certificates
Renewable Energy Certificates ("RECs") generated by systems that receive an incentive will be split proportionally between the system owner and Rocky Mountain Power ratepayers. Rocky Mountain Power will retain an ownership right in any REC associated with a participating facility equal to 0.28 MW/per incentivized kW per year for 20 years. Details regarding the ownership rights in the RECs are available on the Rocky Mountain Power website.
This is a significant victory for solar development prospects in Utah. Full program details are available at www.utahcleanenergy.org/files/u1/Schedule_107_Solar_Incentive_Program_FINAL.pdf