The Energy Regulation and Markets Review - Stikeman Elliott

United States
with their standards through the purchase of tradable renewable energy credits (though
there are no national or regional markets for these credits because of differences across
states’ standards). More than 40 states and the District of Columbia have established
net metering policies that allow retail electricity consumers who own or host distributed
renewable generation resources (predominantly solar electric systems) to supply excess
generation to their retail electricity supplier in exchange for credits against their retail
electricity bills over 12-month and sometimes longer periods. Typically, generation
resources eligible for net metering arrangements cannot be sized at levels greatly in excess
of a retail consumer’s peak demand. A number of states offer various tax incentive and
rebate programs for distributed renewable generation resources. Most notably, California
provides a property tax exclusion for certain solar resources as well as installation cost
rebates or performance-based payments for solar and certain other renewable resources
(e.g., wind, fuel cells and CHP).
As discussed above, many of the federal tax incentive and financing support
programmes have ended or will soon end, though some of these programs could be
extended by Congress, as has been the case in past years, and has been proposed in
various legislation. However, given current fiscal concerns and related political
disagreements over the nature and role of federal financial support for clean energy,
the prospects for such legislation during 2012 remain unclear. At the same time, statebased
renewable portfolio standards, as well as net metering, tax incentive and rebate
programmes for distributed renewable generation resources appear poised to remain in
place for the foreseeable future (and as discussed in Section VI, infra, California not only
strengthened its renewable portfolio standard during 2011, it also took major steps to
begin implementing its own GHG cap and trade program, which is intended, in part,
to support greater deployment of renewable generation resources). Moreover, a number
of states are actively considering establishing, and in 2011 one state established, publicprivate
partnership clean energy financing entities to support deployment of renewable
energy and energy efficiency projects.
ii Energy efficiency and conservation
The United States has a limited set of comprehensive policies regarding promotion
of energy efficiency for electric appliances and energy efficiency standards for federal
buildings and properties. In addition, the federal government has various targeted grants
and financing support programs as well as tax incentives for energy efficiency investments.
A large number of states have similar types of programmes (many of which are
supported in whole or in part by funds provided by the federal government) and a large
number of states have energy efficiency portfolio standards, similar in concept to a
renewable energy portfolio standard, that require retail electric utilities to reduce their
total retail sales, peak retail sales, or both, by certain amounts by target dates. Some states
combine their renewable and energy efficiency portfolio standards. A number of states
have also combined their energy efficiency portfolio standards with retail utility rate
‘decoupling’ policies to allow utilities to recover of and on their fixed costs regardless of
reduced retail sales resulting from energy saving efforts. Certain states have implemented
or will soon implement financing support programs for end-use energy efficiency
investments, including ‘on-bill’ financing or repayment programmes that allow retail
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