Lawmakers consider new solar project subsidies
SALEM House lawmakers from both sides of the aisle signaled their support this week for a bill that would encourage large solar projects in Oregon.
The House Committee On Energy and Environment voted unanimously on Thursday to send the bill to the budget writing Joint Committee on Ways and Means.
House Bill 4037 would create a state subsidy of half a cent per kilowatt hour of energy generated from qualified projects. The subsidy would last five years.
Legislative staff have yet to put a price tag on the legislation, but a solar industry representative who drafted the bill estimated it could cost a total of $5.7 million. The money would come from the state general fund.
It would not be the first Oregon incentive for solar projects: The state issued more than $50 million in business energy tax credits for solar between 2006 and 2014, according to data from the Oregon Department of Energy. Still, Environment Oregon state Director Rikki Seguin told lawmakers this week that only 0.02 percent of the states energy comes from the sun.
David Brown, a senior principal at Obsidian Finance Group LLC in Lake Oswego, drafted the bill with input from other interested parties. Brown said the company has built the states three largest solar projects, and plans to build another large project in Southern Oregon by the end of this year.
Brown said House Bill 4037 would provide much smaller incentives for solar projects, which makes sense because prices have decreased. His company developed the five-megawatt Outback project in southern Oregon, which received a $10 million business energy tax credit. Brown said the production subsidy would provide a total of $250,000 to $300,000 to a similarly sized project.
When the (business energy tax credit) died, the solar program for larger projects stopped, Brown said. And so ironically, the (business energy tax credit) hurt solar development more than it helped it ... I think this bill is a recognition that a small amount of targeted investment paid only for guaranteed results is still a good idea in Oregon. But it took a long time for the dark cloud of the (business energy tax credit) to start to clear away.
The bill does contain language intended to ensure benefits go only to projects that actually produce energy. If a project sits idle and does not produce energy, the state would reduce the length of the subsidy under the bill. Projects that do not produce power within two years would be kicked out of the program, under an amendment added to the bill before lawmakers voted it out of committee.
Solar project developers would have only until Jan. 2, 2017, to apply for the program, and the subsidy would be limited to the first 150 megawatts of solar projects to be accepted into the program. The subsidy would only be available for 2 to 10 megawatt projects in Oregon.
The program would sunset in 2023. Any one program participant can only get the subsidy for up to 35 megawatts of solar
State Rep. Cliff Bentz, R-Ontario, was one of the Republicans who voted to move the bill out of the House Committee On Energy and Environment. Bentz said the solar subsidy would be key to ensuring solar projects are built in Oregon, if lawmakers pass a bill this session to double the states renewable energy mandate for the states two largest utilities, PacifiCorp and Portland General Electric.
If (the renewable energy bill) passes, there is going to be a lot of green energy needed, Bentz said. We would of course want to see as much of that developed in Oregon as we possibly could.
Brown said it was not surprising the bill has bipartisan support.
Most of the economic development will occur in the sunny part of the state, which is rural, Brown said.