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PUC recommends more taxpayer-funded solar incentives

SALEM — The state’s public utility commission has recommended the Legislature consider adopting taxpayer-funded incentive programs for solar energy projects.

The PUC spent the past few months evaluating and gathering input on the state’s solar incentive programs, and voted Tuesday to pass along the substance of its recommendations to the Legislature.

The state already has several taxpayer-funded programs intended to encourage the development of solar energy projects. Some of those incentives are scheduled to sunset soon.

Another handful of ratepayer-funded programs are paid for only by customers of specific utilities.

The report states that if the Legislature “wants to capture the full social and economic development benefits” of systems that convert solar energy into electricity, that taxpayer-funded incentives — programs that all Oregonians, regardless of utility provider, pay for and reap the benefits of — are the way to go.

The PUC released two preliminary drafts of the report — required by legislation in 2015 — earlier this year.

Solar companies had objected to the PUC’s initial description in an early draft of the solar energy landscape in Oregon as “robust.”

Jeff Bissonnette, the executive director of the Oregon Solar Energy Industries Association, said in public comments Tuesday the final draft was an improvement from initial drafts.

He said that solar energy was still an emerging industry and that he hoped the demand for solar energy in Oregon would remain stable. He added that his group was preparing an Oregon-specific solar business plan to evaluate the future potential of solar energy.

The commission noted in its final report that it’s difficult to calculate the benefits and costs of each incentive program designed to encourage solar energy development, as projects or individual customers are often eligible for more than one incentive program.

Oregonians who benefit from any of the state’s incentives can still receive a federal solar investment tax credit, according to the report.

A joint interim legislative committee is currently conducting a review of the Oregon Department of Energy, which has faced intense scrutiny in the wake of the troubled Business Energy Tax Credit program. That program ended in 2014.

In light of the Department of Energy review, the PUC did not offer specific recommendations on what form taxpayer incentives should take, but that the Legislature should study continuing an exemption on property taxes for people who have their own solar photovoltaic (PV) arrays.

An array or other renewable energy system can increase a home’s value, but since 2011, the state has allowed property tax assessments to leave out any increase in property value resulting from the installation of a solar PV system. Currently that exemption is scheduled to run out in 2018.

The commission also recommended legislators look at creating taxpayer-supported programs that incentivize residential and small commercial solar developments.

The second recommendation in the PUC’s report is tied into another piece of legislation that laid out requirements for how much of the state’s energy should come from small-scale solar energy projects.

That legislation, Oregon SB 1547, also known as the coal-to-clean bill, required electric companies credit owners or subscribers to so-called community solar projects in such a way that reflects the value that solar energy provides the electricity grid, a concept called “resource value.”

The PUC is in the process of determining that value. After that, the PUC plans to evaluate what the benefits and costs of using that resource value-driven methodology would be, according to the report.

Finally, the PUC also recommended that the Energy Trust of Oregon, which administers a solar electricity program paid for by a portion of public purpose charges on Portland General Electric and Pacificorp bills, should modify its use of those funds to support high-value projects that provide “unique benefits” to the utility system.

An example of a unique benefit would be a project that improves reliability, according to the report.

Read more: PUC recommends more taxpayer-funded solar incentives