Oh, Stimulus!

On Friday, I attended a Sustainable Atlanta Roundtable titled, Show Me the Energy Dollars: New financial incentives and policies for energy efficiency and solar energy resources. These monthly SARTs are usually very good, and July's was no exception. An overflow audience consisted mainly of public and private organizations seeking access to Federal funds and of contractors and suppliers eager to support the ensuing projects.

David Gipson of the Georgia Environmental Facilities Authority (GEFA) said that the U.S. Department of Energy has approved GEFA's plan to use $82.5 million of Federal stimulus (aka, American Recovery and Reinvestment Act ARRA) funding for statewide energy efficiency and renewable energy projects and $124.8 million for low-income home weatherization. GEFA is now responsible for administering the $82.5 million State Energy Program (SEP) and will release guidance and application forms for SEP programs “shortly.”

Gipson described eight different programs and grants that will be available under the SEP. Most of the SEP's $82.5 million will be applied to one program aimed at retrofitting state government facilities.

Of the remaining SEP programs, I was personally interested to learn more about the Clean Energy Property Rebate (GA HB 473.) This provides grants that will offset 35 percent of the cost of renewable energy equipment, up to a cap that varies by technology. Funding will be awarded on a first come-first served basis for projects that have been installed in the same year for which funding has been applied.

What's really cool is that this grant will not replace the existing state income tax credit that will continue to be offered to residential and non-residential applicants. Unlike existing tax credits, this rebate program can be used by nonprofit organizations, schools and churches, which was welcome news to the many Georgia Interfaith Power and Light representatives in the audience.

For renewable energy projects including solar, the Feds are removing the caps that currently apply to the 30% Federal Income Tax Credit. Gipson said that GEFA is also instituting a reservation of credit program, which removes some of the financial risk when applying for project financing.

An audience member asked for clarification about the types of renewable energy projects covered by these SEP plans, since they only mentioned wind and solar technologies. He was disappointed to learn from Gipson that biomass projects may be added “at a later date.” Upon visiting the DOE's web site, I see that biomass is covered under the Renewable Energy Grants program, which will pay up to 30 percent of the project's cost for large, visible and “shovel-ready” projects.

These grants offer project developers the option of taking tax grants in lieu of tax credits, which became less useful when the current economic downturn shrank tax liabilities and tight credit made it difficult, if not impossible, to secure financing.

Gipson also told us that:

• There is no need to “get in line” for ARRA energy funds that will be administered by GEFA, because all funding will be awarded based on a competitive application process.
• The competitive application process will begin after the DOE awards the ARRA funds to GEFA, probably during the week of July 12, 2009.
• GEFA still needs to develop its competitive application process and the criteria that will be used to evaluate applications.

During the Q&A session, many heads in the room nodded when an audience member mentioned that large renewable energy projects will not be planned in Georgia until PPA providers find a more conducive business environment here. Dave agreed but said that GEFA does not have a plan for addressing this. He said that the Georgia PSC and perhaps the Georgia Power Company needs to address this matter.

I recently discussed this with a friend of mine who works at Georgia Power. My friend said that the PSC is largely responsible for Georgia Power's delay in expanding its existing net metering tariff.

Specifically, the PSC needs to update the formula it uses to compute how much GP pays independent power producers, and this is an issue that the utilities and the solar industry can get behind, together. I am sure that we will also address this within the Georgia Solar Energy Association.

As more information becomes available, GEFA will post it on their ARRA Energy Information web page where you can also sign up for their ARRA energy programs email list.