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7/3/2014
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Expanded distributed generation program becomes law
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Growth will bring green jobs as well as clean energy
STATE HOUSE – Legislation sponsored by Rep. Deborah Ruggiero (D-Dist. 74, Jamestown, Middletown) and Sen. V. Susan Sosnowski (D-Dist. 37, South Kingstown, New Shoreham) to expand a program that encourages the development of renewable energy projects around the state is now law.
The expansion, supported by environmentalists, potential developers and the state’s main electric utility, would lead to the development of more wind turbines, solar panel arrays and other small-scale renewable energy generation projects around the state, supplying Rhode Island with clean energy as well as jobs and economic development.
The pilot program allowed small-scale energy producers to attach to the electric grid and sell their energy to National Grid, with a standard 15-year contract and a set price. The practice is called “distributed generation” because it involves power generation that is spread around the grid, instead of only at large power plants. Larger-scale distributed generation projects compete, using the standard contract, but using the set price as a ceiling to ensure price competition. The pilot program has been oversubscribed, with more than 71 applications for the 24 renewable energy projects awarded.
The new law extends the program, which was set to expire this year, and gradually expands the previous total target of 40 megawatts over four years to a total of 160 megawatts of distributed generation power over five years. Under the legislation (2014-H 7727Aaa, 2014-S 2960Aaa), potential developers can enter 15- or 20-year standard agreements with National Grid that give them a guaranteed income to help them obtain financing for building their projects. Or, if they prefer, they may “net meter,” which would allow them to receive payment at the retail rate for energy they generate in excess of what they use. While the pilot program was aimed at commercial projects, the expansion in the new law opens it up to residential projects as well, which the sponsors expect will give rise to a boom in residential solar arrays.
The Rhode Island Commerce Corporation issued a report in May estimated the expansion will create nearly 250 jobs and an average $30 million annual boost to the state’s economy.
The new law benefits ratepayers by encouraging the continuing downward trend in renewable energy prices It does this by using a competitive bidding process for large and commercial-scale projects and by reducing developers’ financing costs through a guaranteed long-term revenue stream. Under the 2011 pilot program, there was a steady and significant decline in the prices of renewable energy in the state, including a 50-percent drop in solar energy prices in the program’s first two years.
It benefits Rhode Island’s economy by reducing the costs of renewables, and by enabling the growth of the small-scale residential solar generation industry. Under the pilot program, Rhode Island’s total solar generation capacity grew from 1.2 MW in 2011 to 21.65 MW including all projects that were at least under contract by the end of 2012. And as more projects are built, jobs are added. The number of jobs in the state’s solar industry grew from 210 in 2012 to 360 in 2013.
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903
(401) 222-1923
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