Chapter 1.1
Climate Change

• ALL
• Remove Code Barriers
• Create Incentives
• Fill Regulatory Gaps

Renewable Energy Incentives

INTRODUCTION

Coal, natural gas, and petroleum make up 99% of carbon dioxide emissions from electrical energy production.[1] Renewable energy sources help minimize dependence on fossil fuels that create air pollution and emit greenhouse gases (GHG).[2] Local governments can provide incentives for residential and commercial property owners to move away from traditional energy sources and toward renewable sources. Doing so is a prodigious way to help reduce emissions from fossil fuels. Common renewable energy generation systems are wind, solar, hydroelectric and geothermal. This ordinance should be drafted in a way to leverage the most beneficial renewable sources based on the local government’s location. For example, local governments in the sun-drenched portions of the southwest may seek to take advantage of and create incentives for solar energy.[3] Solar panels can be added to existing structures easily and with little effect to the building, making solar an ideal source of renewable energy for those with an abundance of sun.

In drafting this ordinance, local governments have a variety of options for creating incentives, including offering rebates on purchasing equipment, tax incentives, height allowances, setback and area-based incentives, expedited permitting, and others.[4] One incentive would allow net metering. Net metering measures the amount of energy produced by a renewable energy generation system. If more energy is produced than needed, a credit can be issued to the resident. The credits can be utilized to pay for utility bills in months when less energy is produced (see Zero Net Energy Buildings).[5] Another important incentive are rebates. If considering rebates, local governments may base rebates on installation cost or purchasing cost and may limit rebates to installation by local workers. By lowering initial costs, more developers and homeowners are more likely to implement renewable systems.[6] In addition, local governments may seek to help developers and homeowners expedite the permitting of renewable systems. Doing so, may help make it easier for individuals to shift to renewable systems.

Federal and state governments also offer different types of incentives to promote the purchase and use of renewable energy sources.[7] The Federal government has tax credits that can be found in a few places including the IRS website.[8] Other federal and state incentives and regulations regarding renewable energy can be found on DSIRE.org (Database of State Incentives for Renewables & Efficiency).[9]

EFFECTS

There are multiple benefits stemming from ordinances creating incentives for renewable energy, including economic, ecological, and health benefits.[10] The most direct benefit is a decrease in GHG emissions released from the burning of fossil fuels to create electricity.[11] In addition, the renewable energy field is labor intensive and may provide additional jobs. For example, California alone has over 100,000 jobs in the solar industry.[12] Workers are needed to maintain and install solar panels, wind turbines, and others. This can create new local jobs, in employment areas that have been growing. These jobs have a ripple effect on local business’s benefiting the entire economy in the area.[13] With the addition of renewable energy sources local energy prices become more stabilized, as inexhaustible energy sources such as wind and solar produce power that is not affected by shifting costs in fossil fuels.[14] Owners of renewable energy systems see immediate savings on their electric bill that can have substantial cost benefits for the owner by exceeding the initial cost of installation.[15] The reduced emissions also lead to improved air quality, benefiting public health.[16]

EXAMPLES

San Francisco, CA

San Francisco offers a series of incentives for residential installation of solar panels. San Francisco offers funds to residents seeking to install solar panels. The rebates go up to $500.00 per kilowatt hour generated by the solar system. The funds can used toward the design, purchase, and installation costs of solar panels.[17] If the panels are installed by an individual, firm, or organization located in the City, an applicant can receive an extra $250.00 per kilo watt hour, towards a solar system.[18] The San Francisco environment code also created an Administrator of the Solar Incentive Program (the Public Utilities Commission) and gave the position the ability to create rules for the allocation of solar incentive funds.[19] Funds are allocated from the San Francisco Public Utility Commission’s power revenue, along with any surplus from the solar incentive program from the previous year.[20] With the approval of the Solar Incentive Program Administrator, other forms of individual owned renewable generation systems can be given incentives under the program created by the environment code.[21] San Francisco has no generation capacity for eligible systems, meaning the system can generate more power than is used (see Zero Net Energy Buildings). Incentives are available to only the owner of the renewable energy system.[22] The City’s program has been extended to other qualifying renewable energy generation systems.

To view this provision, see San Francisco, CA, Environment Code § 18 (2017).

Georgetown, TX

Georgetown offers multiple incentives for residents wanting to add renewable energy sources to their property. One of the incentive programs is net metering. The Georgetown net metering program allows customers of the City’s electric utility to connect their solar systems and be credited for excess renewable energy production (i.e., producing more energy than they use) (see Zero Net Energy Buildings).[23] Georgetown also offers different rebates for the installation and purchasing of equipment needed to install solar systems. Rebates are based on panel ratings, inverter ratings, and the efficiency of the system installed.[24] The rebates are available for residential and small commercial customers, for solar, and for other renewable energy generation systems. Georgetown also has specific regulations for solar panels, giving the City more comprehensive coverage for the common renewable energy source.[25] The specific solar provisions make it easier for oversight of solar systems, while not limiting other forms such as wind, geothermal, and biomass.[26]

To view this provision, see Georgetown, TX, Code of Ordinances § 13.04.083 (2012).

ADDITIONAL EXAMPLES

Austin, TX, Code of Ordinances § 2-1-168 (Pub. 2018) (creates a resource management commission that encourages renewable energy sources for residential and commercial developers).

Annapolis, MD, Code of Ordinances § 6.29.010 (2017) (establishes a clean energy loan program to help finance renewable energy projects).

Colorado Springs, CO (2018) (provides rebates for $0.25 per watt, and up to 40% of total system costs could be covered by rebates and tax credits).

Milwaukee, WI (2018) (offers a program for affordable financing to purchase solar panels, also coordinates group buys of renewable energy generation systems, and provides other cost reducing incentives).

Model Solar Local Government Law (creates a tiered system for different local governments to use for creating laws relevant to renewable energy generating systems particularly solar).