July 30, 2012

CT renewables program holds millions for small business

Contributed Photo
Contributed Photo
IMTI trainees (from left) Hector Ortiz of Hartford, Dave Cruz of Waterbury, Gonzalo Ortiz of Naugatuck, and Anthony Fonseca of Naugatuck install the support system for a 5-kilowatt solar photovoltaic system at the IMTI training center in Waterbury.

CORRECTION: The original version of this story only had the contribution from Connecticut Light & Power toward the small ZREC program. When including United Illuminating's contribution, the program has $2.6 million available this year. CL&P alone has received 296 proposals for the large and medium ZREC programs.

Up to 150 small businesses could receive help installing renewable power systems this year when the state utilities open a $2.6 million program on a first-come, first-served basis.

Electric utilities Connecticut Light & Power of Berlin and United Illuminating of New Haven will unveil a new zero emissions renewable energy credit program later this year for businesses and other organizations to install smaller power systems, such as solar panels and wind turbines.

"It is really up to the developers to determine who is the best fit for a system," said Christie Bradway, CL&P manager of renewable power contracts.

The small-tier ZREC program spins out of the utilities' overwhelmingly popular medium- and large-tier ZREC program, where owners of renewable power systems are paid for every megawatthour of electricity produced. The Connecticut General Assembly created the ZREC program in 2011, and all of the credits paid come from contracts with utilities that use ratepayer money.

"This is a fantastic opportunity for small business," said Ed Steins, northeast regional director for renewable installer SolarCity. "These are all good opportunities for businesses to take advantage of these programs."

The large- and medium-business programs launched in May, but the small business program won't start until later this year. The amount of the large- and medium-business credits was determined by competitive bid on July 17, to ensure that proposals were competitive on costs. The amount of the small business credits will be determined by the average price of the medium-business credit plus 10 percent, so CL&P and UI can't launch the small program until regulators approve the medium-business program.

CL&P received 296 proposals for the large and medium ZRECs, and on July 17 tentatively selected 84 proposals representing 28 megawatts of renewable generation installed in the utilities' services areas. Because the proposals have not been signed into contracts yet, CL&P and UI are not disclosing the names of the awardees, the types of generation, or the prices of the credits until the deals are submitted for regulatory revenue.

Once the Public Utilities Regulatory Authority signs off on the contracts — and approves the medium-business credit amount — then CL&P and UI will launch the small business program for renewable systems of 100 kilowatts or smaller.

"We expect that the small tranche to be every bit as popular as the medium and large tranches," said Paul Michaud, president of the Renewable Energy & Efficiency Business Association, and counsel at Hartford law firm Murtha Cullina. "Developers have been parsing all sizes of projects, and they will be ready to submit their proposals as soon as that tranche opens."

All three tiers of the program will run new solicitations annually for the next six years. CL&P and UI will spend $1 billion over the life of the contracts for the ZREC program and its sister LREC program for low emissions renewable energy credits.

A 100-kilowatt renewable energy system still is fairly large as most residential roof solar installations are between five and 10 kilowatts.

"That is a fairly decent size commercial system," Bradway said.

Businesses such as manufacturers, distributors, grocery stores or any company with high electricity usage are good fits for the small-tier program, Steins said.

"We will see prices go down next year, so this is a chance to get the best price for ZRECs," Steins said.

Businesses can either purchase their renewable system outright or through a power-purchase agreement with the developer, where the business pays off the cost of the installation by buying electricity directly from the installer, who retains ownership of the system.

The exact number of projects selected for this year's small-tier ZREC program won't be determined until after PURA approves the credit amount. Even then, the quantity will be set by the size of the projects that are approved for the program; and since it is first-come, first-served, larger projects could eat up all the available $2.1 million rather quickly.

"It is another reason to go for this immediately," Steins said.

In anticipation of growth in the renewable industry, the Industrial Management & Training Institute in Waterbury launched a new program for electricians to become installers of solar photovoltaic systems.

"We felt it was probably going to be the next big growth for electricians," IMTI President Janice Shannon said.

The first IMTI solar installers class graduated on July 20, with several companies in attendance. One graduate already has been hired, and more hiring is expected as the industry benefits from Connecticut's ZREC programs, Shannon said.

"This is going to be the next big growth sector," Shannon said.

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