RETC RECOMMENDATIONS SB688/HB2522

In general, the legislature should provide guidelines and cap the renewable portion of the program, while removing the specifics and giving the ODOE the authority to design the best program they can provide.

  • 0 Biofuels (home heating, wood pellets, vehicle) part of RETC. Other states don’t provide these subsidies. Only 4800 of 1,800,000 taxpayers claim these tax credits. Not effective.
  • 0 Appliances. Utility and ETO subsidies are adequate. Few other states have state subsidies, and we judge this as no longer needed. The market is transformed in Oregon as 80% or more of appliances for sale in Oregon meet RETCs standards.
  • 0 Woodstoves. Continue only if standards are increased. Only three states provide subsidy, mandate higher standards instead.
  • 5 Heating and Air conditioning, insulation, ductwork, etc. This is higher cost equipment and improvements. We recommend changingthese tax credits to a loan program similar to EWEBs. There is lots of energy at stake here, but making the changes is cost restrictive to moderate income homeowners who are little helped by a small tax credit. Low or no interest loans would be far more valuable to these homeowners and likely would bring more energy efficiency work forward.

See below for details on EWEB’s program.

  • 5 Renewables, subsidy must be continued as the high cost would eliminate most systems without subsidy. However, revise to 40% skin in the game by the system owner (homeowner, SolarCity or NW Natural. Efficiency measures should be required to be completed, before renewable devices are installed with taxpayer financial assistance.
  • 1 Electric Vehicles (not in this bill). This subsidy is judged unnecessary, the Oregon appetite is present for these vehicles and we have already been named one of the few states where these vehicles are first being introduced. Only 12 states have significant financial subsidies for EVs. Others offer small incentives like use of HOV lanes and small reductions in licensing fees.

On Renewables:

  • Cap the renewables part of the program. The change to allowing Solar City to do solar PV and NW Natural to do solar thermal on residential facilities, and the uptick in the Solarize cities program means there will be growth in the renewable programs you can’t anticipate. To deal with the bulge Repine spoke of, installers of any renewable systems valued at more than $3000 cost should be required “to give notice of installation” or “be approved via a preliminary application prior to installation” so the department can predict the revenue hit, and adjust the RETC subsidy available accordingly.
  • Set guidelines that homeowners (or NW Natural/SolarCity residential programs) shall have 40% skin in renewable projects.

PLEASE NOTE THIS EXAMPLE - collected 3.27.2011 in Portland

RS Energy brochure for the Better Living Show:

“Incentives cover 80% of a system’s cost”

20 Panels – 4.1 KW

Cost $21,033

ETO $7,175

Out of Pocket $13,858

Federal Tax Credit $4,157

State Tax Credit $6000

After Incentive Cost: $3,701 [actually this is less than 18% of cost]

Power savings over 25 years: $18,209

In this example the homeowner is providing 17.6% of the cost, though these is some time value of money not in this calculation as the tax credits must be used over several years. $3,700 of a $21,000 project cost doesn’t seem quite fair.

  • We believe that energy efficiency must come first. Despite the desire of the solar community not to have “their” sales program complicated, this is essential part of logical program design. Enthusiasm for solar is rapidly moving that market. But as we see in the example above, the public would be providing over $17,000 for that enthusiasm. Given that, it is only fair to insist that the cheapest energy first be used, and that is the energy that is never used.

EWEB EXAMPLE OF GREATER USE OF LOANS

EWEB offers alternative approaches to incenting residential energy efficiency. Overall, EWEB’s grant and loan incentives appear to make their program more versatile and usable across economic strata.

5-year, zero-interest loans are available for ductless heating and cooling (up to $4,000), ducted heat pumps (up to $5,000, $7,000 or $8,000 depending on heat pump type and whether or not the home was manufactured), solar water and pool heating (75% of project cost) and duct testing and sealing (costs exceeding grant amount listed below).

A 1-year, zero interest loan of up to $500 is available for air sealing.

A limited-income weatherization program is offered to customers with incomes less than 200% of federal poverty level, providing free energy audits and financial assistance appropriate to the level of weatherization needed. Included are free air sealing and a $875 grant for duct testing and sealing, among other things.