|Title||Utility-Scale Renewable Energy Projects: A Survey of Clean Energy Fund Support|
|LBNL Report Number||LBNL-49667|
|Year of Publication||2002|
|Authors||Bolinger, Mark, and Ryan H. Wiser|
|Keywords||electricity markets and policy group, energy analysis and environmental impacts department, state renewable energy policies|
Perhaps because utility-scale renewable energy projects are both highly visible and often quite cost-effective, support for large (> 1 MW) renewable energy projects has proven to be popular among state clean energy funds. While other incentive structures have been used, most states have thus far employed one or more of the following incentive types:
This report will focus on only the first three incentive structures – grants, forgivable loans, and production incentives.1 So far eight states – California, Illinois, Massachusetts, Minnesota, Montana, New York, Pennsylvania, and Rhode Island – have deployed such incentive structures to collectively allocate more than $265 million in support of a potential 1,500 MW of new renewable capacity. The purpose of this report is to describe this experience, as well as to provide relevant lessons learned. Section 1 provides an overview of project funding to date, along with a brief discussion of factors that potentially account for disparities in funding levels. Section 2 describes experience with grants and forgivable loans, which are typically not tied to project performance. Text Box 1 in this section highlights the potential interaction of state funding with the federal production tax credit (PTC) for wind and closed-loop biomass. Section 3 discusses production incentives – the most common performancebased incentive employed to date – by contrasting California's experience with that of Pennsylvania. Text Box 2 in this section highlights the importance of demand to project success. Section 4 concludes, with Text Box 3 offering opportunities for coordination among clean energy funds.