Green Light Renewable Services

Federal agencies can be a confusing thing. Starting on the hill in Washington D.C. and working their way down to small towns across America, it can be difficult to understand exactly what those agencies do, and why they do it. How does the local business owner feel the effects of a national regulation sent down from thousands of miles away? Sometimes, the work of a federal agency can be obscured and misunderstood, and in some cases, unnecessarily vilified. The EPA is one of these agencies whose regulations are felt all across the country. So what exactly do they do?

The Environmental Protection Agency of today is a federal agency established to protect human health and the environment by writing rules and regulations based on the bills passed by Congress. The agency first appeared as a response to the feeling in the 1950s and 1960s that a federal policy was necessary to incentivize federal agencies to consider the environmental impacts of their decisions. And so the National Environmental Policy Act of 1969 (NEPA) was passed. This Act declared a national policy to protect the environment, as well as creating the Council on Environmental Quality (CEQ). Only a year later, President Nixon signed an executive order changing the NEPA to the federal agency: the EPA.

The EPA is led by an Administrator, who’s appointed by the President and must be approved by Congress. Beneath the Administrator, the EPA runs through 10 regional offices and 27 laboratories who are responsible for:

• keeping track of quality of air, water, land, and human health to set national standards and monitor the agency’s own progress
• conducting environmental assessments, research, and education
• maintaining and enforcing national standards
• working with industries and all levels of government on voluntary pollution prevention programs and energy conservation efforts.

So who works for the EPA?

The EPA employs just over 15,000 employees across the nation. More than 50% of these employees are engineers, scientists, and environmental protection specialists. The other half of EPA employees include legal, financial, public affairs, and informational technologies positions.

The EPA manages more than 100 programs that uphold 12 major laws and statues including air, pollution prevention, wastes and recycling, toxics and chemicals, water, and pesticides.

The Chain of Command

How does the local business owner come to know the regulations of the EPA?

First, Congress must pass an environmental law. Then, the EPA writes a regulation responding to this law. Usually, the regulation will be written as a federal standard. States and tribes then enforce these standards through their own regulations.

How are EPA regulations enforced?

When it’s necessary, the EPA can and will take a number of actions against companies and individuals who don’t follow federal regulations. These actions are either civil administrative actions, civil judicial actions, or criminal actions. Civil administrative actions means there is no judicial court necessary, whereas the civil judicial actions means that a judge must be involved to establish the proper enforcement for the parties not following the federal regulations. In some cases, criminal action is taken, in which case the abusing parties are taken to court with criminal charges and will either be judged guilty or not guilty.

What kind of enforcement does the EPA use?

Typically, the EPA tries to enforce their regulations through one of two ways:

1) Federal Facilities Enforcement: This means that the EPA makes sure that federal facilities are complying with environmental regulations. If they are not, the EPA can take civil administrative, civil judicial, or criminal actions against the federal facility.

2) Clean up Enforcement: This is the more commonly known and used method of the EPA. Clean up enforcement means that the EPA will identify the person and/or company responsible for the pollution and/or contamination and they will negotiate for the party to clean up the area themselves; order the party to clean up themselves; or, ordering the person/company to pay for the clean up to be completed by a third party.

Where does the federal funding go?

The EPA functions on an $8 million budget. Nearly 50% of this funding is used in the form of grants that are given to state environmental programs, non-profits, educational institutions, and others working towards bettering the environment and standards of human health. Remaining funds are used for initiatives spanning scientific studies to community cleanups. The EPA also uses the federal funding to study environmental issues. EPA employees are responsible for identifying and attempting to provide solutions to environmental problems across the country. We can’t forget about environmental education and community action, either. The EPA takes advantage of sponsor partnerships with businesses, non-profit organizations, and state and local governments.

Perhaps you’re familiar with these EPA regulations:

Clean Air Act of 1970

This 1970 Act was one of the first major federal acts to change the government’s role in their ability to control air pollution. The central point of this act was to limit emissions from stationary and mobile sources. To regulate the act, four programs were instated: the National Ambient Air Quality Standards, State Implementation Plans, New Source Performance Standards, and the National Emission Standards for Hazardous Air Pollutants.

In 1990, certain amendments were made to the Act which included:

• authorization of programs to control 189 additional toxic pollutants
• established permit program regulations
• expanded and modified enforcement authority
• established a program to phase out the use of chemicals that deplete the ozone layer

Today, the Clean Air Act regulates carbon monoxide, ground level ozone, lead, nitrogen oxide, particulate matter, and sulfur dioxide.

Clean Water Act

The Federal Water Pollution Control Act of 1948 was amended in 1972 to become the Clean Water Act. The changes made in 1972 made it possible for the EPA to:

• regulate pollutant discharges into US waters
• allowed the EPA to implement pollution control programs like wastewater standards
• made it unlawful for any person to discharge pollutants from a point source into navigable waters
• funded construction of sewage treatment plants under construction grant programs

Food Quality Protection Act

This 1996 Act amended the previous Federal Insecticide, Fungicide, and Rodenticide Act, and the Federal Food, Drug, and Cosmetic Act. The additions made in 1996 dramatically changed the EPA’s ability to regulate the use of pesticides.

Three main considerations were established with the 1996 Act:

• special susceptibility of children to pesticides
• aggregate risk from exposure to pesticides from multiple sources including food, water, and residential sources
• cumulative exposure to pesticides that have common mechanisms of toxicity

This Act also required that the EPA expedited approval of pesticides meeting FQPA standards, provided lists of pests of significant public health importance, expedited review of applications to register antimicrobial pesticide products, and screen pesticides for disruption to the endocrine system.

The EPA’s New Administrator

Perhaps what has brought the EPA into the limelight most recently is the approval of their new administrator, Scott Pruitt. President Trump campaigned, in part, on dismantling the EPA and cutting down the numbers of employees working to ensure environmental and human health across the country.

In early February, Congress approved the nomination of previous Oklahoma Attorney General Scott Pruit, 52-46. Democrats in Congress advocated to hold the vote until the OK Attorney General’s Office released over 3,000 emails detailing the communication of Pruitt and fossil fuel industries.

What is most worrisome about the approval of Pruitt as EPA Administrator is his self described status as a “leading advocate against the EPA’s activist agenda.” Coming in second, a number of lawsuits against the EPA in years past initiated by Pruitt himself, and often in conjunction with other fossil fuel companies. He is not entirely against the EPA and its regulations; however, he believes that environmental regulations are better served on a state-by-state basis, and many of his lawsuits dealt with what he felt was the EPA overreaching their federal bounds. Lastly, and just as worrisome as the previous two comments, is that Pruitt is quoted as questioning the scientific consensus of global warming.

After a largely successful 8 years with the Obama Administration (Clean Power Plan, signing of the Paris Agreement), American citizens must remain cautious and vigilant to see what will become of the EPA with its new leader, and speak out when the wellbeing of our environment and national health is at risk.

With the inauguration of a new president days away, advocates of renewable energy must remain vigilant in speaking out against politicians and utility companies who work against one of our utmost priorities as a nation — protecting the environment.

President-elect Trump ran on a platform that advocated the renaissance of the coal industry. He made comments against wind power, saying it “kills the birds,” and campaigned that solar power has “many problems,” one of them being that it’s “so expensive.” Comments like these have led to a feeling of fear and unsureness concerning the future of renewable energies in the United States.

But renewable energy advocates should not be afraid. Despite the words of the incoming president, the progress seen from the renewable energy industry in the last decade alone should lead us all to believe that progress will continue despite impending actions and policies of a new government.

Solar has been on a steady incline over the last decade, and there’s little to no sign that the incoming presidency will halt that progress. Michael Wheeler of San Francisco Recurrent Energy says that “Anybody who thinks that solar is expensive at the utility scale right now hasn’t seen the latest. Solar’s price, because it’s a technology, will continue to go lower and lower.” 

A LOOK AT THE NUMBERS

In 2016, 6,000 megawatts of utility-scale solar was installed, growing from 4,000 megawatts the year previous. Compared to ten years ago, the power from big solar projects is roughly 70% cheaper. Between 2008 and 2015, utility scale solar farm installation costs dropped 64%, according to the Department of Energy. In the third quarter of 2016, the US installed a record 4.1 GW of solar power, up 191% from the same period last year. Much of this installation boom is due to the Investment Tax Credit that offers solar and wind farms a 30% tax rebate. 

THE POLITICS

One of the largest positive signs from Washington came in December of 2015, before Trump was elected to office. The Investment Tax Credit (ITC) was up for renewal from a Republican congress, and with bipartisan support, the ITC was extended so home and business owners will continue to receive a federal credit for their decision to install solar panels.

Despite a Republican controlled House and Senate, there are still elected officials who have seen the inarguable positivity of renewable energy and will continue to speak out on its behalf, like Senator Chuck Grassley of Iowa. When asked what he would do if Trump were to repeal the wind power tax credit, Grassley responded, “He’ll have to do it over my dead body.” It is elected officials like these that renewable energy advocates must reach out to and support so they can continue fighting for solar and wind power in Washington.

On the state level, Renewable Portfolio Standards (RPS) will continue to benefit the progress of renewable energy industries. 29 states in addition to the District of Columbia partake in RPS which “requires electricity retailers to supply a rising percentage of power from renewable energy sources and accounts for about two-thirds of wind and solar installs in recent years." 

THE BUSINESS SIDE OF THE DEAL

More Americans are currently employed by “the solar industry than on oil rigs or gas fields,” and since 2009, the solar industry has provided one of every eighty jobs, which is expected to double by 2020, according to the National Solar Jobs Census. The marketplace’s demand for cleaner energy can be seen when looking at the recent trends of utility companies across the country. According to the MIT Tech Review, “even unsubsidized solar generation beats coal on price in sun-rich regions.” The utility sector will continue to move towards more use of renewable energy due to its favorable pricing and reduced carbon emissions.

Despite Trump’s claims that he will reinvigorate the coal industry and other fossil fuels, Mark Banteau, director of the Energy Institute at the University of Michigan at Ann-Arbor says that “coal is dying and renewables are surging, and that is not going to change. Once this bunch figures out where the dollars and jobs are, they will follow.” Between 2010 and 2015, the coal mining industry lost 25,000 jobs. “However, the decline of coal isn’t the result of environmental regulations, it’s the result of market forces. Namely, the fact that coal just can’t compete with cheap renewable energy and natural gas.” Even in more conservative states, like Georgia and Texas, electric utilities are choosing renewables on cost alone. 

REMAIN AWARE AND EDUCATE YOURSELF

Yuan-Sheng Yu, energy analyst with Lux Research says, “At the end of the day what Trump says and what is actually implemented are two completely different things.” Ultimately Yu is right, though the one aspect of Trump’s campaign platform that remains questionable is his vow to repeal the Clean Power Plan as well as pulling the US from the Paris Agreement.

His recent appointment of Oklahoma Attorney General Scott Pruitt as the next EPA administrator is also worrisome. Pruitt has fought to overturn the Clean Power Plan and has been a vocal skeptic of manmade global warming. It’s characters like this landing influential positions in Washington that has many renewable energy supporters concerned. American citizens have the responsibility of remaining as aware and educated, and most importantly, as vocal as possible if the incoming administration tries to take any action that may reduce the already very fine impact the renewable energy industry has made in the last decade.

In spite of his plans to “kill the Clean Power Plan,” Trump also promised to invest $500 billion into American infrastructure. Like Banteau from University of Michigan Ann Arbor’s Energy Institute says, this bunch will also fall in line once they realize where the dollars and jobs are located. Ultimately, Trump ought to see the financial success of solar and wind power, and he “will seize the economic opportunity of renewables.”

BACK TO THE COMMUNITY

No matter what happens in Washington, renewable energy has gained massive support at home and internationally. According to John Berger of the Houston Chronicle, “Solar energy in particular enjoys massive support, gives consumers energy options beyond just their monopoly utility and, in many places, is the lowest cost option.” Energy consumers must remember that utility companies are servants of the public — if enough energy consumers request alternative forms of energy rather than fossil fuels and other, dirtier energy sources, utilities will eventually have no choice but to listen to their constituents.

According to the Pew Research Center, solar energy support crosses party lines. 84% of Trump supports and 91% of Clinton supporters are in favor of installing more solar. This should give some peace to those concerned with the future of renewable energies given the claims of the incoming presidency. Energy professor Dan Kammen at UC Berkeley comments, “Sometimes a hostile White House can energize regional efforts.” If citizens rally together at the state level, those in Washington will have no choice but to listen, and act on behalf of those who put them there.

Despite recent legislative decisions and policy approval, the citizens and politicians of Iowa must recognize that the issue of renewable energy is not a political party issue. Iowans must remain steadfast in their adamancy for leadership, funding, and appropriate legislation of renewable energy efforts.

Based on net-metering legislation passed in late July, the state of solar energy in Iowa should be scrutinized. For years, Iowa has led the nation in embracing renewable energies, like wind and solar power, with progressive policy making that made clean energy more accessible to more people.

So what happened?

Three events occurred over the summer that bring into question Iowa’s solar state of affairs:

1. The Iowa Utilities Board passed new net-metering policies that may end up undermining much of the solar progress Iowa has made in the last 10 years.
2. The State of Iowa rejected a $1 million grant for the Iowa Energy Center, and subsequently,
3. Mark Petri resigned from his position as Director of the Iowa Energy Center.

New Net-Metering Policies

Earlier this year, two major utility companies, Alliant Energy and MidAmerican Energy, were asked to submit pilot projects that explored ways to expand rooftop solar. Utility companies across the country are re-envisioning their business model to better account for distributed generation. Companies like Green Mountain Power in Vermont are leaders of this new kind of utility company — one that customizes power offerings similar to a home energy management company.

Alliant and MidAmerican had plenty of innovative, clean energy focused business models to choose from. Instead, their pilot projects did mostly the opposite. Alliant suggested paying their solar customers less, while MidAmerican rallied behind imposing a new demand charge. The good news is that the Iowa Utilities Board rejected much of what the original pilot projects contained. The bad news?

The new policy may seem mostly unchanged. Josh Mandelbaum, an attorney with the Environmental Law and Policy Center said, “They’ve left the structure of net metering in place, and focused on how to expand that in a very narrow way that is on the whole positive.” Supporters of solar must pay attention to Mandelbaum’s last few words: “on the whole positive.”

The new net-metering policy includes three major changes:

1. Increases net-metering cap from 500kW to 1mW
2. When customers take energy back from the grid, they’ll be subject to service fees (administration and infrastructure costs)
3. Energy credits must be cashed out at the end of the year

Let’s focus on the last change: energy credits must be cashed out. In the old net-metering policy, customers generating their own electricity could save those excess credits, which rolled over from year to year, and could be applied to future bills. This credit rollover is one of the biggest benefits of producing your own energy and what makes residential solar a financially viable option for so many families and business owners.

In the new policy, those credits essentially expire at the end of the year. Credits are cashed in to the utility company, who will compensate customers “at the avoided cost rate and the proceeds divided in two: half will go to a utility fund to aid low-income customers, and half will return to the customer.” Barry Shear, president of Eagle Point Solar in Dubuque, IA, says this new cash out of energy credits will “have an adverse effect on the solar development in the state.”

If you produce less than 20,000kWh of energy a month (the average solar customer), the ‘avoided cost’ “falls between one and three cents per kilowatt-hour.”  With the new mandatory cash-out clause, if you have one kWh left over at the end of the year, you’ll receive between one and three cents, divided by two.

This aspect of the new net-metering policy, though benefitting lower-income households, nearly defeats the financial purpose of residential solar. The silver lining is that current solar customers can choose to remain with the old net-metering arrangement. If a solar customer opts for the new net-metering tariff, they cannot switch back to the old. All new solar customers will be automatically enrolled in the new tariff. The policy will be re-evaluated after three years.

Alliant and MidAmerican may not have successfully implemented their pilot projects, but the Iowa Utilities Board’s decision did begin the process of reversing much of the growth and success residential solar has had in the state of Iowa.

With the State’s rejection of a $1 million grant and resignation of the Iowa Energy Center’s Director, there are still questions to be answered. But one thing remains certain: solar advocates in Iowa and across the country must remain diligent in their efforts to ensure fair access to clean energy opportunities, and we must seek to hold the public authorities, officials, and organizations – whom we elect and support to act in our best interests – accountable.

One of the reasons homeowners decide to invest in rooftop solar comes down to one simple thing: money. Though a solar PV system might seem costly up front, it’s the longterm benefits consumers met pay attention to. When producing your own energy, your electricity is no longer pulled solely from the traditional energy grid — that’s the money you pay at the end of the month to your local utility company. In fact, depending on your system’s size and production, and your personal energy usage, you may end up returning excess energy to the traditional grid. Net-metering is a mechanism that allows residential solar consumers “who generate their own electricity from solar to feed electricity they don’t use back into the grid” and receive a credit for doing so. 

How does net-metering work? 

Net-metering is a billing mechanism that allows solar consumers to be financially independent of the grid by giving consumers control over their utility bills. A PV system might generate more energy than the home uses, in which case the excess electricity would be transported back to the nearest major transformer. 

Net-metering policies vary by state, but many utility companies will install a bidirectional meter once a solar user establishes their interconnection agreement with the utility. These meters can run both forwards and backwards. If your electricity is net-metered, your meter will run backwards “to provide a credit against what energy is used at night or other periods where the home’s electricity use exceeds the system’s output. Customers are only billed for their ‘net’ energy use.” 

You may be thinking: Why do I have to be a customer of the utility companies at all if I have solar panels? Using solar makes you financially independent from the grid, but not physically. There are times when your home’s electricity exceeds the ability of your PV system, and you’ll need to rely on the energy you receive from the grid. To be completely independent requires the use of a battery storage system, which we’ll talk more about next month. 

As of 2015, the solar industry employed 174,000 Americans. Net-metering continues to be a topic of interest because choosing the ways we produce and pay for power is one of the central benefits of going solar. In addition to lowering solar users’ utility bills, net-metering brings even more benefits in the form of increased jobs, income, and investment. Metering policies increase the demand for solar PV systems, and in doing so, also increases the demand for installers, electricians, and manufacturers. 

So what’s the problem?

If net-metering increases demand for alternative energy and increases jobs, who could find a problem with it? Well, it’s those pesky utility companies. Some utilities perceive net-metering policies as lost revenue opportunities. Instead of everyone consuming from and paying their local utility company, consumers now have enough control to lower their monthly bill. While some utilities have been able to modify their business plan to become more inclusive of and friendly towards solar users, there are still some others who have succeeded in actually increasing solar users’ utility bills by decreasing their net-metering rate while increasing fixed charge fees. 

Net-metering policies differ by state, and as of May 2016, only four states lacked any active legislation concerning net-metering. Some states have stood strong behind the solar industry by passing laws with progressive metering policies, while some others have fallen to the complaints of their local utilities. 

The Good 

Recently, many states have rallied behind the solar industry by passing favorable legislation in support of numerous solar policies. In 2015, Freeing the Grid gave 16 states an “A” rating regarding their net-metering policies, including Arizona, Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont, West Virginia, California, and Colorado. Each state differs in their specifics, but we’ll focus on the advances made in Colorado and California. 

Policies in Colorado

In Colorado, solar contributed $13.6 million in annual grid benefits and accounted for 3,600 jobs. In just 5 years, the industry has seen a 50% cost decrease, and 78% of Colorado voters now support net-metering. Colorado has had active net-metering and interconnection regulations since 2005. 

One of the biggest points of contingency for net-metering is how much a solar user should be compensated for the electricity they feed back into the grid. A solar user can be compensated in one of three ways: above retail rate per kwH, at retail rate, or below. 

In 2016, Colorado’s net-metering policies were up for a new vote, and legislators unanimously decided to keep the standard, saying that the solar crediting program was satisfactory and balanced as is. With the current Colorado policies, a homeowner who decides to go solar will receive a bidirectional meter free of charge from their utility company, and will continue to receive a “credit for every kwH an array puts on the grid at the same price residential customers are charged for electricity.” 

Policies in California 

Colorado’s policies are doing good work to support the solar industry, but California is said to be setting the national standard for net-metering. The state has a plan to be 50% reliant on renewable energies by 2030, and San Francisco is making further headway on this goal by requiring all newly-constructed buildings to have solar. California already represents nearly half of the country’s solar capacity with 450,000 solar arrays. 

California’s net-metering laws are very similar to those in Colorado, given that utilities credit solar customers at full retail rates, which in California chalks up to about 17-20 cents per kwH. 

All across the nation, utilities argue that the retail rates or “fees are overly generous and that solar owners are piggybacking on the electrical grid without paying a fair share of its cost.” However in California, the newest net-metering policies also offers “concessions to utilities, including additional minimum charges for solar customers and the establishment of time-of-use rates that raise the price of electricity consumed during hours of peak demand.” Time-of-use rates essentially changes the price of electricity during different times of the day to better match of real-time costs of generating and transmitting energy across the grid at large. 

Rather than utilities only seeing the negative of perceived revenue loss, officials should instead be more receptive to these time-of-use measures, and the words of Sacher Constantine, Director of Policy at the San Diego-based Center for Sustainability who says, “The California system will likely influence future net-metering battles across the country. It signals a future approach that can strike a balance between the interests of solar power owners and the legitimate costs to maintain the grid.” 

Utility companies’ central argument is that net-metering unfairly shifts costs to non-solar using customers. When you pay for your monthly electricity bill, you’re paying for the amount of energy used as well as general operating costs for maintaining the grid. If solar users are only receiving a credit for the energy they transmit back to the grid, then it may be fair to say those users are no longer contributing (money) to the grid’s maintenance; however, California’s inclusion of time-of-use rates helps to solve this conflict. 

Now, the bad: 

Even though many states have passed policy to encourage the solar movement, there are also those who have established regulations that prove incredibly regressive to the solar industry. Two of these regressive-policy states include Hawaii and Nevada, talked about in depth below. 

Policy in Hawaii

Just last fall, Hawaii was making front-page news for its solar efforts and how well the state was taking to the increase in solar panels. But as of October 2015, the Public Utilities Commission (PUC) ruled to close all net-metering options to new solar users. Instead, solar users may choose from two new tariff options, which still allow for some credit to be given, but far less than those provided with net-metering. 

The newest policies in Hawaii jeopardizes the solar industry and negatively impacts middle and lower income consumers by taking away one of the central benefits to going solar, as you’ll see in the Nevada case study below. 

Policy in Nevada

Nevada made some of the most drastic and negative changes to their net-metering, despite being one of the states with the most exposure to sun in the nation. Net-metering was first introduced in 1997, and until this year, Nevada utilities paid retail rate to solar users, which came out to be about $623/year in the south, and $471/year in the north. 

In 2015, the Nevada PUC determined there needed to be a new study looking at the electric rate structure in hopes of discovering new ways to shift the costs. In December of 2015, the Nevada PUC decided that utility companies would change to paying wholesale rates to current net-metering users. 

In addition to the new wholesale rates, the PUC tripled the fixed charges solar customers will pay over the next four years, and reduced the solar credit customers receive for “net excess generation” by three quarters. Regulators said the new legislation worked to make solar customers pay their “fair share” of Nevada Energy’s grid. 

Almost immediately, solar industry folks spoke out about the new regulations. Solar companies warned that these changes would negatively affect the industry and make rooftop solar economics unworkable. After the new rates took effect on January 1, 2016, Solar City, SunRun, and Vivint all announced “they would have to cease operations in the state. Local installers have also been forced to cut staff.” 

What’s worse? The new regulations apply retroactively to the nearly 18,000 existing Nevada solar customers, which erases nearly all of the savings from going solar and actually increases monthly electricity bills thanks to the increased fixed charge. 

But the story doesn’t stop there. Nevada is now facing additional backlash from solar customers and industry people. After the new laws took place, a group of solar customers launched a class action lawsuit against Nevada Energy claiming the utility conspired to unlawfully reduce incentives. Those who criticize the 2016 regulations say that the new regulations might even violate the contracts clause of the constitution for “undermining an existing agreement” between solar companies and electricity customers. 

After these outcries, Nevada Energy conceded just a bit, and said it would file a proposal to grandfather in those existing solar customers. 

Remember this though: the blame is not being placed on the solar companies, but the utility companies lobbying for the regulation changes that benefit their companies, rather than the citizens and solar employees working towards renewable energy. 

So the question remains:

Is net-metering in the best interest of the solar industry as we continue to move forward? Compromises must be found, certainly, but the solar industry and utility companies must continue working towards a more inclusive solar culture that includes middle and lower-class families. This means working towards state-supported policies that continue to provide a financial incentive for going solar, rather than working backwards and making solar an all-expense, no pay-off renewable energy resource. Whether net-metering is the be-all-end-all solution has yet to be answered, but one thing is clear: states must continue to reward solar output, which means renewing solar tax credits at the end of 2016, rather than watching them expire.