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HB1105 – House Environment Hearing Testimony Followup

Dear Representatives McCoy, Upthegrove, Pike and Members of the
Environment Committee, Staff and stakeholders:

It was an honor to present to you at Wednesday’s hearing on HB1105.
And I thank you for the opportunity to submit recommendations in
writing. Bottom line is that our State incentive program which has
already created many Washington State jobs is has the potential to
be truly GREAT. The Community Solar element could be a model
program for others and ignite positive public-private partnerships
that leverage citizen investment to make capital improvements on
taxpayer owned facilities in every district in Washington State.

It is a win/win/win/…

  • a Win for communities, rewarded for collaborating to be part
    of a clean energy solution
  • a Win for local governments that host quality renewable energy
    systems and save on their power bill for decades
  • a Win for WA State workers through job creation for installers
    and producers and the ripples that radiate
  • a Win for WA State equipment producers as it creates momentum
    and enough security in the market to establish themselves and
    develop products competitive across the globe
  • a Win for the State economy and State budget with increased
    economic activity
  • and a Win for the environment and climate.
  • and it should be an easy Win in the Washington State
    Legislature with everyone creating benefit to constituents
    without incurring further costs.*

But, to be truly GREAT, we must shake off the complicating elements
which have become painfully apparent in the last three years.

Remember: K.I.S.S. – keep it stupid simple. The secret is to
making this FANTASTIC is to simplify, simplify, simplify. (HB 1301
violates this law of success and will likely raise more problems
than it solves.)

The below recommendations are the result of multiple stakeholder
meetings and dozens of hours of interviews. As you might have been
able to tell by the testimonies, we are all (utilities, installers,
producers, municipal hosts, and community activists are cheering for
you to make it easier for us to do good things across the State.

In collaboration for the public good,

Bill Moyer
Executive Director
Backbone Campaign
http://VashonCommunitySolar.org
206-356-9980

* As the funding for this incentive was allocated when the law was
created, the only fiscal note is currently exclusively for staff
time at Dept. of Commerce or Washington Housing Finance Commission.
Won’t there be saving at Dept of Revenue to reallocate? Beyond
that, there should not be a fiscal note required as changes are
merely making the funds already accessible by pruning a tangled
program.



These are the basic amendments I suggest For

HB 1105

Top Tier Amendments:

  1. As HB 1105 expands eligible properties to include tribal
    properties, please amend to include all properties owned by
    tax-payers
    such as community colleges and city buildings
    in municipalities that have their own utilities
  2. Amend HB 1105 so that in order to qualify for the highest
    incentive program, an automatic transfer of ownership to public
    host is required. [This should help ensure public benefit from
    public incentive, help reduce DFI involvement, decrease
    operating costs like lease/rent/insurance and administration for
    the community solar organizers].
  3. PLEASE make simple amendment that the $5000 (Or whatever
    amount you decide upon – as it may make sense to increase it for
    some aspects of the program to $10,000 or more) cap on
    incentives is per person, yer year, PER PROJECT
    (Not program wide). This will eliminate a source of much
    confusion at DOR and uncompensated and unnecessary burden on
    utilities which have been forced into tracking system wide
    participation – which is impossible for them and thus has
    resulted consequentially in unnecessary limits on who can
    participate in projects to only those who are that utility’s
    electrical customers. This amendment should fix that issue.
  4. 5/25/70 % allocation of incentive pool is problematic because
    LLC limit is squelching participation while the utility portion
    is under utilized. Consider fixes to that ratio, perhaps
    lumping utility and company owned together for a 30/70 split.
  5. PLEASE REMOVE “owner and” and the mentions of “other” from
    the definition of “Administrator so that a non-owners, such as a
    nonprofit organizations, community associations, and community
    organizers can server as an “administrator” without being an
    “owner.” [This was especially a problem when it was required
    that all owners be account holders at the utility within whose
    service area they were organizing. Many nonprofits rent office
    space, not do not have an account with the utility. It is
    another example of where DOR was making rulings, and then
    exceptions, then exclusions trying to interpret words in the law
    that were relatively arbitrary.]

Sec. 1, (1)
“Administrator” means an owner and assignee
of a community solar project as defined in subsection
(2)(a)(i) of this section that is responsible for applying for
the investment cost recovery incentive on behalf of the other
owners and performing such administrative tasks on behalf of
the other owners as may be necessary, such
as receiving investment cost recovery incentive payments, and
allocating and paying appropriate amounts of such payments to
the other owners.

Secondary amendments to consider:

- Section 1 (3) & Section 3 (11)(a):
Consider removing this sentence from the definition of “Customer
Generated Electricity”: Except for community solar projects, a
system located on a leasehold interest does not qualify under
this definition
. The reason being is that this excludes
small business owners with long-terms leases who may want to
install a PV system (e.g. contractors, restaurants, etc.) from
getting production incentives, since they do not own the building.
I believe HB1301 Sec. 3 (2) (b) remedies this by simply requiring
that the customer have an existing meter/account with the utility.
Note that this has nothing to do with “solar leasing” – it
would still require the utility customer to own their own system.
- Section 2 (9): I believe this bill would
need to extend the current program so as to keep the industry from
going in to a coma until the new program takes effect. If this
passes as-is, most if not all PV customers will want to hold off
on buying a system until the new program takes effects. Possible
solutions are changing the date from 2020 to 2023, or allowing
customers who enrolled in 2012 or 2013 to re-apply for the new
program.


In regards to HB 1301:

Please let me know If you end up needing input on HB 1301, the
below is a beginning, but I am compiling other input from
stakeholders, which includes making changes to Phase 2 that are
not listed below

Recommendations
for HB1301 in order to:

  1. Keep community
    organizers, organizations, and associations engaged as
    administrators and organizers of competitive projects into
    Phase 2 AND the Green Jobs Competitive Pool phase.
  2. Remove the
    obligation of utilities to track participation and incentive
    cap across the State
  3. Allow for
    weighing community benefit as criteria to be considered
    competitive.
  4. Remove confusing
    and potentially problematic and arbitrary language from the
    definition of “Administrator”

Do we have
assurances from DFI that the 10 year contract, or other
changes:

  1. Protecting
    community-based projects from extensive legal costs to
    satisfy DFI requirements?
  2. Allowing broad
    participation in community projects without limiting
    participation to “qualified investors,” i.e. millionaires?
  3. Do not require
    onerous non-profit and other claims of exemption that limit
    investors to “members only”?

PLEASE ADD: “PER PROJECT” AS SEEN BELOW

Section 2, #6a

(6)(a) No individual, household, business, or local 38
governmental entity is eligible for incentives provided
under…for more than five thousand dollars per year, PER
PROJECT
.

PLEASE ADD At Section 4, #3, Please add (vi) The
degree to which the installation of the system promises public
benefit through savings on power costs paid with taxpayer
money over the life of the system.

A. Will the system will be located on a public property?

B Will ownership of the system will be transferred to the
public host ownership at the end of the incentive period?

C. Will ownership be transferred by sale or donation?

Sec. 4, #3c. PLEASE ADD (+/-) (IF you are going to
prioritize the considerations, then please prioritize public
benefit by inserting these considerations at the highest level:

i. Whether the system will be located on a public property.

ii. If “yes” on (i), whether ownership of the system will be
transferred to the public host ownership at the end of the
incentive period

iii. If “yes” on (i) and (ii) by what means that ownership will
be transferred, i.e. sale or donation.

Sec. 6 #1 PLEASE REMOVE “and owner” and the 2 mentions of
“other” from the definition of “Administrator so that a
non-owners, such as a nonprofit organizations, community
associations, and community organizers can server as an
“administrator” without being an “owner.” [This was especially
a problem when it was required that all owners be account
holders at the utility within whose service area they were
organizing. Many nonprofits rent office space, not do not have
an account with the utility. It is another example of where DOR
was making rulings, and then exceptions, then exclusions trying
to interpret words in the law that were relatively arbitrary.]

Proposed changes to replace/amend the “community solar” program:

[Update on 2-11-13: The confusion about the meaning of "community solar" may be partially to blame for the current absence of  a public host/public benefit in the current draft of HB1301.  Perhaps the wisest course is to accept the existing definition of community solar in the cost recovery program, clarifying and defending the incentives for public benefit.

Key recommendations remain essential:

  • Create a Rolling 10 year incentive for investors in all projects that qualify.
  • To qualify for the highest incentive program, an automatic transfer of ownership to public host is required. [Depending on when in the term this transfer is made, an additional benefit to
    the investors is a potential tax deduction for the donation. In trade for the simplified transfer of ownership, the public host could more easily/legally waive rent, assume insurance and maintenance responsibilities.
  • Change $5k incentive payment per person/household, per year limit to $5k per project, per person, per year. This removes an impossible reporting burden on the utilities, while maintaining some safeguard that WA State tax dollars cycle back into local economies rather than funneling money out of state speculators.
  • Make all public and tribal facilities, including colleges qualified hosts.]

Recommendations presented here are the result of many conversations with a variety of stakeholders in “community solar” efforts across Washington State. Though these ideas are generally supported by a number of stakeholders, these are not officially endorsed by those parties.

“The beginning of wisdom is to call things by their proper name.”
~ Confucius

To call things by their proper names is a Confucian virtue, echoed in the movie Into the Wild. When many of us first came across the idea of community solar some years ago, it was because of the work of Gary Nystedt, resource manager for the Ellensburg public utility. Gary created a program for long term ownership of shares in solar systems located on city property by community investors .  Virtual net metering, i.e. power generated by each share is credited to the owner’s actual utility bill makes this model simple, clean, easy to understand. In my opinion, the term community solar should be reserved for that model of shared ownership and method for distributing long term benefits to the investors/owners.

The program spelled out in WAC 458-20-273 includes something it refers to as “community solar,” for which it designates what appears to be the most generous production incentive in the world. But part of the problem
is that it isn’t really community solar. Why do I say this?

  1. Unlike the Ellensburg project, there is no incentive for long term ownership as all benefits or ROI rely solely on the production incentive scheduled to expire June 30, 2020.
  2. Though it is not forbidden, there is no provision for or requirement for virtual net-metering for the owners, but instead the public host (school, library, retired land fill) receives the benefit of the power generated.
  3. Though not clearly spelled out by the law, the only sensible path after the production incentive expires is to transfer ownership to the public host. After the incentive period ends overhead such as rent, insurance, maintenance, and accounting and other costs consume all economic benefit of the power savings.

The financing and creation of renewable energy installations on public facilities, for long term public benefit is a great cause. But to call it community solar just confuses people, and in the realm of investment for public benefit, complexity and confusion are the enemy. Ideally, this aspect of the State program would be called
something like “Citizen Financing of Renewable Energy on Public Facilities for Public Benefit.” When framed as such, a few tweaks to the current program will clarify the goals and rescue the currently named “community solar” component from irrelevance. I distinguish that component from the residential element because it seems that the residential program is more or less ok as is, though simplification may be desirable regardless.

Changes to the “community solar” element of the program that we propose would retain the current incentive formula to encourage in-State equipment, and the requirement that to benefit from the “Community Solar” doubling of that incentive, the system must be placed on public facility and deliver public benefit through long term power savings for tax-payers. (Note: My use of “solar” is due to our situation and not meant to undermine wind and other renewable generation allowed under the current program.)

The key recommendations we have developed through conversations with a broad variety of stakeholders and are currently presenting to those in Washington State government agencies and legislature include:

  • Create a Rolling 10 year incentive for investors in all projects that qualify.
  • To qualify for the highest incentive program, an automatic transfer of ownership to public host is required. [Depending on when in the term this transfer is made, an additional benefit to
    the investors is a potential tax deduction for the donation. In trade for the simplified transfer of ownership, the public host could more easily/legally waive rent, assume insurance and maintenance responsibilities.]
  • Change $5k incentive payment per person/household, per year limit to $5k per project, per person, per year. This removes an impossible reporting burden on the utilities, while maintaining some safeguard that WA State tax dollars cycle back into local economies rather than funneling money out of state speculators.
  • Make all public and tribal facilities, including colleges qualified hosts.

Additional recommendations:

  • Allow Dept. of Commerce, WSU, Housing and Finance Commission or other agency to assume administration from Department of Revenue (DOR) on appropriate elements of program.
  • Ensure that Department of Financial Institutions (DFI) involvement is not triggered or involvement minimized, possibly through making shares nontransferable, passing of ownership to host, automatic guaranteed incentives.
  • Eliminate the arbitrary 5% company owned, 25% utility owned, 70% individuals and groups limits on the incentive pool to avoid prorated of incentives in certain categories, while others remain
    untapped.
  • Lift the current limit of .5% of utility tax burden allotted to incentives so a successful program putting renewable energy on schools, libraries, and public facilities can flourish, not be choked, and is not under threat of having incentives oversubscribed and prorated undermining the guaranteed return.
  • Retroactive decisions, such as those by DOR should not be allowed;
  • All projects in the current program are grandfathered in;
  • That incentive rates are locked for each project and not vulnerable to future prorating or elimination.

Pushing “Pause” to Fix the Laws

Dear Friends,

Your interest in Backbone’s Community Solar project is deeply appreciated. Believe me, I hate delivering this message, I wish that I was writing to tell you that all the money was raised and we are moving forward, BUT I am not. As a Vermont farmer once told me, “You cannot push the river.” But I am not giving up, just shifting strategy and asking for your support in that decision.

I am pushing the “pause” button on our ambitious project, and directing energy toward fixing the state law, so that Vashon and other communities can benefit in the future. I recommend the recent article Community Solar Shouldn’t Be this Hard by John Farrell (Institute for Local Self Reliance) that outlined some of the difficulties frustrating the Backbone Campaign and efforts by other organizers in Washington State. Sierra Magazine also had a great article, Solar for All by Paul Rauber which included our effort and difficulties of organizing such projects in the US.

Ironically, as is indicated in the both articles, we successfully navigated every bureaucratic hurdle placed in front of us. We successfully negotiated a win/win/win contract with King County, the terms of which were approved by the County Council. We successfully developed a solid plan working with the limitations of the State program, and our presentation to investors was clear and thorough. Yet, we were only able to generate about 20% of the applications for investment that we needed to maintain the economies of scale needed to deliver the size array and return on investment worthy of our community investors, i.e. YOU.

The scale of the array we proposed merely amplified the shortcomings of the current State program. Through many presentations to groups and individuals, I repeatedly watched people’s eyes glaze over due to the complexity of the State program. Mixing investment with social/environmental good is easier said than done. The decision making process for a donation is much different than that of an investment. As much as we had designed the project to maximize every opportunity, we could not – by law – guarantee a competitive return. Thus, the multiple large $20k and $30k investments we needed never materialized, and there weren’t enough smaller ones to make up the difference. The $70-80k of applications is just not enough to take advantage of the economies of scale we were counting on with a $450k project.

The lessons are many, but principally they relate to the undue complexity of the state program our project was organized to take advantage of. The good news is that the residential solar component of the State program continues to thrive. The sad reality is, that with more than seven years remaining in the ten year program, very few community projects are likely to be initiated, especially west of the Cascades. The State’s “community solar” program will work for those willing to take some loss, but not for those who need a CLEAR path to a reasonable ROI.

If you are person who does not require certainty of a return on your investment, believe strongly in the various educational, social and environmental value of distributed, renewable energy production and want to see it get a foothold on Vashon Island, then I strongly recommend that you participate in phase two of the installation at the Harbor School. More information at VashonSolarLLC.com.

As was true with the Credit Union project (see CUorganizer.org), the Backbone Campaign is not here to do heroic Herculean projects that rely on angels and a wealthy community. Our “local laboratory” projects need to be at least theoretically replicable. Therefore, I have stopped promoting our current plan, and have instead worked with our partners at King County to instigated a dialog amongst stakeholders. The result is a set of recommendations for fixing the “community” element of the Washington State Renewable Energy System Cost Recovery Program, WAC 458-20-273.

The key recommendations we have developed through conversations with a broad variety of stakeholders and are currently presenting to those in Washington State government agencies and legislature include:
(Please read the full text of recommendations below.)

  • Create a Rolling 10 year incentive for investors in all projects that qualify.
  • To qualify for the program an automatic transfer of ownership to public host is required. [Depending on when in the term this transfer is made, an additional benefit to the investors is a potential tax deduction for the donation. In trade for the simplified transfer of ownership, the public host could more easily/legally wave rent, assume insurance and maintenance responsibilities.]
  • Change $5k incentive payment per person/household, per year limit to $5k per project, per person, per year. This removes an impossible reporting burden on the utilities, while maintaining some safeguard that WA State tax dollars cycle back into local economies rather than funneling money to out of state venture capital.
  • Make all public and tribal facilities, including colleges qualified hosts

Contact me if you want to help move these recommendations forward before and during the next legislative session. A small group of committed islanders will be meeting to strategize on January 4. On January 14, I will be presenting our recommendations at the January 14, Solar Washington meeting.

Again, Thank you for your commitment to aligning our community’s energy production with our values for a sustainable economy end energy infrastructure. I am deeply sorry that I was not able to deliver in the way I had hoped. I hope you will stay with me on the journey forward and work together for the greater good of a policy shift that will enable many more to benefit.

In gratitude & collaboration,

Bill Moyer
Backbone Campaign
206-408-8058
c. 206-356-9980



Introduction to proposed changes to replace/amend the “community solar” program:
Recommendations presented here are the result of many conversations with a variety of stakeholders in “community solar” efforts across Washington State. Though these ideas are generally supported by a number of stakeholders, these are not officially endorsed by those parties.

“The beginning of wisdom is to call things by their proper name.” Confucious
To call things by their proper names is a Confucian virtue, echoed in the movie Into the Wild. When many of us first came across the idea of community solar some years ago, it was because of the work of Gary Nystedt, resource manager for the Ellensburg public utility. Gary created a program for long term ownership of shares in solar systems located on city property by community investors . Virtual net metering, i.e. power generated by each share is credited to the owner’s actual utility bill makes this model simple, clean, easy to understand. In my opinion, the term community solar should be reserved for that model of shared ownership and method for distributing long term benefits to the investors/owners.

The program spelled out in WAC 458-20-273 includes something it refers to as “community solar,” for which it designates what appears to be the most generous production incentive in the world. But part of the problem is that it isn’t really community solar. Why do I say this?

  1. Unlike the Ellensburg project, there is no incentive for long term ownership as all benefits or ROI rely solely on the production incentive scheduled to expire June 30, 2020.
  2. Though it is not forbidden, there is no provision for or requirement for virtual net-metering for the owners, but instead the public host (school, library, retired land fill) receives the benefit of the power generated.
  3. Though not clearly spelled out by the law, the only sensible path after the production incentive expires is to transfer ownership to the public host. After the incentive period ends overhead such as rent, insurance, maintenance, and accounting and other costs consume all economic benefit of the power
    savings.

The financing and creation of renewable energy installations on public facilities, for long term public benefit is a great cause. But to call it community solar just confuses people, and in the realm of investment for public benefit, complexity and confusion are the enemy. Ideally, this aspect of the State program would be called something like “Citizen Financing of Renewable Energy on Public Facilities for Public Benefit.” When framed as such, a few tweaks to the current program will clarify the goals and rescue the currently named “community solar” component from irrelevance. I distinguish that component from the residential element because it seems that the residential program is more or less ok as is, though simplification may be desirable regardless.

Changes to the “community solar” element of the program that we propose would retain the current incentive formula to encourage in-State equipment, and the requirement that to benefit from the “Community Solar” doubling of that incentive, the system must be placed on public facility and deliver public benefit through long term power savings for tax-payers. (Note: My use of “solar” is due to our situation and not meant to undermine wind and other renewable generation allowed under the current program.)

The key recommendations we have developed through conversations with a broad variety of stakeholders and are currently presenting to those in Washington State government agencies and legislature include:

  • Dear Friends,Your interest in Backbone’s Community Solar project is deeply appreciated. Believe me, I hate delivering this message, I wish that I was writing to tell you that all the money was raised and we are moving forward, BUT I am not. As a Vermont farmer once told me, “You cannot push the river.” But I am not giving up, just shifting strategy and asking for your support in that decision.I am pushing the “pause” button on our ambitious project, and directing energy toward fixing the state law, so that Vashon and other communities can benefit in the future. I recommend the recent article Community Solar Shouldn’t Be this Hard by John Farrell (Institute for Local Self Reliance) that outlined some of the difficulties frustrating the Backbone Campaign and efforts by other organizers in Washington State. Sierra Magazine also had a great article, Solar for All by Paul Rauber which included our effort and difficulties of organizing such projects in the US.Ironically, as is indicated in the botharticles, we successfully navigated every bureaucratic hurdle placed in front of us. We successfully negotiated a win/win/win contract with King County, the terms of which were approved by the County Council. We successfully developed a solid plan working with the limitations of the State program, and our presentation to investors was clear and thorough. Yet, we were only able to generate about 20% of the applications for investment that we needed to maintain the economies of scale needed to deliver the size array and return on investment worthy of our community investors, i.e. YOU.The scale of the array we proposed merely amplified the shortcomings of the current State program. Through many presentations to groups and individuals, I repeatedly watched people’s eyes glaze over due to the complexity of the State program. Mixing investment with social/environmental good is easier said than done. The decision making process for a donation is much different than that of an investment. As much as we had designed the project to maximize every opportunity, we could not – by law – guarantee a competitive return. Thus, the multiple large $20k and $30k investments we needed never materialized, and there weren’t enough smaller ones to make up the difference. The $70-80k of applications is just not enough to take advantage of the economies of scale we were counting on with a $450k project.

    The lessons are many, but principally they relate to the undue complexity of the state program our project was organized to take advantage of. The good news is that the residential solar component of the State program continues to thrive. The sad reality is, that with more than seven years remaining in the ten year program, very few community projects are likely to be initiated, especially west of the Cascades. The State’s “community solar” program will work for those willing to take some loss, but not for those who need a CLEAR path to a reasonable ROI.

    If you are person who does not require certainty of a return on your investment, believe strongly in the various educational, social and environmental value of distributed, renewable energy production and want to see it get a foothold on Vashon Island, then I strongly recommend that you participate in phase two of the installation at the Harbor School. More information at VashonSolarLLC.com.

    As was true with the Credit Union project (see CUorganizer.org), the Backbone Campaign is not here to do heroic Herculean projects that rely on angels and a wealthy community. Our “local laboratory” projects need to be at least theoretically replicable. Therefore, I have stopped promoting our current plan, and have instead worked with our partners at King County to instigated a dialog amongst stakeholders. The result is a set of recommendations for fixing the “community” element of the Washington State Renewable Energy System Cost Recovery Program, WAC 458-20-273.

    The key recommendations we have developed through conversations with a broad variety of stakeholders and are currently presenting to those in Washington State government agencies and legislature include:
    (Please read the full text of recommendations below.)

    • Create a Rolling 10 year incentive for investors in all projects that qualify.
    • To qualify for the program an automatic transfer of ownership to public host is required. [Depending on when in the term this transfer is made, an additional benefit to the investors is a potential tax deduction for the donation. In trade for the simplified transfer of ownership, the public host could more easily/legally wave rent, assume insurance and maintenance responsibilities.]
    • Change $5k incentive payment per person/household, per year limit to $5k per project, per person, per year. This removes an impossible reporting burden on the utilities, while maintaining some safeguard that WA State tax dollars cycle back into local economies rather than funneling money to out of state venture capital.
    • Make all public and tribal facilities, including colleges qualified hosts

    Contact me if you want to help move these recommendations forward before and during the next legislative session. A small group of committed islanders will be meeting to strategize on January 4. On January 14, I will be presenting our recommendations at the January 14, Solar Washington meeting.

    Again, Thank you for your commitment to aligning our community’s energy production with our values for a sustainable economy end energy infrastructure. I am deeply sorry that I was not able to deliver in the way I had hoped. I hope you will stay with me on the journey forward and work together for the greater good of a policy shift that will enable many more to benefit.

    In gratitude & collaboration,

    Bill Moyer
    Backbone Campaign
    206-408-8058
    c. 206-356-9980



    Introduction to proposed changes to replace/amend the “community solar” program:
    Recommendations presented here are the result of many conversations with a variety of stakeholders in “community solar” efforts across Washington State. Though these ideas are generally supported by a number of stakeholders, these are not officially endorsed by those parties.

    “The beginning of wisdom is to call things by their proper name.” Confucious
    To call things by their proper names is a Confucian virtue, echoed in the movie Into the Wild. When many of us first came across the idea of community solar some years ago, it was because of the work of Gary Nystedt, resource manager for the Ellensburg public utility. Gary created a program for long term ownership of shares in solar systems located on city property by community investors . Virtual net metering, i.e. power generated by each share is credited to the owner’s actual utility bill makes this model simple, clean, easy to understand. In my opinion, the term community solar should be reserved for that model of shared ownership and method for distributing long term benefits to the investors/owners.

    The program spelled out in WAC 458-20-273 includes something it refers to as “community solar,” for which it designates what appears to be the most generous production incentive in the world. But part of the problem is that it isn’t really community solar. Why do I say this?

    1. Unlike the Ellensburg project, there is no incentive for long term ownership as all benefits or ROI rely solely on the production incentive scheduled to expire June 30, 2020.
    2. Though it is not forbidden, there is no provision for or requirement for virtual net-metering for the owners, but instead the public host (school, library, retired land fill) receives the benefit of the power generated.
    3. Though not clearly spelled out by the law, the only sensible path after the production incentive expires is to transfer ownership to the public host. After the incentive period ends overhead such as rent, insurance, maintenance, and accounting and other costs consume all economic benefit of the power
      savings.

    The financing and creation of renewable energy installations on public facilities, for long term public benefit is a great cause. But to call it community solar just confuses people, and in the realm of investment for public benefit, complexity and confusion are the enemy. Ideally, this aspect of the State program would be called something like “Citizen Financing of Renewable Energy on Public Facilities for Public Benefit.” When framed as such, a few tweaks to the current program will clarify the goals and rescue the currently named “community solar” component from irrelevance. I distinguish that component from the residential element because it seems that the residential program is more or less ok as is, though simplification may be desirable regardless.

    Changes to the “community solar” element of the program that we propose would retain the current incentive formula to encourage in-State equipment, and the requirement that to benefit from the “Community Solar” doubling of that incentive, the system must be placed on public facility and deliver public benefit through long term power savings for tax-payers. (Note: My use of “solar” is due to our situation and not meant to undermine wind and other renewable generation allowed under the current program.)

    The key recommendations we have developed through conversations with a broad variety of stakeholders and are currently presenting to those in Washington State government agencies and legislature include:

    • Create a Rolling 10 year incentive for investors in all projects that qualify.
    • To qualify for the program an automatic transfer of ownership to public host is required. [Depending on when in the term this transfer is made, an additional benefit to the investors is a potential tax deduction for the donation. In trade for the simplified transfer of ownership, the public host could more easily/legally wave rent, assume insurance and maintenance responsibilities.]
    • Change $5k incentive payment per person/household, per year limit to $5k per project, per person, per year. This removes an impossible reporting burden on the utilities, while maintaining some safeguard that WA State tax dollars cycle back into local economies rather than funneling money to out of state venture capital.
    • Make all public and tribal facilities, including colleges qualified hosts.

    Additional recommendations:

    • Allow Dept. of Commerce, WSU, Housing and Finance Commission or other agency to assume administration from Department of Revenue (DOR) on appropriate elements of program.
    • Ensure that Department of Financial Institutions (DFI) involvement is not triggered or involvment minimized, possibly through making shares nontransferable, passing of ownership to host, automatic guaranteed incentives.
    • Eliminate the arbitrary 5% company owned, 25% utility owned, 70% individuals and groups limits on the incentive pool to avoid prorated of incentives in certain categories, while others remain untapped.
    • Lift the current limit of .5% of utility tax burden allotted to incentives so a successful program putting renewable energy on schools, libraries, and public facilities can flourish, not be choked, and is not under threat of having incentives oversubscribed and prorated undermining the guaranteed return.
    • Retroactive decisions, such as those by DOR should not be allowed;
    • All projects in the current program are grandfathered in;
    • That incentive rates are locked for each project and not vulnerable to future prorating or elimination.

    inance Commission or other agency to assume administration from Department of Revenue (DOR) on appropriate elements of program.

  • Ensure that Department of Financial Institutions (DFI) involvement is not triggered or involvment minimized, possibly through making shares nontransferable, passing of ownership to host, automatic guaranteed incentives.
  • Eliminate the arbitrary 5% company owned, 25% utility owned, 70% individuals and groups limits on the incentive pool to avoid prorated of incentives in certain categories, while others remain untapped.
  • Lift the current limit of .5% of utility tax burden allotted to incentives so a successful program putting renewable energy on schools, libraries, and public facilities can flourish, not be choked, and is not under threat of having incentives oversubscribed and prorated undermining the guaranteed return.
  • Retroactive decisions, such as those by DOR should not be allowed;
  • All projects in the current program are grandfathered in;
  • That incentive rates are locked for each project and not vulnerable to future prorating or elimination.

King County Council approves Vashon solar project

October 15 King County Council approval of Backbone CSP lease agreement
I am happy to report that as we had foreseen, the lease agreement with King County needed only minor edits and was unanimously approved by the King County Council.  There is no obligation to the project to enact the lease, but this milestone was a critical step toward making the Backbone CSP possible.  Final details of an agreement will be determined when we determine the system size.
Read the original article at King County’s website: Council approves Vashon solar project

Oct. 15, 2012

Council approves Vashon solar project

Panels to be set up at County transfer station

The Metropolitan King County Council today gave its unanimous approval to a partnership that will install solar panels at the Vashon Island Solid Waste Transfer Station to generate energy for the facility.

“Installing solar panels on county property in partnership with local residents is a win-win that promotes renewable energy, facilitates local investment in solar energy technology, and reduces energy costs for King County,” said Councilmember Larry Phillips, chair of the Council’s Transportation, Economy and Environment Committee and co-sponsor of the ordinance. “I hope to see this pilot project lead to expanded opportunities for renewable energy in our region.”

“Today’s vote lays the groundwork for community driven solar projects in our County. I want to thank Backbone Solar for partnering with the County in this innovative program,” said Councilmember Joe McDermott, who represents Vashon and Maury Islands.

“We can work with communities to jump-start local investment in solar energy while saving money and advancing toward our goal to meet half of the County’s energy needs from renewable resources,” said King County Executive Dow Constantine. “Economic development and environmental sustainability go hand-in-hand.”

The adopted agreement between the County and Backbone Community Solar will allow Backbone to lease a 4,000 Square foot portion of the facility. Backbone, a non-profit organization that is involved in sustainability projects, would install solar panels at their expense on the area they’ve leased. The electricity generated by the solar panels would be sold back to Solid Waste at market rates for operation of the site.

The lease payment to the County will be $2,000 per year and shall be used as a credit against any electricity generated and used by King County. For example, if the solar panels generated $2,500 of electricity, King County would simply reimburse the group with difference between the rent and the value of the electricity; in this case $500.

The partnership between the County and Backbone is part of King County’s Community Solar Program. The program was initiated though a motion sponsored by Phillips and adopted by the Council last year. It takes advantage of a state program that provides incentives for citizens to form investment groups and purchase and install solar panels on public property.

 

Backbone & King County convening discussion on improving Washington State’s

Convening Stakeholders for Improvements to the Current Law

I have invested a great deal of time in the last month interviewing stakeholders with interests in the future of solar, community solar, and distributed renewable energy production in Washington State.  Equipment producers, installers, public hosts, utilities, renewable energy advocates, and community organizers across the state have overlapping interests.  Backbone Campaign is working with our King County partner/potential array host to convene a discussion about how the current law and resulting rules can be simplified and improved in the coming legislative session.  State agencies also have an interest in improving the current program due to its current complexity and unrealized potential.

A couple of the ideas that may have “legs” are to:

  • Create a rolling 10 year incentive period and automatic donation of system to public host so that program adequately rewards projects with clear public benefit, and the program remains viable even as the current 2020 scheduled end approaches.  This could also remove some of the burden on community organizers to navigate the through the Department of Financial Institutions
  • Simplify or remove annual incentive application process, and participant qualification requirements to reduce uncompensated burden on utilities and agencies.

This is complicated work that Backbone did not anticipate when agreeing to champion Community Solar on Vashon Island.  But as John Lennon (and others) said, “Life is what happens to us while we are making other plans.”  Our inquiries and efforts have propelled us into a position to of leadership at a time when that leadership is needed.  As a “Local Laboratory” project, the considerable effort we are expending on this community solar project makes sense to the extent that it results in lessons for others, and its potential to be replicated. A heroic effort that succeeds only due to the privilege of the community and insane tenacity of the organizers is not a model for others.

Please join me at the Vashon Land Trust Building on Thursday, November 1 at 7pm if you want to learn more and join the next phase of this journey.  Or give a call to the office 206-408-8058 or send an email to bill@BackboneCampaign.org

Letter to the Editor Supporting the Backbone CSP

Jerry Henley’s Letter to the Editor
In case you missed it, Backbone CSP investor Jerry Henley’s letter to the editor appeared in the October 3 Beachcomber. We want to personally thank Jerry for his public support and explanation to other community members why he has submitted an application to participate in the Backbone CSP.  We hope it will inspire others to take advantage of this significant opportunity to invest in our values and vision for the future. 
~ Backbone CSP

Backbone Campaign provides a great opportunity | Letter to the Editor

OCTOBER 3, 2012 · UPDATED 2:06 PM

The Backbone Campaign deserves some special thanks for all their hard work getting a
community solar project designed and approved to be installed here
on our Island. For people like me who had considered putting solar
on my home but live in an area with many trees, this project is a
perfect way to invest in the alternative energy of solar while
partially fulfilling what I consider my environmental and social
responsibility.

I also like the way Washington state crafted the “opportunity factor” into the law that
created the renewable energy production incentive, thereby keeping
savings and jobs locally while benefiting several local participants
and investors with the project results.

Though it may seem that the solar project return on investment is smaller than hoped, the
truth is that these days, many people’s assets are placed in lower
returning deposit accounts and investments compared to years past.
Being a retired banker, aware of certain global finacial
considerations, it is likely we all will be seeing lower yields for
some time to come.

Backbone’s Community Solar Project offers a way for me to invest considerably less than a
home solar unit would cost yet receive a valuable payback and do
what I believe is a right choice for my grandchildren. And after
all, this plan was never designed as a get-rich scheme to help only
the investor. It was created because concerned people like you and
me believe that it helps to move us towards the correct direction.

I congratulate Bill Moyer and the Backbone team for their effort. I hope those for whom this
matches their values invest in a way that is appropriate for them
and that our community doesn’t lose this opportunity on all the good
work that was done on its behalf.

Count me in!


Jerry Henley

VCS Progress Report to Potential Investors & Community Members
(2-15-12)

We want to update Backbone supporters, fellow Vashon Islanders and potential investors on our proposed Vashon
Community Solar
(VCS) project at the King County Transfer Station
on Vashon.

Since late October we have been working with a multi-departmental team at the County. We’ve identified an empty expanse of land north of the Vashon recycling centre as ideal: excellent solar exposure, easy access to the main panel, reasonable security, and no conflicting plans for other usage. The site is large enough to permit installation of the largest size solar array permitted under the legislation, generating up
to 75 kW, and thus will have good economies of scale.

The County have a mandate to increase their use of renewable energy but they have advised that they will only put the effort into installing community solar if it has the potential to be a large-scale, multi-site program. They are in the process of identifying likely sites and devising template agreements that can:

  1. be executed as quickly (because of the fixed-term incentive period) as County procedures permit, and
  2. apply at every site.

The County must obtain approval for each specific site. The discussions are taking rather longer than we would wish, but the excellent site and the ground-breaking nature of the project keep ‘our eyes on the prize’.

Stay tuned!

with gratitude,

Carol Eggen & Bill Moyer

Vashon Community Solar

(A project of the Backbone Campaign)

Bill Moyer Testifies before the King Co. Council Transportation, Economy, and Environment Committee

The entire meeting with other related testimony is available HERE.

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Vashon Earth Day Celebration of Solar Array & New EV Charging Stations

From Vashon Beachcomber:

Band plays under expanded array, as Snowflake the Polar Bear dances and windmills turn

2011 Earth Day Celebration at VHS

By LESLIE BROWN

Vashon-Maury Island Beachcomber Editor Apr 20 2011

When Islanders gather for an Earth Day celebration at Vashon High School on Friday, they’ll pay tribute to a remarkable set of earth-friendly accomplishments that has already unfolded at the small public school. Two electric vehicle charging stations were installed last week, one of them just beneath a set of solar arrays that will deliver enough energy to power the district’s new electric truck – a $42,000 investment in a greener future funded entirely by donations and grants. There’s an educational component, too: Last week, a kiosk went up at the school, where students can see in real time how much energy the solar panels are generating a project that complements a new course at the school exploring green technology and sustainable design.

But what those who gather on Friday will also discover is that this is just the beginning of what organizers hope will be an even brighter future on Vashon. Next up, organizers say, is a far-reaching community solar project that could deliver thousands of dollars of sun-powered energy to the district each year, enable conservation-minded investors to put their money to work on behalf of solar power and put Vashon on the leading edge of a nationwide movement.

“We’re in the process of delivering the community another victory and another opportunity,” said Bill Moyer, a member of Vashon Community Solar and the director of the Backbone Campaign. Gib Dammann, an Island architect and another leader in Vashon Community Solar, agreed. “The potential is just so great.” The solar activists have formed a new limited liability corporation or LLC that will enable Vashon to do something a handful of other communities in the state are already attempting. Thanks to a set of incentives established by the state Legislature two years ago, those who invest in renewable energy by way of this LLC will not only see a return on their investment but provide the start-up capital needed for a solar project that could shave thousands of dollars off of Vashon Island School District’s annual electricity bill. “If the LLC could build a $450,000 to $500,000 solar array, for instance, the district would save an estimated $5,000 a year in electricity costs and even more as traditional power costs climb,” Moyer said. Investors, meanwhile, would receive an immediate tax benefit and could see a return on their investment within seven to eight years.

“We have a window of opportunity that we can’t guarantee will be open for a great deal of time,” Moyer said. “If the community wants to maximize its investment in solar and see a return on that investment, the sooner we act the better.” The state Legislature passed a bill in 2009 that lays the groundwork for a much greater investment in renewable energy – solar, wind, biomass or other forms – by providing what Jason Williams of Vashon-based Artisan Electric calls a powerful production incentive: For every kilowatt hour produced by a system manufactured in Washington state and placed at a public building, the entity that created the project receives $1.08 to be divvied up among its investors. That’s a significant amount, Williams said, when one considers that a kilowatt hour currently costs Puget Sound Energy customers 10 cents. Investors would also get a one-time 30 percent federal tax credit. The maximum return any one investor could receive in incentive checks under the state program is $5,000 per year. The incentive program is currently slated to end in 2020.

Under the LLC Moyer, Dammann and other solar activists on Vashon created, the Backbone Campaign would also get a share of the cash incentive. The campaign, known for its feisty, high-profile activism in support of progressive issues, would get a 5 percent management fee – funds, Moyer said, that would be used not only to manage the community solar project but also to support the Backbone Campaign’s ongoing community organizing. “It’s not a lot of money for the small organization,” Moyer said. “If a 35 kilowatt system were established, for instance, generating $50,000 worth of incentive checks, Backbone would get $2,500 a year.”"We’re talking about a modest slice for a few hours of organizing a week,” he said. But if other such projects based on a similar model could get established, he added, “It could add up to having a half-time or full-time position.”

Because of the state’s generous production incentives and concern that the program might soon be capped, communities across the state have been scrambling to get solar projects up and running, Williams said.But it’s a complex undertaking, and so far, only five community projects are under way in Washington. “It’s tricky to form the group, … get people to put in the money, form the business and create the relationship with the host site,” said Williams, who’s currently working with five other community solar groups in the Seattle area. “You also have to figure out what happens when the production incentive’s over. Do we sell the system or enter into a power-purchase agreement to sell the power? … There’s a lot of stuff to be figured out.” Even so, Williams said, it’s a remarkable time to be in the solar-power production industry, where Washington is fast becoming a leader. “Our solar capacity as a state is going to get really big really fast,” he said.

Meanwhile, those who gather at Friday’s celebration will not only look to the future but also take stock of what they’ve already accomplished – an investment in solar power that only a year ago was a mere dream, Moyer said. Now, after months of work by a number of Islanders, Vashon High School is home to the first electric car charging station, where anyone with an electric vehicle can pull up, swipe a card and recharge his or her car. A solar array that was placed on one of the school’s buildings a year ago has been doubled – now producing enough energy to charge 10,000 cell phones, Dammann said. And best of all, the project – high-profile and visible to anyone who visits VHS – helps students realize that in rainy, cloudy Western Washington, there’s still enough sun-power to address some of our region’s growing demand for energy. “This is quite a big thing that we’ve accomplished,” Dammann said.

“I don’t know another school that has married so successfully the electric vehicle component, the educational component and the solar array.” Amy Bogaard, a VHS teacher who obtained a grant enabling her to create a sustainable design and renewable energy class, said she’s pleased that so much has come together in the past several months. Students sometimes seem puzzled that solar can work on a place like Vashon, she noted. As a result, the solar array and kiosk give her an opportunity to talk about the enormous potential some see in solar. “Solar is all around us, and the technology is growing,” she said. “I compare it to the early days of the computer. … You have to start some place. You have to walk before you can run.” “I’m really quite excited about it,” she added. “I think it’s a great educational tool.” Vashon’s solar celebration begins at VHS at 1 p.m. on Friday. It will include live music, some brief speeches and a tour of the schools new solar system.