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Report on the Database on Laws and Policies Related to Renewable Energy

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Report on the Database on Laws and Policies Related to Renewable Energy Report on the Database on Laws and Policies Related to Renewable Energy Prepared by Véronique Robichaud Report and database prepared for The Commission for Environmental Cooperation 28 February 2006 Database on Laws and Policies Related to Renewable Energy Table of Contents Introduction .................................................................................................................................................. 3 Definitions ..................................................................................................................................................... 4 Financial Incentives................................................................................................................................... 4 Corporate Tax Incentives...................................................................................................................... 4 Direct Equipment Sales......................................................................................................................... 4 Grant Programs ..................................................................................................................................... 4 Industrial Recruitment Incentives ......................................................................................................... 4 Leasing/Lease Purchase Programs........................................................................................................ 5 Loan Programs...................................................................................................................................... 5 Personal Income Tax Incentives ........................................................................................................... 5 Production Incentives............................................................................................................................ 5 Property Tax Incentives ........................................................................................................................ 6 Rebate Programs ................................................................................................................................... 6 Sales Tax Incentives ............................................................................................................................. 6 Rules, Regulations & Policies ................................................................................................................... 6 Construction and Design Policies ......................................................................................................... 6 Contractor Licensing............................................................................................................................. 7 Equipment Certifications ...................................................................................................................... 7 Generation Disclosure Rules................................................................................................................. 7 Green Power Purchasing/Aggregation Policies .................................................................................... 7 Line Extension Analysis ....................................................................................................................... 8 Net Metering Rules............................................................................................................................... 8 Public Benefit Funds............................................................................................................................. 8 Renewables Portfolio Standards/Set Asides ......................................................................................... 8 Required Utility Green Power Option................................................................................................... 9 Solar and Wind Access Laws................................................................................................................ 9 Database Contents and Sources ................................................................................................................ 10 Annex 1: Canada - Laws and Policies....................................................................................................... 11 Annex 2: Mexico - Laws and Policies........................................................................................................ 22 Annex 3: United States - Laws and Policies ............................................................................................. 26 This background paper was prepared for the CEC Secretariat. The opinions, views or other information contained herein are those of the author(s) and do not necessarily reflect the views of the CEC or the governments of Canada, Mexico or the United States. Cite as: Robichaud, Véronique. Report on the Database on Laws and Policies Related to Renewable Energy. Commission for Environmental Cooperation, Montreal, 2006. 2 Database on Laws and Policies Related to Renewable Energy Introduction The 2004 Puebla Declaration directed the Article 10(6) Working Group to develop a Strategic Plan on Trade and the Environment. In October 2005, the 10(6) Working Group agreed to include in the Strategic Plan a priority area related to renewable energy. The North American renewable energy market faces a number of challenges including higher initial costs, transmission line service gaps, and the differing renewable energy purchasing requirements employed by local, state/provincial, and national governments. One of the projects set out in the Strategic Plan related to renewable energy aims at: • Broaden understanding of trade and environment linkages and thereby promote policy coherence, both at the domestic and regional levels in North America. • Improve regional and national coordination, including coordination between the CEC and NAFTA Free Trade Commission through ongoing collaboration of trade and environment officials. In particular, it is planned that the CEC will supplement the database of existing and planned renewable energy resources with existing laws and policies in each state and province related to renewable energy. This report relates to this project. Based on the Database of State Incentives for Renewable Energy (DSIRE),1 the consultant identified the different laws and policies related to renewable energy in Canada and Mexico, at the federal and provincial level, when applicable. The consultant created a table of: - laws and policies for the most recent year for which the information is available; - people to contact in each jurisdiction; - web links, when available, to facilitate update of the table. All information is included in annexes at the end of this document to facilitate correspondence with the North American Renewable Energy Database (NARED)2 that presents summary data on a state, province or territory level, disaggregated by type of renewable energy source and technology, and by development status. 1 See <www.dsireusa.org>. 2 See <www.cec.org/pubs_docs/documents/index.cfm - varlan=english&ID=1477>. 3 Database on Laws and Policies Related to Renewable Energy Definitions Based on discussions with the Renewable Energy Expert Committee (REEC)3 the laws and policies included in the database are the same as those covered by DSIRE. Here is the description of the financial incentives, rules, regulations, and policies. Note that the terms “green power” and “green electricity” are used interchangeably throughout this report and its annexes, following the usage in the sources cited. Financial Incentives Corporate Tax Incentives Corporate tax incentives allow corporations to receive credits or deductions ranging from 10% to 35% against the cost of equipment or installation to promote renewable energy equipment. In some cases, the incentive decreases over time. Some states allow the tax credit only if a corporation has invested a certain dollar amount into a given renewable energy project. In most cases, there is no maximum limit imposed on the amount of the deductible or credit. Direct Equipment Sales A few utilities sell renewable energy equipment to their customers as part of a buy-down, low-income assistance, lease, or remote power program. Grant Programs States offer a variety of grant programs to encourage the use and development of renewable energy technologies. Most programs offer support for a broad range of renewable energy technologies, while some states focus on promoting one particular type of renewable energy such as wind technology or alternative fuels. Grants are available primarily to the commercial, industrial, utility, education, and government sectors. Some grant programs focus on research and development, while others are designed to help a project achieve commercialization. Programs vary in the amount offered—from $500 to $1,000,000—with some states not setting a limit. Industrial Recruitment Incentives This category focuses on special efforts and programs designed to attract renewable energy equipment manufacturers to locate within a state or city. Renewable energy industrial recruitment usually consists of financial incentives like tax credits, grants, or a 3 See the minutes from the 21 November 2005 annual meeting at <www.cec.org/energy>. 4 Database on Laws and Policies Related to Renewable Energy commitment to purchase a specific amount of the product for use by a government agency. The recruitment incentives are designed to attract industries
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