The U.S. CLEAN program–Clean Local Energy Accessible Now–just got a boost. A 1.21-gigawatt boost, to be exact! That’s the amount of distributed solar power currently planned under the nationwide program, which has so far been adopted in 14 states including Hawaii.
Some of the nation’s largest utilities, such as Los Angeles and the Long Island Power Authority, will be doing most of the heavy lifting to build a more robust CLEAN network in the U.S. Hawaii’s feed-in tariff (FIT) program is also an important part of the new initiatives.
According to a recent report from the Institute for Local Self Reliance (ILSR),
CLEAN programs (Clean Local Energy Accessible Now) provide long-term contracts with utility companies whose price is set to guarantee a modest return for investors. They have long been used in Europe (as “feed-in tariffs”) to spur renewable energy development, often with remarkable success. In Germany for example, CLEAN contracts have been credited with developing over 50,000 megawatts of wind and solar power.
America has been slow getting into the feed-in tariff game, but with this new push for CLEAN across the country, the programs are starting to gain momentum. Hawaii’s feed-in tariff program under CLEAN is state-wide and was established by the PUC (Public Utilities Commission) in 2009. The three major Hawaiian utility companies, HECO, MECO and HELCO, all offer feed-in tariffs.
As of Spring 2012, the Hawaiian Electric Company’s feed in tariff program had accepted 345 applications from a variety of solar energy projects, with some 70 more applicants on the waiting list.
Figures analyzing the U.S. program prices have to account for the robust tax incentives. Without these in place, the costs for solar installations would be much higher.
In comparison, the German model is an all-in pricing model that doesn’t require the use of a tax incentive to provide investors with a return. This aspect is seen by many experts as testament to the long-term success of the program, which has been running since 1990.
According to John Farrell, the director at the ILSR, “the maturity of the German market has significantly reduced the installation and balance of system costs for small-scale solar.” The hope is that America can catch up quickly and bring the cost of solar down similar to the German model.
According to the ILSR, some of the main challenges faced by U.S. CLEAN programs include:
– Program caps and the relatively small size of the program overall.
– General lack of support for on-site residential solar. Many states, Hawaii included, have chosen to focus on larger scale solar projects under the program. Programs in Europe, such as those in Germany and Denmark, on the other hand, have focused on tens of thousands of individual homes with solar power and the resulting economic self-interest has been a huge part of their programs’ success.
– The financial complexity of the U.S. tax incentives is a barrier to entry for many, especially for non-profits and public sector groups, which are tax exempt.
– Minimal planning. Few U.S. CLEAN programs have transparent pricing or on-site storage and consumption as has been the case in Germany.
Hawaii is the most oil dependent state in the nation, and a statewide commitment to renewable energy programs is paramount to creating energy independence. CLEAN and the Hawaii feed-in tariff program is one crucial way to move our common clean energy goals forward into the future.