State Lacking in Renewable Energy Incentives

(posted July 24)

Indiana Renewable Energy Association Executive Director Laura Arnold says the state's renewable energy policies are "in the subbasement" when compared with the rest of the country.

Her biggest complaint against the current administration is its focus on E-85 and ethanol. She said it is not a good, balanced approach. She said monetary resources and incentives should be equally distributed for all renewable energies.

"There is no one technology. Natural gas and coal are not going away. Biomass, solar and wind can help reduce the carbon footprint," Arnold said.

"We need to stop putting every dollar we have into the one technology," IREA member Eric Cotton said.

Arnold noted utilities are now building their base loads to handle energy peaks on hot summer days, and that solar is a good summer source. She said battery innovation is a must to be able to store the sun or wind energy for the peak demand loads.

By educating the "Average Joe" about net metering, feed-in tariffs and net billing, she hopes legislative action will create a balanced renewable energy policy to give individuals financial incentives to use solar, wind and biomass systems. The state currently lacks any policy for net metering or feed-in tariffs for private energy systems. Net metering is the process used by utilities to credit system owners who put more electricity into the grid than they use, a typical scenario with a photovoltaic system. Methods of crediting system owners vary from state to state, with most only requiring a utility to credit the kilowatt hours it receives to a customer's bill to offset future billing. Minnesota and Wisconsin are the only states that require utilities to purchase excess power.

Arnold explained that in the early 1980s, Indiana had solar energy societies and a solar industry association, but Indiana, as well as the rest of the country, started sliding backwards when President Ronald Reagan removed the solar panels from the White House and ended solar tax incentives. "The industry dried up," she said.

"With Ronald Reagan killing those initiatives we are back to square one," said Kerwin Olson of Citizens Action Coalition.

"People need to educate themselves about the need to move away from fossil fuels, they need to educate themselves about the technologies such as solar and wind. When they get serious about making a financial investment, they start to understand the need for net metering."

"Feed-in tariffs are a little more advanced topic since they are a newer concept here in the US. Americans need to decide if we want to be in the forefront of the movement to use renewable energy or if we want to be left in the dust again. There is also a great deal of denial still in Indiana as evidenced by Gary Varvel's editorial cartoon in Saturday, July 19, 2008, Indianapolis Star," Arnold said.

Cotton said his company, ECI Wind and Solar, measures solar installations in kilowatts while installers in California have long since dropped kilowatts and track their installations in megawatts. Cotton does not live on the electric grid. His rural Grant County home is powered by solar and wind because he thought it was too costly to pay the utility company $20,000 to run power lines to his house "just for the privilege of having a monthly bill."

Indiana's solar resources are better than Germany's and Germans have spent billions in renewable energy including solar. "It is cloudier in Germany." Cotton said.

Arnold said there is technology to produce energy on partly cloudy days, but Indiana has no incentives for residents other than passing grants along from the federal government. "We are just behind the times," Arnold said.

In California, a typical five kilowatt residential system costs around $30,000, but homeowners receive rebates from the state that can reach one third the system's cost. (A list of rebates and incentives listed by zip code can be found at www.greenmadesimple.com).

"I think there is misconception in Indiana that consumers and citizens are not interested in renewable energy. It is completely false," Cotton said.

He said the Tipmont REMC voluntarily offered a net metering program and attendance at a Crawfordsville informational meeting grew to a standing room only crowd.

Cotton said net metering is the first incentive and should be a mandatory policy since the utilities are guaranteed a profit. "They (utilities) don't send us a check when they are over earning."

Another reluctance to install alternative energy systems is that the housing market does not recognize a value of adding solar or wind to a home. Cotton says when clients ask if their installation will increase the value of their home, "I shrug my shoulders and say I don't know."