Energy policies – state and federal

By Drs. Robert & Sonia Vogl
President and Vice President,
Illinois Renewable Energy Association

With a December 1 deadline looming, it appears a path has been found to pass an Illinois Energy Bill. Solar developers are pleased that amendments to the bill eliminate the controversial demand charge and preserve net metering which supports the residential solar market.

An existing cap on net metering of 5 percent of total peak demand remains in place. With solar penetration in the state at 0.1 percent, it will be a while before the cap is reached. Unknown at present is what will happen if the 5 percent goal is reached.

With continuing technological progress in solar energy, inverters and battery storage, Amy Hart of solar developer Sun Run believes it is premature to determine what will happen to compensation after the 5 percent limit is reached. However, she feels it is important for stakeholders to have a role in future negotiations.

The bill currently includes a 10-year subsidy limited to what is necessary to keep the Exelon plants in Clinton and the Quad Cities operating. Critics still feel the subsidy is an unnecessary ratepayer expense as the company remains highly profitable. Others express concern that the bailout sets a precedent which will be applied to other nuclear plants in Illinois as they become too costly to operate.

Historically, the environmental movement has been closely tied to the push for renewable energy. However, in the push for nuclear subsidies, environmental, citizen and business interest were not a unified voice.

With the December 1 deadline, we should soon know the outcome of the legislative battle.

The potential passage of the bill has stimulated solar farm developers to search for farm owners willing to lease their land for 20 years to host solar farms. They have met with and sent mailings to farm owners describing the potential use of their lands.

We will have to wait a while longer to see what happens at the Federal level regarding energy policy. While purely speculative at this point, weekly broadcasts by the Energygang spent some time discussing potential energy policies of the Trump Administration under the title of Donald Trump’s Game of Whack-A-Mole on Energy and Climate.

If the Trump Administration does not live up to previous U.S. international commitments on reducing carbon emissions, China appears ready to fulfill its commitments and take the lead in assisting countries develop wind and solar facilities.

The Energygang sees renewable energy as a wealth building opportunity for nations around the globe. With OPEC still funding renewable energy it will be up to the private sector in the U.S. to make the case that renewable energy installations offer economic opportunities and jobs for U.S. workers. Investments in renewable energy through loans and cash represent 55 percent of the new funding for renewable energy, surpassing lease arrangements for the first time.

Considering the advanced state of renewable technologies the business case is clear – the transition to renewable energy is currently the world’s biggest wealth creating opportunity.

As pointed out by Jigar Shah, all four energy sectors receiving heavy investments – fracking, ethanol, wind and solar – primarily occur in rural areas. Since Trump’s victory was rural based, it will be interesting to see how the four energy sectors will be impacted by federal policies. Iowa’s Senator Grassley is already on record as protecting his state’s investment in ethanol and wind energy.

Given Trump’s views and those of some of his advisors on climate change, it is unlikely that renewable energy and efficiency will garner much federal support. But the Energygang believes private interests will continue to invest in solar energy.

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