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FUEL FROM THE SKY: SOLAR POWER’S POTENTIAL FOR WESTERN ENERGY SUPPLY ● tax incentives, which encourage investment in renewable energy sources through tax structures; and ● net metering programs, which reimburse utility customers for electricity they generate from their renewable energy systems. Renewable Portfolio Standards (RPS) RPS require utility systems to sell, purchase, or build minimum amounts of renewably generated electricity. These requirements are usually expressed as a percentage of electricity sold or as a capacity requirement. An example is Texas’ 2,000-MW (about 3% of the state’s electricity) renew- ables requirement by 2009. RPS laws appear to be effective in promoting the installation of thousands of megawatts of new renewable capacity. System Benefit Charges (SBC) SBC are funds collected through utility revenues used to promote renewables (as well as other energy-related public goods goals). SBC monies may be disbursed in the form of grants or sub- sidized financing to assist initiatives such as new large-scale projects, buy-downs for distributed renewables, customer credits for green markets, or other types of renewable infrastructure pro- motion. Oregon has set up an SBC-based renewables fund that receives about 0.5% of utility rev- enues under deregulation. In California, SBC-based support has assisted about 1,000 MW of new (planned or operating) large-scale renewables projects, and helped 200,000 customers switch to green power in the state’s green energy market. Green Energy Programs Green energy programs allow customers to purchase “green” products that contain significant fractions of renewably generated electricity. Green energy programs fall into two broad cate- gories. First, green market programs are offered in deregulated areas, where competitive mar- keters, such as Green Mountain Energy, offer green market products. More than one marketer may enter the market and compete for retail customers as well as wholesale renewable electrici- ty suppliers. Green marketers bear the risk of acquiring or building renewable energy supplies in green markets. California is one of the first and largest green markets. Green pricing programs, on the other hand, are usually offered in regulated utility areas by the local utility. In green pricing programs, the utility builds or purchases a supply of renewably gen- erated electricity and markets the green product to its retail customers. The utility faces no competition in offering a green product, but it bears the risk of acquiring the green electricity. A regulated utility has the backstop of rate recovery to reduce the potential risk of fewer cus- tomers buying the green product than anticipated. Also, the utility may build incremental renew- 104PDF Image | Solar Fuel From The Sky
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