New Hampshire, U.S.A. — Oregon is in the midst of a drastic shift in its solar strategy, only you wouldn’t notice it based on recent news. The state in late August launched efforts on two big, highly visible projects — one just off a major highway and the other across parts of its university system.
But those projects were widely funded by money locked in long ago from the all-but-extinct Business Energy Tax Credit (BETC), which was essentially defunded during the state’s last biennium budget. Now, the $300 million pool of tax credit funding is down to $3 million — yes, that would be 1 percent the size — and large-scale utility projects won’t likely see the $250,000 cap available to them as significant enough to forge ahead.
It’s a scenario that’s becoming increasingly common across the United States as developers face uncertain tax and policy support from state and federal governments. Everyone, it seems, is making big cuts, but it’s often difficult to tell from which direction those cuts will come.
The two projects launched in Oregon got in under the wire, but they may also serve another purpose. Their visibility could be seen as a daily reminder of the communal and economic power of large-scale solar. That, in turn, may help build public support once the next two-year budget begins to take shape.
“We’re suffering from a downward economy that has pitted us against public service dollars,” said Glenn Montgomery, executive director of the Oregon chapter of SEIA. “That model has fallen out of favor at this point in time. These projects help elevate the benefits from an economic standpoint, from an environmental standpoint, from an energy independence standpoint. It shows we have the public sector engaged. Even if we don’t have the financing, at least we have some leadership and some folks who are promoting it from agency to agency.”
The Major Projects
Drivers along Oregon’s Interstate 5 in Wilsonville, south of Portland, will soon see a 1.75-megawatt installation at Baldock Safety Rest Area in what is being billed as the nation’s largest solar highway.
The $10 million project is a collaboration between Portland General Electric and the Oregon Department of Transportation, and is being financed by Bank of America. The solar power produced will be equal to about 9 percent of the annual power consumption purchased by the DOT from PGE. On top of that, it will include an interpretive display where the public can view the solar array and learn about solar power.
Meanwhile, Oregon is also home to a large-scale solar project at several college campuses. At one of the campusus — The Oregon Institute of Technology at Klamath Falls — 100 percent of the power will be produced via solar and geothermal sources and will be fed directly into the school. Large-scale arrays are also being planned for Oregon State University and Eastern Oregon University. The Oregon University System projects will have a combined capacity of 4.9 MW.
Both of these projects relied heavily on the 50 percent credit from BETC, and without that it’s likely neither project would have gotten off the ground. But the commercial industry has been slowly downshifting as it prepared for the BETC to lose support in the down economy.
“The commercial side of solar has been dealing with the fact that tax credits are going away,” said Montgomery, who added that incentives have also been scaled back for other renewables like small hydro, biomass and community wind. “We’re all in the same camp. There’s little money available to any of those technologies from a commercial scale standpoint, and we’ll just have to muscle our way through and find innovative ways to keep commercial alive.”
While commercial is likely to struggle, new opportunities may open up in the residential market, which hasn’t seen its tax credit dramatically reduced in the last budget.
“We have a pretty strong residential installations group in Oregon,” said Claire Carlson, executive director of Solar Oregon, a nonprofit organization. “I think we’ll see a shift more toward residential.”