Topic:
SOLAR ENERGY; GASOLINE; ENERGY (GENERAL); ELECTRIC UTILITIES - RESTRUCTURING; EXECUTIVE AGENCIES; CONNECTICUT INNOVATIONS, INC.; RENEWABLE RESOURCES;
Location:
ENERGY - RENEWABLE RESOURCES; UTILITIES-ELECTRIC-RESTRUCTURING;

OLR Research Report


November 22, 2006

 

2006-R-0692

ALTERNATIVE ENERGY

By: Kevin E. McCarthy, Principal Analyst

You asked for (1) a description of programs and other initiatives to encourage alternative energy in the state and (2) a list of companies and other entities in the state that promote alternative energy.

SUMMARY

Connecticut has two major initiatives to promote renewable and other alternative forms of energy. They are the Connecticut Clean Energy Fund and the renewable portfolio standard (RPS), both of which were established by the state's electric restructuring law. The fund, which is administered by Connecticut Innovations, Inc. (CII), develops and invests in renewable and clean energy resources, notably solar energy and fuel cells, and educates the public about clean energy. The RPS requires that the state's electric companies and competitive suppliers obtain part of their supply from these resources, with the proportion increasing over time.

Other initiatives to promote renewable energy include (1) a “net-metering” requirement, under which electric companies must buy power produced by their residential customers from renewable resources; (2) a requirement that the companies offer their customers a “green option” in which the proportion of power coming from renewable resources exceeds the RPS; (3) Project 100, in which electric companies are required to enter into long-term contracts to buy the power produced from renewable resources; (4) Executive Order 32, which requires state agencies to use specified renewable resources to meet 20% of their electric demand by 2010 and increasing proportions in the future, and (5) a requirement that municipal electric utilities support conservation, renewable energy, or both. The state has also taken several steps, primarily through the adoption of tax incentives, to promote alternative vehicle fuels.

Connecticut is a major center for the development and manufacture of few cells. There are also a number of firms involved in the development of photovoltaic solar energy systems and other forms of alternative energy.

The primary agency that promotes alternative energy in the state is CII, which administers the Clean Energy Fund and Project 100. Other relevant agencies and institutions include the Department of Public Utility Control, the Institute for Sustainable Energy at Eastern Connecticut State University, and the Clean Energy Institute at the University of Hartford.

ALTERNATIVE ENERGY PROGRAMS AND INITIATIVES

Clean Energy Fund

The Clean Energy Fund promotes investment in renewable energy resources, including solar energy, wind, ocean thermal energy, wave or tidal energy, fuel cells, landfill gas, certain biomass technologies, and other new technologies that have significant potential for commercialization. The fund receives 0.67 cents per kilowatt-hour (kwh) sold by electric companies and competitive suppliers. The fund is administered by CII, a quasi-governmental authority.

The law gives CII broad discretion in allocating the fund, so long as the money is used to (1) foster the growth and commercialization of renewable energy resources and (2) stimulate the demand for renewable energy resources that serve customers in Connecticut. CII can provide grants, invest in businesses, and enter into contracts, and support research, development, manufacturing, commercialization, deployment, and installation of renewable energy technologies.

The fund currently supports several programs. Its On-site Renewable Distributed Generation program provides grants to support the installation of renewable electric generation systems at commercial, industrial and institutional buildings. The program targets photovoltaic and fuel-cell projects. The fund's solar photovoltaic program offers qualified installers monetary incentives that will be passed on to residential, governmental, and non-profit customers in the form of rebates.

Under the fund's 2004-2007 strategic plan, its main goals are to: (1) increase the number and diversity of installed clean energy resources; (2) support the early stage development of innovative clean energy technologies; and (3) increase the public awareness, knowledge and purchase of clean energy. OLR Report 2006-R-0446 addresses several questions about the fund, including the types of projects it has funded and its history. Further information about the fund is available at http: //www. ctcleanenergy. com/.

Renewable Portfolio Standard

Electric companies and competitive electric suppliers must obtain part of the power they procure for their customers from renewable resources under the RPS. They must get part of this power from class I resources such as solar or wind energy, some types of biomass, or fuel cells. They must obtain an additional proportion of their power from either class I or class II resources, which includes municipal solid waste and most types of biomass projects. Both proportions increase over time, totaling 10% by 2010. The law allows electric companies and suppliers to meet these requirements by participating in a renewable energy credit trading program. The credit is separate from the power itself and is traded on a separate market.

Other Initiatives

Net Metering. CGS § 16-243h requires electric companies and competitive suppliers to provide a credit for the power produced by residential customers in one- to four-unit buildings who generate electricity from class I renewable resources. It requires electric companies to install metering equipment for such customers. The equipment must measure the amount of electricity the customer consumes, the amount he produces, and the difference between these amounts. The electric company or supplier must, in effect, pay the customer its retail rate for the power he produces.

Green Option. CGS § 16-244c(d) requires electric companies to offer their customers a “green option” in which the proportion of power coming from renewable resources exceeds the RPS. As discussed in OLR Report 2006-R-0056, participating customers do not actually buy power directly from renewable generators. Instead, they indirectly buy renewable energy credits for half or all of their consumption, at a premium of approximately 0.6 cents/kwh and 1.1 cents per kwh, respectively.

Project 100. CGS § 16-243c(j)(2) requires the electric companies (CL&P and UI) to enter into long term contracts with renewable energy generators. The generators' projects (1) must have received funding from the Clean Energy Fund, (2) use class I renewable resources, and (3) be at least one megawatt in size (a megawatt is 1,000 kilowatts). The two electric companies must collectively enter into contracts for 100 megawatts of generating capacity. Further information about this program is available at http://www.ctcleanenergy.com.

Executive Order 32. This order requires state agencies (including state universities) to purchase class I renewable resources to meet 20% of their electric demand by 2010. The proportion goes up to 50% in 2020 and 100% in 2050. The Office of Policy and Management has hired a consultant to update state building load profiles to assist the state in carrying out this measure.

Municipal Electric Utilities. Legislation passed in 2005 requires municipal electric utilities to impose a one mill (one-tenth cent) per kwh charge to fund conservation or renewable energy programs. The charge will increase in five steps, rising to two and one-half mills per kwh starting in 2011. The money raised by this charge goes into a fund administered by the Connecticut Municipal Electric Energy Cooperative (CMEEC), which uses it to pay for conservation programs operated by the individual utilities. CMEEC also purchases power and provides other services for these utilities, which are located in Groton, Jewett City, Norwalk, Norwich, and Wallingford.

Alternative Vehicle Fuels. Until January 1, 2008, businesses can claim a Corporation Business Tax credit for:

1. 50% of expenditures for the construction of, improvements to, or equipment for any compressed natural gas (CNG), liquefied natural gas (LNG), or liquefied petroleum gas (LPG) refueling station or an electric vehicle recharging station; and the purchase and installation of equipment used in dedicated or dual fuel CNG, LNG, LPG, or electric vehicle conversions; and

2. 10% of the incremental cost of purchasing a new dedicated compressed natural gas, liquefied natural gas, liquefied petroleum gas, or electric vehicle.

Both credits may be carried forward for up to three years.

In addition, until July 1, 2008 the following purchases are exempt from sales tax: new dedicated CNG, LNG, LPG, hydrogen, or electric vehicles; equipment used in dedicated or dual alternative fuel vehicles, or electric vehicle conversions; and equipment associated with a CNG or hydrogen filling or electric recharging station. Until October 1, 2008, new hybrid electric vehicles with an Environmental Protection Agency highway fuel economy rating of at least 40 miles per gallon are also exempt from the sales tax.

Finally, in awarding state contracts, the Commissioner of Administrative Services may give a price preference of up to 10% for the purchase of natural gas or electric vehicles, or for the purchase of traditional vehicles plus conversion equipment to convert the vehicles to dual or dedicated alternative fuel use.

Further information about Connecticut's alternative fuel initiatives can be found at http://www.eere.energy.gov/afdc/progs/state_summary.cgi?afdc/CT.

New Energy Technologies. The Office of Policy and Management administers this program which annually provides grants of up to $10,000 to five small business to develop innovative energy-efficient technologies and renewable energy technologies. Further information about this program is available at http://www.opm.state.ct.us/pdpd2/grants/net.htm.

ALTERNATIVE ENERGY ENTITIES

Table 1 lists alternative energy firms with offices in the state. (In addition, a number of firms based in other states do business here.) Much of the information in this table regarding fuel cell firms is taken from the Connecticut Hydrogen-Fuel Cell Coalition's website, http://www.chfcc.org/Membership/current.asp. Much of the information about other alternative energy firms is taken from http://energy.sourceguides.com/.

Table 1: Alternative Energy Firms Based in Connecticut

Name of Firm

Type of

Business

Products

Location

UTC Power

Manufacturer

Fuel cells (stationary and vehicle applications)

Hartford

FuelCell Energy

Manufacturer

Carbonate fuel cells

Danbury

GenCell Corporation

Manufacturer

Molten carbonate fuel cells and metallic separator plates, interconnects, and current collectors for fuel cell stacks

Southbury

Proton Energy Systems

Manufacturer

Proton exchange membrane (PEM) hydrogen generators and regenerative PEM fuel cell systems

Wallingford

Schüco USA L.P.

Manufacturer,

wholesaler, importer

solar roofing systems, Photovoltaic (PV) module mounting systems, solar water and pool heating systems, PV modules and systems

Newington

Apollo Solar, Inc.

Manufacturer, wholesaler

solar charge controllers, backup power systems, battery energy monitors

Bethel

Alternative Energy Solutions, LLC

Electrical contractor

PV systems, wind energy systems, fuel cells, hydro energy systems

Stamford

Burrington's SOLAR EDGE

Sales, service, and consulting

PV systems, solar garden lights and fountains, building integrated PVs, solar water pumping systems

Windsor Locks

Connecticut Solar Energy, Inc.

Sales and service

PVs

Bloomfield

Home Grown Power

Sales and service

PV modules and systems, solar charge controllers

New London

Rountree Architects

Solar design and consulting

PV and other solar systems

Westport

Sunlight Solar Energy

Design and consulting

PV systems

Milford

Solarbrite

Sales and installations

PVs, battery backup

South Windsor

Elyon, Inc.

Sales and installations

PVs

Plainville

Pioneer Valley Photovoltaics Cooperative

Sales and installations

PVs

New Britain

SolarWrights, Inc.

Sales and installations

PVs, small wind systems

Stonington

Sunsearch Inc./Aegis Electrical Systems

Sales and installations

PVs, solar thermal systems

Guilford

Waldo Renewable Electric, LLC

Sales and installations

PVs

Old Lyme

Zelek Electric Company

Sales and installations

PVs

Old Lyme

Enel North America, Inc.

Project development

Hydro, wind, and geothermal energy systems

Stamford

Table 1: Continued

Name of Firm

Type of

Business

Products

Location

Jack Rabbit Energy Systems

Retail and wholesale sales and service

Wind generators, microhydro electric generators, inverters, solar panels.

Stamford

WildWater.Com

Manufacturer, retail sales

Small hydro systems

Milford

Anderson Electric Power Systems

Manufacturer

Wind and biomass systems, fuel cells

Greenwich

Pacific Capital Resources

Sales and service

Biomass, ocean energy, and geothermal systems, wind power plants

New Canaan

Cart-Rite

Manufacturer, distributor

Alternative fuel vehicles

Guilford

Table 2 lists agencies and non-profit organizations that promote alternative energy.

Table 2: Agencies and Nonprofit Organizations Promoting Alternative Energy in Connecticut

Name

Role

Connecticut Innovations, Inc.

Administers the Clean Energy Fund, which promotes the development and commercialization of clean energy technologies and helps stimulate markets for electricity from clean renewable sources. Administers Project 100 (see program descriptions above)

Department of Public Utility Control

Enforces the renewable portfolio standard and net metering requirements, establishes the regulations implementing Project 100 and approves the final contracts with the utilities.

Institute for Sustainable Energy (Eastern CT State University)

Provides energy education and information on energy policy, conservation and load management, renewable energy, distributed generation, environmental protection, energy alternatives, and sustainability.

Office of Policy and Management

Administers the New Energy Technology grant program

Connecticut Hydrogen-Fuel Cell Coalition

Trade organization that seeks to advance the development, manufacture, and deployment of fuel cell and hydrogen technologies and associated fueling systems in Connecticut

Connecticut Center for Advanced Technology

Staffs the Connecticut Hydrogen-Fuel Cell Coalition and has several other initiatives related to fuel cells

Clean Energy Institute, (College of Engineering, Technology, and Architecture -University of Hartford)

Fosters the introduction of renewable energy resources within Connecticut and provides innovative energy solutions that reduce environmental impacts, while fostering cheap, reliable power.

Solar Energy Association of Connecticut

Non-profit educational organization

KM:ts