In January 2015, the Delaware Department of Natural Resources and Environmental Control (DNREC) commissioned the Vermont Energy Investment Corporation (VEIC) to review and provide program design and implementation recommendations for the Green Energy Fund (GEF). The GEF provides grant incentives for qualifying renewable energy systems installed in Delmarva Power and Light’s Delaware service territory. DNREC requested the review because of concerns that program participation rates for solar projects might deplete the funding and result in a larger backlog of applications awaiting approval.
“VEIC had experience tackling this challenge, having worked with the New Jersey solar program since inception,” said Energy Program Administrator Robert Underwood, Division of Energy & Climate at DNREC. “We knew we needed an outside, independent third party review of the program prior to making any changes.”
Throughout the first half of 2015, the VEIC team:
- Reviewed the GEF program history and the existing program design and implementation and analyzed the program in comparison to surrounding states, with a focus on New Jersey and Maryland.
- Performed an analysis of the economics for solar PV systems by comparing the customer economics for leased and owned systems to the PPA or leasing company economics for Residential PPAs and leases with current and changed attributes.Changing the attributes in the financial model, such as grant incentive levels and the Investment Tax Credit, helped determine the financial impacts to customers and project owners of any changes to the GEF.
- Documented key findings from the program review and economic analysis.
- Developed recommended program modifications to ensure sustained, orderly market development for solar PV in Delaware including incentive changes.
Throughout the process, VEIC solicited input from the well-developed network of solar stakeholders, including solar equipment installers and leasing companies currently serving the Delaware market. This helped ensure industry input and involvement in advance of potential program changes.
VEIC produced the report, “Green Energy Fund Review and Recommendations Final Report,” in June 2015 and conducted a stakeholder webinar to review the findings and answer questions.
DNREC staff continued to engage stakeholders throughout the summer of 2015 to review further the findings and recommendations and gather more input on the final plan. Beginning Sept. 21, 2015 the DNREC started to implement changes to the Green Energy Fund for Delmarva Power & Light (DPL) customers. The updated GEF included new solar incentives based on market conditions and recommendations from the Green Energy Fund Review and Recommendations Final Report conducted by VEIC. Key changes include:
- Residential solar systems -- Incentive levels reduced from a maximum of $15,000 for residential solar system to $3,300 for customer-owned systems and $1,000 for PPA/Lease systems.
- Non-residential solar systems -- Incentive levels reduced from a maximum of $24,000 to $3,000.
- Nonprofit solar systems – Incentive levels reduced from a maximum of $50,000 to $41,250.
The new incentive levels will continue to keep the multi-year net present value (NPV) of these solar systems above zero, so that customers see a positive return on their investment.
Download the complete report