2011 Regulatory Guidance and Policy Initiatives Expected to be a Positive Impact on Development
Renewable Energy Projects
Federal and state policies should continue to create an advantageous environment for renewable energy project development in 2011. At the federal level, the U.S. Treasury's Grant in Lieu of Tax Credit program, one of the key federal financial incentives for renewable energy, has been extended to December 31, 2011. In addition, despite the results of the 2010 midterm elections, the enactment of a federal clean energy standard, which could be structured much like the Renewable Energy Portfolio Standards ("RPS") currently in place in more than half the states, is a possibility. Such a standard would likely further promote the development of renewable energy and may also provide additional federal incentives or funding for these projects.
In New Jersey, the state legislature has already passed, and is considering a number of other bills that if passed, would continue to promote the growth of renewable energy in that state. By way of example, Assembly Bill 3139 permits the development of solar energy systems on closed landfills and quarries, and Senate Bill S-2371 could increase the ability of certain projects to attract financing by creating long-term price certainty for the project’s Solar Renewable Energy Credits ("SRECs"). Moreover, New Jersey's SREC market should continue to support high SREC prices, which would lead to lower relative payback periods, as the state's RPS solar generation requirements far exceed the state’s current solar generation capacity. The New Jersey Clean Energy Program also entered the year with an approximate budget of $141 million for various renewable energy grant and loan programs.
In Pennsylvania, although the incoming Corbett administration's renewable energy priorities are uncertain at this point, the Governor's stated desire to enhance alternative energy investment in Pennsylvania could lead to targeted legislative initiatives and renewable energy funding opportunities later this year.