Wind energy-related legislation and loan programs in Florida
According to 25-6.065, F.A.C. enacted in March of 2008, the Florida Public Service Commission (PCS) started net metering and interconnection for all renewable energy systems with a capacity of 2 MW. The PSC is entitled to set all rules and regulation for this net metering policy. This set of rules applies exclusively to the state’s investor owned utilities. Electric co-operatives and municipal co-operatives do not fall under this policy. All customers who generate electricity using one of the following technologies are eligible for net metering: wind energy, solar energy, hydroelectric power, and geothermal energy.
If the customer is using net metering then his or her net excess generation (NEG) will be carried forward to his or her next bill for a time period of 12 months. NEG is carried forward at the utilities’ retail rate as a kilowatt-hour credit. If NEG is remaining at the end of the 12 month period then it will be paid out by the utility. The System owner will hold the rights of Renewable energy credits (RECs). But RECs can be sold back to the utility by the customer. PSC hasn’t stated any capacity limit for the net metered systems. All information related to the renewable energy system must be filed with PSC. This includes the total energy delivered to and generated from the customers and the total payment made to interconnected customers.
According to H.B. 7135 in June 2008, PSC received the authority to adopt March 2008 rules for interconnected and net metered utilities. A standard interconnection agreement and net metering program for customer owned renewable generation was developed by the municipal utilities and electric cooperatives. Though municipal utilities and electric cooperatives need to file annual reports with PSC, they do not have any direct authority above the utilities.
According to Modified Accelerated Cost-Recovery System (MACRS) the US federal government has enabled recovery of investments in property. This can be accomplished through depreciation deductions. A set of class lives for various properties has been declared by MACRS in the range of 3 to 50 years. During this time period the property can be depreciated. According to 26 USC § 168, the eligible 5 year property types under the energy Investment Tax Credit (ITC) include solar electric and thermal technologies, combined heat and power and wind energy. Large wind facilities are also eligible under this provision of ITC.
This 5 year plan for wind and solar energy has been in effect since 1986. Under the federal Economic Stimulus Act of 2008 in February 2008, a 50% bonus depreciation was added for all eligible renewable energy systems which have been in service since 2008. To qualify for this depreciation option certain criteria must be met. The property purchase must have taken place during the year of 2008 or 2009, it must have been in service since 2008 and it must have a recovery period of less than 20 years. If the property satisfies all of these points, 50% of the adjusted cost can be deducted in 2008 or 2009 and the rest will be depreciated over ordinary schedule.
According to Fla. Stat. § 220.193, Florida renewable energy production credit was introduced to encourage the use of renewable energy in Florida. It successfully helped to increase the number of facilities that use renewable energy as their main source of energy. All expanded facilities that increase electrical production using renewable sources by more than 5 percent are eligible for this credit. A facility which is in service after May 2006 will be provided this credit. According to this tax credit, annually a taxpayer will receive this credit based on his or her production and sale of electricity from a new or expanded Florida renewable energy facility. If the facility owned by the taxpayer is a new one then the credit will be based on the taxpayer’s total electricity production. On the other hand if it is an expanded facility then the credit will be decided based on the increased electricity production after May 2006. The amount is capped at $0.01 per kWh of electricity produced or sold by the taxpayer to an unrelated third party during that tax year.
In order to receive this credit a taxpayer first must apply to the Department of revenue by February 1 of each year. The department of revenue will consult with the PSC to provide the application form. If the total amount of credits in one year exceeds $5 million then each applicant will be allotted a pro-rated amount based on his increased sale and production. In cases where the allotted credits are not used during one year, they can be carried forward to the subsequent next year until a maximum of 5 years have been reached.
In an effort to promote environmentally conscious design and construction Miami-Dade County implemented a program to expedite the review and approval of permit applications for green buildings. In this context green building refers to construction promoting the preservation of resources and environmentally sensitive constructive practices, systems and materials. To determine whether the building is qualified or not, the building official will rely on review and evaluation by recognized environmental rating agencies including the Florida Green Building Coalition, the National Home Builder Association and the U.S. Green Building Council.
According to Fla. Stat. § 196.175 enacted in June 2008, an expired Renewable Energy Property Tax Exemption was revived in 1990. According to this exemption any real property which is improved by installation and operation of renewable energy source devices will be entitled to property tax exemption. The exemption will be provided in the amount of the original cost of the device plus the installation cost. However, the total amount should exclude any sort of cost incurred during the removal or improvement of previous existing property during the installation process. If the exemption was filed in the month of January, then during the next 12 month time period the tax will be exempted for fully operational devices. If the device was operational for only a portion of that period then the amount should be reduced in a proportional manner. This exemption cannot be granted for a period of more than 10 years and the device cannot have been installed before January of 2009.
According to Fla. Stat. § 377.804 enacted in June 2006, the Renewable Energy and Energy-Efficient Technologies Grants Program was started in order to promote demonstration, commercialization, research and development projects using renewable energy technologies and also other innovative technologies significantly increasing energy efficiency for vehicles and commercial buildings. Under this matching grants program any of the following entities is eligible to apply: established companies in the state, universities and colleges in the state, municipalities and county governments, non-profit organizations, and utilities located and operating within the state. Various factors will determine the approval of the grant. A project stimulating in-state capital investment and economic development in rural areas will be given preference. To this end, projects that create more jobs and the development of commercial markets are favored. The project should also incorporate an innovative new technology or an innovative application of existing technology. To evaluate various project proposals the Commission may take help from other external organizations such as Enterprise Florida Inc. and also state universities. It may also solicit expertise from other public and private entities.
