Sign-on to AWEA-SWTC comments on USDA 9006 Rules
- Now's the time to sign on to AWEA Small Wind Turbine Committee's comment letter on USDA's proposed rules for the 9006 grant program, pasted below.
Please reply to smallwind@... by NOON PST this THURSDAY Nov 4th to add your name/organization!
You are also encouraged to submit your own letter following our sample: http://www.rurdev.usda.gov/rbs/farmbill/4280proposed.htm
November 4, 2004
Deputy Under Secretary Gilbert Gonzalez, Jr.
U.S. Dept. of Agriculture
Re: RIN No. 0570-0050, Comments on Proposed Rule on Renewable energy Systems and Energy efficiency Improvements Grant, Guaranteed Loan, and Direct Loan Program, 69 Fed. Reg. 59650 (Oct. 5, 2004)
Dear Under Secretary Gonzalez,
The following comments are offered by the Small Wind Turbine Committee of the American Wind Energy Association. AWEA is the national trade association of the wind energy industry and the AWEA Small Wind Turbine Committee focuses on wind turbines up to 100 kW used primarily for homes, farms, and small businesses.
We are pleased to have this opportunity to provide input because the Section 9006 program has been a disappointment to the small wind turbine industry. The USDA has also made note of the very limited number of small renewable energy projects. We believe that the program should aim for a better balance of small and large projects and that achieving this objective will require a radical departure from the current NOFA procurement structure.
The 2004 NOFA process and application scoring contained a myriad of flaws from our perspective, including:
- A paperwork and preparation time burden on small projects that discouraged numerous potential applicants from applying
- An application and approval schedule that lacked the flexibility needed to coordinate with the state rebate programs and grant opportunities also needed to make the projects economically attractive (ie., some farmers did not want to apply for 9006 funds until they were assured of also receiving additional subsidies, but they wouldn�t get that answer until after the 9006 submission deadline). For most small scale RE projects the USDA grants are necessary, but not sufficient.
- Scoring that favored shorter payback period projects.
- Scoring that favored smaller percentage grant requests.
- Scoring that favored �managed� systems over owner-operated systems.
- Scoring that favored projects using RE/EE to help with environmental compliance.
- Scoring that favored energy sales over higher value on-site consumption.
- Requiring an interconnect agreement (or PPA) in advance of project implementation, when most net metered projects don�t require such agreements.
- Used/rebuilt equipment allowed.
The combined effects of these problems provide an effective damper on participation in a program that should have much higher participation from small renewable energy systems. For 2004 there were just 13 awards to small wind and solar projects with combined funding of $590,226 or 2.6% of total funds awarded.
To reverse this situation the AWEA Small Wind Turbine Committee offers the following recommendations:
1. Establish a Small Renewables Rebate Program.
USDA should set aside 10% of available 9006 funds, or ~ $2.3 million, for this program and allow applications to be made throughout the year until funds are exhausted. Any unused funds could be rolled over to the next year with a corresponding reduction in replenishment funding. We suggest that grants would be limited to systems of 10 kW or less, with the 25% grants capped at $15,000. Co-funding from state rebate programs must be fully allowed. The USDA should create a short application form that greatly simplifies the application process and reduces the time requirements. The AWEA Small Wind turbine committee would be prepared to assist the USDA with the design and set-up of this program.
2. Require equipment to be new and unused.
Rebuilt wind turbines will have already received a federal subsidy when they were originally installed, so allowing them in the USDA program provides these mostly foreign-manufactured ex-windfarm turbines a second bite at the federal funding apple. More importantly, used equipment steals sales from new equipment vendors and, thereby, reduces the promotion of higher manufacturing volumes and resulting lower equipment prices. Most state and federal subsidy programs require the use of new equipment. The 9006 program should not be the exception.
3. Base financial need criteria on project payback, not the applicant�s financial resources and liquidity.
If the 9006 grant will materially reduce the project payback period and similar projects are not commonplace in the applicant�s area, we would say there is a de facto financial need.
4. Exempt 100 kW or less renewable energy projects from the requirement of having a PPA or interconnect agreement.
Renewable generators up to 100 kW are guaranteed the right to interconnect under Section 210 of PURPA (Public Utilities Regulatory Policies Act, 1978). In most states the interconnection rules, including net metering availability, are spelled out. No PPA (power purchase agreement) is required.
Thank you for this opportunity to provide input on the Section 9006 program.
With Best Regards,
Chair, AWEA Small Wind Turbine Committee
President, Bergey Windpower Co.
2001 Priestly Ave.
Norman, OK 73069
AWEA Small Turbine Advocate
2724 S. Elmwood Place
Seattle, WA 98144