Maine Community Based Renewable Energy Production Incentive

Date: 25 Jun 2010 | posted in: Energy | 0 Facebooktwitterredditmail

The Maine Community Based Renewable Energy Production Incentive launched in 2010 and contains many components of a feed-in tariff and is one of the few policies to (laudably) focus on community-owned projects.  But the one-size-fits-all price for every renewable energy technology means it lacks the power to encourage a diversity of renewable energy technologies and may fail to encourage project development.  As a result, the program scored an ‘F’  in feed-in tariff expert Paul Gipe’s recent analysis of North American feed-in tariff policies.

The Maine program – described as a pilot – provides either a 1.5 renewable energy credit (REC) multiplier or the lesser of $0.10 per kWh or the “cost of the project” for wind, solar or hydro projects that are 1 megawatt (MW) or smaller.  Other eligible technologies including fuel cells or tidal power will be decided on a case-by-case basis.  Projects that are 1 to 10 MW in size participate in a bid process for pricing.  Projects over 10 MW are ineligible for the incentive and the entire program is capped at 50 MW.  Contracts are signed for 20 years. 

The ownership qualification requires that a project be 51% locally owned, and  “qualifying local owners include individuals, state and local government entities, federally recognized Indian tribes, nonprofit corporations organized under laws of the state, and business entities organized in the state with 51% local ownership.”  To read more of the details, see the DSIRE website.
 
Ultimately, the Maine program lacks the price differentiation that makes a feed-in tariff successful at encouraging different technologies and project sizes, as well as requiring price negotiation for projects over 1 MW (a rather low threshold).  However, the local ownership focus is an admirable provision and should result in greater economic returns on the renewable energy projects that are accepted under the program.