Oregon Solar PV Production Incentive

The state of Oregon established a production incentive for renewable energy systems in 2009 and the state’s Public Utility Commission finalized rules in 2010 that will allow for up to 25 megawatts (MW) of solar photovoltaic (PV) systems to be installed by 2014.  Although proponents of the legislation had hoped to develop a robust feed-in tariff in Oregon, the actual program has only small elements of a feed-in tariff.  Feed-in tariff expert Paul Gipe graded the Oregon law an ‘F’ in his recent analysis of North American feed-in tariff policies.

The program has a 25 MW cap on solar PV installations, which makes it a pilot program at best.  Solar PV systems 100 kilowatts (kW) and smaller will get the guaranteed grid connection (if they get in under the cap), 15-year contract, and cost-based price for their power.  For these projects, the program most closely resembles the successful feed-in tariffs in Germany, Denmark, and other European countries.

Systems 10 kW and smaller will receive $0.55 to $0.65 per kWh for 15 years, based on the connecting utility.  Systems 10 to 100 kW will receive $0.55 per kWh.  There is no distinction between rooftop and ground-mounted solar PV.  Systems between 100 and 500 kW (the latter is the cap on project size) will participate in a competitive bidding process.  More details on the policy can be found at the DSIRE website: Oregon Pilot Solar Volumetric Incentive Rates & Payments Program.

Oregon’s policy makes a poor feed-in tariff.  The policy only allows one technology, solar PV, rather than the wide diversity of technologies (wind, hydro, etc.) that mark a more robust program.  The program cap of 25 MW will likely be entirely subscribed within the 4-year program plan, marking the end of the program and likely any substantial solar PV development in the state.  There is also no distinction between roof- and ground- mounted solar PV, which have significantly different cost structures.  Finally, the competitive bidding process for larger projects is not a feed-in tariff at all because it neither guarantees the grid connection nor the price.