G/TRIMS/W/117  
 
17 April 2013  
(13-2028)  Page: 1/6  
Committee on Trade-Related Investment Measures  Original: English  
 
CERTAIN LOCAL CONTENT REQUIREMENTS IN SOME OF THE 
RENEWABLE ENERGY SECTOR PROGRAMS  
QUESTIONS BY INDIA TO THE UNITED STATES 
The following communication, dated 15 April 2013, is being circulated at the request of the 
Delegation of India.  
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1. The United States implements several incentive programs to promote and develop 
renewable energy sector. Such programs are administered at the federal, state, regional 
and local level. Some of these programs make the availability of incentives contingent upon the use of domestic or state specific products, which raises concerns about their 
compatibility with the obligation of the United States under Article 2 of the TRIMs 
Agreement read with Article III:4 of GATT 19 94. There are issues of consistency with 
relevant provisions of Agreement on Subsidies and Countervailing Measures as well. 
 
2. The United Sates is requested to provide details  as to which of the state or regional or 
local level renewable energy programs within its territory provide benefits including incentives or additional incentives or rebates or credits contingent upon compliance of 
domestic content requirements such as equipment manufactured or principally 
manufactured in certain parts of the state or specific percentage of manufacturing or assembling to be done in a particular region or manufacturing to be done by companies 
having significant presence in a particular region or using domestic feedstock, etc. 
 
3. Having made the general query above, India would request the United States to provide 
information as detailed below with respect to the specific renewable energy sector 
programs. Specific questions follow after a br ief description of the programs. In addition 
to the specific questions, the United States is requested to provide details regarding the 
current status of each of the programs, poli cy or implementing measure listed below in 
terms of its duration and/or any other time-limits attached to it.  
A. Michigan: Renewable Ener gy Credits under the Clean, Renewable, and Efficient 
Energy Act (Public Act 295) 
 
On 6 October 2008, Public Act 295 was signed into law. This Act, known as the Clean, Renewable 
and Efficient Energy Act, established a Renewable Energy Standard for the State of Michigan. The 
Renewable Energy Standard requires Michigan elec tric providers to achieve a retail supply portfolio 
that includes at least 10% renewable energy by 2015. 
 In its 2013 Act 295 Renewable Energy Report to Legislature
1, the Michigan Public Service 
Commission (MPSC) informed that Michigan had experienced significant investment in renewable 
energy since the passage of Public Act 295 of 200 8. Conservatively, over $1.79 billion had been 
invested to bring 895 MW of new renewable energy projects online in Michigan through 2012.   
                                               
1 http://www.michigan.gov/mpsc/0,4639,7-159-16400_17280-295134--,00.html  G/TRIMS/W/117 
 
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  The said report further notes on page 22,  
 "It appears that the Michigan incentive REC provis ion is meeting its intended purpose to encourage 
developers to maximize utilization of Michigan equipment and labor."  
 
The Clean, Renewable, and Efficient Energy Act (Public Act 295), s. 39 (2) states that:  
"Subject to subsection (3), the following additional renewable energy credits, to be known as 
Michigan incentive renewable energy credits, sha ll be granted under the following circumstances: 
…. (d) 1/10 renewable energy credit for each megawatt hour of electricity generated from a 
renewable energy system constructed using equipm ent made in this state as determined by the 
commission. The additional credit under this subdivi sion is available for the first 3 years after the 
renewable energy system first produces electricity on a commercial basis.  
 
(e) 1/10 renewable energy credit for each megawatt hour of electricity from a renewable energy system constructed using a workforce composed of residents of this state as determined by the 
commission. The additional credit under this subdivi sion is available for the first 3 years after the 
renewable energy system first produces electricity on a commercial basis." (emphasis provided)  
 
1. In view of the local content requirements (underlined above), the United States is 
requested to explain how these provisions governing grant of Michigan incentive 
renewable energy credits are not in violation of Article 2 of TRIMs Agreement read with Article III:4 of GATT 1994? 
 
2. The United States is requested to inform if the Michigan incentive renewable energy 
credit will be granted to the applicant in case the requirement indicated in the text 
underlined above is not fulfilled. 
 
3. What is the legal status, constitution, composition and functions of the Michigan Public 
Service Commission? What is the role of the Michigan Public Service Commission in the 
formulation, approval, implementation, gran t and allotment, etc. of the Renewable 
Energy Credits?  
4. What is the process and criteria used by the Commission for determining whether a 
system is a ' renewable energy system constructed using equipment made in this state' ? 
 
5. What are the additional conditions (if any) apart from generating electricity from a 
'renewable energy system constructed using equipment made in this state as 
determined by the commission ', in order to avail the additional incentive as provided in 
s.39 (2) (d) of the Clean, Renewable, and Efficient Energy Act (Public Act 295)? Under 
what circumstances can the granting authority deny applications for the grant of 
additional incentive, despite fulfilling the laid down criteria?  
6. The United States is requested to provide deta ils regarding the method of grant, transfer 
and trading of renewable energy credits  granted under the Clean, Renewable, and 
Efficient Energy Act (Public Act 295). 
 
B. California: Los Angeles Department  of Water and Power (LADWP) - Solar 
Photovoltaic Incentive Program 
 
On its website, while describing program status and incentive levels for the solar incentive 
program, the LADWP notes that,  
"*LAMC – Los Angeles Manufacturing Credit: Customers who purchase & install PV components 
from a manufacturing facility located within the City of Los Angeles or who install building integrated photovoltaic systems (BIPV) may qualify for a higher incentive rate." 
 
The LADWP Solar Photovoltaic Incentive Program Guidelines state that,   "…………. Additionally, the LADWP currently provides a Los Angeles Manufacturing Credit (LAMC) for 
qualifying PV equipment manufactured in Los An geles as approved by the LADWP according to G/TRIMS/W/117 
 
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  Section 8.0 of these guidelines. The goal of the LAMC is to promote local economic development 
through manufacturing and job creation within the City of Los Angeles and to reduce costs through 
increased volume and competition…………… ". 
 
The guidelines further provide as follows: 
 
"8.3 Minimum Requirements to Qualify for LAMC  
 
8.3.1 Manufacturing Location and Controls 
 
1. To qualify for the LAMC, PV modules and solar power equipment must be 
manufactured within the limits of the Ci ty of Los Angeles. The manufacturer 
must have received written approval from the LADWP as qualifying for the 
LAMC.  
 
2. For installations that use this product, the manufacturer must certify to LADWP 
by means of documentation, inventory control summaries, physical plant visits, 
and other means necessary, as determin ed by LADWP, sufficient to document 
local manufacturing before any LAMC payment will be made. The LADWP 
reserves the right to audit the records and inspect the premises of 
manufacturers requesting the LAMC. 
 
3. To qualify for the LAMC and be cons idered locally manufactured, a minimum 
of 50% of the components of the finished PV modules or qualifying equipment 
must have been manufactured and/or asse mbled within the City of Los Angeles. 
 
4. Alternatively, LAMC status may be obtained through the submission of and 
acceptance of the manufacturer's local business plan by LADWP. Such local 
business plan should clearly demonstrate and document the use of local 
workforce, locally-manufactured components, or other local economic resources 
such that 50% or more of the manufactured product's wholesale value is 
derived from the aforementioned local re sources. Business plans submitted shall 
be current, and must be renewed annually. Quarterly financial and labor 
business reports may be required." (emphasis provided) 
 
1. In view of the local content requirements (underlined above), the United States is 
requested to explain how these provisions specifying eligibility for grant of LAMC are 
not in violation of Article 2 of TRIMs Agreement read with Article III:4 of GATT 1994? 
 
2. The United States is requested to inform if the LAMC will be provided to the applicant 
in case the requirements indicated in the text underlined above are not fulfilled jointly 
or separately. 
 
3. The LADWP Solar Photovoltaic Incentive Program Guidelines states that ' The LADWP 
retains sole discretion to determine if a manufacturing process or manufactured 
equipment qualifies for the LAMC and only those that receive written approval from 
LADWP may receive the LAMC '. What is the criteria used by the LADWP in its 
determination? 
 
4. What are the conditions for fulfillment of criteria of ' PV modules and solar power 
equipment must be manufactured within the limits of the City of Los Angeles ' as used 
in the LADWP Solar Photovoltaic Incentive Program Guidelines? 
 
5. What are the conditions for fulfillment of criteria of ' a minimum of 50% of the 
components of the finished PV modules or qualifying equipment must have been 
manufactured and/or assembled wi thin the City of Los Angeles ', as used in the LADWP 
Solar Photovoltaic Incentive Program Guidel ines? Which are the qualifying equipment? 
If there is a list of the qualifying equipment, the same may kindly be provided. 
 G/TRIMS/W/117 
 
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  6. What are the conditions for fulfillment of criteria of ' other local economic resources 
such that 50% or more of the manufactured product's wholesale value is derived from the aforementioned local resources ' as used in the LADWP Solar Photovoltaic Incentive 
Program Guidelines? What can be 'other local economic resources'  other than local 
workforce and locally-manufactured components? 
 
7. Is an applicant required to fulfill any additional condition apart from those stated in 
LADWP Solar Photovoltaic Incentive Program Guidelines 8.3 to be eligible for the 
LAMC? If yes, the United States is requested to provide information regarding these additional conditions.  
 
8. What is the amount/rate/percentage of ince ntive payment available for each applicant, 
with respect to LAMC and the method of determination of the same? What is the financial contribution made on this account by LADWP for the years 2010-11, 2011-12 
and 2012-13, including the method of transfer  (cash, cheque, bank transfer, credit on 
customers' bill, set-off etc.)? 
 
C. California : Self Generati on Incentive Program (SGIP) 
 Initiated in 2001, the SGIP offers incentives to customers who produce electricity with wind turbines, fuel cells, various forms of combined heat and power and advanced energy storage. 
Originally set to expire at the end of 2011, SB 412  of 2009 amended the Public Utilities Code to 
allow incentives to be available through 1 January 2016
2 
 
The handbook for SGIP3 provides that, 
 "3.1.1 Incentives for Technolo gies from a California Supplier 
 
An additional incentive of 20 % will be provided  for the installation of eligible distributed 
generation or Advanced Energy Storage techno logies from a California Supplier. "California 
Supplier" means any sole proprietorship, partnership,  joint venture, corporation, or other business 
entity that meets the following criteria: 
 A) The owners or policymaking officers are domi ciled in California and the permanent principal 
office, or place of business from which the supplie r's trade is directed or managed, is located in 
California.  
Or 
 B) A business or corporation, including those owned by, or under common control of, a corporation that meets all of the following criteria continuously during the five years prior to 
providing eligible distributed generation technologies to an SGIP recipient: 
 i) Owns and operates a manufacturing facility located in California that builds or manufactures 
eligible distributed generation technologies.  ii) Is licensed by the state to conduct business within the state. 
 iii) Employs California residents for work within the state. 
 For purposes of qualifying as a California Supplier, a distribution or sales management office or 
facility does not qualify as a manufacturer. " 
 
1. As per the above guideline, an additional incentive of 20% is made available subject to 
installation from a ' California supplier' . The United States is requested to explain how 
this provision specifying eligibility for grant of additional incentive is not in violation of 
Article 2 of TRIMs Agreement read with Article III:4 of GATT 1994 ?  
 
                                               
2 http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CA23F&re=0&ee=0  
3 http://www.cpuc.ca.gov/NR/rdonlyres/0DDABA86-9DF1-41C7-AD08-
FF5B255155FA/0/2013_SGIP_Handbook_v1.pdf  G/TRIMS/W/117 
 
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  2. Is there an approved list of 'California Suppliers' ? If yes, the same may kindly be 
provided. Which authority is responsible for approving status as 'California Supplier' ? 
 
3. Is there a list of ' eligible distributed generation or Advanced Energy Storage 
technologies'? If yes, the same may kindly be provided. Which authority is responsible 
for maintaining or making changes to this list?  
 
4. What is the meaning of 'installation'  in the above guidelines? Does it mean that the 
various equipment or components of the eligible distributed generation or energy storage technologies should be manufactured or assembled by the approved supplier in 
California? Is it possible to source the physical systems components from out of 
California and still be eligible for this 20% additional incentive? If yes, under what 
conditions? 
 
D. Texas: Austin Energy 
 
On its website
4, Austin Energy, a publicly-owned power company and a department of the City of 
Austin5, notes that  
"We offer solar photovoltaic (PV) rebates and co mmercial incentives to encourage our customers 
to install solar energy systems. In addition, we administer solar projects and funding in 
cooperation with state and national organizations. These incentives help diversify electric 
generation with clean, renewable energy and help  develop the clean energy industry in Austin. 
As of April 2011 Austin Energy supports more th an 1,200 customer-owned solar energy systems, 
100 commercial projects, 37 municipal projects, 32 school installations, and 6 libraries. Together, 
these produce more than 4.7 megawatts of generation capacity. In addition, more than 30 new solar installation companies have developed in Austin, creating approximately 300 green jobs." 
D.1 Commercial Solar Photovoltaic Pe rformance-Based Incentive Program 
  
The Commercial Solar Photovoltaic Performance-Based Incentive Program Guidelines and 
Qualifications issued by Austin Energy, under the heading " Incentive Funding " states that: 
 
"The current rate Austin Energy is offering for th e PBI is $0.14 per kWh. In an effort to promote 
solar technologies and economic growth, qualifying equipment at least 60% manufactured or 
assembled in Austin Energy's electric service area  may qualify for a PBI at a rate not to exceed 
$.175 per kWh. "Manufactured or assembled" does not include installation of the system."  
(emphasis provided) 
 
1. In view of the local content requiremen t (underlined above), the United States is 
requested to explain how this provision is not in violation of Article 2 of the TRIMs 
Agreement read with Article III:4 of GATT 1994 ? 
 
2. The United States is requested to inform whether the performance based incentive at 
a rate not exceeding $0.175 per kWh will be provided to the applicant if the 
requirement indicated in the text underlined above is not fulfilled? 
 
3. The United States is requested to inform if this incentive program is backed by some 
federal or state or local public law or by some mandate/guidelines of the electricity regulator. If yes, details of the same may kindly be provided.  
 
4. What is meant by ' qualifying equipment' ? What are the conditions that an equipment 
has to fulfill to be recognized as 'qualifying equipment'? Is there a list of 'qualifying equipment'? If yes, the same may kindly be provided.  
 
5. Can the United States clarify whether an entity is required to fulfill any additional 
condition apart from 'qualifying equipment at least 60% manufactured or assembled 
                                               
4 http://www.austinenergy.com/En ergy%20Efficiency/Programs/Rebates/Solar%20Rebates/index.htm  
5 http://www.austinenergy.com/About%20Us/Company%20Profile/index.htm  G/TRIMS/W/117 
 
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  in Austin Energy's electric service area' in order to  avail the incentive up to $ 0.175 
per kWh? If yes, please provide informat ion regarding these additional conditions. 
Under what circumstances can the granting authority deny applications for grant of additional incentive, despite fulfilling the laid down criteria? 
 
6. The United States is requested to provide information regarding budget allocation and 
disbursement by the Austin Energy towards the Commercial Solar PV Performance-
Based Incentive Program for the years 2010-11, 2011-12 and 2012-13, in particular 
with respect to the additional incentive up to $ 0.175 per kWh. 
 
D.2 Austin Energy Residentia l Solar PV Rebate Program 
 
The Austin Energy Residential Solar PV Rebate Program Guidelines under the heading ' Rebate 
Funding ' states that: 
 
"The standard rebate level for qualifying equipment is $2.00 per Watt. In an effort to promote solar technologies and economic growth, qualifying equipment at least 60% manufactured or 
assembled in AE's electric service area may qualify for rebates at a level not to exceed $2.50 per 
watt. "Manufactured or Assembled" does not include installation of the system."  (emphasis 
provided)  
1. In view of the local content requiremen t (underlined above), the United States is 
requested to explain how this provision is not in violation of Article 2 of the TRIMs Agreement read with Article III:4 of GATT 1994 ? 
 
2. The United States is requested to inform if the above rebate at a level not exceeding 
$2.50 per watt will be provided to the applic ant in case the requirement indicated in 
the text underlined above is not fulfilled. 
 
3. The United States is requested to inform if this incentive program is backed by some 
federal or state or local public law or by some mandate/guidelines of the electricity 
regulator. If yes, details of the same may kindly be provided.  
 
4. What is meant by 'qualifying equipment' ? What are the conditions that an equipment 
has to fulfill to be recognized as 'qualifying equipment' ? Is there a list of 'qualifying 
equipment' ? If yes, the same may kindly be provided.  
 
5. Can the United States clarify whether an entity is required to fulfill any additional 
condition apart from ' qualifying equipment  at least 60%  manufactured or assembled 
in Austin Energy's electric service area' in order to  avail the additional rebate under 
this provision ? If yes, please provide information regarding these additional 
conditions. Under what circumstances can the granting authority deny applications for 
grant of additional rebate, despite fulfilling the laid down criteria? 
 
6. The United States is requested to provide information regarding budget allocation and 
disbursement by the Austin Energy towards, the residential Solar PV Rebate Program for the years 2010-11, 2011-12 and 2012-13, in particular with respect to the 
additional rebate up to $ 2.50 per watt. 
  
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