G/SCM/Q2/USA/61  
 
25 April 2014  
(14-2518)  Page: 1/7  
Committee on Subsidies and  
Countervailing Measures 
 Original: English  
 
 SUBSIDIES 
REPLIES TO QUESTIONS POSED BY INDIA1 TO THE UNITED STATES UNDER 
ARTICLE 25.8 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING 
MEASURES - STATE LEVEL RENEWABLE ENERGY  
 
The following communication, dated 24 April 2014, is being circulated at the request of the 
Delegation of the United States.  
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  I. Delaware: Solar Renewable Energy Credits 
 
The Delaware Code, Title 26- Public Utilities, Ch.1.- Public Service Commission, Subchapter III-A - Renewable Energy Portfolio Standards (Renewable Energy Portfolio Standards Act), provides that: 
 
"§356. Multiple credits for specific energy sources 
…… 
(d) A Retail Electricity Supplier or a Rural Electric Cooperative shall receive an 
additional 10% credit toward meeting the RPS for solar or wind energy installations sited in Delaware, provided that a minimum of 50% of the cost of the renewable 
energy equipment, inclusive of mounting components, relates to Delaware 
manufactured equipment. " (emphasis provided) 
Question 1 
 
In view of the local content requirement (underlined above), the United States is 
requested to clarify as to how this provision is not in violation of Article 3.2 read with 
Article 3.1 (b) of the ASCM. The United St ates is also requested to inform if the 
additional 10% credit will be provided to th e applicant in case the requirement indicated 
in the text underlined above is not fulfilled.  Question 2 
 
The United States is requested to clarify the meaning of the phrases ' a minimum of 50% 
of the cost of the renewable energy equi pment, inclusive of mounting components, 
relates to Delaware manufactured equipmen t' and 'derived from  eligible energy 
resources'  occurring in the definition of 'renewable energy credits' under the Delaware 
Code, Title 26- Public Utilities, Ch.1. Pu blic Service Commission, Subchapter III-A 
Renewable Energy Portfolio Standards.  
 
                                               
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  Question 3 
 The United States is also reques ted to explain whether an enti ty is required to fulfill any 
additional condition apart from 'a minimum of 50% of the cost of the renewable energy 
equipment, inclusive of mounting componen ts, relates to Delaware manufactured 
equipment' , in order to avail the additional credit under Delaware Code, Title 26- Public 
Utilities, Ch.1. Public Service Commission, Su bchapter III-A Renewable Energy Portfolio 
Standards §356 (d). If yes, the United States may please provide information regarding 
these additional conditions. Please also specif y as to under what circumstances, can the 
granting authority deny applications for gran t of additional credit, despite fulfilling the 
laid down criteria.  
 
Reply 
 
In 2005, the Delaware General Assembly enacted, and the Governor signed into law, the 
"Renewable Energy Portfolio Standards Act," 26 Del. C . §§351-364 (the "RPS Act"), which 
establishes a tradable market for electricity generated from renewable energy resources. The 
stated purpose of the RPS Act is to develop a minimum level of electricity generated from 
renewable energy sources.  
 Beginning in 2007, the RPS Act requires any "Retail Electric Supplier" to annually accumulate a 
portfolio of "renewable energy credits" ("RECs") equivalent to a specified percentage of its retail 
electric supply sales generated in Delaware.  
 
Section 354 of the RPS Act now requires Delmarva Power & Light ("Delmarva"), currently the only 
Commission Regulated Electric Supplier in Delaware that provides Retail Electric Product to Delaware End-Use Customers, to acquire a minimum cumulative percentage of its retail sales from 
Eligible Energy Resources, which must be derived from RECs and solar renewable energy credits 
(SRECs). In 2010, the RPS Act was further amended to include Section 356(d), which provides an additional 10 percent credit to Delmarva agains t its required minimum RPS obligation, provided 
that a minimum of 50 percent of the cost of the renewable energy equipment is manufactured in 
Delaware. SRECs, like RECs, are tradable instruments that inherently reflect any credits granted by 
the Public Service Commission (the "Commission"). The Commission has jurisdiction over and oversees implementation of the requirements set forth in the RPS Act.  
 
At its most basic level, the RPS Program proceeds as follows:  
 
 A renewable energy equipment installer, brok er or owner submits an application to the 
Commission for certification of a facility as an Eligible Energy Resource. 
 Commission staff reviews the application and if approved, assigns a specific Delaware 
certification number to the Eligible Energy Resource. Each certification number 
inherently reflects any credits associated with that particular Eligible Energy Resource, 
including any credits for installation projects using equipment manufactured in Delaware. The Eligible Energy Resource can then sell RECs and SRECs through an established 
market. 
 Currently, Delmarva is the primary end buyer of RECs/SRECs in Delaware. As noted 
above, the RPS Act requires Delmarva to purchase a minimum annual amount of RECS 
and SRECS equivalent to a specified percentage of its retail electric distribution sales 
generated in Delaware. The RPS Act furthe r requires Delmarva to file an annual 
compliance report for the respective year which, among other things, documents the number of RECs/SRECs Delmarva applies to meet the statutory minimum, annual RPS 
compliance obligation. Any RECS/SRECS Delmarva applies to meet the statutory 
minimum requirements are "retired" and may not be used or applied against any further reporting requirements under the RPS Act.  
"Renewable Energy Equipment" is not defined in  the RPS Act. "Eligible Energy Resources" is 
defined in 26 Del. C. Section 352(6). "Renewable Energy Credits" is defined in 26 Del. C. Section 352(18). Finally, we note that the quoted language in the question is from the 
Administrative Code of Delaware, not the Delaware Code.  
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  II. Minnesota: Xcel Energy Solar Rewards Program and MN-Made PV Rebate Program 
 The Xcel Energy Solar Rewards Program enables customers to access the Minnesota Bonus PV Solar Rebate Program. The Minnesota Bonus PV Solar Rebate Program
2 under the heading 
'Program Qualifications'  states that: 
 
"To qualify for the Minnesota Bonus incentive program, an applicant must: 
… Install qualified "Minnesota Bonus" PV modules  as defined by state statute."  
(emphasis provided) 
Furthermore, the 2012 Minnesota Statutes, Chapter 116C, section 7791, subd. 3 states that: 
 
"Subd. 3. Rebate eligibility. (a) To be eligible for a rebate under this section, a solar 
photovoltaic module: 
must be manufactured in Minnesota;"  (emphasis provided) 
Question 1 
 In view of the local content requirements (underlined above), the United States is 
requested to clarify as to how these provisio ns are not in violation of Article 3.2 read 
with Article 3.1(b) of the ASCM. The United States is also requested to inform if the incentive under the Minnesota Bo nus Program will be provided to the applicant in case 
the requirement indicated in the text  underlined above are not fulfilled. 
 
Question 2  
The United States is requested to confirm if the 2012 Minnesota St atutes, Chapter 116C, 
section 7791 mandatorily requires utilities, such  as the Xcel Energy to provide rebates to 
an owner of a qualified prop erty for installing solar phot ovoltaic modules manufactured 
in Minnesota after 31 December 2009. The Unit ed States may please provide a list of 
such utilities mandated under the 2012 Minne sota Statutes, Chapter 116C, section 7791.  
 Question 3 
 
What is the role of the Minnesota Department of Commerce in the formulation, approval, 
implementation, enforcement, funding, etc. of the Xcel Energy- Solar Rewards Program 
and MN Made PV Rebate Program? Please provide relevant details. 
 Question 4 
 
What are the conditions to be fulfilled by  the applicant in order to avail the ' Minnesota 
Bonus' ? The United States is also requested to inform whether an entity is required to 
fulfill any additional condition apart from installing " qualified 'Minnesota Bonus' PV 
modules as defined by state statute ", in order to avail the additional incentive. If yes, 
the United States may please provide inform ation regarding these additional conditions. 
Please also inform as to which is the relevant 'state statute'  referred above. The United 
States is also requested to specify as to under what circumstances, can the granting 
authority deny applications for the grant of additional incentive, despite fulfilling the 
laid down criteria.  
 
Reply 
 Xcel Energy's Solar Rewards Program provides an incentive for residential and commercial 
customers that install grid-connected photovoltaic (PV) systems of at least 0.5 kilowatts (kW) and 
less than 40 kW. Previously, the incentive took th e form of an up-front rebate of $2.25 per watt 
(W) DC; this rate was reduced to $1.50/W. In exch ange for the up-front incentive, the customer is 
                                               
2 
"http://www.xcelenergy.com/Save_Money_&_Energy/For_Your_Home/Solar*Rewards/Bonus_PV_Solar_Rebate
_-_MN"  G/SCM/Q2/USA/61 
 
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  required to enter into a 20-year contract with  Xcel Energy that transfers ownership of all 
renewable energy credits (RECs) produced by the system to the utility during the life of the contract. The annual budget for this program is $5 million through June 30, 2015.  
In order to qualify for the program, the PV system  must be installed on a property or a building 
located in Minnesota that is owned by the applican t and that receives electric service from Xcel 
Energy. New construction projects are eligible for incentives, but must have an Xcel Energy electric 
meter on site and an electricity account set up with the utility.  
 To receive the incentive, participants must submit an application and receive approval from Xcel Energy prior to installing the system. All PV sy stems must use new equipment, carry a five-year 
warranty, and meet several other equipment and installation requirements designed to assure the 
safe and effective operation of the system.  
In addition to the Solar Rebate Program offered by Xcel Energy, consumers can also qualify for an 
additional rebate of $2.75/W with the purchase of a PV module manufactured in Minnesota.  (See, 2012 Minnesota Statutes, Chapter 116C, sect ion 7791.) To qualify, an applicant must: 
 
 Be an Xcel Energy customer and have applied for and received an Xcel Energy Solar 
Rewards interconnection agreement (All current Solar Rewards program requirements apply). 
 Install qualified PV modules manufactured in  Minnesota (meaning the production of 
modules, including tabbing, stringing, and lamination or production of interconnection of low-voltage photoactive elements that pr oduce the final photovoltaic output). 
 Submit a valid purchase order. 
 Install the PV system within the funding year that the incentive reservation was 
assigned. 
 Sign a rebate contract confirming the payment calculation assumptions prior to 
payment. 
The Minnesota Department of Commerce oversees the Solar Rewards program under the 
Conservation Improvement Program (CIP) authorit y. The interaction between these two programs 
is somewhat complex and does not lend itself to a brief summary. For that reason, please refer to 
Minnesota Chapter 216B.241 for a statutory background on CIP.  
 
III. Massachusetts: Commonwealth Sola r II Photovoltaic Rebate Program 
 The Program Manual of the Commonwealth Solar II Photovoltaic Rebate Program (Solicitation 
No. 2013 CSII-Version 13.0) provides the following additional rebate for both commercial as well 
as residential projects:  
"Massachusetts Company Components Adder  
To qualify for this adder, the System Owne r must provide evidence that the modules, 
the inverter(s), and any other significant component which is important to the 
electricity production of the project are manufactured by a company with a 
significant Massachusetts presence , as determined at the sole discretion of 
MassCEC."  (emphasis added) 
Question 1 
 
In view of the local content requirement (underlined above), the United States is requested to clarify how this provision is not in violation of Article 3.2 read with 
Article 3.1(b) of the ASCM. The United Stat es is also requested to inform if the 
Massachusetts Company Components Adder will be  provided to the applicant in case the 
requirement indicated in the text un derlined above is not fulfilled. 
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  Question 2 
 What are the conditions under which a component would be regarded as ' any other 
significant component which is important to the electricity production of the project ', as 
used in the Program Manual of the Commonwea lth Solar II Photovoltaic Rebate Program 
(Solicitation No. 2013 CSII-Ve rsion 13.0). Please inform if there is a list of such 
components. If yes, the United States  is requested to provide the same.  
 
Question 3  What are the criteria used by MassCEC in determining whether the modules, the 
inverter(s), and any other significant comp onent are "manufactured by company with a 
significant Massachusetts presence". The Un ited States is also requested to clarify 
whether the place of manufacture of the modules, the inverter(s), and any other 
significant component is taken into cons ideration by the MassCEC in determining 
whether a company has a "significant Massachusetts presence"?  
Question 4 
 The United States is requested to provide details relating to the establishment, purpose, sources of funds and the administration of the Renewable Energy Trust Fund. What is 
the role of the Renewable Energy Trust Fund  in the administration of Commonwealth 
Solar II Photovoltaic Rebate Program?  
Question 5 
 The United States is requested to provide de tails regarding the legal status, constitution, 
composition, purpose, functions and sources of funds of MassCEC? 
 Reply 
 
The Massachusetts Clean Energy Technology Center ("MassCEC") was created as part of the 
Massachusetts Green Jobs Act  of 2008 to accelerate job growth and economic development. In 
November 2009, An Act Relative to Clean Energy  (together with the Green Jobs Act , the "enabling 
legislation") transferred the Massachusetts Renewable Energy Trust Fund ("RET Fund") from the 
Massachusetts Technology Park Corporation to MassCEC. The RET Fund was originally created by the Electric Restructuring Act of 1997, which places a renewable energy systems benefit charge on 
each kilowatt-hour of electricity purchased by consumers. With the RET Fund transfer, MassCEC 
added the mission of supporting the installation of renewable energy projects throughout the 
Commonwealth.   
The Commonwealth Solar II Photovoltaic Rebate Pr ogram (the "CSII Program") is an authorized, 
but not required program, under the enabling legislation. MassCEC has the sole discretion to change or adjust the program, as necessary. Th e RET Fund is the source of funds for the CSII 
Program. The CSII Program provides rebates through a non-competitive, first-come first-served 
application process for the installation of photovoltaic ("PV") projects. The rebates are based on the size and other characteristics of the PV pr oject and are calculated by applying a per-watt 
incentive for the first 5kW of nameplate capacity. The current base incentive is $0.40/watt.  
 The Massachusetts company components adder (the "adder") is an additional $0.05/watt incentive. To qualify for the adder, the system ow ner must provide evidence that the modules, the 
inverter(s), or any other significant component which is important to the electricity production of 
the solar PV project are manufactured by a compan y with a significant Massachusetts presence, as 
determined at the sole discretion of MassCEC. Currently, MassCEC considers any "significant 
component" to include modules, inverters and mounting systems.  The maximum amount for this 
adder is $250 per project. Only about four percen t of the rebate applications currently submitted 
through the CSII Program receives the adder. MassC EC recently announced to the solar industry 
that the CSII Program will end in 2014. 
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  IV. Connecticut: S.109 Of The Public Act No.11-80 Read With The Residential Solar 
Investment Program  
The Residential Solar Investment Program enables the eligible recipients to access an 
additional incentive provided in s.109 of the Public Act No.11-80, which states that: 
"Sec.109. The Public Utilities Regulatory Auth ority shall provide an additional incentive 
of up to five per cent of the then-applicable incentive provided pursuant to section 106 
of this act for the use of major system components manufactured or assembled 
in Connecticut , and another additional incentive of up to five per cent of the then 
applicable incentive provided pursuant  to section 106 of this act for the use of major 
system components  manufactured or assembled in a distressed municipality , 
as defined in section 32-9p of the general statutes, or a targeted investment 
community , as defined in section 32-222 of the general statutes." (emphasis 
provided)  
Question 1 
 In view of the local content requirement (underlined above), the United States is 
requested to clarify how this provision is not in violation of Article 3.2 read with 
Article 3.1(b) of the ASCM. The United States is also requested to inform if the additional 
incentive will be provided to the applicant in  case the requirement indicated in the text 
underlined above are not fulfilled. 
 
Question 2  
The United States is requested to clarify which components are considered as major 
system components. If there is a list of such components, the same may also be provided. The United States is also requested to specify the conditions under which such 
major system components would be regarded as 'major system components 
manufactured or assembled in Connecticut' as used in s.109 of the Public Act No.11-80? 
Who makes this determination. What are the conditions under which a municipality 
would be regarded as a ' distressed municipality' , and a community would be regarded as 
a 'targeted investment community' , as used in s.109 of the Public Act No.11-80?  
 Question 3 
 
The United States is requested to provide de tails regarding the legal status, constitution, 
composition, objectives, functions and sources of funds of the Public Utilities Regulatory 
Authority and the Clean Energy Finance and Investment Authority. How does the Clean 
Energy Finance and Investment Authority re late to the Public Utilities Regulatory 
Authority and what are their respective role s in the formulation, administration and 
implementation of the Resident ial Solar Investment Program? 
 
Question 4  
The United States is also requested to spec ify the conditions to be fulfilled by the 
applicant in order to avail the incentive of  5% over and above the incentive received 
under the Residential Solar Investment Program, for the use of major system 
components manufactured or assembled in Connecticut, as provided in s.109 of the 
Public Act No.11-80.  Question 5 
 
The website of the Clean Energy Finance and Investment Authority
3 states that in 
relation to the Residential Solar Investment Program:  
 
                                               
3 
http://www.ctcleanenergy.com/YourHome/ResidentialSolarInvestmentProgram/ResidentialSolarIncentives/tabid/617/Default.aspx  G/SCM/Q2/USA/61 
 
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  "…there is a 5% bonus for projects that use major system components 
principally manufactured in Connecticut. An additional bonus is available if 
these components are principally manuf actured in a Connecticut distressed 
municipality" (emphasis provided) 
The United States is requested to clarify if the incentive stated above is different from 
that provided in s.109 of the Public Act No.11-80.   
Question 6 
 The United States may please specify th e criteria for determining whether major 
systems components are " principally manufactured in Connecticut ". Please also provide 
information as to who makes this determin ation and how are these criteria different 
from the criteria used for determining " major system components manufactured or 
assembled in Connecticut " as used in s.109 of the Public Act No.11-80. 
 
Reply 
 
In March 2012, the Clean Energy Finance and Investment Authority (CEFIA) announced a solar 
photovoltaics (PV) residential investment program. It is limited to owner-occupied homes. Only customers of Connecticut Light & Power and United Illuminating are eligible.  
There are two incentive types available, depend ing on the ownership of the PV system. For 
consumers who purchase a solar PV system for their residence directly, the first 5 kilowatts (kW) receives a maximum $1.75/W and the next 5 kW receives $0.55/W rebate, which may be adjusted 
based on expected performance. Systems greater than 10 kW are allowed, but the incentive is 
only paid on the first 10 kW.  
For consumers who do not purchase a solar PV system directly but enter into a contract with a 
company that owns/operates the system, there is a performance-based incentive (PBI) available to that third-party owner. Currently, it is $0.300/W for six years and is paid on actual performance of the PV system. In both cases, there is an additi onal incentive of up to five percent for the use of 
major system components manufactured or assembled in Connecticut. All systems must be 
installed with a CEFIA-Performance-Data-Provider-approved monitoring system (the cost of this system has been taken into account in designing the incentive levels). 
 
CEFIA and the Public Utilities Regulatory Authority (PURA) determine in consultation with each other which components qualify for the additional incentive. Created as part of Pubic Act 
No. 11-80, CEFIA is authorized pursuant to Conn. Gen. Stat. Section 16-245n. PURA was also 
create by Public Act No. 11-80, as a subdivision of the Department of Energy and Environmental 
Protection, and is authorized in Conn. Gen. Stat. Section 16-2.  
The incentive described in Question 5 is the same as that discussed above. A "distressed 
municipality" is defined under Conn. Gen Stat. Section 32-9p(b).  
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