American Council On Renewable Energy

The Economic Impact of Renew

Energy in the Border States

March 24, 2011
ACORE’s Mission and Strategy

501(c)(3) tax-exempt nonprofit organization founded in 2001 to:

“...bring renewable energy into the mainstream of the U.S. economy

“...assume responsibility for the success of renewable energy in Ameri“...be for renewable energy and against nothing”

ACORE encompasses all renewable and inexhaustible energy options:

- Solar energy and power - Biomass energy and fuels

- Wind power - Geothermal energy and power- Hydro & ocean power - Waste-to-energy

...in all forms of energy:

- Electricity - End use thermal energy - Fuels - Hydrogen

2
ACORE’s Organizational Members

Strategy to Assemble All the Players Necessary to 

Make Renewable Energy Successful in the U.S.

3
Renewable Energy in America: Markets, Econo

Development and Policy in the 50 States

Two-Page Executive Summaries 

 Market activities Resource potentials Installed capacity for each tech Economic development Policies

4 www.acore.org/publications/50states
U.S. Renewable Energy Financ

0

2,0004,0006,0008,000

10,00012,00014,00016,000

Millions (USD)

U.S. Renewable Project Financing Investments

WindSolarGrand Total

 Market activity increased 

2009 slowdown

• Boost from 1603 Trea

Program

 New build project loans: 

billion

 Debt refinancing: 18.2%, 

0

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010

The following types of investments are considered: project construction debt, project term or refinancing 

debt, and tax equity investments. Figures adjusted for the average size of deals where no value was disclosed.

Source: Bloom

 Venture funds still cautio In Q4 2010, 8/10 investm

based company

 Solar was top clean tech

investment in 2010

 Large deals in 2010

• Solyndra $175 m (CA• BrightSource Energy 

5 Figures adjusted for the average size of deals where no value was disclosed.

0

500

100015002000

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10

Millions (USD)

VC/PE New Investment in Renewable Energy 

Companies

Source: Bloomberg New Energy FinanceSource: Bloomberg New Energy Finance
U.S. Investment in Renewable Energy Assets, 2

(Billions of $)Pew Charitable Trusts: Global Clean Power: A $2.3 Trillion Oppor

6 C
Global Clean Energy Projected Growth 2010-20

($U.S. Billions)Clean Edge: Clean Energy Trends, 2011

7
Renewable Energy in the Border S

 In 2010, projects in the four border 

over 35% of the nation’s renewable 

 California led the nation in the num

asset finance transactions and in thventure capital/private equity deal

 California had the most renewable 

businesses and jobs

 Texas received the most funding fr

competitive tax credit and grant pr

6,0008,000

10,00012,000

Megawatts

Renewable Energy in the Border States

competitive tax credit and grant prthe Federal government

8

Texas California New Mexico Arizona U.S. State Average

Small Hydro 6 24 0 0 25

Geothermal 0 2,566 0 0 61Biomass 82 705 0 37 103

Solar CSP 0 364 0 4 10

Solar PV 25 798 34 47 30

Wind 10,085 3,177 700 128 788

0

2,0004,000

0

500

1,0001,5002,0002,5003,000

California Texas Arizon

Millions (USD)

Venture Capital/Private Equ

Border States 2009-2

Sources: American Wind Energy Association, Solar Energy Industries Association, Interstate Renewable Energy Council, Bloomberg New Energy Finance, Geothermal Energy Association

Source: Bloomberg New Energy Finance
The Border States Host a Rich, Div

Supply of Renewable Energy Reso

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Solar Resou

Market Highlights

 Largest PV, CSP and geothermal power markets in the nation, 

third largest wind power market

 PG&E and SCE programs to install 500 MW of solar PV on 

commercial and industrial rooftops

 Over 10 GW of CSP under development, over 2.7 GW of which 

received permitting 

 Over 80% of U.S. geothermal power capacity is in CA, 

California Overview

Geotherma

 Over 80% of U.S. geothermal power capacity is in CA, 

representing ~10% of in-state commercial electricity generation

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 California Solar Initiative: Rebates & Performance Based Incentives. More th

over ten years in onsite, grid-connected solar energy. For every dollar spent othe state, there has been another $2.62 invested in solar technology in Califosources (CEC).

 Renewable Portfolio Standard: 20% by 2010, TRECs authorized (SBX1-2 for  Renewable Auction Mechanism (RAM): Requires California’s three IOUs to p

electricity from renewable energy systems up to 20 MW in size within their seterritories. For the initial part of the program, each utility is authorized to acq

California Featured Policies

with each utility allocated a portion of the 1 GW cap. Competitive auctions artwice a year for two years. 

 AB 32 - Global Warming Solutions Act of 2006: Requires CA to develop reg

market mechanisms to reduce the state’s GHG emissions to 1990 levels by 20representing a 25% reduction statewide, with mandatory caps beginning in 2significant emissions sources.

 Public Benefit Fund: Funds for renewable energy ($540 million), energy effic

million), and research, development & demonstration (RD&D) ($62.5 million). through three programs: the Existing Renewable Facilities Program, the EmerRenewable Program, and the Customer Education Program. 

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Project Details

 392 MW tower and heliostat STEG plant under construction in San Bernardino County

 Three separate plants to be built in phases between 2010 and 2013 To power more than 140,000 homes 13.5m tons of CO2 avoided over its 30-year life cycle

 First large-scale solar thermal project to be built in CA in two decades Project sited near existing roads and transmission linesFinancial Details

California BrightSource Ivanpah STEG Project

 Total investment cost disclosed as $300m PPAs: 259 MW with PG&E, 133 MW with SCE (25 years) Lead investor NRG Energy will invest up to $300m in the project over the next three years Bechtel Enterprises is an equity investor in all phases of the project Received a conditional $1.4 bn loan guarantee from the U.S. DOE

Economic Impact

 1,000 jobs at peak of construction; average 650 jobs annually over three year period

 86 operations and maintenance jobs $250 million in total construction wages $650 million in total employee earnings over the plant lifecycle Partnering with state and regional trade councils to provide qualified, skilled craft workers

 $300 million in state and local tax revenues

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Market Highlights

 Largest wind market in the nation – over 10 GW –

responsible for over 7.8% of electricity generation in 2010

 Home to wind energy companies, manufacturers Developed $5 bn Competitive Renewable Energy Zones plan 

to build out transmission lines to connect to areas with strong wind resources

Wind Reso

Texas Overview

Solar Resou

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 Renewable Portfolio Standard: 10,000 MW by 2020 (already m

wind), goal of 500 MW from non-wind renewable sources (not m

 Franchise Tax Exemption: Companies that manufacture, sell, or 

devices qualify

 Franchise Tax Deduction: 10% of the amortized cost of a solar e

device from a company’s apportioned margin

Texas Featured Policies

 Property Tax Exemption: For the amount of the appraised prop

that arises from the installation or construction of a solar or wind device

 Legislation: 

 SB 330: Mandate for utilities to purchase up to 1,500 MW of power fro

renewable sources by 2021, about 2% of the state’s electricity usage

 HB 774: Clarification that existing RPS requires 500 MW from renewab

other than wind (companion to SB 330)

 SB 492: Incentive for rooftop and utility scale solar

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Project Details

 781.5 MW project owned and operated by E.ON Climate & Renewables in rural Texas

 World’s largest wind farm, with 627 wind turbines manufactured 

by Mitsubishi, General Electric and Siemens

 Powers 265,000 homes Spans parts of 4 Texas counties and covers nearly 100,000 acres

 Began as a rural initiative: A local farmer organized 400 land owners to seek investors Construction began in May 2007 and ended in October 2009, built in 4 phasesFinancial Details

Texas Roscoe Wind Farm

 More than $1bn to build Equity Investors: GE Energy Financial Services, E.On Climate & Renewables PPA: 5-year contract with TXU Wholesale to purchase power from Phase I (209 MW)

Economic Impact

 Around 400 landowners share royalties, earning between $5,000 and $15,000/year Created 500 temporary construction jobs and 70 full-time positions Led to a wind energy service center in the region that employs 120 technicians Helping to revive local economy in remote areas of West Texas and the Texas 

Panhandle, traditionally based in dry-cotton farming

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Market Highlights

 Serves as headquarters for leading solar energy companies like First Solar 

(~200 jobs at HQ, building manufacturing facility to employ 600), Kyocera Solar (~60 jobs) and Stirling Energy Systems (~75 jobs)

 Over 2.2 GW of solar PV and CSP in development

• $967 million DOE Loan Guarantee for First Solar’s 290 MW Agua 

Caliente project (PPA with CA-utility PG&E)

• Conditional $1.45 bn Loan Guarantee for Abengoa Solar’s 250 MW 

solar trough plant (PPA with APS to purchase all power output for 

next 30 years, for a total revenue of around $4bn)

Solar Reso

Arizona Overview

Wind Reso

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 Renewable Portfolio Standard: 15% by 2025 for IOUs, with 30% of targ

distributed generation technologies Broad array of utility incentives to meet distributed generation target

 Renewable Energy Production Tax Credit: For wind and biomass, $0.0

first 200,000 MWh produced in a calendar year; for solar $0.04/kWh in yedecreasing to $0.01/kWh in year-10

 Arizona Renewable Energy Tax Incentive: 

Arizona Featured Policies

1. Refundable corporate income tax credit up to 10% of the total capit

of the project

2. Real and personal property tax reclassification, effectively constituti

reduction, for projects with a minimum of $25M in capital investme

 Requirements:

 51% of new jobs must pay a wage that is equal to or exceeds 125% of the state's 

determined by the Arizona Department of Commerce.

 Firm must offer health coverage for which the firm pays 80% or more of the prem

employee or equivalent for alternative models

 Since January 2010, at least eight companies have made the commit

to the Phoenix Metro area, with many more anticipated for the future

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Project Details

 World’s largest producer of solar panels built its first North American 

manufacturing plant in Goodyear, Arizona 

 First Chinese renewable leader to bring manufacturing jobs to the U.S.  Opened in 2010 with a 30 MW/year production capacity, planning to 

expand to 50 MW/year in early 2011. End goal of 120 MW/year.

 Chose Goodyear, AZ due to costs, logistics, clear and consistent statewide 

energy policies, the Greater Phoenix Area’s supportive business climate, and the availability of local manufacturing-ready facilities

Arizona Suntech Solar PV Manufacturing Facility

Financial Details Suntech invested $10m in initial 30 MW/year phase Awarded $2.1m in tax credits from the U.S. government

Economic Impact

 Employs 75 people, plans to employ more than 150 by the end of 2011 Suntech to directly spend $24.6m on construction, equipment, leasing and 

payroll within three years, and $275m within six years

 Under an agreement with Goodyear, Suntech must operate the facility for 

three years, maintain 50 employees, pay an average salary of $30,000 and cover 80% of health insurance benefits

 Goodyear will waive permit fees, pay $6,494 for each employee hired, 

among other benefits

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Market Highlights

 New Mexico is home to major solar energy manufacturers

 Schott Solar’s 85 MW/yr PV module production plant EMCORE’s 50 MW/yr CPV plant

 Home to 700 MW of wind energy capacity, with nearly 300 

MW under construction

 Largest solar project: Cimarron Solar PV project, a 30 MW, 

$100m project - among the nation’s largest

Solar Res

New Mexico Overview

Wind Res

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 Renewable Portfolio Standard: 20% by 2020, including carve-outs for wind and s

and for distributed generation (0.6%)

 Tax Incentives:

 Advanced Energy Tax Credits: 6% credit for solar electric and geothermal s

MW against personal or corporate income taxes 

 Alternative Energy Product Manufacturers Tax Credit: 5% credit for man

renewable energy systems for their capital expenses

New Mexico Featured Policies

 Solar Energy Systems Gross Receipts Tax Exemption: Power produced fro

and solar thermal energy systems is exempt from gross receipts tax (sales taxgenerated power is used on-site

 Advanced Energy Gross Receipts Tax Deduction: Revenue generated by t

installation of solar electric, geothermal electric, and recycled energy systemexempt from gross receipts tax

 Renewable Energy Production Tax Credit: Tax credits against the corporat

2.7 cents (on average) per kWh for the first 400,000 MWh of electricity produconsecutive years by renewable energy systems over 1 MW, fully refundable

 Biodiesel Blending Facility Tax Credit: A 30% credit against gross receipts 

compensating tax for businesses that install biodiesel blending equipment fblending facility

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Project Details

 Three 100-acre facilities to be built in phases near Columbus, Luna County

 Plans to reach commercial demonstration scale by 2012 (1 mGy) If successful, will develop commercial-scale facility in 2015 (150 mGy)

 New Mexico’s resources ideal for algae-based biofuel: non-arable land, high 

level of sunlight, non-potable water, energy and agricultural infrastructure

Financial Details

 Up to $135m for the demonstration facility

New Mexico Sapphire Energy Algae Facility

 Received a $50m cost-share grant from the U.S. DOE and a $54.5m loan 

guarantee from the USDA’s Biorefinery Assistance Program

 High-powered investors back the company’s NM operations– more than $100m 

from the Wellcome Trust, Cascade, Venrock, and ARCH Venture Partners

 Sapphire also owns an $8m algae research facility in Las Cruces, NM

Economic Impact

 750 direct and indirect jobs for construction, administration and operation of 

the facility, with 30 permanent jobs 

 Value added to the state’s economy for a 100 mGy algae facility estimated to be 

about $28m, with $8m in state tax revenuesSource: “Economic Impacts of an Algal Industry on New Mexico” National Alliance for Advanced Biofuels and Bioproducts; New Mexico State University

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