NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

U.S. Renewable Energy 

Policy and Industry

Presentation at CNREC

Ella Zhou

October 2015

NREL/PR-6A20-65255
2

U.S. Renewable Energy Policy and Industry

• Federal and State Drivers for RE

• Solar Update

• Wind Update

• Biofuel Update.
3

Federal Drivers for Renewable Energy

• Investment Tax Credit (ITC)

• Production Tax Credit (PTC)

• Clean Power Plan (final rule)

• Modified Accelerated Cost Recovery System 

Depreciation Schedule (MACRS)

• DOE Loan Program.
4

Summary of U.S. Renewable Electricity Tax Policy

Policy Name Description Technologies Amount Expiration

Production 

Tax Credit 

(PTC)

A per-kilowatt-hour 

tax credit for 

electricity generated 

by qualified energy 

resources and sold by 

the taxpayer; eligible 

projects can opt for 

ITC instead

Wind, closed- and open-loop biomass, geothermal, solar, 

small irrigation power, municipal solid waste, and some 

hydroelectric sources

$23 / MWh for 

wind, closed-loop 

biomass, and 

geothermal. $11 / 

MWh for others; 

generally applies 

to first 10 years of 

operation

Projects under 

construction 

prior to 2015 

qualify

Investment 

Tax Credit 

(ITC)

Allows the tax credit 

to be taken based on 

the amount invested 

rather than electricity 

produced 

Solar water heat, solar space heat, solar thermal electric, 

solar thermal process heat, photovoltaics, landfill gas, wind, 

biomass, hydroelectric, geothermal electric, fuel cells, 

geothermal heat pumps, municipal solid waste, 

CHP/cogeneration, solar hybrid lighting, hydrokinetic power 

(i.e., flowing water), anaerobic digestion, small 

hydroelectric, tidal energy, wave energy, ocean thermal, 

fuel cells using renewable fuels, microturbines, geothermal 

direct-use

30% for solar, fuel 

cells, and small 

wind; 10% for 

geothermal, 

microturbines, and 

CHP

For commercial 

solar placed in 

service after 

2016, reverts to 

10%; 

geothermal

remains at 10%; 

for all other 

technologies, 

expires end of 

2016 

MACRS and 

bonus 

depreciation

Five year accelerated

depreciation schedule 

means greater “loss” 

on paper, reduces

taxes

All ITC-eligible technologies as well as large wind projects

(essentially all renewables)

Depends on tax 

situation

No expiration 

(MACRS)

Source: United States Department of Energy (U.S. DOE)
5

Extended Incentives for Renewable Energy Generation

Source: NREL. 2015. Annual Technology Baseline (ATB). Golden, CO: NREL. Accessed September 2015, 

http://www.nrel.gov/analysis/data_tech_baseline.html. 

CS: central scenario (current case)

Ext: extending PTC and ITC
6

Clean Power Plan (final rule)

CPP sets target emission rates (or mass-totals) for each state and aims to 

lower total power sector emissions by 32% by 2030 from 2005 levels.

See more on CPP’s impact at: EPA 

(U.S. Environmental Protection 

Agency). 2015. Regulatory Impact 

Analysis for the Clean Power Plan 

Final Rule. Research Triangle Park, 

NC: U.S. EPA. Accessed September 

2015, 

http://www3.epa.gov/airquality/c

pp/cpp-final-rule-ria.pdf. 

Projected Generation

Mix (thousand GWh)
7

State-Level Drivers of Renewable Energy

• Renewable Portfolio Standards (RPS)

• Renewable Energy Certificates (RECs) or Performance Based 

Incentives

• Net Metering; Virtual Net Metering

• Carbon Markets

• State Tax Credit

• Property Assessed Clean Energy (PACE) Programs

• Property Tax Exemptions

• State Sales Tax Exemptions

• Grants

• Clean Energy Financing Program

• Subsidized Loans

• On-Bill Financing.
8

RPS Policies

Source: www.dsireusa.org / June 2015

WA: 15% x 2020* 

OR: 25%x 2025* 

(large utilities)

CA: 50% 

x 2030

MT: 15% x 2015

NV: 25% x

2025* UT: 20% x 

2025*†

AZ: 15% x 2025*

ND: 10% x 2015

NM: 20%x 2020 

(IOUs)

HI: 100% x 2045

CO: 30% by 2020 

(IOUs) *†

OK: 15% x 

2015

MN:26.5% 

x 2025 (IOUs)

31.5% x 2020 (Xcel)

MI: 10% x 

WI: 2015*† 10% 

2015

MO:15% x 2021

IA: 105 MW IN: 10% 

IL: 25% x x 2025†

2026

OH: 12.5% x 

2026

NC: 12.5% x 2021 (IOUs)

VA: 15% x 

2025† KS: 20% x 2020

ME: 40% x 2017

29 States + Washington, D.C. 

+ 3 territories have a Renewable 

Portfolio Standard 

(8 states and 1 territories have 

renewable portfolio goals)

Renewable portfolio standard

Renewable portfolio goal

*

Includes non-renewable alternative resources

Extra credit for solar or customer-sited renewables

†

U.S. Territories

DC

TX: 5,880 MW x 2015*

SD: 10% x 2015

SC: 2% 2021

NMI: 20% x 2016

PR: 20% x 2035

Guam: 25% x 2035

USVI: 30% x 2025

NH: 24.8 x 2025

VT: 75% x 2032

MA: 15% x 2020(new resources) 

6.03% x 2016 (existing resources)

RI: 14.5% x 2019

CT: 27% x 2020

NY: 29% x 2015

PA: 18% x 2021†

NJ: 20.38% RE x 2020 

+ 4.1% solar by 2027

DE: 25% x 2026*

MD: 20% x 2022

DC: 20% x 2020
9

RPS with Solar or DG provisions
10

Comparison of RE Estimated Market Sizes, 2006-2013

Source: Heeter, Jenny. 2014. Status and Trends in the U.S. Voluntary Green Power Market (2013 Data). Golden, CO: NREL. Accessed September 2015, 

http://www.nrel.gov/docs/fy15osti/63052.pdf. 
11

Renewable Energy Certificates (RECs)

Source: “Green Power Markets: Renewable Energy Certificates (RECs).” (2015). Washington, D.C.: U.S. DOE Energy Efficiency and Renewable 

Energy (EERE). Accessed September 2015, http://apps3.eere.energy.gov/greenpower/markets/certificates.shtml?page=5. 
12

State-developed mandatory rules for certain utilities

No uniform or statewide mandatory rules, but some utilities allow net metering

www.dsireusa.org / March 2015

* State policy applies to certain utility types only (e.g., investor-owned utilities)

Note: Numbers indicate individual system capacity limit in kW. Percentages refer to customer demand. Some limits vary by customer type, technology and/or application. Other limits might also 

apply. This map generally does not address statutory changes until administrative rules have been adopted to implement such changes. 

• PV project capacity limits range from 10 kW to 80 MW

• Net metering rules are being actively discussed in over a dozen state 

public service and utility commissions across the country.

WA: 100

OR: 25/2,000*

CA: 1,000*

MT: 50*

NV: 1,000*

UT: 25/2,000*

AZ: 125%

ND: 100*

NM: 80,000*

WY: 25*

HI: 100*

CO: 120%*

OK: 100*

MN: 40

AR: 25/300

MI: 150* WI: 20*

MO: 100

IA: 500*

IN: 1,000* IL: 40*

FL: 2,000*

KY: 30*

OH: no limit*

GA: 10/100

NC: 1,000*

VA: 20/1,000*

NE: 25

KS: 15/100/150*

ME: 660*

AK: 25*

State: kW limit residential/ kW limit nonresidential

U.S. Territories:

American Samoa: 30

Guam: 25/100

Puerto Rico: 25/1,000/5,000

Virgin Islands: 20/100/500

LA: 25/300

44 States + D.C.,

AS, Guam, USVI, & PR 

have mandatory net 

metering rules

DC

WV: 25/50/500/2,000

VT: 20/250/2,200

NH: 1,000

MA: 60/1,000/2,000/10,000*

RI: 5,000*

CT: 2,000/3,000*

NY: 10/25/500/1,000/2,000*

PA: 50/3,000/5,000*

NJ: no limit*

DE: 25/100/2,000*

MD: 2,000

DC: 1,000/5,000/120%

SC: 20/1,000*

Net Metering
13

Carbon Markets

Regional Greenhouse Gas Initiative California

Source: International Emissions Trading Association, Environmental Defense Fund, CDC Climate Research. (2015). The World’s Carbon Markets. 

Accessed September 2015, http://www.ieta.org/worldscarbonmarkets. 
14

U.S. Regional Transmission Organizations Regions

Source: “Regional Transmission Organizations (RTO)/Independent System Operators (ISO).” 2015. Washington, D.C.: Federal Energy Regulatory Commission 

(FERC). Accessed September 2015, http://www.ferc.gov/industries/electric/indus-act/rto.asp. 
Solar Update
16

U.S. Installation Breakdown

• United States installed 1.3 GW in Q1 ’15, down Q/Q and Y/Y

– Q1 is typically a down quarter (weather, tax purposes); this year was particularly snowy

– Residential market was actually up (11% Q/Q, 76% Y/Y), with 9 states adding more than 10 MW

– CA (53% of res. market) had interconnection backlogs for some utilities which pushed installs from Q4 to Q1

• GTM reports that technology convergence is gaining traction (energy storage, demand response, load 

control, EV charging), though it’s still in its infancy due to high costs. As costs come down and rates 

evolve, demand should pick up.

Source: Green Tech Media (GTM)/ Solar Energy Industries Association (SEIA). U.S. Solar Market Insight Q1 2015. Accessed 

September 2015, http://www.seia.org/research-resources/solar-market-insight-report-2015-q1. 

CA

718 

NV

97 NY

59 

NC

58 

MA

55 

Other

318 

U.S. PV Installations by State 

(MWDC), Q1 '15

0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.3 0.2 0.3 0.3 0.4 0.4 0.3 0.2 0.3 0.3 0.2 0.2 0.2 

0.4 0.2 0.3 0.2 

0.3 0.2 0.1 0.5 0.3 

0.9 

0.3 

0.6 0.5 

1.4 

0.9 0.8 0.7 

1.5 

0.6 

0.55 

0.82 

0.69 

1.31 

0.74 

0.96 0.94 

2.11 

1.36 1.38 

1.28 

2.19 

1.31 

0.0

0.5

1.0

1.5

2.0

2.5

Q1

'12

Q2

'12

Q3

'12

Q4

'12

Q1

'13

Q2

'13

Q3

'13

Q4

'13

Q1

'14

Q2

'14

Q3

'14

Q4

'14

Q1

'15

Quarterly PV Installed (GWDC)

U.S. PV Installations by Market Segment

Utility

Non-Residential

Residential
17

Systems Installed Without Incentives

• CA distributed PV installations continue to grow; however, majority of them are now doing so without CSI incentives 

– Only 15% of distributed PV used California Solar Incentive (CSI) in Q1 ’15

– Additionally, the queue time for projects in CSI program has significantly increased, from 133 days in 2013 to 410 

days in H1 ’15 for systems under 10 kW (median between incentive application to installation)

• AZ distributed PV installations in SRP & APS territories have increased between H1 ’14 and H1 ’15, but only 13% of 

these systems received incentives in Q2 ‘15

Sources: For CA: CSI Database, accessed April 8, 2015; GTM/SEIA Q4 2014 U.S. Solar Market Insight. For AZ: APS & Salt River Project (SRP), accessed April 

10, 2015. Data set segmented by “incentive type”; all projects listed as “non-incentive”, “non-incentive residential”, or “non-incentive commercial” 

assumed to have received non-incentives. 

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

350

Q4

'11

Q1

'12

Q2

'12

Q3

'12

Q4

'12

Q1

'13

Q2

'13

Q3

'13

Q4

'13

Q1

'14

Q2

'14

Q3

'14

Q4

'14

Q1

'15

% of Total Quarterly Installations

Quarterly Installations (MW)

California

CSI Installs Non-CSI, CA Distributed CSI % of Total

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

10

20

30

40

50

60

70

80

90

100

Q3

'13

Q4

'13

Q1

'14

Q2

'14

Q3

'14

Q4

'14

Q1

'15

Q2

'15

% of Total Quarterly Installations

Quarterly Installations

Arizona

APS & SRP w/o incentives APS & SRP w/ incentives

% of capacity w/ incentives
18

PPA Pricing by Region

Sources: 1. Bloomberg NEF, “U.S. PPA Market Outlook.” Accessed July 8, 2015. 2. GTM/SEIA. 2015. U.S. SMI Q1 2015.

2008 2009 2010 2011 2012 2013 2014 2015

300MW

100MW

$0

$50

$100

$150

$200

Average PPA Price ($/MWh)

PPA Signing Date

ERCOT Southwest California Northwest MISO SPP Southeast

• From 2008-2015, PPA signed contracts have dropped from ~$150/MWh to ~$50/MWh

– Wider geographic distribution of where contracts are being signed

• Recent announcements of much lower PPA bids 

– In June ‘15 Austin Energy received 1.3 GW of bids under $40/MWh (though not yet signed)

– In July ‘15 NV Energy announced that it had agreed to a PPA price of $38.7/MWh (3% 

escalator) with a 100MW First Solar project

• GTM reports that over 5 GW of PV have been procured by utilities based solely on its competiveness 

with natural gas
19

• Union labor 

($2.07/W)

• Kansas City, 

MO insolation

• No subsidies

How Are Developers Able to Bid so Low?

Sources: Current installed system price from Fu et al. (forthcoming). Economic Competitiveness of U.S. Utility-Scale Photovoltaics Systems in 2015: 

Regional Cost Modeling of Installed Cost ($/W) and LCOE. Golden, CO: NREL. LCOE calculated using the System Advisory Model (SAM).

• Las Vegas, NV 

insolation

• Non-union 

labor 

($1.89/W)

• Federal 

subsidy: 30% 

ITC

• State 

subsidy: $3 

REC at 2.4 

multiple

• Bid for future 

price of 

$1.5/W

• Reduced 

financing: 

nominal 

WACC 5.5% 

from 7.0%

$0.11

$0.04

$0.024 

$0.006 

$0.022 

$0.003 $0.009 

$0.006 

$0.00

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

LCOE ($/kWh) • Current unsubsidized LCOE for PV projects across the United States is around $0.10-$0.11/kWh

• However, federal and state subsidies still exist, and certain locations have lower labor costs and 

better insolation

• Additionally, developers typically bid PPAs based on where they think system costs will be

– Some are also able to achieve lower cost financing with larger projects.
20

Solar PV Plant Cost and Performance Projections

• In general, the degree of adoption of a range of technology innovations distinguishes between the low, 

mid, and high cost cases

• The range of LCOE associated with variation in solar resource across the United States is reduced from 

$94-187/MWh for high cost to $48-94/MWh for low cost reduction scenarios.

20

70

120

170

220

270

320

2010 2015 2020 2025 2030 2035 2040 2045 2050

Solar PV Levelized Cost of Energy 

($/MWh)

Utility PV - 14% - Low Utility PV - 14% - Mid

Utility PV - 14% - High Utility PV - 20% - Low

Utility PV - 20% - Mid Utility PV - 20% - High

Utility PV - 28% - Low Utility PV - 28% - Mid

Current (2013) Future Projections

Source: NREL ATB 2015

Note: 14%, 20%, 28% are capacity factors
Wind Update
22

• Wind power additions rebounded in 2014, with 4,854 MW of new capacity added

• $8.3 billion invested in wind power project additions in 2014

• Cumulative wind capacity up nearly 8%, bringing total to 65.9 GW.

U.S. Wind Installation

Source: Wiser, Ryan and Mark Bolinger. 2015. 2014 Wind Technologies Market Report. Washington, D.C.: DOE. DOE/GO-102015-4702. Accessed September 2015, 

http://eetd.lbl.gov/sites/all/files/lbnl-188167.pdf. 
23

Wind Represented 24% of Generating Capacity Additions in 2014

From 2007-2014, wind 

comprised 33% of capacity 

additions nationwide, and a 

much higher proportion in 

some regions.

0%

10%

20%

30%

40%

50%

0

20

40

60

80

100

Total Annual Capacity Additions (GW)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Wind Solar Other Renewable

Gas Coal Other Non-Renewable

Wind Capacity Additions

(% of Total Annual Capacity Additions)

Wind (% of Total, right axis)

54% 49%

27% 26%

2%

33%

0%

20%

40%

60%

80%

100%

Interior Great Lakes Northeast West Southeast U.S. Total

Percentage of Generation 

Capacity Additions (2007-2014)

Wind Solar Other Renewable Gas Coal Other Non-Renewable

Source: Wiser, Ryan and Mark Bolinger. 2015. 2014 Wind Technologies Market Report. Washington, D.C.: DOE. DOE/GO-102015-4702. Accessed September 

2015, http://eetd.lbl.gov/sites/all/files/lbnl-188167.pdf. 
24

Land-Based Wind Cost and Performance Projections

25

35

45

55

65

75

85

95

2010 2015 2020 2025 2030 2035 2040 2045 2050

Land-Based Wind Levelized Cost of Energy 

($/MWh)

TRG 1 - Low TRG 1 - Mid TRG 1 - High

TRG 2 - Low TRG 2 - Mid TRG 2 - High

TRG 3 - Low TRG 3 - Mid TRG 3 - High

TRG 4 - Low TRG 4 - Mid TRG 4 - High

TRG 5 - Low TRG 5 - Mid TRG 5 - High

Current (2013) Future Projections

• In general, the degree of adoption of a range of technology innovations distinguishes between the low, 

mid, and high cost cases

• The range of LCOE associated with variation in wind resource across the United States is reduced from 

$50-83/MWh for High Cost to $31-53/MWh for Low Cost reduction scenarios.

Source: NREL ATB 2015

Note: TRGs, “techno-resource groups” 

represent different resource classes
25

Recent Wind Prices Competitive with Expected 

Future Cost of Natural Gas Plants

Price comparison shown here is subject to variability; see full report for caveats.

0

10

20

30

40

50

60

70

80

90

100

20152016201720182019202020212022202320242025202620272028202920302031203220332034203520362037203820392040

 Range of AEO15 gas price projections

 AEO15 reference case gas price projection

 Wind 2012 PPA execution (985 MW, 14 contracts)

 Wind 2013 PPA execution (3,674 MW, 26 contracts)

 Wind 2014 PPA execution (1,768 MW, 13 contracts)

2014 $/MWh

Source: Wiser, Ryan and Mark Bolinger. 2015. 2014 Wind Technologies Market Report. Washington, D.C.: DOE. DOE/GO-102015-4702. Accessed 

September 2015, http://eetd.lbl.gov/sites/all/files/lbnl-188167.pdf. 
Bioenergy Update

26
27

U.S. Bioenergy Market Overview

2013 U.S. Bioenergy Production

• 1,500 trillion Btu total produced 

in 2013, or 1.8% total primary 

energy production in the United 

States

• 98% of U.S. ethanol production 

use corn as feedstock 

• Key driver of the biofuel industry 

is the federal Renewable Fuel 

Standard (RFS), which requires 

transportation fuel sold in the 

United States to contain a 

minimum volume of renewable 

fuels. The majority of fuel ethanol 

and biodiesel made in the United 

States is blended with gasoline

Starch Ethanol

75%

Renewable 

Hydrocarbons

0%

Biopower

14%

Biodiesel

11%

Sources: 1. EIA Annual Energy Review 2. EPA 2014 RFS2 Data 3. 

Lewis, John. 2015. “Systems-Level Analysis & Bioenergy Market 

Assessment”. Golden, CO: NREL. Accessed September 2015, 

http://energy.gov/sites/prod/files/2015/04/f22/sustainability_and_

strategic_analysis_lewis_4121.pdf. 
28

U.S. Renewable Biofuels Production 

• Ethanol: More than 96% of gasoline sold in the United States contains ethanol, and nearly all ethanol is used in 

E10 (10% ethanol 90% gasoline blend which does not require vehicle modification), creating an effective 

constraint on total ethanol use at near 10% of total gasoline consumption. This is referred to as the “blend 

wall”. Ethanol is competitive against fossil fuels without subsidies. 

• Biodiesel: Accounted for approximately 2% of the 50 billion gallon diesel market in 2013, driven primarily by the 

RFS. The biodiesel PTC($0.50- $1.00/gallon) expired at the end of 2014. 

• Cellulosic: Since 2010, the renewable volume obligations under RFS for cellulosic ethanol has been adjusted 

down due to insufficient capacity. Annual cellulosic ethanol production capacity is estimated at 113 million 

gallons, with 60.3 million gallons registered under RFS2 (Bloomberg New Energy Finance June 2015).

• Advanced biofuels: Small quantities entered commercial markets in 2012 and 2013 due to RFS2.

U.S. Renewable Fuels Production

Sources: Ethanol and biodiesel production: EIA Annual Energy Review. Washington, D.C.: EIA. Accessed September 2015, 

http://www.eia.gov/totalenergy/data/annual/ ; cellulosic ethanol: EPA-RFS2 2014, EPA-420-R-10-006. Washington, D.C.: EPA. Accessed September 

2015, http://www3.epa.gov/otaq/renewablefuels/420r10006.pdf. 

0

2000

4000

6000

8000

10000

12000

14000

16000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Million Gallons

Fuel Ethanol Production

Biodiesel Production

Cellulosic Ethanol Production
29

Renewable Fuel Standard

• Increased the volume of 

renewable fuel blend from 9 

billion gallons in 2008 to 36 

billion gallons by 2022.

• Included diesel in addition to 

gasoline, included new 

categories of renewable fuel 

(ethanol, biodiesel, and 

cellulosic biofuels, and other 

advanced biofuels), and set 

separate volume 

requirements for each one. 

• EPA proposed new renewable 

volume obligations for biofuels 

in the United States for 2014-

2016. 

• Cut corn ethanol and cellulosic 

biofuel markets below the 

original RFS2.

• Biodiesel sees continued 

increase from 2014-2016.

• The new regulations still must 

be finalized to be in effect. 

RFS1: 2005 RFS2: 

2007 Amendment Revised Quotas 2014-2016

• Required gasoline refiners 

or importers to meet 

specific volume-based 

requirements for biofuels. 

• 7.5 billion gallons of 

renewable fuel to be 

blended into gasoline by 

2012. 

• Renewable identification 

numbers assigned to each 

gallon of qualifying fuel to 

demonstrate compliance 

and are traded as credits. 

Source: EPA Proposed Renewable Fuel Standards for 2014, 2015, and 2016, and the Biomass-Based Diesel Volume for 2017. Washington, D.C.: EPA. 

Accessed September 2015, http://www.gpo.gov/fdsys/pkg/FR-2015-06-10/pdf/2015-13956.pdf. (billion gallons)

EPA Proposed Renewable Fuel Standards for 2014, 2015, and 2016
30

Biofuel Outlook 

• Ethanol: EIA’s projection assumes that both ethanol blending into gasoline and E85 consumption are essentially flat 

through 2030. The United States is expected to experience decline in gasoline consumption and limited penetration 

of flexible fuel vehicles that can accommodate E85. 

• Biodiesel production is also expected to remain constant, assuming the EPA will continue to follow the 1.38 billion 

gallons per year requirement in the RFS. 

• In June 2015, EPA proposed reducing the RFS renewable biofuel requirement for 2014-2016 due to the blend wall 

(10% of demand) and limited cellulosic production. If passed, cellulosic production would be limited and biodiesel 

would experience an increase in demand. 

• Renewable Fuel Standard (RFS), which requires transportation fuel sold in the United States to contain a minimum 

volume of renewable fuels. (The new regulations still must be finalized to be in effect). 

• Near term opportunity to expand the ethanol market is selling more E15 and E85. The U.S. Department of 

Agriculture has issued $100 million to build E15 and E85 infrastructure. 

U.S. Biofuel Production Outlook, 2012-2030

0

5000

10000

15000

20000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Million Gallons

Other Biomass-derived Liquids Biodiesel Fuel Ethanol

Source: EIA Annual Energy Outlook 2015 reference case