By Jeffrey Howell, Esq.
The RAM requires California’s three largest investor owned utilities to hold biannual auctions where renewable developers will place competitive bids. The utilities will then award contracts to purchase solar renewable energy to the lowest cost projects first, moving to higher cost projects until the maximum 20 megawatt limit is reached.
The contracts will benefit utility consumers by paying for excess power produced with rooftop solar installations. In effect, it will turn solar installations into income generators that will provide substantial incentive to invest in small to mid-scale solar installations while recognizing benefits such as proximity to load. Proximity to load considerations will allow developers to locate projects where costs and obstacles caused by transmission are diminished resulting in improved efficiency.
Several European countries have established feed-in tariff programs, accounting for the higher percentage of energy those countries generate from solar installations. The California program is expected to be in effect by Spring 2011 and will begin with a 1 GW pilot program.
Many believe that the RAM will have a huge positive effect on solar installation in California. The benefit of the auction mechanism is that it provides a greater opportunity for the market to dictate the price utilities are required to pay for excess power. Traditional feed-in tariffs have been criticized for setting prices too high and creating artificial value that disrupts energy markets.
Endsley + Associates is proud to be a part of the growing cleantech and renewable energy sectors. The firm is uniquely positioned to handle business transactional and litigation needs, as well as real estate transactions with perspectives and understanding of cleantech, renewable energy, sustainable building, and carbon emissions.
Reference sites:
http://docs.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/128432.htm
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