Oregon's utility-scale solar incentive brings flood of projects
Oregon, which began rising in the national solar power ranks last year, looks to be in line for a big jolt of utility-scale PV in the coming year.
Projects totaling 291 megawatts have applied for the state’s new Solar Development Incentive Program, which pays one- half cent per kilowatt-hour of electricity produced for five years.
That's more solar than the state’s total installed capacity — 218 megawatts — as of the end of the third quarter last year.
It’s also more than the program’s limit of 150 total megawatts, which means Business Oregon will pare down the participants, enrolling the projects that it determines are most likely to be built in the next year.
The big response was a gratifying surprise to David Brown, who runs Obsidian Renewables, one of the state’s leading solar developers. He spearheaded lobbying for the subsidy in recent years, finally winning passage last March.
"I thought we had to do something to help get languishing programs going,” Brown said. “Apparently, it’s been enormously successful.”
Brown, whose company could directly benefit from the subsidy, conceded that falling costs had already begun to improve the economics of utility-scale solar development in the state.
“That’s certainly helping to fuel this flurry of projects,” he said. “But as a one-time, short-term program to ensure that projects get built, the incentive is a great thing for Oregon.”
Brown said building projects will help strengthen the industry.
“When companies and counties gain experience getting projects done, that helps bring costs down,” he said. “So even though this program is very limited, I think its impact could be felt for a long time.”
For a typical 10-megawatt project built at a cost of around $21 million, the subsidy could bolster lifetime revenue by more than $500,000, depending on actual energy production.
Individual companies are limited to 35 megawatts in the program, and projects are required to be up and running within a year of enrollment. The state has estimated that a fully enrolled program would result in around $8,212,500 in payments over the program's life.
Pete Danko, Staff Reporter - Portland Business Journal