Virginia sets aside $39 million for renewables

We often remark that the right mix of state and federal incentives  — like tax credits, rebates and renewable energy credit (REC) schemes — can make a HUGE difference in determining if solar PV is a cost-effective solution for individuals and businesses. These types of incentives help either, (1) by lowering upfront costs, (as is the case with rebates and credits), or (2) by guaranteeing that the PV system can generate respectable future cash flows (as is the case with REC purchase contracts, feed in tariffs, or FITs, and production-based incentives). Details aside, such incentives are key. In those states that offer scant support for solar energy, you’re likely looking at a low (perhaps even negative) ROI and a looong payback period. We’re talking, like, two decades here folks…

Anyway, up until very recently, Virginia counted itself among the states that put virtually no money towards supporting the adoption of solar and other forms of renewable energy. This is about to change. As reported last Friday by the Washington Business Journal, the state of Virginia

plans to set aside $39 million from its $70 million share of the federal stimulus package to help residents, businesses, nonprofits, schools and government agencies summon electricity and heat from the sun and wind.

While the state must still apply for those funds from the U.S. Energy Department, the proposed dollar figure has astonished even the strongest advocates for incentives to support renewable-energy projects, especially in a state that has long trailed Maryland and the District in that department.

For those Virginia residents out there, hold on to your britches. The money is on its way, and in a relatively big way, but details on the application process and funding levels have yet to be determined. Here’s the Business Journal again:

The $39 million pot is expected to be divvied into three portions. One is for local governments to invest in schools and municipal buildings. Another is for state-owned buildings, including those at universities and prisons. The third portion, perhaps as much as $15 million, will reimburse homeowners, companies and nonprofit groups for their wind and solar power investments.

The state is still too early in the planning process to give many details on the incentives, but Virginia officials envision renewable-energy rebates, likely doled out after installation is complete and the bills are paid for residential and smaller commercial projects.

If their request to the Energy Department is approved, they expect some money to start flowing as early as July.

I gotta say, it’s great to see another state hop on the “put your money where your mouth is” bandwagon. Just last week, the Texas legislature voted overwhelmingly in favor of funding a state-wide solar rebate program. And the week before that, Pennsylvania announced it finally secured funding for its solar rebate program.

One last note: don’t forget that, in addition to state-level programs, individual homeowners can take a 30-percent tax credit when installing a solar PV system. Businesses can, too — or, for systems installed in 2009 and 2010, they can opt instead to get a grant from the Treasury equal to the 30-percent credit.

Ping us with your incentive-related questions. And let’s hope the pro-solar incentives keep rolling in.