Expansion of Eligible Low Income Community Projects to Include Solar Projects

The Environmental Protection Agency's Clean Energy Incentive Program (CEIP) allows participants to earn tradeable emissions credits for operating certain renewable energy and energy efficiency projects during 2020 and 2021, ahead of the 2022 start date for its Clean Power Plan. On June 30th, EPA proposed changes to the CEIP that would allow those participants willing to implement solar projects that serve low income communities to earn double the credits. Public comments on its proposal are due by Sept. 2, 2016.

While the CEIP has always authorized double credits for energy efficiency programs serving low income communities, the agency expanded the availability of the two-for-one credits to solar installations in these communities to spur greater earlier clean power investment in those areas. The initial program was principally directed at lowering individual household usage, but the revised program expands the scope of qualifying “low income community projects” to include solar projects and system-wide conservation projects by commercial, non-profit, or governmental entities that serve low income communities as well as households. “Solar technology," the EPA reasoned – "particularly distributed, rooftop, or community solar – is particularly well-suited among zero-emitting [renewable energy] resources to implementation in low-income communities.” To qualify for credit, a low income community project must commence operation on or after Sept. 6, 2018, though only savings achieved in 2021-22 would be eligible for credits.

One of the key questions the agency has opened for comment is whether wind and solar projects that receive federal tax credits should nonetheless still receive CEIP credit and, if so, whether the CEIP credit ought to be reduced. Municipal utilities and rural electric cooperatives will likely be affected differently, in this respect, from private utilities and other for-profit project operators. The rationale for limiting CEIP credits would be that the availability of tax credits means these projects “may not require additional incentives for deployment.” Parties have also been asked to comment, among other things, on how "low income community" should be defined and how the program can be implemented most efficiently.