Hearing Examiner's Ruling Would Allow Third-Party Solar Financing, Drive Green Job Growth in New Mexico
Santa Fe, NM - October 27, 2009 - The New Mexico Public Regulation Commission (PRC) will soon be reviewing and finalizing a case that will determine whether state energy consumers can take advantage of a third-party renewable energy finance model called a Power Purchase Agreement (PPA). Already a major driver of clean energy market growth in other states, the PPA allows customers to go solar without high upfront costs. Last week, the Commission's Hearing Examiner ruled that these PPA arrangements are consistent with New Mexico law and should be allowed to go forward. State leaders and solar advocates applauded the decision as an important step forward on the path to a strong renewable energy market in New Mexico:
"All across the country, solar PPAs are already helping customers save on their power bills, creating new green jobs and building a cleaner energy future. There is no reason why New Mexico should not have access to those same benefits," said Patrick Griebel, board member of the Renewable Energy Industry Association of New Mexico (REIA-NM). "This recommended decision would mean a brighter energy future for all New Mexicans, and we hope to see the Commissioners accept the recommended decision of their hearing officer who very clearly laid out New Mexico's unambiguous law on the subject."
"This ruling was very important to set the tone for renewable development in New Mexico. I'm pleased that our state has affirmed its commitment to locally driven renewable energy development and entrepreneurship. It's my hope that our local utilities and renewable energy entrepreneurs can work together to develop a truly home grown solar industry," said State Senator Tim Keller (D-Albuquerque).
"The PRC Hearing Examiner's decision on third party financing of solar systems is a victory for common sense, a competitive renewables marketplace, and for consumers," said State Senator Steve Fischmann (D-Las Cruces).
"I am very happy that the PRC's hearing officer has decided the case entirely in our favor. I and the 25 other legislators who joined me on our brief know how important this issue for New Mexicans across our state. If adopted by the full PRC, New Mexico will see an explosion in clean, affordable renewable energy - something everyone can be happy about," said State Representative Brian Egolf (D-Santa Fe).
Through a PPA, a third-party developer installs, owns and operates a solar energy system on a customer's premises. In turn, the customer agrees to purchase the clean power that the system generates under a long-term contract. The PPA translates daunting upfront system costs into predictable electricity payments, typically at or below utility rates. The third-party finance model also allows non-tax paying entities like schools, public buildings and non-profits to take advantage of the federal solar incentive, a 30 percent tax credit. As a result, the PPA has proven to the most popular way for large electricity customers to go solar across the U.S.
The PRC initiated the case last summer to determine whether PPAs infringe on the monopoly rights of New Mexico utilities to sell power. More than 450 individuals submitted written comments urging the PRC to support third-party arrangements. In Friday's decision, the Hearing Examiner determined that PPAs between a developer and a single energy customer are in fact legal. The ruling is now subject to approval by the PRC's five elected commissioners.
REIA-NM is comprised of 39 Member Companies from across the renewable energy spectrum including several large manufacturing members as well as companies that design, install and consult on solar projects in New Mexico. REIA-NM supports renewable energy industry growth in New Mexico by increasing public awareness and ensuring high quality standards for manufacturing, designing and installing renewable energy systems. REIA-NM works with local, state and national government representatives to advance renewable energy policies and practices. www.reia-nm.org