clean contracts: making clean local energy accessible now

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ENERGY ACTION

COALITIONT H E H U B O F T H E Y O U T H C L I M A T E M O V E M E N T

CLEAN Contracts: Making CleanLocal Energy Accessible Now

Richard W. Caperton and Bracken Hendricks, Center for American Progress

John Lauer, Groundswell , and Courtney Hight, Energy Action Coalition

January 2011



CLEAN Contracts:Making Clean Local EnergyAccessible Now

Richard W. Caperton and Bracken Hendricks, Center for American Progress

John Lauer, Groundswell , and Courtney Hight, Energy Action Coalition

January 2011



Contents 1 Introduction and summary

5 CLEAN contracts: A proven success story

8 Key ingredients in CLEAN contracts

10 Understanding the ins and outs of CLEAN

contracts and electricity regulation

11 Possible steps to get started

12 Recommendations for making CLEAN contracts

work for constituents

12 Residents

14 Ratepayers

16 Workers

17 Investors

19 Conclusion

20 Endnotes

21 About the authors and acknowledgments



1 CLeAn Cracs: Makig Cla Lcal ergy Accssibl nw

Introduction and summary

For many reasons, i’s ime o change direcion in America’s energy use o rely on

clean renewable energy. Renewable power reverses harmul environmenal rends

rom global warming o local air polluion ha hurs human healh. Bu clean

energy has many purely economic benes as well.

Tis paper looks a he one policy ha has helped o bring more renewable elec-

riciy ino he markeplace han any oher: he Clean Local Energy Accessible

Now, or CLEAN, conrac, also known as a “eed-in ari.” Tese are naional,sae, or local policies ha allow renewable energy projec owners o sell heir

elecriciy o uiliies a a predeermined, xed price or a long period o ime. We

explore here how o implemen CLEAN conracs in ways ha creae he greaes

bene or consumers, communiies, and he economy as a whole.

Renewable elecriciy’s benes o he economy are clear. I creaes more jobs han

ossil uels or every dollar invesed and or every uni o energy brough on-line.1

Clean energy reinvess more dollars locally in communiy-based inrasrucure and

i places U.S. indusries on he leading edge o innovaive echnologies rom smar

grids o advanced batery sorage o wind and solar generaion and superecien

building maerials. Renewables proec consumers rom rising ossil uel prices,

sabilize energy prices across he whole economy, improve our naional balance o

rade, and posiion America on a compeiive ooing wih Europe and China.

For hese and many oher reasons, renewable elecriciy will power he uure o

he American economy.

Bu geting clean energy projecs buil rapidly on a large scale—so ha renew-

able elecriciy can ow easily ono he grid o supply large amouns o our energy needs—will require clear signals rom ederal, sae, and local energy policy, and

a susained naional commimen o overcome he barriers acing he adopion o

hese advanced echnologies in oday’s elecriciy markes.




Clean energy projecs require subsanial new capial invesmens. Bu hese

invesmens are hampered by several acors. oday, energy markes are domi-

naed by incumben echnologies and limied by exising business models. Many

innovaive echnologies are ready o ener he marke oday bu hey ofen require

changes in operaions o he elecriciy grid or new sraegies or uiliy companies

o generae pros or shareholders.

Poenial clean energy invesors also ace an uncerain regulaory environmen in

he Unied Saes, boh rom ederal energy policy and rom regulaors in sae and

regional markes. A every urn renewable energy is held back by he absence o

naional policies o guaranee equal sanding wih radiional sources o power. As

a resul, he growh o clean energy echnology has no kep pace wih he poen-

ial o hese exciing echnologies o mee our naion’s pressing energy needs.

A range o sraegies are being employed around he world o mee his invesmen

challenge. Tese range rom raising he price o polluion hrough ees or axes odirec public invesmen in clean energy inrasrucure o underwriing he cos

o research and developmen. As he Unied Saes looks o modernize is own

elecriciy sysem—especially in he absence o a naional climae sraegy—i is

criically imporan o undersand which policies have mos eecively encour-

aged privae invesors o build renewable energy projecs.

Te CLEAN conrac is designed o overcome he specic barriers ha sand in he

way o businesses and consumers invesing in renewable energy projecs. I helps

overcome upron cos barriers o invesmen by making renewable energy projecs

more easily nanceable. Te conracs provide cerainy on he price o elecriciy

and upake o ha energy by uiliies hrough long-erm conracs. And hey oer

a clearly undersood, sandardized process or developing projecs, which reduces

red ape and cus down on uncerainy or developers and conusion or homeown-

ers, reducing marke risk and lowering he coss o geting hings buil.

In shor, he CLEAN conrac makes i easier o run businesses, build projecs,

and give consumers wha hey wan.

Tis paper begins wih a look a how CLEAN conracs work and wha heir key ingrediens are. I hen examines how lawmakers and advocaes can successully

move hem orward given how he conracs are aeced by ederal regulaion. I

closes wih recommendaions on how o make sure he policies bene raepayers,

workers, invesors, and he U.S. economy.

The CLEAN

contract is

designed to

overcome the

specifc barriers

that stand in the

way o business

and consumers

investing in

renewable ener

projects.




Lawmakers and advocaes who are ineresed in bringing CLEAN conracs ino

heir communiies will need o ake elecriciy regulaions ino accoun. In mos

cases, he Federal Energy Regulaory Commission, or FERC, has o approve a

CLEAN conrac because i involves a wholesale sale o power. Bu here are also

some cases where ederal regulaors do no play a role.

As ederal and sae auhoriies regarding CLEAN conracs are being claried,

here are a number o ways ha programs can move orward oday. We recom-

mend ha sae and local aciviss and legislaors consider he ollowing sraegies

or immediae acion o promoe hese imporan policies:

• Implemen a CLEAN program a a municipal or cooperaive uiliy.

• Engage wih he Federal Energy Regulaory Commission o clariy how hey

would view poenial saewide CLEAN conracs.

• Encourage ederal lawmakers o sponsor and voe or legislaion ha would

amend ederal law o allow saes o implemen CLEAN programs.

• Build a base or CLEAN supporers in a sae so ha sae legislaors can move

orward as he regulaory environmen becomes clearer.

We also propose he ollowing suggesions or implemening CLEAN conracs

in ways ha bene key sakeholders. We will discuss hese in greaer deail wihin

his repor.

• Residens – Pursue public consulaion and oureach abou CLEAN conracs. – Make programs accessible and ecien. – Promoe communiy-owned projecs. – Expand access o nonpropery owners. – Help grow small and local businesses.

• Raepayers

– Cap program sizes o manage oal program coss. – Decrease incenives over ime as he marke maures.




• Workers – Incenivize he use o local workers. – Encourage locally made clean energy. – Provide worker raining. – Promoe sandardized communiy benes and projec labor agreemens.

• Invesors – Connec pension unds, communiy developmen nance insiuions, and

communiy banks o CLEAN projecs. – Dedicae some program unding o educaing local nanciers abou clean

energy. – Explore opporuniies or “crowd sourcing” invesmen o engage smaller

invesors and provide new sources o capial or projecs.

Te CLEAN conrac sands ou as a perecly crafed mechanism o make clean

energy invesmen a smarer choice or homeowners, uiliies, and developers o renewable energy projecs. I can help speed our ransiion o a clean energy uure.




CLEAN contracts: A proven success story

A CLEAN conrac is a policy ool ha creaes a sable marke or clean energy.

I allows renewable energy projec owners o sell heir elecriciy o uiliies a a

predeermined, xed price or a predicable and exended period o ime.

CLEAN conracs—also known as “eed-in aris” in some areas—are ar and

away he mos imporan marke creaor or renewable energy in he world.

Globally, he U.S. Deparmen o Energy’s Naional Renewable Energy Lab has

ound ha 45 percen o all wind energy and 75 percen o all solar phoovolaic,or PV, elecriciy capaciy insalled beore 2008 was direcly linked o his ool.2

Research rom Deusche Bank Climae Change Advisors has ound ha CLEAN

conracs are successul because hey provide he hree marke characerisics ha

enable wide-scale deploymen o clean energy: ransparency, longeviy, and cer-

ainy.3 Collecively, Deusche Bank reers o his ramework as providing “LC”

or clean energy.

Te exac deails o CLEAN conracs dier based on local marke condiions

and rules. Bu hey all share cerain key elemens ha provide or his ranspar-

ency, longeviy, and cerainy, which allows rapid, predicable, and very subsanial

marke growh or clean energy.

Germany has employed his policy on a naional scale very eecively hrough

heir eed-in ari. Te German marke added 17 imes more solar power las year

compared o Caliornia even hough he underlying solar resource in Caliornia is

70 percen greaer.4 CLEAN conracs provide he clear marke signals ha have

been lacking in U.S. clean elecriciy markes o dae.

Domesically, his policy in Gainesville, Florida, led o a remarkable sixold

increase in solar capaciy in only 18 monhs a an esimaed cos o a mere 75

cens per raepayer.5 In Onario, Canada, his policy is esimaed o creae 74,000

jobs by 2015.6 Tis aggressive job creaion comes a less han a 1 percen increase

Globally, the U.S

Department o

Energy’s Nation

Renewable Ene

Lab has ound t

45 percent o al

wind energy an

75 percent o al

solar photovolta

or PV, electricity

capacity installe

beore 2008 was

directly linked to

this tool.




in raepayers’ uiliy bills (less han a cup o coee a monh). Per dollar invesed,

a CLEAN conrac also creaes 12 o 15 imes more jobs han nonrenewable

resources such as nuclear, coal, or naural gas.

Under a CLEAN conrac he price ha a uiliy pays or elecriciy rom a renew-

able resource is based on he cos o generaing he clean elecriciy plus a reason-able reurn or invesors. I is deermined by an open policymaking process. Tis

price is sandardized or all generaors using he same echnology (ha is, all wind

power has one price and all solar power anoher price).

Tis akes he price seting ou o unpredicable negoiaions beween uiliies and

invesors and pus i in a ransparen process wihin he marke. Visibiliy on pric-

ing and marke demand allows projec developers o much more ecienly build

clean energy projecs o mee demand.

When clean energy developers sell heir power in a CLEAN conrac or eed-inari sysem hey’re also guaraneed a xed price or a long ime, such as 20 years.

Tis maches he long-lived naure o energy projecs and i urher reduces risk

o invesors. Properly designed CLEAN conracs oer more proable raes or

projec developers ha sign up in early years and he raes decline as he marke

maures. Tese incenives can help reduce he long-erm coss o CLEAN pro-

grams while encouraging early acion by program invesors.

Finally, CLEAN conracs require uiliies o hook clean energy ino heir grid—

as long as he projec mees echnical requiremens—creaing a cerain marke or

he power ha renewables can generae and providing predicable revenues or he

developers o new clean energy projecs.

Furher, CLEAN conracs help mee exising commimens o bring renewable

energy on-line. weny-nine saes plus he Disric o Columbia already have

policies known as renewable energy sandards in place.7 Tese policies require a

cerain porion o a uiliy’s elecriciy sales o come rom clean energy sources.

Research rom UC Berkeley shows ha CLEAN conracs can grealy accelerae

he eeciveness wih which saes, ciies, and uiliies mee heir commimens

under a renewable energy sandard.8

Addiionally, CLEAN conracs can ie he pachwork o exising clean energy

incenives in he Unied Saes ino a susainable marke ramework ha is clearly

undersood and accessible o consumers. oday, we have a mix o renewable




porolio sandards, ax incenives, ne meering programs, nancing ools, and

direc rebaes (among ohers) ha are each exremely valuable. Bu none o hem

provide he ransparency, longeviy, or marke cerainy (LC) ha come wih a

CLEAN conrac. Many saes and ciies have recognized his problem and hey

are now considering complemening exising programs wih eed-in aris.

Because energy is so undamenal o economic growh, CLEAN conracs should

also be an imporan componen o broader economic developmen sraegy.

CLEAN conracs can eecively help mee communiy-based economic devel-

opmen goals and reec values o inclusion, equiy, and susainabiliy. Conracs

help ensure democraic engagemen ha benes all Americans by providing a

clear and sandardized way o engage in clean energy projec developmen. In his

way, hey increase access or residens, workers, raepayers, and invesors o he

economic opporuniies creaed by communiy-based energy invesmens.

Le’s ake a more deailed look a he key ingrediens o CLEAN conracs.




Key ingredients in CLEAN contracts

Exac deails o a CLEAN conrac sysem will vary based on local marke charac-

erisics and program goals. Some CLEAN conracs, or example, could reward

projec developers who use locally made producs. Tis variaion on he deails

and srucure o programs means ha no wo CLEAN programs will be exacly

alike, bu here are some componens ha every CLEAN program includes.

Wihou hese pieces a generic clean energy incenive program ceases o be a rue

CLEAN program.

Every CLEAN program has hese elemens:

• Standard-offer contract. Every renewable projec ha sells power in a CLEAN

sysem uses he same sandardized conrac. Tis minimizes ransacion coss

or each projec and brings ransparency o he markeplace.

• Long-term contract. Te sandardized CLEAN conrac covers a period o ime

ha’s similar o he expeced lieime o a clean energy projec. Tis is ypically

beween 15 and 25 years.

• Fixed price for electricity. Te price a projec developer receives or heir

elecriciy is xed in a CLEAN sysem, which makes i much easier or invesors

o know wheher or no a projec will be proable. In urn, projec developers

are able o atrac nancing rom banks and oher invesors due o his long-erm

xed price.

• Cost-based rate for electricity. Te xed price ha a projec receives is based

on he ypical cos or a clean energy projec. Tis is he same way ha raes or

convenional power projecs have hisorically been se, wih an appropriae raeo reurn (pro) on op o coss. Projecs using dieren echnologies—wind,

solar, or geohermal—have dieren coss and hus receive dieren raes.




• Must-take and mandatory interconnection provisions. Under a CLEAN sys-

em he local elecric uiliy mus allow clean energy projecs o connec o he

grid as long as he projec mees basic echnical guidelines. Te uiliy mus buy

he projec’s power under erms se orh in he sandardized conracs, grealy

reducing marke barriers o enry or new clean energy.

Tese basic characerisics mean ha every CLEAN sysem provides he ranspar-

ency, longeviy, and cerainy (LC) ha are necessary or he broad deploymen

o clean energy echnologies.

I’s imporan o keep in mind, however, ha hese conracs are aeced by elec-

riciy regulaions. Lawmakers and advocaes ineresed in hese programs should

undersand how hese regulaions work. We’ll review hese in he nex secion.




Understanding the ins and outs of CLEAN

contracts and electricity regulation

Elecriciy markes are overseen by boh sae and ederal regulaors, and i’s

imporan or sae or local lawmakers o know how CLEAN conracs or eed-in

aris wihin his regulaory sysem.

Te Federal Energy Regulaory Commission, or FERC, generally approves he

prices ha uiliies pay or wholesale elecriciy, while sae public uiliy com-

missions approve he raes ha uiliies charge consumers or reail elecriciy.

A CLEAN conrac is a wholesale power ransacion, which gives FERC anoversigh role.

Lawmakers can use a variey o mehods o make sure ha FERC will approve

a eed-in ari.9 Mos imporan, FERC has recenly signaled ha hey could

approve a eed-in ari in a sae wih a renewable energy sandard as long as he

price o clean energy under he ari is relaed o he cos o oher clean energy

projecs in he same area.10 Tis is no a ailsae approach, however, because some

uiliies have indicaed ha hey will challenge such rulings in he cours. Tis

unorunaely means ha here is no currenly a ully veted mehod or a sae-

wide CLEAN conrac mechanism o ge guaraneed ederal approval.

Bu here are some cases where ederal regulaors do no play a role. Tese are pri-

marily cases where he uiliy is eiher municipally owned or an elecric coopera-

ive (a nonpro uiliy ha is owned enirely by he cusomers i serves). Boh are

exemp rom FERC rae regulaion.

Te easies way o quickly move orward wih a CLEAN conrac program,

hereore, is o esablish i in an area served by a municipal or cooperaive uiliy.11

Consequenly, much o he near-erm implemenaion o CLEAN conracs willake place hrough local eors. Over ime, sae and even naional CLEAN pro-

grams are also likely o move orward as ederal and sae regulaions are claried.

The easiest way

to quickly move

orward with a

CLEAN contract

program, there

is to establish it

in an area serve

by a municipal o

cooperative util




Possible steps to get started

Lawmakers and advocaes who are ineresed in moving orward wih CLEAN

conracs should keep hese regulaory issues in mind. Some may preer moving

orward in ways ha will see immediae success while ohers may preer ways ha

will produce slower progress bu may ulimaely be bigger successes.

Some producive possible seps include:

• Implemening a CLEAN program a a municipal or cooperaive uiliy • Engaging wih FERC o clariy how hey would view poenial saewide

CLEAN conracs• Working wih ederal lawmakers o sponsor and voe or legislaion ha would

amend ederal law o allow saes o implemen CLEAN programs• Building a base or CLEAN supporers in a sae so ha sae legislaors can

move orward when he regulaory environmen is clearer

Ulimaely, CLEAN conracs need o work or everyone involved. Te ollowing

are a range o measures o help ensure CLEAN conracs bene key players.




Recommendations for making CLEAN

contracts work for constituents

Te esablishmen o a CLEAN conrac program can be a complex process.

I enails uiliy rae regulaion and rae-seting proceedings ha require rigor-

ous research and in-deph analysis o ensure ha he policies mee he specic

needs o each locaion. Bu policymakers can sill design specic componens o

CLEAN policies o make sure hey are air and communiy based and ha hose

elemens remain inac hroughou program implemenaion.

Te design elemens below can serve as a guide or communiy leaders andpolicymakers boh in crafing specic policy measures and in public educaion

campaigns. I mus be sressed, however, ha regional markes and he renewable

energy and job-creaion needs o each communiy are dieren. Lawmakers mus

design CLEAN conrac policy o mach he needs o each locaion.

Te below guidelines, mached o local circumsances, will help creae policies

ha minimize program coss, proec raepayers, creae local jobs, and rapidly

deploy clean energy.

Residents

Pursue public consultation and outreach

Policymakers can convene communiy orums o solici communiy engagemen

in seting prioriies. Tese orums increase communiy paricipaion and ensure

he program mees he communiy’s needs. Communiy-based organizaions

and local governmens should work hand in hand o increase public educaion

abou he program. Expanding awareness among communiy members abou hisopporuniy or economic developmen is one o he bes acics or ensuring ha

local communiy groups and small businesses will bene rom CLEAN policies.




Increased awareness should be coupled wih educaing he communiy abou

he legal and nancial issues involved in owning par o a power aciliy. Many

invesors in a communiy-owned projec, or example, may no be able o capure

he benes o he ederal invesmen ax credi, which would aec he reurn on

heir invesmen. Te impac o specic incenives should be careully analyzed

and communicaed.

Public educaion eors o build suppor or smar CLEAN policies also pro-

vide an imporan opporuniy or he educaion o communiy members on

how local energy markes work, how raes are se and invesmen decisions are

made by uiliy commissions, and wha hey can do o help improve he pro-

cess. Broader public engagemen on elecriciy rulemaking is criically needed

in he Unied Saes o advance clean energy deploymen and help reverse

global warming.

Make programs accessible and efficient

Programs esablished underCLEAN conracs need o be designed simply and

ransparenly or communiy members o bene. Addiionally, sreamlined applica-

ion processes will allow more communiy groups and individual residens o paric-

ipae in a program and encourage disribued renewable energy generaion. Furher,

sreamlined processes will reduce program overhead coss and minimize liigaion—

increasing he eciency o he projec and reducing he coss o raepayers.

Promote community-owned projects

CLEAN programs can esablish a range o incenives or local projec develop-

men and increased capial ormaion wihin communiies. Tis migh include

“bonus paymens” or higher raes in he conracs or cooperaive, communiy-

owned, and small-scale wholesale energy producion o encourage invesmen

in communiy-owned projecs. Tese “social adders” or “bonus paymens” have

been used eecively in Onario o provide residens wih he added incenive

o paricipae in he program, which helps democraize energy producion and build local economies. Tese bonus paymens also oer invesors meaningul

incenives o engage communiies as parners in projec developmen.




Projecs owned by low-income consumers or operaed in a low-income area by

cooperaives or communiy groups can also be expedied in permiting or oher-

wise incenivized o urher enhance communiy benes. Such an incenive also

ensures volunary choice or businesses o paricipae in such a program.

Expand access to nonproperty owners

Policymakers should allow low-income consumers or oher individual invesors

o purchase shares in renewable projecs ha are no locaed on heir propery.

Te benes o renewable energy projecs can hus be shared by local residens

who do no own propery or possess he resources o develop projecs by

hemselves. Such an approach also expands he pool o capial available or new

invesmen in projecs.

Help grow small businesses

Much o he marke creaed by eed-in aris will be lled by larger wholesale

energy generaion projecs bu specic carve-ous can be dedicaed or smaller

projecs. A cerain percenage o he oal program could be allocaed o smaller

and more localized projecs, which eecively simulaes local small business

growh and provides enrepreneurs wih an easier enry poin ino his emerging

marke.

Ratepayers

Well-designed CLEAN policies are a highly ecien orm o incenive, helping o

reduce he oal cos o raepayers. Tis means ha adding clean energy under a

CLEAN sysem is ofen cheaper han adding he same amoun o energy hrough

oher programs. In he near erm, as markes begin o develop, hese coss may a

imes be higher han convenional ossil energy, which means consumers could

see shor-erm impacs on elecric raes. CLEAN programs can and should be

designed o minimize any such rae impacs on consumers. When paired wihenergy eciency incenives o reduce overall energy consumpion, oal consumer

bills can be held sable or reduced.




Cap program sizes

Te simples and mos common way o minimize any rae impacs is o pu a cap

on he overall size o he CLEAN program. Tis has several benes.

Firs, puting a limi on he number o new projecs ha can ener ino CLEANconracs each year makes he sysem more predicable. Second, limiing he

number o projecs ha can bene rom he program in early years means ha

more projecs will ener in laer years. Because raes decline over ime, limiing he

number o projecs ha bene in early years guaranees ha more projecs ener

he CLEAN program a he subsequen lower raes. Tese wo eecs combine o

ensure ha any rae increases are small and well-managed.

A program cap, while desirable, does presen some challenges ha mus be

acively managed. Te primary challenge is ha a program cap creaes an incenive

o be he rs projec developer in line since only a nie number o projecs will be allowed ino he program. Te bes projecs aren’ necessarily he rs in line,

which can lead o wo ineciencies. Firs, developers who are awarded a place in

he program can sell heir spo o someone else. Tis is an exra cos on projecs

ha ulimaely ge buil. Second, even i he policy precludes selling he place in

he program, some projecs ha were hasily submited may no be buil because

he developer hasn’ ully hough hrough heir projec.

Te bes way o address his challenge is o require airly deailed projec descrip-

ions in he applicaion process and a small cash deposi o reserve a space in he

program. Tere will always be projecs ha aren’ nalized because circumsances

change. Bu hese wo echniques can ensure he maximum benes are gained

rom a capped CLEAN program.

I’s also imporan o emphasize ha he rae or a program should be he mini-

mum rae required o achieve he program’s deploymen goals. A massive rush o

ge in line or a spo in he eed-in ari program could be a signal ha he prede-

ermined rae is higher han necessary and should be adjused in he uure. All

successul CLEAN programs revisi cerain elemens on a regular basis o make

sure he bes oucomes are being achieved.




Decrease incentives over time

Te rae oered or new projecs should go down each year o reec decreas-

ing program coss. Tis is known as “rae degression.” Rae degression is a way o

incenivize immediae projec developmen while puting downward pressure on

program coss over ime—saving raepayers money. Rae degression also helpsaccoun or he decreasing coss o echnology and more sreamlined projec

developmen over ime, providing or a more accurae accouning o coss or he

duraion o he program. Te mos successul eed-in ari or CLEAN policies

around he world have uilized rae degression.

Workers

Incentivize the use of local workers

Projec developers ha use a high percenage o local workers and develop

parnerships wih local workorce developmen organizaions can be inceniv-

ized hrough he elecriciy conrac price awarded. Tis can provide developers

and invesors wih srong incenives o suppor local economic developmen.

Raepayer dollars can also bene he communiies rom which hey are colleced.

Encourage locally made clean energy

Some areas where a eed-in ari could be insiued also have signican clean

energy manuacuring capaciy. In hose areas, policies could encourage projec

developers o use locally made renewable energy componens where possible.

A local-conen mandae—such as he requiremen ha has been insiued in

Onario—would likely no work in he Unied Saes. Bu a eed-in ari policy

could reward projecs wih signican local conen by providing an incenive rae

or carve-ou o projecs ha maximize local conen.

Expand access to worker training

As a complemenary policy, saes, ciies, communiy colleges, uiliies, and

unions can work ogeher o provide worker raining so ha local workers will

be able o insall and operae clean energy projecs. I is imporan or commu-




niy economic developmen ha local workers are prepared o ake advanage o

emerging marke opporuniies given he large amoun o jobs hese policies have

creaed. Job-creaion esimaes in Onario indicae ha he need or rained work-

ers o perorm insallaion and mainenance o hese projecs can soon ougrow

he supply o skilled workers.

Promote standardized community benefits and project labor agreements

CLEAN policies can encourage or even require communiy workorce agree-

mens wih local hiring provisions or wholesale disribued generaion projecs

(beween 1 megawat and 20 megawats). Communiy workorce agreemens have

been eecive in many pars o he counry in increasing he creaion o good jobs

and local economic benes while reducing he risk o delays or projec develop-

ers by limiing labor disagreemens ha can disrup projec schedules.

Conracing in his way can help build local small businesses, increase economic

developmen or hisorically disadvanaged communiies, and ensure ha local

communiies have access o new jobs creaed in emerging indusries by making

valuable appreniceship opporuniies available in he building rades. Such com-

muniy benes sraegies also can ensure ha high-qualiy work is compleed on

ime, under budge, and perormed in a publicly accounable manner.

Investors

Connect local capital to clean energy

Communiy banks, communiy developmen nance insiuions, socially respon-

sible invesmen unds, and pension unds can all be encouraged o inves in eed-in

ari projecs, and hey may provide an imporan source o early projec capial.

Lack o public awareness abou clean energy invesmen opporuniies can be a

very real barrier o invesmen, even in insances where here are no legal or policy

barriers o local invesors’ paricipaion in a CLEAN program. Saes hereoreshould devoe some level o unding o oureach eors o connec local nanciers

wih projec developers. Onario has done paricularly well a linking local proj-

ecs o local nancing.




CLEAN conracs are proven o creae large marke opporuniies, so policymak-

ers should coordinae wih he small-business communiy o make sure local

businesses have he requisie access o capial, capaciy, and knowledge o expand

ino hese markes. Policymakers should recognize hese policies’ subsanial eco-

nomic rewards and acively prepare heir communiies o reap hese enormous

poenial benes.

Policies can also ake advanage o he “crowd sourcing” o local invesmen.

Crowd sourcing, or he use o new echnologies and new business models o

engage he broader public in decision making and invesmen processes, can

allow or large pools o noninsiuional invesmen o ener he marke. Tis can

be an eecive way o raise small-scale projec nance, expand public awareness,

and share wealh-building opporuniies. Communiy solar gardens such as hose

developed in Colorado, or example, allow individuals o own shares in solar

projecs no locaed on heir propery. Tis kind o policy can be used alongside

CLEAN conracs o creae opporuniies or communiy wealh generaionhrough renewable energy.12

CLEAN conracs are clearly opporuniies or local economic developmen.

Creaive communiy invesmen sraegies can help increase he public benes o

hese invesmens by allowing communiy members o paricipae as invesors in

addiion o being he beneciaries o job creaion and new projec developmen.




Conclusion

ransiioning he U.S. economy o run on clean and renewable energy is a naional

challenge. I requires a keen ocus on local deploymen o projecs. Access o

capial, complexiies in securing long-erm sable conracs, and marke barriers in

elecriciy regulaion all creae hurdles o geting clean energy projecs buil. Te

CLEAN conrac provides ransparency, longeviy, and cerainy (LC) in con-

racs, permiting, and nance o projecs. Tis makes i a proven ool or accelera-

ing adopion, innovaion, and manuacuring o clean energy echnologies a scale.

Te more inclusive and democraic hese invesmen policies are, he more public

suppor such measures can generae. And he more likely i is ha broader eco-

nomic goals will be realized hrough CLEAN invesmens. Invesors and policy-

makers hus have real reason o suppor CLEAN conracs ha broaden suppor

or new projec-level invesmens, expand public educaion, and increase he

cerainy and predicabiliy o he overall marke. Te experience o oher coun-

ries suggess ha he sronges clean energy markes emerge and are consolidaed

wihin a poliical conex ha provides opporuniies or many ciizens o engage

hrough invesmen, ownership, and local job creaion.

CLEAN conracs are a powerul emerging ool or speeding clean energy deploy-

men. Tey oer a way o link renewable energy more rmly o economic devel-

opmen ha mees America’s long-erm energy challenges. Well-crafed CLEAN

conrac programs can provide a much-needed ool or rebuilding our economy

now, on he oundaion o clean, locally generaed, and renewable energy.




Endnotes

1 “Jb Crai pr $1 Milli Ivsm,” availabl a p://apar-rs.rg/abls/Jb_Crai_r_Ivsm_-_Garr-Plir.p ;Sara Pickrig, “nw Suy: Gr ergy Ivsm Cul d livrMillis Jbs,” Cpag Clima Cucil, May 24, 2009, avail-abl a p://www.cpagclimacucil.cm/g-irm/ws/w-suy-gr-rgy-ivsm-cul-livr-millis--

jbs.ml.

2 tby d. Cuur a rs, “A Plicymakr’s Gui F-i tari Plicy dsig” (Gl, Co: naial Rwabl ergy Labrary,2010), availabl a p://www.rl.gv/cs/y10si/44849.p .

3 dB Clima Cag Avisrs, “Payig r Rwabl ergy: tLC a Rig Pric” (2009), availabl a p://www.bcca.cm/bcca/en/_mia/Payig_r_Rwabl_ergy_tLC_a__Rig_Pric.

p.

4 “FIt Calii - t Rig Plicis r Rwabl ergy nw,” avail-abl a p://www.calii.cm/.

5 “Fam F-i tari i Flria Ciy May Urg Sm Cags r2011,” t Slar hm a Busiss Jural, July 4, 2010, availabla p://slarbj.cm/ws/am--i-ari-i-fria-ciy-may-urg-sm-cags-r-2011-0674.

6 “Slar iusry cra mr a 70,000 jbs i oari by 2015,”Clar Sky Avisrs, nvmbr 22, 2010, availabl a p://www.clar-skyavisrs.cm/516/slar-iusry--cra-mr-a-70000-jbs-i-ari-by-2015/.

7 “RPS Plicis,” daabas Sa Icivs r Rwabls a e-cicy, Jauary 2011, availabl a p://sirusa.rg/cums/summarymaps/RPS_map.ppx.

8 Max Wi a dail Kamm, “ecmic Bs a Cmpr-siv F-i tari: A Aalysis ReeSA i Caliria” (Brkly,CA: Uivrsiy Caliria, Brkly, 2010), availabl a p://www.calii.cm/srag/rsurcs/suis/cmic-bs--a-/cmic_bs__a_cmprsiv_-i_ari-

july072010.p.

9 Sc hmplig a rs, “Rwabl ergy Prics i Sa-LvlF-i taris: Fral Law Csrais a Pssibl Sluis”(Gl, Co: naial Rwabl ergy Labrary, 2010), availabla p://www.rl.gv/cs/y10si/47408.p.

10 “133 FeRC, 61,059: Ui Sas Amrica Fral ergy Rgula-ry Cmmissi,” ocbr 21, 2010, availabl a p://www.w.cm/LarigCr/pralrsurc/10-10_CAISo_1021.

11 hmplig a rs, “Rwabl ergy Prics i Sa-Lvl F-i taris.”

12 Sa Clra, hus Bill 10-1342, availabl a p://www.lg.sa.c.us/clics/clics2010a/csl.s/sbillc/490C49ee6BeA3295872576A80026BC4B?op&l=1342_01.p .

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http://www.nrel.gov/docs/fy10osti/44849.pdf

http://www.dbcca.com/dbcca/EN/_media/Paying_for_Renewable_Energy_TLC_at_the_Right_Price.pdf



http://www.fitcoalition.com/

http://solarhbj.com/news/famed-feed-in-tariff-in-florida-city-may-undergo-some-changes-for-2011-0674


http://www.clearskyadvisors.com/516/solar-industry-to-create-more-than-70000-jobs-in-ontario-by-2015/



http://dsireusa.org/documents/summarymaps/RPS_map.pptx


http://www.fitcoalition.com/storage/resources/studies/economic-benefits-of-a-fit/economic_benefits_of_a_comprehensive_feed-in_tariff-july072010.pdf




http://www.dwt.com/LearningCenter/portalresource/10-10_CAISO_1021


http://www.leg.state.co.us/clics/clics2010a/csl.nsf/fsbillcont/490C49EE6BEA3295872576A80026BC4B?Open&file=1342_01.pdf



















http://www.fitcoalition.com/




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He was ounding execuive direcor o he Apollo Alliance or good jobs and

energy independence and has served as an energy and economic advisor o he

AFL-CIO, Pennsylvania Governor Ed Rendell’s Energy Advisory ask Force, and

numerous oher ederal, sae, and local policymakers and eleced ocials.

Hendricks’s publicaions include he book Apollo’s Fire: Igniting America’s Clean Energy Economy , which he co-auhored wih U.S. Congressman Jay Inslee (D-WA).

Courtney Hight is he co-direcor or he Energy Acion Coaliion. Prior o joining

he Energy Acion Coaliion, Courney worked wih he Whie House Council on

Environmenal Qualiy and he Unied Saes Suden Associaion. She earned her

bachelor’s degree in environmenal sudies rom he Universiy o Oregon.

Acknowledgments

Te auhors would like o acknowledge he conribuions o Lisbeh Kauman,

Special Assisan o he CAP energy eam, and Dan Wagener, o CAP’s exraordi-

nary ediorial eam, in bringing his paper ino being.

We would also like o hank he Rockeeller Brohers’ Fund, and Michael

Norhrop in paricular, or heir suppor o CAP’s energy economics work, and

more broadly or providing essenial suppor o he growing naional movemen

or CLEAN conrac and eed-in ari policies.

clean contracts: making clean local energy accessible now

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