News

Ohio halts green-electricity grants to homeowners

All grants go now to big institutions, firms, wind farms
Thursday, March 27, 2008
John Funk
Plain Dealer Reporter

Ohio homeowners who want to apply for state grants to help pay for rooftop solar panels or backyard wind turbines can put away their pencils.

The Ohio Department of Development has decided it will no longer offer homeowners grants of up to $25,000 to help pay for home-grown power.

About 100 homeowners have received roughly $1 million since 2003 - and spent another $1 million of their own money, largely on solar panel systems that typically produce as little as 3,000 to 4,000 watts.

These and small wind turbines often generate electrical surpluses that force a home's electric meter to run backward, an asset to the owner as the state's utilities push for higher rates.

The decision to turn a bureaucratic blind eye to smaller projects comes as Gov. Ted Strickland and Ohio lawmakers prepare to move the state into a green power era. Pending legislation would require Ohio's utilities to begin generating a portion of the electricity they sell with wind, solar and other alternative energy technologies.

The decision also comes three months after the development department's public advisory board recommended that it increase - not end - homeowner participation in the grant program.

Sherry Hubbard, chief of the development department's Office of Energy Efficiency, said she personally called a number of small installers to break the news about the change.

"Looking at the realities of the market today, we want to make the best use of the resources we have," Hubbard explained in an interview Wednesday.

Translation: The state intends to focus on commercial-scale solar projects and wind farms. Processing a small application takes as long as a large one.

The development department's renewable energy grant fund contains about $7 million, money raised by a 9-cent monthly assessment on every electric bill, whether residential or commercial, paid to an investor-owned utility.

In other words, most of that money has been contributed by residential ratepayers, who outnumber the big accounts and who now are shut off from receiving any of the funds

Mark Shanahan, energy adviser to Gov. Ted Strickland, said the administration regrets the change. "Residential installations are a good thing to do," he said. "We want to support them, but we only have so much money. The issue is scarce resources."

Eighteen states maintain grant and loan funds for renewable energy projects. Ohio's is the lowest funded, raided by lawmakers for other purposes and set by law to end in 2011, said Amanda Woodrum, a Policy Matters Ohio analyst. She told an Ohio House Committee last month that a surcharge should be added to all bills to fund renewable energy. Based on consumption, the rider would cost residential ratepayers about $2.80 per month but big commercial and industrial users much more.

Since 2004, the department has awarded businesses, schools, universities, cities and other institutions $5.7 million in grants for a wide array of "advanced energy" projects.

The developers have spent $37 million of their own funds. (That tally includes $1.25 million to Cleveland-based HydroGen LLC, a fuel cell developer, which in turn leveraged another $13.5 million in other funds for its project.)

Most of the others receiving grants -- up to $150,000 -- leveraged about the same amount of money as the grant gave them.

Still, grants for large projects get more kilowatts deployed per dollar invested, Shanahan said. "It's a significantly better return."

That doesn't give much solace to green energy champion William Spratley, executive director of Green Energy Ohio, an advocacy group that has pushed hard for solar and wind projects for years.

"A large part of our success has been residential," said Spratley, who was shocked to learn of the decision a few days ago. Home solar "has been a beachhead in Ohio."

A number of installers said the change would hurt their businesses. Hubbard's staff told them the state has to spend just as much time reviewing small grant applications as it does large grants. They were given a week to submit their final applications.

"It comes down to staff availability," said Alan Frasz, vice president of Dovetail Solar and Wind, which has offices in Athens and Chagrin Falls.

"They are saying they are short-staffed," Frasz said, "and doing a grant application for a 1-kilowatt or 2-kilowatt took the same amount of staff time as doing larger institutional grants."

But Hubbard insisted, "We are not walking away totally from the residential market," explaining that the department is trying to develop new tools, including:

Working through builders and home improvement contractors, who would be treated as commercial even though they would represent residential clients.

Working with condominium associations whose members have decided they want to retrofit their entire complexes with renewable energy generation.

Working with manufacturers to buy solar panels in bulk, making them available to installers without asking whether the panels are going on home rooftops or big commercial jobs.

"I welcome suggestions," she said.

Sherry Hubbard can be reached at Shubbard@odod.state.oh.us.

To reach this Plain Dealer reporter:

jfunk@plaind.com, 216-999-4138