This is an excerpt from EERE Network News, a weekly electronic newsletter.

October 15, 2003

California and Ohio Support Distributed Generation Projects

Two recent actions in the states of California and Ohio will help groups and individuals generate their own power on-site, a concept known as "self-generation" or "distributed generation." The actions bode particularly well for solar power installations in the two states.

In California, outgoing Governor Gray Davis signed legislation on October 12th that will extend the state's Self-Generation Incentive Program through the end of 2007. The program has been critical to the growth of solar power in the state, and was set to expire at the end of 2004. The new legislation, Assembly Bill 1685, also sets emissions standards and requires a minimum conversion efficiency of 60 percent for any fossil-fueled distributed generation that seeks to qualify for the incentive payment. Combined heat and power projects can earn credits against the emission standards based on how much heat they recover. See the governor's press release, and see the full text and history of the bill on the Official California Legislative Information Web site. Governor Davis faced a deadline of midnight on October 12th to either sign or veto 282 bills that awaited his signature; any bills that he didn't sign or veto would automatically become law.

In Ohio, the Department of Development has awarded a total of $924,019 in grants to 26 distributed generation projects throughout the state. The projects cover a wide range of technologies to be installed in both homes and business, including solar power systems, solar thermal systems, wind turbines, a biomass-to-energy system, a geothermal heat pump, a gas turbine, and a reciprocating engine. Many of the projects involve "hybrid" systems that combine two or more of the technologies, and several make use of waste heat produced by the electrical generators. But perhaps the most interesting award is to the City of Cleveland, which plans to install a 530-kilowatt solar power system at one of its water treatment plants. If built, it will be the largest solar power system in the Midwest. See the Ohio Department of Development press release.

Aside from financing, the trickiest parts of installing distributed generation usually involve agreements with the local utility, including agreements on how to connect to the grid-referred to as "interconnection"-and on how the utility will credit the owner for any power fed into the grid. Advocates of distributed generation prefer a "net metering" agreement that credits power fed into the grid against power drawn from the grid, requiring the owner to only pay the net difference. To help advance distributed generation, the Interstate Renewable Energy Council (IREC) recently released new model rules to help guide policymakers considering net metering or interconnection rules in their states. See the announcement, which includes a link to the draft rules, on the IREC Interconnection Web site.