In 2011, the Connecticut legislature passed a groundbreaking renewable provision that, among other things, created a $1 billion contract-based incentive program intended to create the development of renewable-energy-based energy generation such as solar, wind, small hydro and fuel cell projects in Connecticut. The legislation also created the nation’s first Green Bank—now a model for other states, such as New York—that leverages public money with private investment dollars, making the overall cost of renewable energy much more competitive with traditional fossil fuel generation technologies. The public purpose for investing in renewable energy is to diversify the state’s overreliance on fossil fuels, reduce or eliminate the need for new electricity transmission, increase electric reliability, and lower greenhouse emissions.
Although it is an ever-growing number, more than 350 Connecticut commercial and industrial businesses have opted to install medium to large renewable-energy-generation technologies at their places of business amounting to well over 125 megawatts in energy generation. This number equates to a small power plant. The number is even larger if the several-hundred smaller renewable energy systems currently under construction are included. Commercial and industrial business owners typically have two options when deciding whether to install a renewable energy system. They might opt for a third-party energy developer to own the system and sell the energy back to the commercial and industrial business owner at a discounted rate over a set period of time under a contract called a power purchase agreement (PPA). Or, they might opt to self-finance the system on their own or through the assistance of the Green Bank. This article focuses on the latter, where a commercial or industrial property owner decides to own the system.
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