Nevada, Massachusetts, California Renewable Energy Markets Attract Investment in 2012

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State energy markets poised for more growth under second Obama administration, says Ernst & Young LLP

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A second Obama administration bodes well for the prioritization of renewable energy programs and incentives. What remains to be seen is whether a divided Congress will support the president’s renewable energy agenda.

Nevada and Massachusetts’ state renewable energy programs thrived this year, propelling the two into the ranks of top-performing states like California, according to a new Ernst & Young LLP report. Moreover, under a second Obama administration, this trend is likely to continue. The report – United States renewable energy attractiveness indices – which benchmarks the US investments that drive the state energy markets, finds Nevada’s wind market improved as a result of the commercial operation commencement of the state’s first wind farm on public land and the state’s review of a potentially massive solar pipeline project. Massachusetts continues to take advantage of the solar market signing into law a new Energy Act, which complements other state incentives like SB 2395 and makes the state one of the most attractive in the union for small-scale solar.

Elsewhere in the rankings, California remains the renewable energy capital of the nation taking the top spot in the “All Renewables Index.” Colorado, Texas, New Mexico, and Massachusetts round out the top five, demonstrating the relative stability of state energy programs in the All Renewables Index and showing states that are well positioned to benefit from future investment.

“In light of national tax credits that have been expiring over the past year, states interested in maintaining or bettering their renewable energy markets have had to make efforts to take advantage of remaining incentives,” said Michael Bernier, Senior Manager, National Tax, Ernst & Young LLP. “Nevada, in particular, has been successful in doing this. It helped developers capitalize on state programs, such as their PACE program, and their sales and use tax abatement program. As a result, Nevada has increased its installed capacity by 39% in 2012 so far while also having over 3,500 MWs of renewable energy under development. Projects like these allow proactive states – like Nevada and California – to create a more positive long-term state outlook.

“In terms of a national long-term outlook, a second Obama administration bodes well for the prioritization of renewable energy programs and incentives,” said Bernier. “National support very much drives development in the states. What remains to be seen is whether a divided Congress will support the president’s renewable energy agenda.”

In addition to looking at specific states and regions, the report highlights drivers within specific industries. For example, US wind installations are likely to surpass total installed capacity before the end of the year. With the Production Tax Credit (PTC) expiration and the 1603 Credit Termination Date looming, mid-year wind development surpassed that of the previous year as developers rushed to start projects. Additionally, the solar market is expected to continue to grow as a result of rooftop solar projects.

About the Survey
The Ernst & Young LLP United States Renewable Attractiveness Indices provides scores for state renewable energy markets, renewable energy infrastructures, and their suitability for individual technologies. The indices are based on a total score of 100 and are updated on a biannual basis.

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Lauren Condoluci
Ernst & Young U.S. LLP
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