Colorado Okays $500/kW Incentive for Recycled Energy

Jan. 13, 2015
Xcel Energy will begin offering a $500/kW incentive for recycled energy projects, following a recent ruling by the Colorado Public Utilities Commission.

Xcel Energy will begin offering a $500/kW incentive for recycled energy projects, following a recent ruling by the Colorado Public Utilities Commission.

The incentive will be paid out over 10 years to industrials and manufacturers who convert waste heat from stacks and processes into electricity.

“The ruling—a first for the state—places recycled energy technologies alongside better-known renewables like wind, solar, biomass, and geothermal,” said Christine Brinker, director of combined heat and power at the Southwest Energy Efficiency Project (SWEEP). “These innovative and advanced technologies deserve attention because they produce electricity with no added emissions and no added fuel, making them just as pristine as wind or solar.”

The ruling allows Xcel Energy to count up to 20 MW of recycled energy per year through 2016 toward its renewable energy standard (RES) goal of 30 percent by 2020.

The recycled projects can be as large as 10 MW. There is no minimum project size.

A facility can use the power it produces for its own operations or sell it. The incentive is meant to drive down the payback period for investing in waste-heat recovery technology

Gwen Farnsworth, senior energy policy adviser at Western Resource Advocates (WRA) said that the new program “expands customer choice, adding another type of clean, renewable energy technology in addition to solar that Xcel’s business customers can invest in directly.”

WRA also pushed for removal of any requirement that waste heat recovery projects pay Xcel Energy a standby charge. But the commission ruled that the issue was beyond the scope of the proceeding and said it will take up a tariff separately.

In addition to setting the waste heat incentive, the decision creates parameters for community solar gardens. Specifically, the commission said that Xcel may secure 6.5 to 30 MW per year in 2014, 2015 and 2016 from solar gardens to help meet its RES.

Solar gardens, a popular form of local energy in Colorado, allow a group of households or businesses to take a stake in a common photovoltaic system. Solar garden owners can then offset energy they consume with the power produced by the installation. The model is sometimes compared to community food gardens, where homeowners use a common plot of land to grow food, except in this case they are producing solar energy instead.

The  PUC  decision (C14-1505) is here.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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