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Impact of Energy Policy Act of 2005 Section 206 Rebates on Consumers
and Renewable Energy Consumption, With Projections to 2010

Release date: February 2006



Analysis Caveats

As mentioned earlier, this analysis does not include all the possible residential renewable energy sources listed in the law, such as pellet fuels, small wind, geothermal direct use, and alternative forms of biomass. In the case of pellet fuels, small wind and geothermal direct energy, technology for the residential sector is available commercially but is not modeled in NEMS. Sales of pellet fuels made in the United States during 2004 totaled nearly 875,000 tons, or 14 trillion Btu. Industry expects sales to grow in the future.[6] Most pellet fuel is shipped to the residential sector, with some either going to the commercial sector or exported.

The American Wind Energy Association estimates that a total of 35 megawatts of small wind capacity was operational in the United States, with an average size of 1,000 watts in 2004.[7] Assuming that small wind turbines would have capacity factors similar to those of typical commercial-scale units, small wind turbines probably provide 6 to 10 trillion Btu of energy. But the typical cost of a small wind turbine is so high that it is unlikely that the rebate itself would increase the number of units.[8]

According to the Oregon Institute of Technology, Geo-Heat Center, the geothermal direct use of energy, not included in NEMS, may account for almost 1 trillion Btu of energy. In the case of alternative forms of biomass, the technology to use these alternative forms in dwellings is not widely commercialized, though it might be in the future.



 




[6] Pellet Fuels Institute, Pellet Fuel Sales Survey, website: http://www.pelletheat.org/3/industry/marketResearch.html
[7] American Wind Energy Association, Home and Farm Wind Energy Systems: Reaching the Next Level, (Washington, DC, June 2005), p. 1, website: http://www.awea.org.
[8] The price of a 10-kilowatt (KW) residential wind turbine, including a voltage regulator, pump controller, or a line-commutated inverter, ranges from $19,900 to $24,750 according to a major manufacturer of residential wind turbines. The cost of a tower, depending upon the height, ranges from $6,200 to $9,200. Adding installation costs brings the estimated total cost to around $45,000.