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In the energy industry, everyone is re-evaluating Oregon’s new, BETC-free climate, with the resulting reactions spanning from frustration to resignation. The state legislature voted overwhelmingly in June to phase out the program, which had a hefty price tag but was also credited with bringing to Oregon thousands of jobs and millions of dollars in revenue.

Under , BETC will be replaced by three separate programs that keep the structure of the old credits for renewable energy generation, conservation, and manufacturing, but with drastically smaller pots of money than in the past, including the $300 million dedicated during the last biennium.

The new energy generation credit, 鈥淕ennie,鈥� will significantly impact emerging renewable energy industries and large-scale solar projects. The entire grant fund now has relatively paltry $1.5 million to distribute each year.

In the old program, renewable energy projects could earn tax credits for 50 percent of eligible costs. Now, individual awards may not exceed $250,000 or 35 percent of a project’s cost. Projects will be capped at 35 megawatts.

Critics of the restructure say overcoming the changes in legislation will be especially hard for emerging industries.

Tax credits on the state and federal levels helped Oregon’s biodiesel industry move forward, but none of the policies have had much staying power, said Tyson Keever, general manager of SeQuential-Pacific, an Oregon-based biodiesel company. The lapsing of a federal excise tax credit in 2009 caused about 80 percent of national biodiesel facilities to close or furlough. Although that credit has returned, Keever and others in the biodiesel market say the future of biodiesel is still uncertain.

鈥淭he atmosphere for biodiesel in Oregon has totally changed place since 2005 when we opened our first plant,鈥� Keever said.

Due in part to a business model that ties local feedstock to the biodiesel’s end-user at the gas pump, Sequential-Pacific is faring well, Keever said. He’s less optimistic about investor confidence in Oregon, though.

鈥淏ETC was an element that helped get us in, but now there will be a barrier to entry for others, unfortunately,鈥� Keever said.

On the other end of the spectrum, BETC also made the financing of commercial-scale projects feasible in Oregon.

鈥淭he state of Oregon is no longer capable or interested in providing incentives to industrial scale projects,鈥� said John Audley, deputy director of Renewable Northwest Project.

The clearest effect will be on commercial-scale solar projects because the tax credits under the old BETC reduced the price of solar energy enough to sell it to a utility, Audley said. Now, many solar companies are readjusting their business plans and may be ending plants to site projects in the state.

鈥淭he economics have to be compelling for commercial scale projects, and BETC was the thing making Oregon more compelling,鈥� said Matt Ziskin, senior marketing director at SunWize Systems. 鈥淣ow you will see a very substantial slowdown on the commercial side of solar, at least until BETC is revisited and funded at a more substantial rate.鈥�

SunWize now plans to focus on residential business in Oregon, which means fewer potential jobs. It’s a move that Ziskin thinks may become more common among solar companies.

鈥淥bviously if we’re not doing large-scale projects, we’re not employing local labor to do that construction work, those jobs just won’t exist,鈥� he said.

Ultimately, those in the solar industry considered BETC one of the main tools in building larger projects . With the program at its previous levels, the prospects of those projects getting done are slim to none.

鈥淚 don’t think there’s any question within the industry that the decision (the legislature) has made will have a negative impact in terms of renewable energy generation,鈥� said Glenn Montgomery, executive director of the Oregon Solar Energy Industries Association. 鈥淲e will see less generation and job losses as a result. Hindsight will prove whether or not this was a wise choice or perhaps there could have been a better choice.鈥�

Industrial-scale wind, on the other hand, is facing a completely different set of challenges in Oregon, ranging from uncertain markets in California to curtailments from the Bonneville Power Administration’s transmission system.

鈥淔iguring out the whole set of reasons for impacts on the wind industry will be more complicated,鈥� Audley said.

For biogas projects, the changes to BETC will make construction financing more difficult, but a new biomass tax credit within HB 3672 may help on the revenue side, according to Ben Vitale, president of the Climate Trust.

鈥淪ome was taken away and some was given back,鈥� Vitale said. 鈥淲e’ll have to see how it pencils off for different types of projects.鈥�

Ultimately, there seems to be a concern about Oregon slipping from its leadership position in renewable energy across industries, coupled with an acknowledgment that the legislature was faced with massive budget issues that left them with few choices.

鈥淚 have kids in public schools and I drive down these roads, so I see what the state’s fiscal house looks like and it’s not pretty,鈥� said Chris Taylor, chief development officer of Element Power. 鈥淚 don’t think renewable energy should be exempt from the state’s broader problems, but renewable energy has been a bright spot in fairly gloomy economy 鈥� it would be unfortunate if as a result of this we end up with declining investment.鈥�