Pennsylvania Considers Raising Renewable Energy Target after Solar Demand Surge

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Graph courtesy PSEIA
Residential and small business demand for solar photovoltaic (PV) and solar hot water systems grew so fast in Pennsylvania from 2009 to 2010 that the state’s $100 million PA Sunshine Solar Program ran out of rebate money.

With the program in “Waiting List” mode since August 2011, state legislators are now considering a bill that would speed up the rate at which utilities are required to add solar power capacity to their distribution systems in an effort to avoid a “boom, bust, boom cycle,” the York Daily Record’s Stephanie Reighart reported.

Pennsylvania’s 2004 Alternative Energy Portfolio Standards Act set a solar power goal of 41 MW for 2012. With 2012 now here, Pennsylvania finds itself with 150 MW of installed solar power capacity, according to solar installer I Need Solar president Mike Barnes, the majority of which comes from net-metered residential solar PV systems.

Modulating Solar Market Conditions: HB 1580

Pennsylvanians are still installing solar PV and solar hot water systems, but at a rate far lower than what’s been the case when the rebate program was active. Moreover, the value of Alternative Energy Credits (AECs), aka Solar Renewable Energy Credits (SRECs) issued under the Alternative Energy Portfolio Standard (AEPS) is dropping. That, along with the suspension of the PA Sunshine Solar rebate program, has those who have installed solar energy systems looking at longer payback periods, in some cases from 10 or so years out as far as 15, according to the York Dispatch.

The PA Sunshine Program continues to accept rebate applications while in waiting list mode, but the state’s solar energy businesses, having ramped up to meet the surge in demand, are now hurting. “The increased supply flooded the market and now, as a state, Pennsylvania is way overbuilt,” Barnes told Reighart.

In an effort to boost demand for solar power, the Pennsylvanians legislature’s House Consumer Affairs Committee is considering House Bill (HB) 1580, a bill proposed by House Rep. Chris Ross (R-Chester) that would increase the rate at which the state’s electric utilities add solar power capacity to their distribution systems, according to the York Dispatch report.

Enacted in 2004, the Alternative Energy Portfolio Standard requires all Pennsylvania electric utilities to purchase 0.5% of their annual electricity supply from solar energy by 2020. HB 1580 would speed up the process by increasing the interim solar power targets utilities are required to meet.

Energy Policy as Political Fodder

Pa. Governor Tom Corbett and House Committee chair Rep. Bob Godshaw (R-Montgomery) both oppose HB 1580, concerned about increasing consumers’ electricity bills. The proposed changes to Pennsylvania’s AEPS included in HB 1580 would add only 4 cents to residential ratepayers’ monthly electric bills, according to Ron Celentano, president of the Pennsylvania chapter of the Mid-Atlantic Solar Energy Industries Association (MSEIA).

The Pennsylvania chapter of MSEIA puts the number of solar PV installations in the state at 5,500, with a total capacity of more than 130 MW. There were around 300 in 2009, the year the PA Sunshine Solar program was established.

The state’s solar power capacity today is already more than 3x that of what’s required by the AEPS in 2020. The price of AEPS solar renewable energy credits (SRECs) has plummeted 90%, which has “drastically slowed down new project installations, and has caused hundreds of Pennsylvanian jobs to be lost in just the last few months,” according to PSEIA.

Moreover, HB 1580 includes a cost cap that would limit rate increases, a mechanism that isn’t part of the AEPS Act today. It would also extend SRECs to qualified solar hot water systems, further reducing the cost to ratepayers, PSEIA explains.

The trade-off to enact HB 1580 appears to be well worthwhile. For an additional 4 cents/month, Pennsylvanians would keep both the drive to replace polluting fossil fuel with clean, renewable energy and the emergent solar/renewable energy job creation engine going.

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