The Pennsylvania House Consumer Affairs Committee delayed the public hearing for the Pennsylvania Solar Jobs Bill (HB 1580) for the second time after a death in Committee Chair Representative Godshall’s family. The hearing was originally scheduled for November 17, 2011 and is now on the calendar for Wednesday, January 11, 2012 (click this link for location and time).
Taking into account the increase of solar PV installations in Pennsylvania over the last two years, the PASEIA calculates the total in-state solar capacity to be around 120MW (5,200 solar PV systems) with 38 MW of PV capacity installed out-of-state but registered in Pennsylvania. The burst of installations has solar capacity estimated to be closer to triple the RPS requirements by the end of 2012, which does not account for additional projects coming online. The oversupply has caused market prices for solar renewable energy credits (SRECs) to decrease by close to 90%. In the spot market, RY 2011s are trading in a range of $15 to $30 and the latest auction cleared at $10, RY 2012s are in the range of $30 to $75, and a market for RY 2013s seems non-existent at this point. The collapse is causing a slowdown in new project installations and is negatively impacting the solar industry, forcing job losses and relocation of such businesses.
The Solar Jobs Bill (HB 1580) could provide the necessary amendments to the current Portfolio Standards to revive the solar industry and fix the temporary collapse of the Pennsylvania SREC market. This bill offers two solutions:
- Increase Solar Requirements – by accelerating the amount of SRECs required to be purchased by utility companies during a limited period of July 2012-2013 through July 2014-2015 (Table 1 provides a comparison of the accelerated standards to the current requirement).
- Alleviate the oversupply of SRECs – by closing off the Pennsylvania SREC market to facilities located outside of the state. As proposed in HB 1580, all solar PV systems registered after January 1, 2012 must be located within the state of Pennsylvania
Pennsylvania AEPS Requirements (Current vs. Proposed)
|Period (Energy Year)||Current Requirement (MWh)||Proposed Requirement (MWh)||Percentage Increase|
|July 2012 –June 2013||75,189||221,144||194.12%|
|July 2013 – June 2014||125, 012||253,001||102.38%|
|July 2014 – June 2015||216,338||306,478||41.67%|
|July 2015 – June 2016||379,150||379,150||—|
|July 2016 – June 2017||449,047||449,047||—|
|July 2017 – June 2018||525,500||525,500||
The proposed requirements would only increase the required percentage of energy to be derived from solar during “the Acceleration Period.” This will enable the market to balance current supply with growth in solar demand, bringing the SREC market back into equilibrium. Once “the Acceleration Period” is over in July 2014-2015, the cumulative share requirement will not have increased. Rather the year over year change from 2015 to 2016 will increase 22.55% instead of 73.61%, allowing for a smoother transition and the overall requirement only being moved forward.
Furthermore, various reports have shown the proposed change to the original AEPS will not cause a burden to ratepayers. Dayhill estimates the consumer cost to be $12 and the commercial/ industrial cost to be $168 during “the Accelerated Period.” While other estimates to fix the market dislocation put the cost at less than a ½ a penny a day for 5 years.
Pennsylvania is the fourth largest solar economy in the United States and would benefit greatly if the Solar Jobs Bill were to be enacted. HB 1580 will bolster renewable energy standards for Pennsylvania utilities and increase the value of the currently lagging market and solar economy.
About Sol Systems
Sol Systems is a solar energy finance and development firm that was built on the principle that solar energy should be an economically viable energy solution. With thousands of customers and hundreds of partners throughout the United States, Sol Systems is the largest and oldest SREC aggregator. We provide homeowners, businesses, solar installers, and developers with sophisticated financing solutions that help make solar energy more affordable. Sol Systems also helps energy suppliers and utilities manage and meet their solar RPS requirements efficiently by providing them with access to diverse portfolios of SRECs. For more information, please visit http://www.solsystemscompany.com.