As the Ohio General Assembly approaches the final few months of its 2013 legislative session, attention has been brought to the Senate Bill introduced to repeal the state’s Renewable Portfolio Standard. Ohio State Senator Kris Jordan introduced Senate Bill 34 (SB 34) which, if passed, would “repeal the alternative energy resource requirements imposed on electric distribution and electric services companies to provide, by 2025, 25% of their electric supply from alternative energy.” To put it simply, if passed, this legislation would repeal Ohio’s Renewable Portfolio Standard (RPS), and the Ohio SREC market would be dismantled.
This is not the first time that Senator Jordan has attacked the Ohio RPS; similar legislation was introduced by Senator Jordan in 2012, but those previous bills failed to gain any support. It remains to be seen how SB 34 will move forward in this current legislative session, as it has only been assigned to the Public Utilities Committee. A hearing has yet to be scheduled.
The Ohio General Assembly originally passed its state’s RPS under SB 211 back in 2008 and set an aggressive goal to have 25% of their electric supply come from alternative energy by 2025, with a 0.5% solar carve-out. Since the passage of SB 221, the RPS requirement spurred renewable energy investment in the state, creating 2,930 local jobs putting them at 10th in the nation for most jobs, and driving down prices to make solar and other renewables more affordable. In the last year alone, installers and developers helped to build 25 MW of solar energy within the state establishing its rank as 15th nationally in installed solar capacity.
If passed, SB 34 would halt and further impede the progress that has already been made within the solar industry, and renewable energy industry as a whole, in Ohio. The bill itself would essentially dismantle the SREC market in Ohio and the bordering states such as West Virginia, Indiana, Michigan, and Pennsylvania that sell their SRECs into Ohio.
Senator Jordan has expressed his interest in repealing the RPS because he believes the requirements will greatly increase electricity costs for residential and commercial customers without much environmental or economic benefit. However, historical data shows that Senator Jordan’s assumptions may be inaccurate, and ratepayer costs have been minimal over time. Furthermore, the current Ohio RPS has a protection for the ratepayer already built-in, as the utility will not be mandated to comply with these standards should electric rates increase by more than 3%.
This bill comes at a time where Ohio needs progressive solar legislation more than ever, as the SREC market continues to struggle. The Ohio SREC market in 2013 is projected to be more than two times oversupplied with an expected 129,000 SRECs to be issued compared to a demand of only 60,000 SRECs. This oversupply is likely to continue into the 2014, 2015 and 2016 compliance years. Sol Systems recommends for solar energy system owners and industry advocates to contact their state legislator to preserve the Ohio solar market.
Developers interested in financing options for commercial Ohio solar projects can contact our project finance team at firstname.lastname@example.org or (888) 235-1538 ext. 2. Our team is happy to discuss your project with you and assess financing opportunities. Solar installers with customers in need of SREC options in Ohio can contact our SREC services team at email@example.com or (888) 235-1538 ext. 1.
About Sol Systems
Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.
For more information, please visit www.solsystemscompany.com.