Fight for solar power heats up

During the past three years, solar energy has blossomed in Pennsylvania, creating a green sustainable energy source and new jobs, but a hiccup in the state requirements could have a detrimental effect on the industry.

Pennsylvania’s solar industry exploded when state tax incentives were initiated in 2009, called the PA Sunshine Program combined with the Alternative Energy Portfolio Standards Act enacted in 2004, also known as the AEPS Act.

The PA Sunshine Program, a four-tiered rebate program, is designed to be an incentive for residential and small commercial business to install solar panels.

“Currently we are in the fourth tier,” said Mike Pitcavage, president of Endless Mountain Solar in Wilkes-Barre. “The Sunshine Program is estimated to end late this summer.”

Under the AEPS Act, utility companies are required to purchase a growing percentage of electricity generated by solar facilities, called solar renewable energy credits. The goal is to reach .5 percent of electricity produced by solar energy by 2020.

Solar Renewable Energy Credit, or SREC, is one megawatt of power generated by a solar facility. Businesses and homeowners can increase the return on their solar panels by selling excess SRECs to electric companies.

According to Vote Solar, a nonprofit solar advocacy group, there are about 71 megawatts of solar energy being generated in Pennsylvania. This is enough to satisfy the state’s solar requirements over the next three years, said Pitcavage.

“It is basic economics, supply and demand,” Pitcavage said.

A.J. Bittner, president of Keystone Energy LLC. in Luzerne, still maintains a sunny outlook on the industry. The end of solar is not near, he said.

“The tax credits and rebates did what they were supposed to do,” Bittner said. “It is just that the industry is beginning to outpace the portfolio.”

The Sunshine Program did create new jobs and is providing a clean, renewable form of energy, he said. Pitcavage estimated 600 solar companies popped up in Pennsylvania and about 5,000 new jobs were created.

“The system just needs to be reworked,” Bittner said.

Pitcavage said part of the problem, is the AEPS Act does not require Pennsylvania utilities to purchase SRECs generated within the state.

“Currently, solar energy credits from Ohio and Washington, D.C. are being purchased by Pennsylvania utility companies,” Pitcavage said.

Lissette Santana, spokesperson from electric company PPL, confirmed recently her company purchased 25,000 SRECs for an eight-and-a-half-year period for $149 per SREC.

When asked where the solar credits were from, she responded, “it was one winning bidder, location is undisclosed.”

Pitcavage and Bittner have noted the selling price utility companies are paying for SRECs have dropped as a result.

Pocono Raceway President Brandon Igdalsky, has seen this drop first hand. Overseeing the largest solar farm at a sporting venue in the world, the Pocono Raceway solar farm has 40,000 solar panels and produces enough energy to power the race track facility and 1,000 local homes.

“Our system is expected to generate roughly 3.6 to 3.8 million kilowatt hours each year,” Igdalsky said.

Igdalsky said the prices of SRECs have dropped from $300 to $80. New Jersey, for example, is selling SRECs for $655, and Massachusetts for $525.

“One main reason for this is Pennsylvania allows out-of-state systems to register to sell their SRECs in PA,” Igdalsky said.

To fix this problem state Rep. Chris Ross, R-Chester, proposed Bill 1580 to increase the amount of solar energy utility companies are required to purchase between the years 2012 and 2015.

Katy Gresh, a spokeswoman with the state Department of Environmental Protection, said “Pennsylvania taxpayers and ratepayers have offered extraordinarily generous support for the solar industry over the past several years, both through the AEPS mandate and through the $180 million in grants and rebates included in the 2008 Alternative Energy Investment Act.”

She said as good as the programs have worked, other factors need to be considered.

“While we want to see continued growth of this and other energy industries across the commonwealth, we need to keep in mind that all costs associated with the solar renewable energy credit market are passed on to ratepayers. We will continue to monitor this situation going forward, and we will seek to strike the appropriate balance that is sustainable both for this industry and for ratepayers.”

Pitcavage said he would also like to see Pennsylvania utilities only buy SRECs generated within the state. This could boost the price of SRECs up again and make Pennsylvania’s solar market more competitive with neighboring states.

“Solar created in Pennsylvania should stay in Pennsylvania,” Bittner said. “Why should utility companies charge PA customers fees for energy created in other states?”

Despite this, Igdalsky firmly believes the $18 million solar farm was worth the investment.

“It was a good business move,” he said. “For one it was the right thing to do. We have shown the sports world and fans that solar can be done and done right.”

Pitcavage said he has heard of several solar companies and specially trained solar technicians migrating to New Jersey where the market is strong. He plans on weathering this drop and stay in the area.

Bittner said with any new industry, glitches arise, but believes solar will be around for a long time.