In August 2012, Senator Dave Argall (R-29) of the Pennsylvania State Senate, introduced legislation to spur change to the state’s declining solar renewable energy credit (“SREC“) market. This bill has been introduced in response to the lack of movement on a similar House Solar Bill introduced in 2011. The House Solar Bill (HB 1580) has remained stalled in Committee for the last 10 months with no signs of further action. With the latest introduction of the Senate Solar Bill (SB 1350), the hope is that SB 1350 will provide a countering force to the stalled HB 1580. If further considered, both of these bills would provide further momentum and leverage toward adjusting Pennsylvania’s Alternative Energy Portfolio Standard (“AEPS“) and solar carve-out.

In the meantime, the Pennsylvania SREC market continues to steadily decline as the supply increases at a faster rate than the demand. The market remains four times oversupplied with a current supply of 295,228 SRECs and a current demand of only 75,544 SRECs. This oversupply has driven down SREC prices to levels around $25–$28/SREC. The legislation introduced to the Senate Consumer Protection & Professional Licensure Committee aims to increase the demand such that SREC prices begin to stabilize with a limited to no cost to the ratepayer over time. Stabilization in the SREC market will have a positive influence on the Pennsylvania solar industry by spurring installations, while also ensuring the security of clean energy jobs in the state.

To create a positive impact, SB 1350 includes the following changes and/or provisions to the original PA AEPS:

  • Increase the AEPS solar carve-out requirements starting with compliance year 2013 through 2015, keep the AEPS solar carve-out requirements the same from 2016 through 2019, and then decrease the AEPS solar carve-out requirements in 2020 and extend the AEPS through 2025. (See Table 1 for reference)
  • Change the alternative compliance payment (“ACP“) to $285/SREC for compliance year 2013 through 2019, then reduce the ACP by 2% each subsequent reporting period.
  • Allow for solar thermal facilities to qualify.

Table 1. Current vs. Proposed Requirement for the PA AEPS Solar Carve-Out

SB 1350 provides for an increase in the solar carve-out from 2013 - 2015, followed by a decrease in the solar carve-out in 2020. This proposed change aims to stabilize the market with a limited to no cost to the ratepayer.

SB 1350 provides for an increase in the solar carve-out from 2013-2015, followed by a decrease in the solar carve-out in 2020. This proposed change aims to stabilize the market with a limited to no cost to the ratepayer.

Previous versions of the Senate Bill included language to close the market to out-of-state systems. Closing the borders to out-of-state systems, as recently done in DC and Maryland, would potentially have the greatest impact on the oversupply currently in Pennsylvania. Unfortunately, this language also received some of the most significant opposition when HB 1580 was first introduced. Subsequently, despite the positive effects that this could have on an oversupplied market, SB 1350 does not include any provisions to close the borders to out-of-state systems.

As stated above, SB 1350 was introduced to the Pennsylvania State Senate on August 14, 2012 and then referred to the Senate Consumer Protection & Professional Licensure Committee. No further action has been made a Committee Hearing has not been scheduled.

Sol Systems will continue to track the progress of both pieces of legislation. Please visit our blog for further updates.

Lead image: Pennsylvania sign via Shutterstock