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Proposed legislation shines light on continuing to subsidize solar

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Pennsylvania is making strides in solar energy development, experts say, but those gains have come largely thanks to $100 million in state appropriations since 2008 to a rebate program for solar systems at homes and businesses.

Now, legislation before the Pennsylvania General Assembly is seeking additional funding for the PA Sunshine Solar Program.

State Rep. Gregory S. Vitali, D-Delaware, has introduced not only House Bill 200 to support the rebates but also another bill that would increase the percentage of renewable energy electric companies must purchase.

The legislation would provide temporary boosts to renewable energy, particularly solar, because that sector cannot compete in the marketplace on its own right now, Vitali said. The goal is that it one day will.

Vitali, who is minority chairman of the House Environmental Resources and Energy Committee, said oil companies and the nuclear power industry already get breaks from the government.

"Other sources of energy get subsidized," he said.

Shawn Good from the Pennsylvania Chamber of Business and Industry disputed that characterization, saying he would like to see a current list of subsidies. He argued that many of them, like research and development grants, are available to other industries.

Pennsylvania already has electric choice, and a business owner can select a power generation supplier that uses renewable energy, according to Good, who is director of government affairs at his organization.

"Generally, we are opposed to all kinds of subsidized energy mandates. ... We believe market forces are the best way to utilize renewable energy," Good said, saying those mandates drive up energy costs.

Pennsylvania Public Utility Commission statistics indicate electric companies have more than 2,000 residential and business customers, but they are in some ways customers themselves. Because electric companies no longer own power plants, they buy energy wholesale. They are required to purchase renewable energy credits related to a percentage of their sales.

Electric companies make a profit from distributing energy, not reselling it, according to Terrance "Terry" Fitzpatrick, president and CEO of Energy Association of Pennsylvania.

On Feb. 15, Vitali introduced House Bill 100 in an effort to increase the percentage of renewable energy electric companies must purchase, establishing a new rate of 15 percent of their power by 2023. Current law requires 8 percent by 2021.

Energy Association of Pennsylvania surveyed its members from electric and natural-gas utilities about the possible effects of H.B. 100.

H.B. 100 could create $2 billion in additional costs for the companies over the next 12 years, Fitzpatrick said.

"We're concerned about policies we don't think can be sustained in the long run," Fitzpatrick said.

The existing Pennsylvania Alternative Energy Portfolio Standards Act, which would be amended by H.B. 100, gives electric companies the right to recoup additional costs from customers.

While passed-along costs could be minimal for residential customers, they could have serious implications for large companies, Good said. He said industrial members of the Pennsylvania Chamber of Business and Industry have expressed those concerns.

"If the price of their electric goes up, the costs of their products will go up," he said.

Vitali, who says the country needs to move away from fossil fuels, designed H.B. 200 so that the Pennsylvania Sunshine Solar program would receive funding from Marcellus Shale tax fees to stay active. The program provides rebates for solar electric or solar hot water projects for homeowners and small businesses.

The state rep described the program as popular among the public and solar panel installation companies but said passing the legislation could be challenging. He wants his bills to put lawmakers on the record regarding where they stand on renewable energy and climate change.

Not only is the cost of solar energy coming down, but there is value in increasing the overall variety and supply of electricity, Vitali said. He argued that increased supply will put pressure on prices and drive down those prices.

"There's a value in developing things like solar and wind, because that's going to diversify your energy portfolio," Vitali said.

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