Law expected to boost Pa. solar projects
A state bill recently signed into law is designed to fire up the state's solar industry, although the ultimate impact depends on how the bill is interpreted by the Pennsylvania Public Utility Commission, according to one solar industry executive in Central Pennsylvania
The bill, enacted Oct. 30, blocks solar projects built in other states from taking advantage of Pennsylvania incentives for solar energy. It was part of a larger bill related to the state budget.
"We are making sure that the benefits of increased renewable jobs, a cleaner environment, and a growing renewable economy will be felt in the commonwealth," Gov. Tom Wolf said Monday at a ceremony held at a solar array in Elizabethtown.
Under a 2004 state law, 0.5 percent of Pennsylvania's electricity must come from solar sources by 2021.
To meet that requirement, solar projects generate credits that are sold to utility companies, helping to make the projects financially viable. Under previous law, the projects could be anywhere in the PJM region, a discrete electricity distribution region that stretches from North Carolina to Illinois.
As a result, Pennsylvania has had more credits than it needed, driving down prices, according to a blog post by law firm McNees Wallace & Nurick. And nearly half of the credits come from North Carolina, with slightly less than a fifth originating in Pennsylvania.
Credit prices have plunged from around $230 per credit in 2007 to $5 today.
The new law could send prices back up but it may take some time, according to the McNees Wallace post, as existing contracts with solar facilities outside Pennsylvania are grandfathered.
"The second expectation is that some of the in-state PA solar projects that may have previously been shelved due to financial decisions may now become viable," McNees specialist Amy York wrote.
The chief question, however, is whether out-of-state solar arrays that already are certified to sell credits in Pennsylvania can continue to do so even if they do not currently have contracts to sell the credits, said Tim Beiler, CEO of Paradise Energy Solutions, a solar-panel installer based in Paradise Township, Lancaster County.
"I think there is still some uncertainty on how the PUC will interpret it," Beiler said.
If certified out-of-state projects can continue to sell credits, their prices are likely to remain low, he said. Still, he added, a lot of people are investing in solar despite low credit prices.
"The commission will work to implement this legislation," a PUC spokesman, Nils Hagen-Fredericksen, wrote in an email, declining to comment further.
The top three solar-producing states as of 2016 were California, North Carolina and Arizona, according to the Solar Energy Industries Association, a trade group. Two of Pennsylvania's neighbors, New Jersey and New York, appeared in the top 10.