Pennsylvania
Pennsylvania Solar Renewable Energy Certificates (SRECs)
Pennsylvania SREC Alert!
July 29th, 2010
Posted by Michael Flett in Pennsylvania
The first Pennsylvania SRECs/Alternative Energy Credits (AECs) for the 2011 Energy Year (vintage) will be created by PJM-GATS on Friday, July 30, 2010. PA SRECs are generated on an energy year basis which runs from Jun 1 to May 31. Values for 2010 vintage SRECs differ from the values of 2011 SRECs. Valuation differentials between specific vintage SRECs are attributable to the estimated future value of compliance payments (this is currently 200% of the sum of the “market value” of solar AECs) or a lower fixed payment as described in proposed house bill 2405. SRECs are valid for RPS compliance for the year generated and the following 2 years. Some energy suppliers will be limited to the amount of vintages according to when they were required to comply. Sellers will have to check which energy year SRECs they have before they sell them on Flett Exchange. Prices for 2010 PA SRECs have softened lately due to more buyer interest in 2011 PA SRECs.
The Flett Exchange trading platform allows for the simultaneous listing of multiple vintages. Our transparent and competitive trading platform ensures that our buyers and sellers achieve the market value for their SRECs at the most competitive rate in the industry. Our brokers are available to answer any questions that you have at 201-209-0234.
Register Your PA, MI, IN, KY, & WV SRECs in Ohio
July 17th, 2010
Posted by Ronald Black in Indiana
Ohio Renewable Portfolio Standard (RPS) buyers can buy 50% of their SRECs from neighboring states. Pennsylvania, Michigan, Indiana, Kentucky, and West Virginia SREC sellers can certify their solar systems in Ohio and have the potential to sell their SRECs into a growing Ohio solar market.
However if too many solar generators register to sell their SRECs in a particular state or region an oversupply scenario could occur. Market saturation could diminish SREC demand and depress prices. It is also important to note, that a solar facility generating SRECs outside of Ohio and also registered within Ohio might not receive the same price of an Ohio sited SREC. For more information please click on the application for certification as an Ohio Renewable Energy Resource Generating Facility.
Click Here To Download Details from Ohio.gov
Contact:
Public Utilities Commission of Ohio
Email: AEPS@puc.state.oh.us
Toll-Free: (800) 686-PUCO (7826)
Phone: (614) 466-3292 (in Columbus area)
Fax: (614) 752-8351
180 East Broad Street
Columbus, Ohio 43215
US Solar Capacity Surges in 2009 on New Economic Incentives
April 21st, 2010
Posted by Daniel Popp in California
LOS ANGELES, APRIL 15, 2010 — (Reuters) — Installed solar capacity jumped an astonishing 37% in 2009 following an onslaught of state and federal incentives offered during the recent economic crisis to help prop-up demand for new solar equipment. Grants, subsidies, tax-credits and cash incentives helped push revenue past $4 Billion in 2009, a 36% increase from the previous year.
According to a report released last Thursday by solar advocates it was the fourth straight year of unprecedented growth for the solar photo-voltaic industry here in the United States. This contrasts with the long-standing European solar power industry, which has seen a decrease as it’s mainstay nations ramp-down their incentive programs.
New U.S. solar capacity reached 481 Megawatts (MW) last year, an increase of 130 MW from 351 in 2008. Solar thermal for water heating also rose, but at a more modest 10% on the year. The only decline was seen in solar-pool heating, which saw a 10% decline blamed mostly on the slowdown in the housing sector.
Analysts say that the spike in U.S. growth is also attributed to lower prices of solar hardware, which the Solar Energy Industries Association (SEIA) reported fell an estimated 40% in recent years. “Despite the Great Recession of 2009, the U.S. solar industry had a winning year and posted strong growth numbers… Consumers took notice that now is the best time to go solar,” says SEIA CEO Thone Resch. The increase in solar was led by California, with New Jersey coming in second place, followed by Florida, then Arizona.
According to the SEIA, six solar utility projects also came on line in 2009, including both solar PV and solar concentration plants. Despite the increase, solar still remains under 1% of utilities generation within the United States. The SEIA is optimistic for the future however and predicts 17 Gigawatts of solar power down the line, enough to power over 3 million homes.
“Now we’re talking gigawatts of solar, not megawatts,” said Resch.
View the SEIA’s 2009 Industry Year in Review Here:
http://seia.org/galleries/default-file/2009%20Solar%20Industry%20Year%20in%20Review.pdf
View the original article from Reuters Here:
http://www.reuters.com/article/idUSN159853820100415
(Reporting by Dana Ford; Editing by Marguerita Choy)
Solar Financing
April 20th, 2010
Posted by Ronald Black in California
Solar energy is attracting investment dollars. Competitive returns, lower barriers of entry, state and federal incentives, SREC revenue streams, and progressive Renewable Energy Portfolio Standards (RPS) are advancing solar to the forefront of renewable energy world. As the solar market evolves, so are the financial structures that are assisting investors in financing and completing projects. This article will examine various financing strategies, the risks and rewards associated with them, and the incentives involved with solar investing.
- Self Financed (Most Risk/Most Reward)– Self financed solar facilities are for residents and entities who want control of their solar destiny. These parties absorb the upfront costs for developing solar and the challenges of operating and maintaining their solar facility. This is the most capital intensive structure and poses the most risk and reward. The risk lies in the development of the project, the failure in properly monitoring and maintaining the facility, and the price associated with the Solar Renewable Energy Certificates (SRECs). The rewards are a reduced rate of electricity for as long as the facility can generate solar energy, declining installation costs, and a revenue stream generated by SREC monetization. Self-financiers take the risk of developing solar because there is the potential for them to payoff the facility in a shortened period of time and realize increased upside profit potential.
- Solar Lease Financing (Moderate Risk/Moderate Reward)– Solar lease financing structures are being executed in both the residential and commercial markets. The concept is simple, straightforward, and similar to an equipment or automobile lease. Instead of self financing your solar facility, parties can enter into a leasing contract and agree to make monthly lease payments on their solar installation. Similar to a PPA contract the client does not incur the expensive upfront installation costs or the responsibility of operating and maintaining the solar facility. In a best case scenario the lessee can take advantage of higher SREC values and an option to buy out the system in six years, while the lessor obtains the ITC and accelerated depreciation of the system. A solar lease structure is also an alternative to a PPA contract for non-profit organizations who want to take on SREC risk for potential reward, while the lessor passes on the ITC and accelerated depreciation indirectly through a lower lease payment. Solar leasing firms have a set of criteria that clients need to meet in order to participate in their solar leasing program: commercial clients may need to submit audited financial statements and residents may need to have a FICO score of 700 or greater to be considered. However there are also risks associated with solar leases. One risk is that a lessee could go upside down on their contract. This happens when the solar lease is more expensive than the SRECs being monetized. Another risk is the future price of electricity. Lessees could potentially pay more for solar electricity than basic generated electricity if demand diminishes. The financial crisis of 2008-2009 was a reminder that electricity prices do not always go up and that electricity demand could decline during lean economic times. Solar lease financing is becoming more popular because it is affordable, convenient, environmentally responsible, and lowers your electricity bills. However, interested parties should weigh the risks and rewards associated with solar leases and learn more about the leasing company before signing an extended contract.
- PPA Financed (Less Risk/Less Reward)– A Power Purchase Agreement (PPA) is a contract between a solar electricity generator and a client seeking solar energy. This financial structure is designed to provide the client with a reduced rate of electricity for an extended period of time (10-20 years), no upfront installation cost, and the option to purchase the solar facility at the end of the contract. The PPA Provider designs, develops, operates, maintains, and owns the solar facility located on the client’s property. In turn the client pays the PPA Provider for the electricity generated from the solar facility. PPA Providers enter into these agreements because there is a profitable margin between where solar can be developed and what electricity can be sold for. The PPA Provider can also take advantage of the Investment Tax Credit (ITC) and accelerated depreciation. PPA Providers gain ownership of the SRECs which are generated from the solar facility and can monetize them on the Flett Exchange live markets. This solar structure is popular with non-profit organizations that cannot take advantage of the ITC and realize the accelerated depreciation of their solar facility.
Many solar projects are contingent on tax benefits, rebates, and long-term SREC contracts. Without these incentives and risk mitigation strategies solar projects can be difficult to finance and pose significant risk to investors. Let’s examine some of the incentives and strategies that are allowing the solar market to flourish.
- Tax Benefits- At this juncture, tax incentives are an integral part of solar financing. The Investment Tax Credit (ITC) returns over 30% of a solar project’s capital cost to investors in the form of a tax credit. Sophisticated investors are utilizing solar as a tax-equity investment vehicle because tax credits can offset tax liability. Section 1603 of The American Recovery and Reinvestment Act of 2009 (Stimulus Bill) also allows investors to receive a grant in lieu of tax credit when the “specified energy property” is submitted to the “grant program.” This program runs out at the end of 2010, and the SEIA www.seia.org is lobbying to have it extended. Both the credit and grant programs promote renewable energy on the institutional level and help incentivize solar development.
- Accelerated Depreciation- Developers of commercial projects can realize additional tax benefits from the depreciating cost of their solar facility. An entity “can depreciate the installed cost of the system minus 50% of the business Investment Tax Credit (ITC) over the first five years of ownership (SEIA 2008) using the modified accelerated cost recovery system (MACRS) (DSIRE 2008). According to a report by Lawrence Berkley National Laboratory, the tax benefit of this depreciation is equivalent to 26% of the installed cost of the system, 12% of which comes from the ability to accelerate it over a five year period (Bolinger 2009).” –National Renewable Energy Laboratory, “Solar Leasing for Residential Photovoltaic Systems.”
- Long-Term SREC Contracts- are helpful in financing proposed solar projects. Flett Exchange brokers long-term SREC contracts between qualified institutional counterparties. Our ability to facilitate and streamline long-term SREC contracts is value-added to both buyers and sellers. Buyers gain direct access to large pools of SRECs at a discounted price to satisfy their RPS, while sellers have the ability to mitigate risk and lock-in profits. Counterparty credit risk is paramount in this market. Buyers and sellers enter into bilateral contracts to secure price, quantity, and term of the SREC contract. Counterparties agree to pay or delivery SRECs at a specified future date. Flett Exchange augments this process by employing a stringent vetting process and presenting quality and creditworthy solar projects to the market. Flett Exchange is currently brokering 1-7 year SREC contracts in the open market and growing our ability to facilitate longer term deals for eligible commercial entities.
As the solar markets continue to evolve new and innovative thinking will be the most prized commodity. The emergence of banks, lenders, financial institutions, and new financial structures will be welcomed and as solar makes the transition form a subsidized market to a self-sustaining market.
Why Investors are Attracted to Solar
April 20th, 2010
Posted by Ronald Black in California
Solar energy is gaining momentum in the renewable energy world. It is being heralded as a smart investment due to growth prospects, favorable market conditions, federal and state incentives, and more stringent Renewable Portfolio Standards (RPS). Individual and institutional investors are committing capital and taking risk because of potential profits and tax benefits that are associated with developing solar. Existing and newfound factors are driving solar energy to become a more mainstream investment. This article will examine these factors and demonstrate how they are contributing to solar energy’s success.
- Growth- Over the past decade, technological advancements have made solar energy more affordable, more reliable and less obtrusive. Lower barriers of entry have allowed solar installers, integrators, and developers to offer competitive pricing on residential and commercial facilities and reduce their installed cost per watt.
- Value- Solar energy is a potential hedge against higher electricity prices. It is estimated that electricity prices could conservatively increase by 3.0% a year. Solar energy is a wise alternative to higher electricity bills and can provide clean, green, and cheaper power. Self-Financing, Solar Lease Financing, and Power Purchase Agreement (PPA) Financing are all financial structures that can accomplish reduced electricity costs.
- Tradable SREC Markets- Solar Renewable Energy Certificates (SRECs) are environmental attributes that can be transacted and monetized. SRECs are the driving financial component that makes solar economically feasible. SRECs are generated from the production of solar energy and can be monetized on Flett Exchange’s live SREC markets. SRECs are market based. Unlike feed-in tariffs SRECs pass savings on to ratepayers over time, if overdevelopment occurs or if solar becomes less expensive.
- State Mandated Markets- SREC markets are state mandated. State governments are establishing stringent Renewable Portfolio Standards (RPS) and increasing their solar carve-outs. Electric suppliers need to procure SRECs to meet their RPS. If electric suppliers cannot procure enough SRECs in the open marketplace to satisfy their RPS they are subject to a Solar Alternative Compliance Payment (SACP) which is a penalty payment and can be considerably higher then the spot SREC market.
- Tax Benefits- Many solar projects are candidates for federal tax incentives and state rebates. The Investment Tax Credit (ITC) returns over 30% of a solar project’s capital cost to investors in the form of a tax credit. Section 1603 of The American Recovery and Reinvestment Act of 2009 (Stimulus Bill) also allows investors to receive a grant in lieu of tax credit when the “specified energy property” is submitted to the “grant program.” State rebates may also be available for residential and commercial solar installations. Rebate programs can differ from state to state and exist on a sliding scale depending on the size of the proposed solar facility.
- Escalating Fossil Fuel Demand- Global demand for fossil fuels is increasing while supplies are diminishing. Developed and emerging nations are competing for fossil fuels and all petroleum products come with political and environmental risk. Solar energy, on the other hand, is limitless, does not emit harmful emissions, and can be achieved without any political risks. Also if the US Dollar continues to depreciate the price of foreign fuel could continue to rise.
- Climate Change- Private and public corporations, organizations, agencies, and municipalities are implementing clean energy programs. Climate change is a growing social and political issue, both domestically and internationally. Insightful entities understand the benefits of renewable energy and the risks associated with not staying ahead of the climate curve. These players are implementing clean energy programs and are well positioned if climate legislation gets passed. The recent US healthcare decision demonstrates that political winds can shift momentarily and legislation can be passed swiftly. Renewable energy strategies and sustainability teams are becoming more conventional, as private and public entities recognize their social responsibilities to the environment and potential legislative risk.
Solar energy is a favored renewable energy source. Solar is easy to install, is a hedge against higher electricity prices, generates a SREC revenue stream, and is beneficial to the environment. So far advantageous market conditions have attracted investors to solar.
However the future of the solar market also comes with challenges and risks. Increased competition could create an overpopulated market. Inexperienced players who are attracted by favorable market conditions could sacrifice engineering and construction quality for short term monetary gains. The reduction of federal and state incentives could make solar less appealing. As the solar market evolves it will be interesting to see if it could sustain itself and emerge as an established renewable energy source.
PECO Harnesses Solar Power, Company Purchases 6 Megawatts of Solar Credits
March 5th, 2010
Posted by Daniel Popp in Pennsylvania
Article Sourced From: PECO.com – Click to View Original
PHILADELPHIA (March 3, 2010) PECO has signed 10-year agreements to purchase 6 megawatts, or 80,000 solar energy credits, in support of Pennsylvania’s Alternative Energy Portfolio Standards (AEPS). The purchases were made at an average price of $256.57 per megawatt hour.
Enough energy to power nearly 1,000 homes for 10 years, it would take about eight football fields of solar panels to produce the 6 megawatts purchased. Once complete, the company’s purchases could result in the same environmental benefit as planting more than 48,000 acres of trees or not driving more than 133 million miles.
The first utility in the state to buy and bank green energy credits, these solar purchases are in addition to more than 450,000 megawatt-hours of wind and other renewable energy credits already purchased by PECO since 2008.
“These purchases underscore our strong environmental focus and commitment to renewable energy for our customers,” said Denis P. O’Brien, PECO president and CEO. “By acting now PECO is helping to increase demand for renewable energy resources and promote clean energy technologies.”
The AEPS legislation requires that by 2011, 3.5 percent of the energy sold to PECO customers is generated from renewable resources such as wind, landfill gas, and solar. These requirements are measured by renewable energy credits. Credits are sold by electric generators on a one-to-one basis each time they produce one megawatt-hour of renewable energy.
PECO’s support of alternative energy is part of a broader environmental initiative to preserve the environment and help customers become more environmentally responsible. Totaling more than $15.3 million of work, the comprehensive program also includes the installation of a green roof and new energy efficient Crown Lights system at the company’s Center City headquarters; the opening of PECO’s first ‘green building’ in West Chester, recently awarded silver certification for Leadership in Energy and Environmental Design (LEED); improvements to secure LEED certification for many other company work sites; the increased use of hybrid and biodiesel vehicles; support for community environmental projects; and enhanced tools and programs to help customers use energy more efficiently.
PECO’s efforts are a component of Exelon 2020: A Low-Carbon Roadmap, the comprehensive environmental plan of PECO’s parent company. Exelon 2020 sets the goal of reducing, offsetting or displacing more than 15 million metric tons of greenhouse gas emissions per year by 2020. This is more than the company’s 2001 carbon footprint and is equivalent to taking nearly 3 million cars off American roads and highways.
PECO completed the solar credit purchase through a competitive Request for Proposal (RFP) process launched in October 2009. The RFP process was overseen by independent monitor Navigant Consulting, and approved by the Pennsylvania Public Utility Commission (PUC).
For more information visit www.peco.com/AEPS.
Based in Philadelphia, PECO is an electric and natural gas utility subsidiary of Exelon Corporation (NYSE: EXC). PECO serves 1.6 million electric and 486,000 natural gas customers in southeastern Pennsylvania and employs about 2,400 people in the region. PECO delivered 84.3 billion cubic feet of natural gas and 38.1 billion kilowatt-hours of electricity in 2009. Founded in 1881, PECO is one of the Greater Philadelphia Region’s most active corporate citizens, providing leadership, volunteer and financial support to numerous arts and culture, education, environmental, economic development and community programs and organizations.
Pennsylvania Solar Energy Program Highlights
March 5th, 2010
Posted by Shean Nelson in Pennsylvania
Under the direction of the Commonwealth Financing Authority (CFA), the Alternative and Clean Energy Program supplies loans and grants used for the development of clean energy projects in Pennsylvania. The program is administered by the Pennsylvania Department of Community and Economic Development in conjunction with the Department of Environmental Protection.
Highlights of the program are:
Eligible Applicants
• A corporation, partnership, sole proprietorship, limited liability Company, non-profit, or other commercial entity approved by the commonwealth financing authority.
• A non-profit corporation or association whose purpose is the enhancement of economic conditions in their community.
• A municipality, county, or school district.
Eligible Projects
• Solar projects, including facilities to generate, distribute, or store solar energy, as well as manufacturing or assembly facilities for solar panels or other equipment. Solar photovoltaic and solar thermal technologies are eligible.
• The development or construction of facilities used for the research and development of technologies related to solar energy.
Matching Funds Requirement
• Eligible applicants must provide evidence of commitment of matching funds on the project. The amount of the matching investment must be at least $1 for $1 of program funds awarded by the CFA.
Funds are distributed in three ways (loans, grants, or guarantees) .
Grant (Matching Funds To Help Facilitate Project)
• The maximum grant amount for a solar energy project shall not exceed one million dollars or $2.25 per watt, whichever is less. The CFA will consider projects over one million dollars if the project significantly impacts their goal to increase solar energy generation in Pennsylvania.
• The maximum grant for a solar research and development facility or a solar thermal project shall not exceed one million dollars.
Loan (Borrow Money to be Paid Back at Agreed Interest Rate)
• The maximum loan amount for a solar energy generation or distribution project shall not exceed $5 million or $2.25 per watt, whichever is less. In calculating the $2.25 per watt cost, CFA will not include the cost of any energy storage equipment. The CFA will consider loan requests over $5 million for projects that will significantly impact the Authority’s goal to increase the amount of solar energy generated in the Commonwealth.
• Loans will be repaid over a period not to exceed 10 years for equipment and 15 years for real estate.
• The interest rate for the loan will be fixed at the time of approval of the loan. The current interest rates are posted on www.newpa.com
Guarantee (Acts as a Loan Guarantee to Obtain Financing)
• The guarantee will be in the form of a letter of credit.
• Projects applying for the guarantee must invest a minimum of 10% in equity as part of the project financing.
• The term of the guarantee will not be more than 5 years.
• The amount of the guarantee will not exceed $30 million.
For all terms and requirements please refer to alternative energy funding sight:
Click Here.
Pennsylvania Sunshine Solar Rebate Program
March 5th, 2010
Posted by Shean Nelson in Pennsylvania
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The Pennsylvania Sunshine Program was originated to offer rebates as incentives for the installation of solar energy systems. The program was authorized in July 2008, by the Pennsylvania legislature and began accepting applications in May 2009, under the direction of the Department of Environmental Protection (DEP). The program will provide $100 million in rebates for residential and small business solar electric (solar photovoltaic) and solar hot water (solar thermal) installations. Rebates are set up on a declining scale as goals are met in installations. Rebates will only cover up to 35% of system installation charges. Residential Solar Photovoltaic Rebates
|
Small Business Solar Photovoltaic Rebates
| Step No. | MW in Step | 3-10 kW Rebate Amount ($/Watt) | 10-100 kW Rebate Amount ($/Watt) | 100-200 kW Rebate Amount ($/Watt) |
| 1 | 10 | $2.25 | $2.00 | $1.75 |
| 2 | 10 | $1.75 | $1.50 | $1.25 |
| 3 | 10 | $1.25 | $1.00 | $0.75 |
| 4 | 5 | $0.75 | $0.50 | $0.25 |
Residential and Small Business Solar Thermal Rebates
| Step No. | No. of Systems in Step | Rebate Amount |
| 1 | 1,500 | 25% |
| 2 | 1,500 | 20% |
| 3 | 1,500 | 15% |
| 4 | 1,500 | 10% |
Information Sourced From: www.state.pa.us
Highlighted requirements for the Pennsylvania Sunshine Solar Rebate Program:
Residential:
• Must be a Pennsylvania resident.
• Own the home and use it as primary residence (no vacation homes or investment real estate properties).
• Households are permitted only one photovoltaic and one solar thermal rebate.
Small Business
• Must be for-profit entity.
• Located within Pennsylvania.
• Have no more than 100 full-time employees.
• Small businesses can receive multiple rebates but the projects must be completed before they submit any another applications.
Both resident and small business applications must be submitted through a qualified installer on behalf of the applicant.
Please refer to this page on the Pennsylvania Department of Environmental Protection site for more requirements and a list of qualified installers: Click Here To Learn More.
Deregulation of Pennsylvania Electricity Markets
March 5th, 2010
Posted by Ronald Black in Pennsylvania
Electricity rates in Pennsylvania could soon be on the rise. Businesses, federal agencies, non-profit organizations, and residents could soon experience an increase in their electric bills. The increase in price stems from the deregulation of the Pennsylvania electricity markets.
In the 1990s Pennsylvania lawmakers moved from a regionally monopolized electricity market to a competitive electricity market. Pennsylvania consumers were paying about 15% more for electricity than the national average, so the decision to embrace a competitive electricity market was easy to make. Legislators restructured electricity generation to promote more competition. However to achieve the transition from a regional electricity market to competitive electricity market, legislators had to institute rate caps to protect from unpredictable price fluctuations and implement a “stranded costs” provision for electricity providers to pay for former infrastructure investments. “In return for the loss of their monopoly status, utilities were allowed to collect a surcharge above the price of electricity, otherwise known as stranded costs. Rate caps already have expired for six utilities statewide, and the transition period will end for all state utilities in 2011—ending the rate caps and the collection of stranded costs.” 4/9/2009, Pennlive.com, “Electricity Deregulation is a Win for Pennsylvania” –Elizabeth Bryan. As rate caps and the collection of stranded costs expire the Pennsylvania electricity market could experience unwanted changes during difficult economic times.
Electricity deregulation was established to promote competition and market efficiency. Unfortunately this is not always been the case. In 2001, California experienced the negative repercussions of a deregulated electricity market. California residents were forced to endure volatile electricity prices, while rolling blackouts plagued the state, and electricity could not be supplied during peak hours. For Californians, electricity deregulation equaled disaster.
The expiration of electricity rate caps could bring unwanted price increases to Pennsylvania. Consumers could experience percentage increases in their electric bills as regional rate caps expire. The following map exhibits regional Pennsylvania electricity territories and the electric providers that serve those areas. So far the consequences have been minor with rate cap expirations only affecting 14.1% of the Commonwealth. However from January 2010 – January 2011, rate caps for five major electricity service territories expire and the Pennsylvania electricity market will be completely deregulated.

Image Source: Pennsylvania Utility Choice (www.puc.state.ps.us)
Electricity rate caps for the Duquesne Light Company, PPL Electric Utilities, Inc., West Penn Power Company, Pennsylvania Electric Company, Metropolitan Edison Company, and PECO Energy Company expire between January 2010 – January 2011. This comprises 85.9% of Pennsylvania’s electricity market and could have an impact on electricity prices going forward. Fortunately Pennsylvania has learned from California’s missteps. Lawmakers are forcing utilities to diversify their electricity risk by securing both short- term and long-term contracts. This mixture of contracts could be helpful in mitigating risk, unlike California whose focus was concentrated on short-term contracts only. Regardless of the outcome, the Pennsylvania electricity market is one to monitor in the months and years to come.
Is there a way for Pennsylvanians to protect themselves from the upcoming deregulated electricity markets and future price uncertainty? The answer is yes. Pennsylvanians’ best solution is to embrace renewable energy. Solar energy can solve Pennsylvania’s electricity deregulation issue and act as hedges to potential higher electricity prices. Solar facilities level the playing field and allow businesses, federal agencies, non-profit organizations, and residents to participate in renewable energy, become less dependent on electric companies, and produce electricity during peak demand times. Parties that install solar facilities have the ability to achieve a fixed or reduced cost of electricity for an extended period of time, generate Alternative Energy Credits (AECs) (which are actively traded on Flett Exchange), and embrace clean energy that is absolutely vital to our environment. Pennsylvania also offers state incentives for affordable green energy. If you are a resident interested in solar click on, Pennsylvania Sunshine Program and for businesses interested in solar, click Pennsylvania Solar Energy Program to learn how to achieve clean energy.
Pennsylvania SREC Market Heats Up
November 24th, 2009
Posted by Ronald Black in Pennsylvania
Solar energy is growing in Pennsylvania. The Keystone State is diligently working to make solar power a significant part of its renewable energy policy. Solar developers, installers and integrators are migrating to Pennsylvania to capture a growing market share. The key factors that are contributing to Pennsylvania’s SREC market are:
1. Shortage of Installations – The shortage of solar installations in Pennsylvania could be beneficial to short-term SREC pricing. The lack of solar generators in PA could keep SREC prices buoyant as qualified buyers need to procure SRECs to satisfy Pennsylvania’s Alternative Energy Portfolio Standard (AEPS). This underlying bid could push SREC prices higher if the buyers are forced to pay Alternative Compliance Penalty (ACP). The cap for PA SRECs is 200% of the average market value for SRECs. With Pennsylvania SRECs trading a weighted market value of $297 in October on GATS, this could translate to $594 cap by the end of the energy year.
2. House Bill 80 and Senate Bill 92 – Can establish Pennsylvania as a leader in renewable energy and attract businesses that are environmentally conscious and support the state’s economy. These bills attempt to:
- Raise the amount of solar generated electricity sold in Pennsylvania from 0.5% to 3% by 2026. This amount of solar energy will power approximately 438,000 homes;
- Increase the amount of electricity sold in Pennsylvania from Tier I clean energy sources, such as wind, from 8 percent in the current statute to 20 percent in 2026 and;
- Make enough clean energy to power 2.1 million Pennsylvania homes by 2026;
- Extend the timeline for the Alternative Energy Portfolio Standards (AEPS) Act to 2026 and strengthen Pennsylvania’s competitive position by sending a strong, long-term market signal for new investment.
- Solar energy can also benefit Pennsylvania’s economy. The Solar Energy Industries Association (SEIA) estimates that the Advanced Energy Portfolio (AEP) will support over 14,000 jobs in the solar industry, with at least one third by Pennsylvania residents.
Source: http://www.PennFuture.org
3. PECO Request for Proposal – PECO is making a concerted effort to promote solar and make projects feasible in Pennsylvania. In October of 2009, the company issued a 6 Megawatt Solar Request for Proposal (RFP) and may enter into fixed agreements if the solar project and prices are right. PECO is committed to reducing, offsetting and displacing harmful emissions and supporting Pennsylvania’s Alternative Energy Portfolio Standards (AEPS). This RFP will total 80,000 solar alternative energy credits or 8,000 credits per year spanning a 10 year lifetime.
Pennsylvania has the opportunity to implement a competent renewable energy policy. Renewable energy can reduce the Pennsylvania’s addiction to brown power, upgrade electric infrastructure, create jobs and decrease harmful emissions. Progressing thinking and wise actions can steer the state in the right direction and make renewable energy a reality.
(201) 209-0234
info@flettexchange.com
