Over the last decade, Pennsylvania has unfortunately ranked second-to-last in renewable energy growth (encompassing solar, wind, and geothermal energy), according to a new study by the Environment America Research and Policy Center.
There are two easily defined reasons for this:
- Pennsylvania met its renewable energy targets in 2021, so power companies are not incentivized to expand their renewable energy efforts further.
- The ACP (alternative compliance payment) in Pennsylvania is muddy and unclear. Power companies do not have a defined consequence for not meeting their renewable energy goals.
Because of this sad reality, Pennsylvania homeowners receive a far less fair price for their SRECs than homeowners in neighboring New Jersey.
At the time of this writing, Pennsylvania SRECs are at $31.25 according to SRECTrade.com (meaning the price hasn’t moved for a year). This is a very low value compared to neighboring New Jersey, where SRECs are valued anywhere from $90 to $110.
Luckily, as a Pennsylvania resident interested in owning your power and living in a less polluted state, you can take action to address this critical problem and raise the price of Pennsylvania SRECs.
TL;DR: Call your local representative and say that you support updating the Alternative Energy Portfolio Standard
If you’d like to know more about why this will work and why the price of SRECs is so low in PA, read on!
We Can Address this Problem Together!
State Senator Carolyn Comitta, the minority chair of the Senate Energy & Environment Committee, recently wrote an op-ed in the Delaware County Times on the need to update the AEPS, as well as how we can address this issue.
“Renewables are on the rise nationwide — on the coasts and in the heartland, in red states and blue — because they make sense. Compared to fossil fuel-generated power, renewables are better for our health, better for our environment, and in the long run (sometimes even the short-term too), better for our bank accounts.”
– Senator Carolyn Comitta
While solar energy has been booming in the United States, various policies in Pennsylvania have stunted its growth rate here in our home state, leaving us with adoption rates far lower than those of many of our neighbors.
In 2010, Pennsylvania was one of the top five solar states. Sadly, we’ve since fallen far down the rankings. PennEnvironment Research & Policy Center found that Pennsylvania is the 4th worst in the country for solar growth percentage.
According to a live data tracker published by the Solar Energy Industries Association (SEIA), Pennsylvania has only 61,000 solar installations versus 189,000 in New York state and 178,000 in New Jersey (as of November 2023).
Why Pennsylvania Is Falling Behind
“At our current rate, Pennsylvania will continue to fall far behind a nation that’s becoming more and more powered by clean energy every day. This means that we will miss out on critical opportunities to reduce the state’s climate and air pollution, as well as promising economic and job opportunities in the clean energy sector.”
– Senator Carolyn Comitta
Renewables are the future of energy. They now make up 17% of our total electricity in the U.S. Compare this with Pennsylvania, which in the last decade only brought online enough renewable energy to power 2% of the state’s homes, and only purchases 3% of renewable energy out of state.
Pennsylvania lags far behind in renewable energy progress, and not because of a lack of resources. According to data gathered by the National Renewable Energy Laboratory, Pennsylvania possesses enough solar capacity to power the state five times over.
The reason for this lack of progress is a bill that was passed 19 years ago (the Alternative Energy Portfolio Standard/AEPS) requiring that energy companies include 8% of power produced from “alternative sources” in their portfolios by 2021 .
Because there was oil industry lobbying involved, the word “alternative” was used in place of the word “renewable.” The “alternative” power production methods included natural gas.
The AEPS was progressive for its time. Pennsylvania was one of the first states in the union to mandate that any percentage of total power must come from renewable sources.
But the fact remains, “alternative,” is not “renewable.”
The AEPS required 8% of Pennsylvania’s power to come from “alternative” sources by 2021 when it was passed in 2004. Compare that to neighboring New Jersey, who’ve committed to generating 50% of their total power from renewable methods by 2050.
That 8% alternative energy target was hit two years ago and the state stopped seeking renewable energy sources.
Currently, the AEPS only requires that 0.5% of the total energy produced in Pennsylvania come from solar power. This number has stayed the same for almost two decades.
In addition, the SACP (Solar Alternative Compliance Payment) is muddy and confusing in PA.
The SACP is essentially the “slap on the wrist” that keeps power companies accountable. Unfortunately, it’s very easy for PA power companies to work around, since it’s very unclear.
In DC, the average SREC is worth over $400. But the ACP is set at $500. Therefore, each time a power company fails to buy an SREC, they essentially pay a $100 penalty per SREC they don’t buy.
PA’s ACP is set at 200% of the average SREC price paid by providers in the billing year. Which ends up being very convoluted and easy for power companies to fudge at the end of the year. It’s easier for then to pay the fine than to buy SRECs as the program intends for them to.
All of this combined means that Pennsylvania homeowners who own solar panels aren’t getting a fair price for their SRECs compared to surrounding states. There’s low demand for SRECs and high availability.
Pennsylvania, as the second-to-last ranking state in terms of Renewable Energy Development, desperately needs to update the AEPS. Taking action will protect and create energy jobs, address climate change, and ensure reliable access to power for all Pennsylvanians.
Governor Shapiro has introduced PRESS (the Pennsylvania Reliable Energy Sustainability Standard), which would raise Pennsylvania’s renewable targets to 35% and create a clear path to implimentation for utility companies.
Updating the AEPS Creates a Financial Incentive for PA Homeowners
If PRESS were passed, these bills would update the required amount of solar energy utilities were required to hold in their portfolios under the Alternative Energy Portfolio Standard.
The easiest way for power companies to increase their solar power energy percentage would be to buy it from home and property owners who’d invested in solar energy. Pennsylvania SREC prices would likely double or triple, giving solar system homeowners a return on their SRECS comparable to neighboring New Jersey.
Higher-priced SRECs mean Pennsylvania solar system owners can pay back and own their power generation in a shorter timeframe.
If you’re a solar system owner in Pennsylvania or you’re looking to take the plunge and start producing your own power, it is in your best interest that these bills get passed.
By raising the solar standard, we force power companies to increase the amount of solar in their portfolios. One of the easiest short-term ways they’ll meet this requirement is by buying SRECs from people who are already producing power.
Pennsylvania SRECs would become multitudes more valuable overnight.
If you’re unfamiliar with Solar Renewable Energy Credits (SRECs), these credits are automatically generated per 1000 kilowatt-hours (kWh) a system produces. Homeowners can sell or trade them.
The price varies based on supply and demand, but one thing’s for sure:
SRECs are worth much more in New Jersey than in Pennsylvania.
The price for one Pennsylvania SREC has fluctuated between $20 to $35 for the last few months. The price for one New Jersey SREC, meanwhile, is currently anywhere from $90 to $110. In practical terms, this means that someone living in New Jersey with a 10 kW roof-mounted system is earning at least $2400 a year for their SRECs, while someone next door in Pennsylvania is earning just over $300.
So, How Can You Help?
PRESS has unfortunately stagnated in the Pennsylvania state legislature because of opposition from the coal/oil and gas lobbies. But Pennsylvania homeowners can help get the ball rolling again.
When we interviewed Liz Robinson from the Philadelphia Solar Energy Association, we asked how the average person could help drive positive change for the AEPS.
“Make a phone call to introduce yourself to your representative. Set up a Zoom meeting with them and ask them to co-sponsor the bill. Face-to-face communication is way more effective than email. They need to know how strong the interest is.”
– Liz Robinson, PSEA
It’s critically important that we gather cosponsors and expand the support base to get these bills passed.
Pennsylvanians hold the key to significantly increasing solar energy development and building personal wealth in the process. Achieving 35% renewables by 2035 is not wishful thinking. By rallying behind PRESS, we contribute to a brighter and cleaner future for Pennsylvania.
It’s time to put power over our energy back in the hands of the people.
If you need help finding/contacting your legislator, Legis has a handy guide that you can use here.
At Exact Solar, we don’t believe that solar power is a political issue. The economics of solar power speak for themselves. This isn’t about red vs. blue. This is about the people of Pennsylvania standing up to a stagnant power industry and demanding to walk into the future of energy with the rest of the country.
As a Pennsylvanian interested in solar energy, you can help us accelerate toward a brighter future and raise the price of Pennsylvania SRECS, making the power your solar system produces much more valuable.