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Solar Policy is Social Policy

Because of strong federal policies that have facilitated the increasing adoption of renewable energy technologies, we are now at a point where states and local governments are picking up the torch to carry their communities towards 100% clean energy. As recently as 2018, Pennsylvania and New Jersey legislators revamped and improved upon some outdated policies that were seen by many to hamper faster growth of solar energy in the state.

This new energy transition is important for a few key reasons. It puts authority more into the hands of each community to find the best energy solutions for themselves. And it provides more opportunity for each individual to play a greater role in the health and direction of their lives. In this way, technical energy policy plays a dual role as social policy, too.

But this requires that communities accept this responsibility and let their views be known. Because Pennsylvania and New Jersey have followed different paths with respect to renewable energy adoption, current and future policies are not all the same. However the power of the voice of the voters is only getting stronger and more important in each state.

Pennsylvania Policy

This is a brief timeline of the beginning of Pennsylvania renewable energy support and the most significant changes since.

As far back as 2004, Pennsylvania establishes the Alternative Energy Portfolio Standard (AEPS), requiring a conservative 18% of energy produced to be from renewable sources. It also includes the following:

  • A solar set-aside that peaks at 0.5% in 2020.
  • The Solar Alternative Energy Credit (SAEC), which is the mechanism by which utilities can meet these standards by purchasing “credits” from approved solar energy generators such as homeowners or businesses. See our SREC page for most the most current details.
  • Net metering. This allows solar homeowners to carry forward excess generated solar power (more than may have been used in a given month) until the end of a year. Should there a net total excess, the utility is bound to reimburse that at a predetermined rate.

In 2010 , the state enacted a new and novel program. The Pennsylvania Sunshine Solar Rebate Program was administered by the state Department of Environmental Protection (DEP). Before solar energy systems became as popular as they are today, costs were significantly higher, and a this program was needed in order to kick start the solar revolution in the state. The original rebate allocation was met in 2013, ending the program. It played a big role in the state approaching 500 MW of solar energy installed today.

In 2018, the state began to enforce new rules that further improve the value of rooftop solar. In shorthand it is referred to as Act 40, and is closes the borders for the future disallowing utilities from buying SAEC credits from our neighboring states. This enhances the value of each solar system installed and to be installed within the borders, as nearby competition is removed.

Looking forward into 2019, there are three areas that we at Exact Solar will watch closely. Our goal is to be a part of the conversation and pushing these policies forward. As well, we will be advising our friends and customers in advance so they, too, can be a part of advancing solar policies in the state. Expand these to see more.

Alternative Ratemaking methods
Renewable energy advocates want to change the status quo for the Public Utility Commission (PUC) to alter the way the state allows utilities to value alternative energy and energy efficiency. A new method is needed that will benefit both the citizens and the utilities. There are states that have set successful precedence in this area.
Improve PECO customer access
As solar has expanded, it has become more clear we need to improve the ability and cost for PECO customers to solarize their homes and businesses. Currently, across the utility’s region the infrastructure and the procedures make it more costly and time consuming for many homeowners choosing to go solar.
Updating the AEPS
With renewable energy installations booming and costs declining rapidly, advocates are confident now is the time to significantly boost Pennsylvania’s solar energy production targets. In combination with other efforts, such as the alternative ratemaking, there are clear paths to much higher solar energy installations that deliver lower overall electricity costs for everyone.

New Jersey Policy

This is a brief timeline of the beginning of New Jersey renewable energy support and the most recent, significant changes since. Many incentive and policies have been updated more than once.

All the way back to 1999, New Jersey established its Renewable Portfolio Standard (RPS). This made the state a leader in the U.S., by requiring by the year 2030 that up to 50% of the energy sold within the state to be produced via renewable sources. It also codified many of the existing incentives and programs that have been changed a number of times since. As the renewable energy industry has grown, the state has been aggressive and frequent in updating policies.

As of 2008, the state enacted a new property tax exemption allowing homeowners with solar PV to apply for a certificate from their local assessor to exclude the solar energy system value. This same year, the state also began allowing owners to request a sales tax exemption that could apply to the purchase of a solar system.

In 2012, the state updated the Solar Renewable Energy Credit (SREC) annual rate schedule through the end of 2028. See our SREC page for most the most current details.

Big changes in 2018. The state considerably modified many programs and set expectations for the future of renewable energy policy. Expand these to see more.

Net Metering Policy
Net metering policy has been altered for the third time. The program that allows residents to take month-to-month credit for excess solar energy production, also allows for full compensation at the avoided-cost of wholesale power at the end of an annualized period. The most recent modification removes the mandate for utilities to offer net metering once they achieve the rate for 5.1% of what they each sell. They are free to continue offering the incentive afterwards, if they choose.
RPS solar carve-out
The state modified the solar carve-out for the RPS. While maintaining the renewable energy target of 50% by 2030, the new policy escalates the solar portion each year starting at 4.3% in 2019 and peaking at 5.1% in the years 2021 to 2023.

Looking forward into 2019, the solar industry is working to advise on the third aspect of the 2018 policy changes – the phasing out of SRECs once limits are reached. It is anticipated those limits could be reached as early as the first quarter of 2019. Many organizations and advocates are pressing hard to lock down the follow up to the highly successfully SREC program, and we are working closely to engage and monitor the progress.

Stay tuned as we follow all of these clean energy initiatives and update everyone of the progress and the needs for community input.

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