Solar States Blog

Time and again, we hear about a new “solar project” in the works.  The plans for these large-scale installations are always quite grand and include the promise of profits in the near term.  However, more often than not we don’t see projects coming to fruitarian.  For some reason, great projects are not growing the wings they need to get off the ground.  Obviously, it all comes down to money.

Consider the finances of a solar project.  Per kW installed cost, federal tax credits and state incentives are fairly similar across the board.  In terms of income, we have the value of generated electricity, which is usually chump change compared to the big hitter…  SRECs.  Yes, the government’s answer to the age old question “How do we make them comply?”  For those of you unfamiliar, there are hundreds of websites, but generally speaking, Solar Renewable Energy Credits (SRECs) are credits generated for every MW-hr of photovoltaic derived energy.  The owner of the panels owns the credits and is free to sell them.  Buyers of credits are the large electricity generators (PECO, PennPower, Edison, etc.)  The generators will buy credits to make up for any shortfalls they have in meeting the state mandated renewable energy standard.

Now lets get back to SRECs.  How much are they worth?  Well, it depends where you live.  Check out the table below for June 2010 prices:

Prices for SRECs vary from state to state ($290 to $665).  Between states that all trading of SCRECs across state lines, the prices are more normalized, however, the driving forces for the markets are still ambiguous.  That’s another word for unpredictable or volatile.  Two words that investors don’t like to hear.  Of course the laws of supply and demand come into play here, however there is no means of predicting where prices will go.  So, if you were an investor and the return on your investment was based on a volatile and unpredictable commodity would you feel safe investing your money?  Is investment in solar projects the equivalent of visiting the tables in Vegas or AC?

So, although the state regulators had good intentions with the renewable energy portfolios, incentives for projects and mandated penalties for non-compliance, the plan had a huge hole.  Since SREC prices can not be counted on, the driving forces thrusting us into the age of renewable energy have sputtered.  Is there a solution?  Of course…  1) Renewable Energy Portfolio standards need to be nationalized; 2) A “bottom price” needs to be placed on SREC prices.  By nationalizing the programs, the disparity between neighboring states will be normalized.  Meanwhile a bottom price will reduce a portion of the risk associated with investment in solar projects.  If governments are really serious about energy independence and investing in the green future, they too will soon see the shortfalls in the current system.  Lets hope for change.

Sandip D. Shah, Ph.D.

The Amish way of life has learned to live side by side with secular residents in Lancaster County for years, despite differences in the way the two cultures choose to live. But while Lancaster’s newest proposed addition will involve electricity, it shouldn’t ruffle too many Mennonite beards as this improvement is both respectful to the environment and completely silent.

Suburban Philadelphia’s Community Energy unveiled plans this week to build a $20 million solar array on 40 acres of farmland in East Drumore Township, Lancaster County. The solar farm would generate enough electricity to power 900 homes using nothing but the sun.

Amish ingenuity to use natural resources to create energy is at the heart of this simple innovation. And with the productivity of solar panels increasing everyday, it is likely 900 homes is a conservative estimate over the 25-year lifespan of the array.

The success of this plant will create construction jobs and help diversify the state’s coal-heavy energy portfolio. Keep it here for updates on this and other projects around the state.

As Solar States founder Micah Gold-Markel continues the fight to bring solar energy to Philadelphia, Solar States is bringing some new voices to the conversation. This month, Solar States is hosting monthly investor salons to talk to alternative energy investors and venture capitalists about the state of the alternative energy marketplace and what it will take to make the solar dream a reality in Philadelphia.

Solar States would also like to bring you in on the conversation. That’s why we will be video taping these meetings and taking your comments on the Solar States blog. These videos will start to appear on the blog in early December, after the first Salon takes place. Keep all eyes glued here for more information on these exciting investment meetings.

Solar States is at it again! With students at the Science Leadership Academy finishing up another great semester of solar design and photovoltaic research, we thought long and hard about what our next step should be in bringing solar education and industry to the Philadelphia area. But in the end, it came down to one simple question: what comes after high school?

College. And in college, the first classes you take are the intro classes, the 101 classes, with names like “Intro to Psychology” and “History of Early America.” This is Green Energy 101.

GREEN BY EXAMPLE is our newest course, teaching you the basics of LEED certification, weatherization, solar and other groundbreaking innovations. Taught by LEED expert Sam Klein (LEED For Homes Quality Assurance Designee), GREEN BY EXAMPLE can show you the investments you should consider and the ones you need to make in order to become LEED certified or just save your family a few bucks. And with guest speakers from the Philly solar and green building communities, we are making sure you are getting the most up-to-date information.

Before Philadelphia students and prospective installers can get on a roof and install solar panels, they have to understand the basics of home and commercial energy. There are natural, creative ways to plug the energy leaks that are harming your environment and draining your wallet. Come learn about them.

And even if you are afraid of heights; even if you can’t tell an inverter from a ballast mount; even if you have no interest in solar at all, wouldn’t you like to know how to stop your house from hemorrhaging energy and costing you a fortune? Get your prerequisite energy knowledge out of the way with Green By Example.

Ok Sales Pitch over. Thanks for your interest in our mission and if you are interested in signing up, we will see you in class!

GREEN BY EXAMPLE: An introduction to Alternative Energy, Weatherization and LEED For Homes

When: Saturday, June 6th, 2009 / Saturday, June 13th, 2009 / Saturday, June 20th, 2009 / Saturday, June 27th, 2009

Where: Northern Liberties Community Center, 700 N. 3rd Street (at the corner of 3rd and Fairmount Sts.)

Time: 9:30am-12:30pm

Cost: $350 for the entire 4-week program. There are 5 spots available to low-income participants.

I know it sounds like a cheesy sixties travel song or the latest tourism campaign but Pennsylvania Sunshine may brighten our state in another way.

As an add-on to Gov. Ed Rendell’s Alternative Energy Investment Act, Pennsylvania Sunshine provides $100 million in grant funding for commercial and residential solar projects. This bill, which was passed after the Commonwealth Financing Authority board voted unanimously last week, knocks down the largest barrier to solar energy in Pennsylvania. High upfront costs for solar arrays, combined with Pennsylvania’s already high labor and building costs have prevented solar development from taking off.

Funding will be available on a first-come-first-served basis, with applications available through the Department of Environmental Protection as early as next week.

This legislation comes as a huge sigh of relief for companies like Solar States, interested in furthering solar development. The fact is that solar energy is not yet cost effective for up-and-coming businesses to afford in the short term. The Pennsylvania Sunshine law allows for investment into energy independence; an investment that is going to become more and more important as rate caps disappear at the end of 2010.

The Pennsylvania solar community came out in force in support of the bill last week, as installers, potential developers and displaced solar company employees gathered in Harrisburg. Nine months ago, when Rendell’s energy policy was passed through the state house, install and development companies sprung up across PA, hoping to take advantage of promised rebates. But by the first of the year, no rebates had been issued and many installers had to lay off employees.

With the economy being in the shape it is in, cities and municipalities have been scrambling to keep development dollars flowing in. Philadelphia, for example, has had bills flowing through City Council since December to scale back generous tax abatement programs. But fears about negative impacts on development prevented support from the Mayor’s office. Pennsylvania Sunshine was propped up alongside federal stimulus funds as better incentives for green development.

Lastly, this law is great news for the city’s engineering students and solar technicians-in-training counting on early investment into solar energy to create a bedrock of the Philadelphia solar industry. Because, hey, someone has to be first.

Check out the full literature of the Pennsylvania Sunshine Law, as well as applications for inclusion here.