Lack of Subsidies Clouds Future of Solar Power

Jul 31 - The Patriot-News

Perhaps the thought of using solar energy in central Pennsylvania is tempered by a memories of gray winter skies. Not to worry, advocates for the solar industry said.

For much of the year, Pennsylvania has as many hours of sunshine as Florida.

However, supporters of the technology do worry about the Rendell administration's approach to solar electricity, even though the governor has a solar panel on the roof of his residence in Harrisburg.

"Nearly all the surrounding states treat their residents better on solar," said Darrell Brubaker of Wilkes-Barre, president of Solar Power of America, formerly known as Million Solar Roofs.

Advocates of solar power readily acknowledged that Harrisburg will never be Tucson. But many Pennsylvanians could fill a surprising percentage of their electricity needs -- 50 percent or more -- through the use of rooftop solar panels, they said.

The sun makes electricity through a bit of alchemy involving chemical-coated silicon panels. Photons in sunlight cause electrons in the silicon to move around, creating electricity.

If the system makes too much electricity for the home, the excess goes directly into the electric grid for use by others. The electric meter then runs backward, crediting savings to the homeowner.

Trouble is, even with free and plentiful sunlight, solar systems can cost as much as $50,000 for a home.

Pennsylvania, unlike New Jersey and most other states it borders, has no state subsidy program for residential solar energy. That hurts solar electric development here, advocates said.

New Jersey gives subsidies to homeowners of up to 70 percent of the cost of a photo-voltaic system.

--New York pays 40 percent to 70 percent.

--Delaware pays 50 percent.

--Maryland pays 20 percent.

--Ohio pays up to $25,000.

Among Pennsylvania's neighbors, only West Virginia doesn't offer a subsidy for solar systems. The subsidies have been popular, especially in New Jersey, and some of the programs have exhausted their budgets.

Todd Foley is director of market development for BP Solar, which manufactures solar systems in Frederick, Md. Solar subsidies "capture the public value" in deploying solar electric roof panels, he said. Solar panels produce clean electricity at peak periods, reducing the need for utilities to run their most expensive -- and sometimes dirtiest -- power plants, cutting air pollution, he said.

Dale Johnson, a certified solar system installer in Mechanicsburg, said the high cost of solar systems stem from the cost of materials, especially silicon, but also from the lack of economies of scale. That is another reason cited for the subsidies -- to create greater demand for solar energy, which is expected to lower costs.

But the Rendell administration is unmoved, saying it will not consider a direct subsidy program for solar energy.

Instead, it is relying on the Alternative Energy Portfolio Standards, or AEPS, which the Legislature approved in 2005. These require the state's utilities to obtain certain percentages of their electricity from renewable fuels, such as wind or solar, by the year 2020.

Beginning in 2010 or 2011, depending on when their rate caps expire, utilities must gradually increase the amount of electricity they get from solar sources until it totals 0.5 percent of their total power, or between 400 and 800 megawatts. That is equivalent to a medium-sized coal- or gas-fired power plant.

"This will create jobs and economic incentives in Pennsylvania," said Charlie Young, a spokesman for the state Department of Environmental Protection. "Secondly, this will lower electric rates for all rate payers, not just those who can purchase solar equipment for their homes."

Asked how the administration expected utilities to meet the solar requirement without thousands of roof-top solar panels, Young said the hope is they will build "utility-scale" solar generation, meaning large arrays of solar panels.

Scott Surgeoner is a spokesman for FirstEnergy Corp. of Akron, Ohio, which owns Metropolitan Edison Co., Pennsylvania Electric Co. and Penn Power Co. in Pennsylvania. He said not much is going on with solar energy now because "we have the luxury of some time."

Met-Ed, which serves customers in Lebanon and York counties and a few other places in the midstate, has a program to help commercial customers hook up solar systems to the power grid, but no subsidy program, he said.

PPL Electric, which serves customers in Dauphin and Cumberland counties, also doesn't have an incentive program, according to spokesman George Lewis. PPL built about 40 solar electric systems for low-income customers as part of its 1998 restructuring settlement. But it discontinued the program because electric savings did not offset installation costs. PPL has four customers with solar electric panels connected to the power grid, he said.

One of those is a 2-kilowatt unit on the Penn Future building at 610 N. Third St. in downtown Harrisburg. John Hanger, director of the environmental policy group, said it cranks out electricity even on cloudy days.

Excess electricity produced on sunny days is sold to Green Mountain Energy through the PPL network at a rate about twice what residential consumers typically pay to PPL. Green Mountain then uses it to serve customers who buy its premium-priced green energy service.

The solar panels used by Penn Future and at the Governor's Residence were subsidized by the Sustainable Development Fund of Philadelphia, which was created as a condition of settlement of the 2000 merger of PECO Energy and Unicom that created Exelon. Some $4 million was allocated to small-scale solar electric projects. As of the beginning of this year, all that money has been assigned to projects.

Most of the 176 approved projects are in Philadelphia and the suburban area, but a few demonstration projects, such as those at Penn Future and the Governor's Residence, are elsewhere in Pennsylvania, according to Roger Clark, who headed the project for the Sustainable Development Fund. The subsidies covered 45 percent to 50 percent of system costs, he said.

Clark said he hopes to get additional funding out of the merger of Exelon and Public Service Electric & Gas in New Jersey once it gets final approval from the New Jersey Board of Public Utilities. About $7.2 million is earmarked for the Sustainable Development Fund, but not all of that would go to solar subsidies.

Some solar advocates have all but thrown in the towel on the prospects for solar electric in Pennsylvania and are focusing their energies on solar water heating, which has much cheaper up-front costs.

"Because there are no incentives, solar [electric] is not viable in Pennsylvania at this time," Brubaker said. "But solar hot water may be."

Maureen Mulligan of Shermans Dale, a former PUC employee who is a communications consultant for renewable energy issues, said solar hot-water systems cost between $4,000 and $6,000 and might qualify for a $2,000 federal tax credit.

"It makes solar hot water more cost-effective," she said.

Dale Johnson, who is certified as a solar electric system installer and put a solar panel on his home in Mechanicsburg, retired from his full-time job as an electrical engineer at PPL recently and is moving to Burkina Faso in Africa to do mission work.

He said he could easily do solar installations full time if he moved to the Philadelphia area or New Jersey. But now he'll concentrate on renewable energy projects of all sorts in Africa.

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