Solar supply shines past demand in Pennsylvania

Apr 9 - McClatchy-Tribune Regional News - Stephanie Reighart York Daily Record, Pa.

Three years ago, the solar power industry in Pennsylvania took off. Residential and small business customers tapped into the growing number of incentive programs that made it more affordable to install solar panel arrays, eliminating their monthly electric bills.

The financial support came from sources at the state and federal level, including the Pennsylvania Sunshine Solar Program.

First available in 2009, the rebate fund was popular. In one year the $80 million payback source was gone, said Mike Barnes, the president of I Need Solar, a solar installation company in Mechanicsburg.

"We built a lot of (solar) systems that year," said Barnes, who also teaches alternative energy at HACC-Harrisburg as an adjunct professor. "But the increased supply flooded the market and now, as a state, Pennsylvania is way overbuilt."

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As mandated by the state Alternative Energy Portfolio Standards Act originally passed in 2004, Pennsylvania needs to produce 41 megawatts of solar energy in 2012, Barnes said. The current capacity installed in the state can produce 150 megawatts.

"Three years ago, there were 300 (solar) systems built in Pennsylvania," said Ron Celentano, the president of the Pennsylvania Chapter of Mid-Atlantic Solar Industries Association. "Now, there is over 6,000."

That jump in production was a direct result of financial incentives like the Sunshine Program, Barnes said.

Steps are being taken to gradually ramp up the demand for solar to meet the already high levels of supply.

In January, Rep. Chris Ross (R-Chester) got his proposal, HB 1580, into the House Consumer Affairs Committee. The bill would update the existing Alternative Energy Portfolio Standards Act. It includes provisions to increase the rate of solar energy purchased by utilities starting in 2013. The current legislation does not mandate an increase until 2016.

"The act was originally passed . . . when there were no incentives," said Maureen Mulligan, a lobbyist and policy expert with the Pa. Solar Industries Association. "Now the demand for solar is so low compared to the supply."

The crash in solar production won't last forever, said Ross. ". . . We want to protect the market from falling into a boom, bust, boom cycle."

While residential solar installations have stalled, corporate America is catching on, said Barnes. Large companies are investing in solar power because, he said, after the initial investment, there is a guaranteed energy source with low operating costs for decades.

Craig and Laura Horowitz have been powering their home in Spring Garden Township with solar energy since June.

"It costs more up front," Craig Horowitz said. "Especially with the longer payback time."

The Horowitzs originally estimated an 11-year payback time frame -- essentially the amount of time for the savings in electric bills to surpass the cost to install the system. With the surplus market, that number could be more like 15 years.

Craig Horowitz doesn't seem to mind.

"America has ADHD when it comes to energy policy," he said. If they can't see the payoff in the near future, they move on to the next thing, he said.

Part of the problem, Celentano said, is the lack of understanding that an increase in solar power will benefit other utilities.

"A mixed system is best," said Celentano. "And solar power is a wonderful complement to the electric grid."

Like most solar systems in homes and businesses, the Horowitzs are "grid-tied." They are hooked to the electric grid used by everyone with a two-way meter. When they need more power than their panels can generate, like after sunset, they pull it from the grid like they always have. Any excess power they create during daylight goes into the grid, helping utility companies meet the demand for electricity.

Solar panels work best on hot, clear summer afternoons in Pennsylvania. That also is when demand for electricity is highest, said Celentano.

The electric grid is set up for the cheapest source of energy to be used first at any given time of day.

"In the morning, that's coal or nuclear power," said Celentano. "But, by midday, solar is at its peak and at its cheapest."

Now that state funding for solar energy is no longer a guarantee for residents and the spotlight is on the natural gas boom, the future of the solar industry in Pennsylvania is in question, said Barnes.

"But I am confident that in 15 years or so solar will be at a price where it's the cheapest way to make electricity."

House Bill 1580 status

House Bill 1580 is an effort to try to stimulate demand for solar energy by increasing the requirement of how much solar energy utility companies must purchase.

But if it doesn't pass by the end of June, the state will lose jobs, said Maureen Mulligan, a lobbyist and policy expert with the Pa. Solar Industries Association.

Also, the payback time -- essentially the time it will take for electricity bill savings to exceed the installation cost of the system -- will lengthen for current solar panels owners, she said.

For example, Mulligan said, her home is powered by solar panels. She anticipated to earn back the cost of installation in 9 to 10 years.

"Now it's closer to 15," she said.

Currently, the state law will require all electric utilities to purchase 0.5 percent of their annual output from solar energy in 2020.

House Bill 1580 would accelerate that process. For example, currently, by 2016 utilities would need to purchase 0.25 percent from solar energy. The bill would see that happen sooner and stimulate demand.

In other words, HB 1580 would allow the market to reshape now rather than later, said Rep. Chris Ross (R-Chester), the bill's author.

"We're looking for leadership from the House and the Governor's office," Mulligan said.

Neither Governor Corbett nor the House Consumer Affairs Committee chair, Rep. Bob Godshaw (R-Montgomery) supports HB 1580, said Celentano.

"But we have made a lot of compromises," said Celentano. "Now we are more optimistic that it will get legs and move through."

Gov. Tom Corbett's concern is the increase to ratepayers, wrote Eric Shirk, deputy director of communications in the governor's office, in an email.

Any person who purchases electricity is a ratepayer.

As the public utilities are mandated to purchase more solar, they push the cost to their clients, said Celentano.

Over the life of the bill, Celentano estimates the cost to ratepayers will be $0.04 per month.

Online

For details on solar options in the state, try these websites:

pennfuture.org

paaeps.com

Is solar power right for you?

If you are interested in installing solar panels on your home, there are a few things to consider first.

How much are you willing to spend?

The cost of solar panels varies depending on the size of the system, what incentives are available and how much power you want to offset. Most installation companies surveyed provided a general quote near $40,000.

What is the condition of your roof?

The best roof for solar panels faces south, is completely unshaded and has been recently redone. A flat or angled roof doesn't matter too much because panels can be installed to correct for pitch.

You will need about 100 square feet for every kilowatt of power you want to generate.

The average life of an installed solar system is 30 years, similar to a new roof. If your roof will need replacing in 10 years, adding solar panels now will greatly increase the cost.

Reduce your energy consumption now

Renewable energy is expensive. Reducing your consumption means any solar energy generated will off-set more of your usage.

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