While some states generate five percent or more of their electricity from solar, Pennsylvania gets less than one percent. Yet almost 33 percent of the state’s greenhouse gases are created from generating electricity.* To reduce Pennsylvania’s greenhouse gas emissions, the state’s General Assembly is reviewing legislation it hopes will promote renewable energy innovations.
There are two key areas of legislation: one that looks to update the Alternative Energy Portfolios Act of 2004 and the other that seeks to permit community solar projects.
Increasing the use of renewable energy in Pennsylvania
Passed into law in 2004, the Alternative Energy Portfolio Standards (AEPS) set a renewable energy generation goal for Pennsylvania of eight percent, with 0.5 percent coming from solar by May 2021. The legislation obligates electric distribution companies (EDC) and electric generation suppliers (EGS) to meet these goals by purchasing alternative energy credits.
By establishing goals, the AEPS indirectly sets the price of alternative energy credits. Because Pennsylvania utilities have met the policy’s eight percent goal, the price for credits is currently low, reducing the public’s incentive to adopt solar. Pennsylvania could drive solar energy investment over the next few years by raising the goals for EDCs and ESGs, which would increase the price of the alternative energy credits.
Several bills that the General Assembly is reviewing seek to amend or replace AEPS, including:
- HB 1080 and SB 501, companion bills in the House and Senate, which increase renewable energy goals to 18 percent with a solar carve-out of 5.5 percent by 2026. The solar carve-out specifies that 3.75 percent comes from utility-scale solar and 1.75 percent from distributed generation. Potential benefits of the bills include:
- The creation of an estimated 50,000 jobs
- $15 billion in private investment in Pennsylvania
- A reduction of the wholesale cost of energy for all Pennsylvania consumers by increasing solar to five percent of the grid
- Negligible impact on the state treasury
- HB 1531, which proposes creating a new renewable energy policy that would require 15 percent of renewables with 2.5 percent derived from distributed solar by 2030
- HB 1394, which would increase the renewables goals in the AEPS to 15 percent by 2030 with a solar carve-out for distributed generation to grow to 2.5 percent by 2030
- SB 300, similar to SB 501, this bill proposes increasing renewables to 30 percent by 2030, with 10 percent coming from Pennsylvania-based solar projects
All of these bills seek to spur private investment in solar generation projects by raising the percentage of renewables that EDCs and EGSs must include in their mix of energy sources.
Giving lower-income residents access to solar power initiatives
To provide lower-income customers with the opportunity to access the benefits of solar power, a community solar project shares the electricity it generates with anyone who subscribes to the project or purchases some number of its solar panels.
The General Assembly is looking at ways to allow community solar in Pennsylvania through the following legislation:
- SB 472 and a related House bill, HB 1555, which would allow the development of community solar projects up to five megawatts (MW) in Pennsylvania. Developers could build solar installations from which residents could purchase subscriptions and pay for electricity at lower rates than they would pay to their utility.
- HB 1161 would allow EDCs to issue proposals for solar developers to build solar projects up to 20 MW within their service area and enter into long-term power purchase agreements (PPA). The EDCs could then solicit customers to subscribe to the facility to purchase a portion of the power and receive a credit on their electric bill, similar to a community solar program. The bill stipulates that a percentage of the power must be sold to lower-income customers.
- HB 1396 permits community solar and provides full net metering to subscribers.
As the General Assembly seeks to reduce Pennsylvania’s greenhouse gas emissions, legislators are reviewing new policies they hope will promote renewable energy innovations, including solar. As some neighboring states have shown, expanding the AEPS solar requirements can be an effective way of increasing private investment in solar. Similarly, community solar has the potential to help democratize access to renewable energy for all.
Although many of the proposed bills have sponsorship from both political parties, no meaningful progress was made in recent legislative sessions. The Pennsylvania solar industry remains hopeful that the state will join its neighbors in expanding access to clean renewable solar power for all.
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