Gov. Rendell Steps up his Administration's Push for More Solar in PA

By Edward G. Rendell

(a PDF version of this article is available here: http://www.philly.com/philly/opinion/20100825_Let_sunshine_into_Pa__power_goals.html)
The solar-energy industry is growing rapidly and creating thousands of jobs
nationwide. But Pennsylvania is falling farther behind in the race for these
green jobs. When it comes to producing clean electricity from the sun, other
states are leaping ahead of the commonwealth.

Pennsylvania requires that only 0.5 percent of the electricity we use will
come from the sun as of 2021. By comparison, New Jersey will require that 4
percent of its electricity come from solar generation by 2021, Delaware has
set a target of 3.5 percent by 2025, and Maryland's standard is 2 percent by
2022. Even Illinois, a ranking coal producer, has a goal of 1.5 percent by
2025.

What does that mean for the Keystone State? It means we are less likely to
attract a major solar-related economic-development project - or to keep the
more than 600 solar businesses we already have, which offer jobs in
research, manufacturing, installation, and maintenance.

If we want to keep those businesses and the jobs they support, we must
create a business environment that helps them expand and attracts companies
that are looking to relocate.

That's why we must increase solar-energy share in the state's alternative
energy portfolio standards. Passed by the legislature in 2004, the standards
jump-started a green revolution that has made Pennsylvania one of the
leading states in renewable-energy development. Twenty-five thousand
Pennsylvanians are working in renewable-energy jobs, while the state's
consumers and businesses have invested at least $600 million in solar-energy
projects.

House Bill 2405 would wisely increase Pennsylvania's solar requirement to 3
percent, but support for the bill has been hard to come by in the
legislature. Even so, a more modest increase would still be worthwhile. A
1.5 percent target, for example, would triple our existing requirement and
make Pennsylvania more competitive in the sector.

There are billions of dollars being invested in the solar-energy industry.
Despite the global recession, the American solar industry grew substantially
in 2009, with revenues increasing by 36 percent and generating capacity by
37 percent over the previous year. What's more, the investment community is
bullish when it comes to solar; venture capitalists, sensing its incredible
growth potential, invested $1.4 billion in the industry last year.

Besides putting Pennsylvania in a position to capitalize on this growth,
increasing the state's solar-energy requirement would help consumers control
their electricity bills. The cost of solar energy has dropped by half from
the levels of just a few years ago. In fact, solar energy now costs less
than electricity from new nuclear power plants, according to a recent Duke
University study.

When the owner of a business or home installs a solar system, he or she can
count on benefiting from the power it provides at a stable price over the
lifetime of the panels, or up to 25 years. That lessens the volatility of
energy prices and lowers electricity costs, offsetting the costs of solar
panels.

Next month, when the legislature returns to Harrisburg, we will have a final
opportunity this year to ensure a robust market for solar-energy development
in Pennsylvania. We may not be able to achieve a 3 percent requirement, but
there is widespread support for a 1.5 percent target. Even that would go a
long way toward making Pennsylvania more competitive with its neighbors,
attracting companies and jobs rather than losing them to states where the
sun shines brighter.

Edward G. Rendell is the governor of Pennsylvania.

http://www.philly.com/philly/opinion/20100825_Let_sunshine_into_Pa__power_goals.html

Update on PASEIA’s most important policy initiative this September: SOLAR LEGISLATION!

We must now mobilize both the manpower and finances to lobby for a solar bill for Pennsylvania.

Please visit the members area of the MSEIA website or email paseia@mseia.net to get copies of the following documents:

1. Notes from a steering committee call re: Strategy and Background for the Solar Bill.

2. MOST IMPORTANTLY: A FUNDRAISING LETTER which we need to start getting out to all of our contacts ASAP, in order to mobilize the $25,000 required to finance our efforts to pass the bill. Contact your suppliers, distributors, partners, and fellow members, encouraging them to contribute to ensuring PA’s solar future. Please let us know who is willing and interested in taking an active role in supporting this initiative, and hope that all of you will consider supporting it financially as well.

IF YOU HAVE NOT RENEWED YOUR MEMBERSHIP FOR 2010, PLEASE DO SO AT THIS CRITICAL TIME! A membership application can be found at www.mseia.net, and if you have contacts that are considering joining, please urge them to do so NOW to support this initiative. Membership is critical to PASEIA being able to support this policy work and lobbying.

In addition to fundraising, please let us know if you will be willing to join a lobby day(s) in Harrisburg and make calls to your representatives, representatives in whose districts you have projects and customers (particularly in the SEast – Chester, Bucks and Delaware counties) and local media and Chambers of Commerce. All of these avenues are important to getting the bill passed, please keep us posted.

Thank you!
Kira

Kira Costanza
Secretary
Interim Steering Committee
PA Solar Energy Industries Association (PASEIA)
www.mseia.net
www.paseia.blogspot.com

PASEIA Lobbyist Pushes "Solar-Only" Bill to House Committee

Note: this is also available for members in PDF format in the PA Members Section of the Website under "Announcements" : http://www.mseia.net/MEMBERS/Announcements.php

Given by Maureen Mulligan-PASEIA Lobbyist, Sustainable Futures Communications

House Majority Policy Committee Hearing on Alternative Energy

July 28, 2010

Thank you Chairman Sturla and the Majority Policy Committee for your interest in alternative energy and solar energy in particular. My name is Maureen Mulligan and my energy consulting business is Sustainable Futures Communications. I have represented the two major solar trade associations: Pennsylvania Solar Energy Industries Association, a division of Mid-Atlantic Solar Energy Industries Association and the Solar Alliance since 2003, shortly before the original Alternative Energy Portfolio Standard (AEPS) became law in 2004. Thank you for advancing solar energy and other renewable energies in our state through your legislative efforts over the last several years. Between the two organizations, I represent more than 60 solar businesses, many of whom are currently operating in Pennsylvania, while others are awaiting the outcome of House bill #2405 or similar legislation before entering the Pennsylvania market.

First, I would like to briefly review some of the benefits of solar energy:

· Solar deployment can help avoid costly transmission line upgrades and help alleviate grid congestion.

· Solar helps break our reliance of foreign energy sources coming from unstable countries unfriendly to the US. In addition, centralized power plants are more vulnerable to security breaches and can be targets of terrorists.

• Solar is a clean, reliable locally sourced energy and creates more jobs per megawatt than any traditional form of energy. All 67 counties in Pennsylvania have enough sunlight to benefit from solar development. Germany, the world leader has less solar insolation than anywhere in our state.

· Solar serves as a hedge against increasing fossil fuels prices and volatility in the market. Costs for coal and oil as rising as more fossil fuels are exported to China and India.

· Solar development is a new source of tax revenue for the state.

· Since solar is almost perfectly coincident with peak energy demand in our region and has zero fuel costs, it can force downward pressure on wholesales and ultimately retail rates, which result in savings to consumers. Electricity prices are most expensive during peak usage periods such as on the hot, sunny, days like the ones we’ve being having this summer. This is exactly when solar is most efficient and operating at peak performance.

The rest of my testimony will address two legislative efforts that will help continue the incredible growth in solar, and help retain our state’s leadership role in advancing solar energy. At the time of passage of Act #213, (AEPS) there was only one other state with a separate solar share in their portfolio standard. Solar businesses started looking to invest in Pennsylvania but at that time we lacked incentives and the requirement for utilities and electricity generation suppliers to purchase solar renewable energy credits did not take effect until after the utility rate caps expire. Now, of the 29 states plus the District of Columbia with portfolio standards, 16 of those states + DC have solar shares. Half of those 16 states solar shares are now larger than Pennsylvania’s. In a few short years, we have fallen behind and so will solar business investment in Pennsylvania. (NJ, DE, MD, IL, CO, NM, AZ and NV have more robust solar shares). Delaware’s Governor Merkell is signing another pro-solar, pro renewable energy bill today that will advance Delaware even further ahead of Pennsylvania.

Before Act #1 passed in 2008 which provided $180 million for solar; there were fewer than 20 solar installers in Pennsylvania, most of who did not work at it full time. In just as little over a year, Pennsylvania attracted over 600 solar businesses and individuals qualified to install solar photovoltaics and solar thermal energy. Technological advances, investment by the industry and federal government in research and development, increased efficiencies in assembly production and manufacturing, and a more skilled workforce are bringing solar costs down but, the solar marketplace is young and there are challenges despite advances.

So where are we with solar in Pennsylvania? Act #1 of 2008, which provided $100 million dollars for the development of residential and small business solar grants run by DEP, is almost fully subscribed, as is the Commonwealth Financing Authority’s $80 million for large scale solar projects. At CFA’s July meeting, the last of the program dollars for grants and loans were approved. Both of these programs have been well-run and enormously successful at advancing solar energy in our state. It was hard to imagine in 2004 when the AEPS passed, that the demand for solar would be as high as its’ been. Even in today’s economic climate, solar is growing and so are the associated jobs. Along with solar development comes well-paid, local jobs in diverse fields such as engineering, sales, finance, construction, to name a few, and these jobs are not unlikely to be outsourced. In addition, DOE recently announced Pennsylvania won a $2 million dollar grant over three years to develop a multi-state solar training center through Penn State University and the Philadelphia Naval yard designed to train the next solar workforce for New Jersey, Maryland, DC, Delaware, Virginia, West Virginia and Pennsylvania. It would be a shame if Pennsylvania loses our newly trained workforce because we have fallen behind neighboring states.

The solar industry is not seeking additional grant and loan money from the state. We are well aware of the budget constraints facing Pennsylvania and other states. The industry is seeking legislative relief in the form of good policy to further transition from a rebate/grant dependent resource to a market driven one. There is an urgent need to enact policies such as those in HB #2405. These policies include: redesigning the solar requirement to develop more solar now while there are dedicated incentives to complete already approved projects; extend the solar share out into the future to remain competitive with surrounding states; support long term contract language; set a firm alternative compliance payment, and advance lower cost solar thermal energy. I will talk about each of these issues briefly.

Without long term contracts, costs for the exact same solar installation will be higher because investors will demand more security, if they are even willing to finance projects. The RECs market lacks liquidity. Banks question whether the solar renewable energy credits (SRECs) market has “staying power” making financing difficult. SRECS account for almost two-thirds of the revenue stream for most large scale solar projects so long term contracts are essential to solar financing. If projects aren’t built because of the lack of long term contract availability, the result could be high compliance payments and no real benefit to Pennsylvania. Contract procurement has historically been limited to short term; around three years. Solar requires ten year or longer attracting both project financing and customers.

Along with long term contracts, there needs to be a change in how the alternative compliance payment is set. Banks and other investment companies are not interested in financing something that is “200 percent of the regional market value”. That’s too nebulous. At a time when capital markets are tight, both customers and banks need to know what revenue they can count on from the sale of the renewable energy credits. Solar businesses often have to pay a premium for capital if they can get financing at all, because the value of the solar renewable energy credits is uncertain. Setting an alternative compliance payment (ACP) and allowing for long term contracts helps with financing and lowers lenders’ risks. The language in HB #2405 fixes that problem and ensures consumers don’t overpay for solar. If these issues aren’t remedied soon, Pennsylvania will be faced with projects that have been approved but unable to be completed. In addition, the requirement now and in the next few years is much lower than the projects already approved for development. HB#2405 would have increased the solar share from 0.5% to 3.0% by 2025. At the time the solar share was determined in 2004, the requirement was set at very modest levels in the early years because there were no incentives driving the market. Today, due to technology and other advancements that lower the cost, the solar industry is able to fill a much higher demand. The chart below illustrates the problem.

In addition to changes to the 2004 AEPS, alternative financing programs such as the Property-assessed clean energy, (PACE) finance mechanisms sweeping the country are an important market development that will make solar, energy efficiency and other small scale renewable energy options more financially assessable to homeowners and commercial businesses. To date, twenty-three states have passed enabling legislation which would allow local government entities to issue bonds for the purpose of financing renewable energy and energy efficiency improvements through local property tax assessments. States and local governments across the country have been moving forward with PACE in order to take advantage of the $100 million dollars in ARRA money that has been secured for PACE development. There has been limited private market development of these loan funds although AFC First Financial has had very successful solar and energy efficiency loan programs. PACE would provide another option for consumers.

The solar industry and the energy efficiency businesses and non-profits that I represent would welcome PACE financing opportunities to Pennsylvania and support Representative Matt Bradford’s House bill #2525. I know much work and effort to engage the business, environmental and other stakeholders has been done by him in order to introduce the best possible bill. HB #2525 is broad enough to allow municipalities to design their own programs yet specific enough to give clear guidance. One suggestion from both of these groups would be to clearly define qualifying renewable energy technologies as well as energy efficiency technologies to avoid a mish-mash of technologies qualifying under the PACE program. This can lead to consumer confusion especially when state and federal programs may already have different qualifying resources.

It is our hope that concerns raised by Fannie Mae/Freddie Mac on senior lien position to a mortgage can be quickly resolved so there are more options to fill the growing consumer demand for renewable energy and energy efficiency now that grant money is almost exhausted, at least for solar.

In conclusion, if HB #2405 can not pass the House and Senate this fall, the solar industry strongly suggests a solar only version of the bill that we believe has legislative support, and will help provide the necessary tools now to continue solar development in Pennsylvania.

Thank you for this opportunity.

Maureen Mulligan

A Solar Only Bill for PA - Help Make it a Reality

The PASEIA Steering Committee has begun the push for a PA SOLAR ONLY BILL - in addition to removing many of the controversial elements from HB2405 which resulted in one ammendment after another, eventually weighing down the bill so much that it did not make it to a floor vote, a Solar Only Bill is already bringing the PA solar community together and building a strong coalition to fight for our solar rights!

Come September, we will have only 17 legislative days to pass the bill, and we will be competing with a severence tax re: Marcellus Shale and a transportation bill. We will need all hands on deck to send a strong signal to PA businesses, legislators and the public that solar legislation is critical to PA's energy future.

Get involved! Email paseia@mseia.net to find out how you can help.

Doing solar business in PA? Do not underestimate the importance of policy. This type of legislation is what you need to guarantee the continued success of your solar business in PA.

From last week's Philadelphia Inquirer: (Thank you Diane Mastrull!)

With Delaware moving to 3.5 percent, Maryland to 2 percent, and New Jersey setting new megawatt requirements that equate to about 3 percent, Pennsylvania is losing solar ground in the region. That puts it at risk of losing the approximately 600 solar businesses it has and being unable to lure others, industry advocates contend.

So instead of waiting until next year to renew the push for passage of H.B. 2405, solar proponents are launching a new plan of attack. (YES PASEIA THAT'S US! :))

They want the legislature to embrace the idea of a stand-alone bill that would hike the state's solar-energy requirements only. That would leave other aspects of the controversial H.B. 2405 - nuclear power and clean coal, for instance - for later consideration.

"It's really important we have this bill to move the industry from a rebate-dependent energy source to a more market-driven energy source," Maureen Mulligan of Sustainable Futures Communications said in an interview. She is the chief lobbyist in Pennsylvania for the two largest solar-energy trade associations in the region: Solar Alliance and the Mid-Atlantic Solar Energy Industries Association/Pennsylvania division.

Mulligan will attempt to make her case for a solar-only bill at a House Majority Policy Committee hearing on alternative-energy issues in Worcester, Montgomery County, Wednesday afternoon.

The PASEIA Steering Committee has begun the push for a PA SOLAR ONLY BILL - in addition to removing many of the controversial elements from HB2405 which resulted in one ammendment after another, eventually weighing down the bill so much that it did not make it to a floor vote, a Solar Only Bill is already bringing the PA solar community together and building a strong coalition to fight for our solar rights!

Come September, we will have only 17 legislative days to pass the bill, and we will be competing with a severence tax re: Marcellus Shale and a transportation bill. We will need all hands on deck to send a strong signal to PA businesses, legislators and the public that solar legislation is critical to PA's energy future.

Read the full article here: http://www.philly.com/philly/business/20100728_In_commitment_to_solar_energy__Pennsylvania_sees_neighbors_pull_ahead.html?nlid=3140847

Again, PLEASE GET INVOLVED: Email paseia@mseia.net to find out how you can help.