New Study
Finds that Solar Power is a Bargain for Ratepayers in Jersey and Pennsylvania
The value
solar energy delivers exceeds its cost by 50% to over 100%
Bordentown- November 5, 2012 - The Mid-Atlantic
Solar Energy Industries Association (MSEIA) and the Pennsylvania Solar Energy
Industries Association (PASEIA) today released a study by consulting firm Clean
Power Research showing that solar power in New Jersey and Pennsylvania delivers
value to the electric grid that exceeds its cost by a large margin, making it a
bargain for energy consumers.
Energy providers in New Jersey and Pennsylvania are
required to buy certain amounts of solar power each year. They pay a premium for that solar power in
the form of Solar Renewable Energy Certificates, or SRECs, and pass this
premium cost on to ratepayers. The study
found that solar power delivers a total levelized value ranging from
$256 to $318 per MWh (25.6 cents to 31.8 cents per kWh). However, this includes
a premium value
in the range of
$150 to $200 per MWh (15 cents to 20 cents per kWh), above the value of the solar electricity generated. The SRECs in New Jersey currently cost about $60/MWh
(6 cents per KWh), and in Pennsylvania they cost about $20/MWh (2 cents per
KWh).
“This indicates that electric ratepayers in the
region are getting more than a two-to-one return on their investment in solar
energy”, said Dennis Wilson, President of MSEIA, “Although the current SREC prices are
unsustainably low, our analysis indicates that SRECs can increase in price ,
deliver net benefits and still support strong solar growth. Solar
power has proven it can deliver value that exceeds its cost by 50% to over
100%. This net positive benefit will
only increase as solar technology continues to drop in cost”.
Full text of the report is available at: http://mseia.net/site/wp-content/uploads/2012/05/MSEIA-Final-Benefits-of-Solar-Report-2012-11-01.pdf
“Both
states have considered expanded investments in solar energy. This study shows
that
such
programs and policies are well justified from an economic standpoint and
generate far
more
instate jobs than central plant generation. Add together the proven public
health,
security
and environmental benefits, and it’s clear that aggressive solar power
development
is a
win for these states and their residents,” said Lyle Rawlings, Vice President
of MSEIA,
New Jersey division.
“We
are very excited about this study”, said
Ron Celentano, President of PASEIA and Pennsylvania VP of MSEIA. “For the first time the solar industry can
show the quantitative benefits of implementing solar energy technologies
specifically in Pennsylvania and New Jersey.
For more than three years we have been unsuccessful with enhancing our
solar share requirement in Pennsylvania, largely because solar was perceived as
only a cost to rate payers. But this
study concludes that the value of solar far exceeds the costs to both the rate
payer and taxpayer.”
“Solar
PV does not get a fair shake in our current utility accounting protocols
because those rules
evolved for centralized, large scale power plants” says Roger Clark, manager of
The Reinvestment
Fund’s Sustainable Development Fund, a major funder of this study. “We supported
this study because it is critical to understand the costs and benefits of solar
so that
our energy policies, such as Pennsylvania’s Alternative Energy Portfolio
Standards Act, are grounded on an accurate perception of the value of solar
energy.”
Both
New Jersey and Pennsylvania are major solar markets in terms of the amount of
solar capacity already installed. Each has great opportunity for continued
clean energy industry growth. New Jersey, the nation’s second-largest solar
market with 900 MW of solar capacity, is the first state to generate more than
1% of its annual electricity from solar energy.
Its annual solar share is now approaching one and a half percent, with
contributions during peak demand periods several times higher. Once one of the
nation’s fastest growing solar markets, Pennsylvania has since fallen to eighth
place in installed capacity. Increasing the state’s near-term solar commitment
would put Pennsylvania solar growth back on track.
According
to Richard Perez, one of the authors of the study, “This report broke new
ground in that it incorporated a wealth of utility power cost data, enabling
detailed analysis of economic drivers such as the ‘merit order effect’,
according to which power can have different values depending on when it is
generated. Solar energy has inherent
advantages stemming from such economic drivers”. Today’s report assessed the value of modest solar
penetration (15% of utility peak load) at six locations: Pittsburgh,
Harrisburg, Scranton, Philadelphia, Newark, Atlantic City, and Jamesburg.
Research concluded that by offsetting the need for conventional power,
distributed solar power delivers measurable benefits, including:
- Lower conventional electricity market prices due to reduced peak demand;
- Valuable price hedge from using a free, renewable fuel rather than variably-priced fossil fuels;
- Avoided costs of new transmission and distribution infrastructure to manage electricity delivery from centralized power plants;
- Reduced need to build, operate and maintain natural gas generating plants;
- Reduced outages due to a more reliable, distributed electric power system;
- Reduced future costs of mitigating the environmental impacts of coal, natural gas, nuclear, and other generation;
- Enhanced tax revenues associated with local job creation, which is higher for solar than conventional power generation.
Prepared
by Clean Power Research, the report was funded by the following organizations:
The Reinvestment Fund’s Sustainable Development Fund, Mid Atlantic Solar Energy
Industries Association, Advanced Solar Products, SMA Americas, Vote Solar,
Renewable Power, and Geoscape Solar.
About MSEIA
MSEIA, the Mid-Atlantic Solar Energy Industries Association, is a solar
energy advocacy trade association which represents over 100 solar companies
doing business in New Jersey, Pennsylvania, and Delaware.
Established in 1997 by solar
energy advocates, MSEIA is an historic and highly-effective non-profit
membership organization created to advocate for solar energy incentives, create
permanent solar energy jobs and a renewable energy infrastructure, and promote
solar energy as a viable and important source of energy for the future. Our efforts in the legislature and with the
Board of Public Utilities have been instrumental in helping to create the New
Jersey solar industry.
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About
PASEIA
The Pennsylvania Division of
MSEIA. PASEIA is an organization of
manufacturers, developers, contractors, installers, architects, engineers,
consultants and other industry professionals dedicated to advancing the
interests of solar energy and to developing a strong local PA industry offering
high quality installation and professional services to business and residential
customers in the region we serve.
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