Hershey’s sweet PV installation soured by poor renewable energy generation incentives

The Hershey Company has also installed two electric car charging stations in the same lot and an additional 182 panel array on its Technical Centre a short distance away. The installations and charging stations were opened in a ceremony yesterday. However, the sweet deal has been soured by the falling price of Solar Renewable Energy Certificates (SREC) in the state.

The SRECs are issued on the generation of renewable energy electricity fed back into the grid. However, as the level of mandated renewable energy that the power companies are legally required to buy off renewable energy generators has remained low, the price of these certificates has plunged in recent months.

At the inauguration of the Hershey’s installation, the company’s director of energy utilities Kevin Melley was quoted as saying, "when we wrote this project, (the certificate price) was valued at about $266 a credit." However in recent weeks that price has plunged to below $100 as new installations come online and demand for SRECs remains weak.

The Pennsylvanian solar industry and lobby has been up in arms about the freefall of the SREC price and claim that the solar industry in the state is under immense pressure. Many in the industry, "are ready to throw in the towel due to low SREC prices," said Ron Celentano from the Pennsylvanian Division of the Mid-Atlantic Solar Energy Industries Association. Celentano went on to tell pv magazine that, "100 megawatts (MW) of potential projects" are under threat because of the low prices.

Late last month, Representative Chris Ross announced his intention to introduce into the Pennsylvanian state legislature a bill aimed at rescuing the state’s solar industry in the face of the plummeting EREC prices. While announcing the bill, Rep. Ross said that it would allow the industry to install the facilities already in the pipeline. "My Bill is designed to re-stabilize the market by bringing the requirements back in line with the supply that we already have in the ground right now and stabilize the marketplace."

Rep. Ross’ bill would increase the solar share required of utility companies only in the years 2012 through 2015. At present, only 0.5 percent of energy supply must be purchased by the utilities and attempts to raise that level to three percent have failed in the past. By contrast, Delaware requires a solar component of 3.5 percent, Maryland two percent and New Jersey three percent.

The bill will also close the borders for the solar generators in Pennsylvania, while at present utility companies can purchase solar power from out-of-state generators. In short, this means that Pennsylvanian ratepayers help fund out-of-state solar projects. Pressure on utility rates is seen as a major factor behind opposition to Rep. Ross’ bill, however the solar industry told pv magazine that it estimates that the bill will only cost an additional $7.50 per household over the three year period.

The Vote Solar Initiative, a non-profit lobbying initiative to support the United States solar industry, reacted positively to Rep. Ross’ bill. Peter Olmsted from Vote Solar told pv magazine that the proposal, "is extremely important for stabilizing Pennsylvania’s market over the next few years." The solar industry’s Celentano added, "we know (the bill) is not enough – we would want to increase our solar requirement to three percent or more. But, we lost that battle twice last year, and now Pennsylvania has many more new legislators and an administration that is much more unfriendly to solar."

To a degree the solar industry in Pennsylvania is a victim of its own success. 2010 was a big year for the solar industry in Pennsylvania with a solar installations bringing the state’s total to 54 MW, according to solar market research, making it the sixth largest US state in terms of installed capacity. However, mandated demand for ERECs total only 46.8 MW leading to prices falling by almost as much as 75 percent in 2011, with the solar lobby themselves admitting that "no bottom" is in sight.

The Solar Foundation, in their National Solar Jobs Census, estimate that there are 6,700 people employed in the Pennsylvanian solar sector, making it the second largest photovoltaic employer nation-wide, behind California. When announcing his intention to introduce the bill, Rep. Ross said, "in many cases people who were downsized out of other jobs and have started their own little business. We really don’t want to pull the rug out from underneath them after they’ve just begun to get their feet back underneath them."