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Parties debate path for Pennsylvania to reach 10% by 2030 solar target

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Parties debate path for Pennsylvania to reach 10% by 2030 solar target

A plan aimed at achieving Pennsylvania Gov. Tom Wolf's vision of getting 10% of the state's generation from in-state solar by 2030 is coming together as stakeholders work through the details.

The Pennsylvania Department of Environmental Protection and PennFuture, an independent advocate for clean energy, are taking comments on a draft of the plan, with a final version expected for public comment in June, Rob Altenburg, Director of the PennFuture Energy Center, said during a March 8 stakeholder meeting. The meeting was co-sponsored by Penn State University.

The state's current alternative energy portfolio standard requires 18% of the state's energy sales to come from renewables by 2021, but only 0.5% is mandated to come from solar. Reaching the 10% vision would take the state from current levels of about about 318 MW installed to 11,000 MW, according to modeling from consultant Vermont Energy Investment Corporation, or VEIC.

The discussion, which will result in a menu of policy choices, has included a range of options to meet the goal, from carbon pricing to raises or carve-outs added to the state's solar target. Various ownership and financing models are also being considered by PennFuture and the Department of Environmental Protection to spur development of different types of solar projects.

Stakeholders are also debating the appropriate value for solar renewable energy credits, which qualified solar systems can generate and sell to electric suppliers who have to comply with the solar target.

VEIC modeling showed that an average 7.5-kW residential solar system in Philadelphia would need an SREC valued at $58/MWh to help pay off the system over 10 years after a federal investment tax credit for residential solar expires after 2021, according to a presentation from David Hill, distributed resource director at VEIC.

But some saw that price as unrealistic. For example, SREC prices for 2018 terms were in the $11/MWh to $12.38/MWh range the week of March 5, according to data from S&P Global Market Intelligence.

Some stakeholders said a higher SREC price is key to offset costs and spur adoption for tax-exempt sectors such as municipalities, universities, schools and hospitals. Others suggested that the higher SREC price requires a change to legislation in terms of how the SRECs are calculated.

Some parties also felt that higher SREC prices depend on implementation of Act 40, a new law Wolf signed in 2017 that requires new solar projects be built within the state. Part of the reason that SREC prices have fallen is because the state has allowed out-of-state projects in the wider region to qualify. For instance, 57% of the solar credits retired in the 2016-2017 period came from projects in North Carolina, according to data from regional grid operator PJM Interconnection.

Stakeholders are also discussing whether utilities should be able to own solar assets, potentially putting them at an advantage over competitive solar developers and installers.

Residential solar installer Sunrun Inc. said the utility-ownership model can constrain consumer choice, but others felt it was unrealistic that solar would be built without cooperation from a local utility.

Erin Walkowiak, a project manager at Maryland-based utility-scale solar installer Urban Grid Solar, said, "Having a diversity of ownership of solar is a good thing. We develop in the Mid-Atlantic area and ... in the areas where the utilities own the assets, the projects get built." Though a utility does not necessarily need to own solar, they need to "be on board" for solar to get built, she added.

For distributed solar, stakeholders considered incentives such as virtual net metering, a billing tool that encourages community solar projects, where customers can purchase a share of energy from a project in their community.