Update: Inaction on HB 1580

Hello Readers,

My previous posts: Response to Inaction on PA HB 1580 and Pennsylvania HB 1580 - Bill Introduced, so I have decided to provide brief follow up on the bill.

As you are likely aware, the bill has not yet passed. It stands in virtually the same position as it did when I wrote the original articles (stuck in committee). The Consumer Affairs Committee had a hearing on the bill (after weeks of postponements) on January 11, 2012. Unfortunately, due to strong resistance from the committee chair and a promise by the governor not sign the bill as it stood, the bill has not yet been brought to a vote.

Thanks in large part to the efforts of PASEIA (Pennsylvania Solar Energy Industry Association), the author of the bill made some amendments to gain the support of the Chair of the PUC (Public Utility Commission) during mid-March. However, this was not enough to secure a vote in the committee prior to the legislative break for the primary. Thus, it is now extremely unlikely that the bill will pass in any form prior to June (in time for the new utility accounting year, which the SREC market tracks).

As a result, the SREC market regulations will not be adjusted for the 2013 Utility Year in Pennsylvania. This means:

1. SREC prices will not recover to any significant level in the coming year or anytime prior to 2015 (when the demand for SRECs once again overtakes the current annual production from previously installed systems).
2.  Further, SREC prices will likely not mean anything at all until about 2018 (when all of the previously accrued SRECs lose their value - an SREC has a 3 year lifespan).
3. Current system owners in Pennsylvania should not expect to receive any significant income from SRECs. Thus, their return on investment is likely to be twice as long as they initially estimated (if the system was bought prior to mid 2011).
4. Prospective system owners in Pennsylvania should also plan accordingly.
5. Pennsylvania installers will face (and have already faced) significant difficulty selling new systems despite the drop in installation price by about 70% since the 2007. Thus, many installers are likely to leave the state or go out of business (if they haven't already).
6. This means Pennsylvania will likely lose (have already lost) nearly as many jobs in the solar PV industry as there are employees of the coal mining industry in Pennsylvania.
7. Many of the systems installed in Pennsylvania will not be properly maintained, because the companies that offered service warranties will be out of business or understaffed.

I tried to put these effects in an order that represents a flow of causation, but just understand that all of these are now very likely to occur in Pennsylvania but not in any of the other surrounding states that have properly functioning SREC markets. The passage of PA HB 1580 could (or could have) mitigated many of these damages, and the falling price of solar PV components may alone reduce some of the impacts in the long run. However, by not passing this bill (or some useful amended version) the state legislature and governor are ensuring that my predictions will be mostly true.

I encourage you read more about this issue and contact your legislators and local newspapers. Virtually no action has been taken by the legislature and equally little news coverage has been given to a bill that will impact (and already has impacted) thousands of jobs and millions of dollars of private and public investment in the state.

Links about this issue:

• Response to Inaction on PA HB 1580
• Pennsylvania HB 1580 - Bill Introduced
• Official Legislative Page for the Bill
• PASEIA's March update on the Bill
• SRECTrade.com's information about the Bill
• Recent York Daily Record article about the Bill

Despondently,

Sean Diamond