For home and business owners who shoulder the significant up-front costs of converting to solar power, alternative-energy credits are crucial to making the expense worthwhile.
But clouds have gathered over the rooftops of Pennsylvania's solar-powered homes and businesses. The state's alternative-energy credit law, adopted in 2004, has fallen woefully out of date. As a result, credits here are selling for a small fraction of what they earn elsewhere.
The state's law set the renewables threshold - the amount of power utilities must generate from sun and wind - very low. The current solar requirement is a paltry 44 megawatts a year. Since the state's solar-system owners are producing more than 80 megawatts a year, it's easy to see why the bottom has fallen out of the market.
Last year, I earned $275 for every 1,000 kilowatt-hours my system produced. But the agent who sells my credits on the market recently told me that he expects to receive no more than $90 or $100 per 1,000 kilowatt-hours.
When the 2004 law was passed, there were only about 200 homes and businesses powered by solar in Pennsylvania. Now there are more than 3,300. Those of us who have converted have done so out of a commitment to clean energy, to be sure, but the economic incentives matter.
Pennsylvania lags
Congress has provided some generous tax credits for those who convert to solar, and the state provides grants under the Pennsylvania Sunshine Program. Together, they can cover nearly two-thirds of the cost of a system. Still, since the typical conversion can cost $30,000 or more, sales of credits remain important.
