A solar jobs bill that has been through Albany but has much on its side to pass this June, is suddenly undergoing much debate amongst environmentalists.
The New York Solar Jobs Act is projected to create thousands of jobs and provide 5 thousand MW (or 5 GW) of electricity in the state by 2025 (an estimated 3% of generation). The legislation involves mandates on utilities and energy providers to purchase SRECs (solar renewable energy credits) to meet standards. Under this SREC system, solar would eventually meet “grid-parity,” where it would be at the same price in terms of dollars as the grid. The price of solar is dropping precipitously anyway, but not fast enough for the environmental movement.
Debate was triggered by a panel discussion at NYIT last December where the Solar Jobs bill was discussed by leaders in the solar industry. The panel discussion drew a crowd of one or two hundred people, though not all were satisfied by the focus on SRECS. “All they wanted to talk about was something called solar renewable energy credits,” said Ken Gale on his WBAI show, “Eco-Logic.” Gale hosted a show to broaden the discussion to include legislative approaches such as “feed-in tarrifs” or FITs. The show was followed by a similar dialogue at a panel discussion, (which was also prompted by the NYIT discussion), and was attended by two hundred local activists at The Community Church of New York. Though they differed greatly, the two panel discussions had the same moderator, Ran Kohn of Cleantech Corridor, who won some popularity by insisting that external costs of conventional energy are not reflected in monetary costs.
The NYIT event triggered debate, if not criticism of the SREC model, but it also simply prompted dialogue because it was laden with industry jargon and left people scratching their heads. The Sierra Club Atlantic Chapter sponsored the Community Church meeting; they’re also part of the coalition behind the SREC-driven Solar Jobs Act, which includes The NRDC, labor unions and a group called The Vote Solar Initiative. However, there was nonetheless a more critical leaning towards the bill at the Community Church, as panelists insisted that it wasn’t strong enough for environmental protection.
Last June, the bill came up for a vote in the legislature. Though it didn’t pass, Governor Cuomo signed the New York Power Act in August. The Power Act lumped together several initiatives including community empowerment in the siting of power plants, the Green Jobs Green New York program – “on-bill financing”, which provides affordable loans for residential investment in efficiency and it directed NYSERDA to conduct a study around the Solar Jobs Act. The study assesses the potential costs and benefits of such legislation and is expected to be released by the end of this month.
The study concerns “two different solar scenarios for New York,” says Peter Olmsted of The Vote Solar Initiative in an interview. The first is “a solar program that would deploy 2500 MW of solar capacity by the year 2021 and the second scenario [is] the deployment of five thousand MW of [solar] by the year 2025.”
There are 292 solar companies in New York State. Two of the panelists on Eco-Logic and the church panel expressed that the SREC system catered to the largest solar companies and left smaller companies out. This would be because solar companies would sell SRECS (one credit per megawatt) at their own given price.
A feed-in tarrif program is used more broadly around the world including in California, Gainesville, Florida, Italy, Portugal and Germany. In 2010, 75% of worldwide solar PV installation was due to FITs. Unlike the SREC system, feed-in tarrifs consist of a government-set (or fixed) price that energy providers and utilities would have to pay per year. The price is gradually reduced as solar becomes cheaper.
New York is in the middle of an emerging SREC field. New Jersey, Pennsylvania, Massachusetts, Ohio, Delaware, Maryland, D.C. and North Carolina have state-enacted SREC markets; bordering states are allowing companies to sell SRECs to companies in states that have markets. All of the solar business leaders on the NYIT panel were from the region, particularly New Jersey; there was also the CEO of Flett Exchange, (an SREC trading firm) and a US REC market analyst from Bloomberg New Energy Finance.
The solar business leaders on Eco-Logic and at the Community Church had more rooting in New York and international sales, were joined by Sustainable CUNY and a Californian organization, all offering a perspective outside of the SREC market. “Every policy is about reaching grid-parity,” said Anthony Periera of Alt Power at the church. He then repeated his statements from Eco-Logic, that Italy’s 11 GWs (11 thousand MWs) in 2011 under FITs, trumped the US’s 1.7 GWs for 2011 and that the market could more easily plan around the solid price of FITs. He referred to Germany, where a 15% reduction in the FIT last year resulted in an additional 3 GW for the month of December alone. Solar is working in Germany, he said, because the market became “a good place to invest in solar.
The FIT model is considered successful by people on both sides of the debate though the Vote Solar Initiative, which began in San Francisco about ten years ago and is based on the legislative success and subsequent industry successes of solar in California, favors SRECs in New York.
“I think that the comparable program on the east coast would be at this point New Jersey,” says Peter Olmsted. In New Jersey, about 532 MW of solar power has been installed under the SREC market, making it the leading SREC state; it is also second to California for solar MWs in general and has surpassed California in commercial installations last year. New Jersey has “done quite well,” says Olmsted, “in meeting their annual goals that they set out for themselves.”
New York only has 64 MW of installed solar but five thousand is achievable, says Olmsted, from “both a politic standpoint and just a practical standpoint as well.” Nevertheless, the Community Church panel, particular Anthony Periera of Alt Power expressed disappointment with the goal of five thousand MW, arguing that it was not high enough in a state that uses almost forty thousand MW of electricity. Yet Olmsted insists that given the political reality and the opinions of stake holders, five thousand is “a significant objective.” He says it would make New York a solar leader.
Two concerns with FITs, says Olmsted, are uncertainty in the market due to potentially dramatic price settings in a given legislative year and the lack of incentive for competition. “If a certain market is guaranteeing a price that is administratively set,” he says, “there is concern that that undercuts the incentive for research and development. So if developers or even manufacturers for that matter are assured a given rate of return, it removes some of the incentive for driving down the cost.”
Nevertheless, the SREC system still interferes too much with the market as it is according to Con Edison, which has vocally opposed the New York Solar Jobs Act. They’ve been quoted as saying that the costs passed onto consumers could amount to 29 billion through 2039. The Vote Solar Initiative refers to different findings, which say that rates may rise by only 39 cents. In any case, the bill puts a cap on rate increases at 1.5 percent.
Yet regardless of what kind of legislation passes, or even of talk around Community Choice Aggregation, the audience at the Community Church resounded with discontent when Pierrera suggested that some energy customers may have to settle for natural gas while the solar technology continues to develop.