News & Press

Making Money from Solar

Bucks County Courier

April 17, 2011

The solar energy panels on Hal Marcovitz's New Britain Township home paid him $1,650 last year.

If he lived 30 miles or so to the east, however, he would have made three times as much by selling credits generated by alternative energy systems in New Jersey.

The varied pricing for solar renewable energy credits - or SRECs - highlights the differences between the solar industry in the neighboring states, experts say. One SREC is equal to 1,000 kilowatt hours of electricity.

Some are calling for Pennsylvania to do more to foster a renewable energy.

"(Clean energy) is a national priority," said Marcovitz, a freelancer writer and retired journalist. "The state Legislature should be encouraging this."

Utility companies in Pennsylvania, New Jersey and other states are required by law to generate a certain amount of power from alternative sources like solar and wind. If they don't generate that power themselves, they can buy "renewable energy credits" on the open market to meet their quota.

In Pennsylvania, the price of solar credits has dropped dramatically, from above $300 last year to less than $200 now, according to recent auction results. In New Jersey, prices have remained steady at around $640 a credit.

Experts say the falling prices in Pennsylvania were due to a jump in the supply of alternative energy sources over the past year. The number of solar installations increased more than tenfold between 2009 and 2010.

"The process to sell them is very complicated," said Barry Moore, president of Moore Energy, a Northampton solar company. "Because of all this uncertainty, it drove the price down very quickly."

Moore said prices should increase in Pennsylvania as utilities are required to have more alternative energy sources.

"A lot of things happened that surprised people," Moore said. "The general feeling is, the hope is, the amount of certificates will increase over time. The amount that's required over time will increase."

Alexander Sarly believes it'll take more than a year for the market in Pennsylvania to return. He's a project manager for Borrego Solar, which installed one of Bucks County's largest solar arrays at NewAge Industries in Upper Southampton.

A year-plus is too long for Borrego, which has stopped actively pursuing solar projects in this state, Sarly said.

"New Jersey is a more mature market," He said. "They've gone through these fits and starts and learned from them. Hopefully Pennsylvania will do the same."

Markovitz said that between energy savings and the money generated from credits, his electricity was free last year.

He and his wife paid about $40,000 for the system, offset by an $11,000 state grant and $12,000 in federal tax credits.

"I'm not going to kid anybody; that's very generous," he said. "It takes a significant financial contribution from the homeowner to do this. The government has helped out, but the dwindling value of the credits has removed a very important incentive to do it in the first place."

Crissa Shoemaker DeBree can be reached at 215-345-3186 or cshoemaker@phillyBurbs.com

Follow her at twitter.com/BucksMontBiz

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