While public attention has been focused on the proposed Bloom Energy Tariff another hit on your electric bills has begun moving through the Public Service Commission. The price of Solar Renewable Energy Credits (SREC) has recently fallen from about $300 to $100. This is good news for electric ratepayers as your utility company has to buy these credits and the cost is passed onto you in higher electric rates. Lower SREC prices save you money. It is bad news for solar installers who are having more trouble selling expensive solar panels to a wary public. The Public Service Commission (PSC) is considering setting a very high fixed price for SREC’s and the only public hearing will be Wednesday, October 19, 7:00 PM, in the PSC Hearing Room, 861 Silver Lake Blvd., DOVER, DE, 19904 with written comments required by October 21.
Typically, a solar panel installation costs $30,000 to $40,000. Buyers get state and federal grants, save on their utility bills, and can sell the SREC’s for every megawatt of power they produce (about one a month) with everyone else picking up the cost of these subsidies. Solar panel owners don’t even pay a minimum monthly service charge but get to sell power for about five hours a day and take power the rest of the day using the electric grid like a battery. The cost of an installation is paid back in about five years and the owner makes about 11% on their investment over twenty-five years.
The risk of falling SREC prices has always been the one risk carried by homeowners and small businesses purchasing solar panels. Lower prices for SREC’s means solar panel buyers are more reluctant to buy. Installers could sell their products for less. Nationally, the price for solar panels has dropped about 27% but not in Delaware. Installers and potential customers have been waiting to see if the PSC approves a “Pilot Program for the Procurement of Solar Renewable Energy Credits”. The program will guarantee an SREC price of up to $312 for ten years and $60 for the following ten years.
The price guarantee will prop up solar panel prices at a higher level, give solar panel buyers a guaranteed return on their investment, an ensure you will pay higher electric bills. The plan is supposed to be a one year pilot program with SREC prices adjusted after one year but once passed it will be with us forever.
You might think this is being done because not enough solar panels are being installed. In fact, there is a rush to build large solar farms while federal tax credits can be swapped for cash grants. This has led to an oversupply of SREC’s and to falling SREC prices. You would think all of that is good news. But,one study shows installing small projects creates more “Green” jobs than large projects so the state wants to prop up sales of small installations. Of course, the study did not consider the loss of jobs caused by higher electric rates. Other studies show every expensive “Green” job costs two to eight jobs elsewhere.
CRI is an intervener in this case with the PSC and will be working to stop this proposal.
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