Last fall, Pennsylvania lawmakers set out to fix a problem
with the state’s 2004 Alternative Energy Portfolio Standards Act (AEPS).
No, the problem they took on with Act 40 of 2017 was not the weakness of the renewable
energy targets in the AEPS. (Those targets still have not been updated since 2004). Act 40 addressed the “oversupplied” state of Pennsylvania’s Solar Renewable
Energy Credits (SREC) market. Before Act 40, the AEPS gave solar projects
located throughout the PJM
region (which stretches as far west as Illinois and as far south as
North Carolina) the unqualified right to sell SRECs in Pennsylvania. The
resulting glut of SRECs led to depressed SREC prices, which has made solar
development less economical in the state. Act 40’s fix was to establish new,
more restrictive SREC eligibility criteria in order to spur more in-state solar
photovoltaic (PV) development, and thereby deliver more clean air benefits to
Pennsylvanians.
