The Keystone Solar Project in Lancaster County, Pennsylvania will be the state’s largest at 6 megawatts. Though it's a far cry from the solar photovoltaic farms that are starting to blanket rusty desert areas in the U.S. southwest, the project shows that the demand for solar in the Keystone state remains strong despite a troubled incentive program.
Community Energy recently closed financing and has begun construction on the project, which will serve customers backed by a long-term contract with Excelon Generation. Among the customers who have already signed up to buy electricity from the project are Franklin & Marshall College, Eastern University, Clean Air Council, the Philadelphia Phillies, and Millersville University. Still, “They’re not buying all of it. They’re buying part of it,” said Community Energy Executive Vice President Brent Beerley.
The organizations are buying the solar renewable energy credits (SRECs) the project will produce on a voluntary basis and at a premium to current market prices in Pennsylvania. “The customers are really helping us build out the project in a pretty challenging market,” Beerley said. That’s because the amount of solar installations in the market outpaced the demand for SRECs, at least for now. “It’s helping us build in a tough market,” he said.
Most of the subscribers for the Keystone, according to Beerley are signing multi-year agreements in anticipation that the value of SRECs will increase in future years. Many of them for five years, by that time the state’s SREC market should stabilize. “If there are no regulatory changes we think it's probably three or four years before the market reaches an equilibrium,” he said.
Community Energy has been building wind and solar projects for renewable energy credit markets in the eastern US for over a decade. When it started out building wind projects it would sell about 70 percent of the credits to support the project before completing it. Times have changed. “Right now there’s a lot of momentum. We believe we’re on target to have it sold by the end of the year,” Beerley said. “If we do it, there’s additional projects beyond this that we’d bring on to supply that demand.”
In addition to offering SRECs to commercial entities, Community Energy also offers a residential product, according to Beerley. “It’s a mix of wind and solar,” he said. It’s offered at a slight premium to resident’s regular retail rates and even despite the recent recession, the company hasn’t seen a drop off in customers. So even without legislation or incentives in the market, demand remains high.