Ohio Tries to Freeze Its Renewable Portfolio Standard, Again. Not Cool
Late last month, Ohio state Senator Bill Seitz (R – Cincinnati) introduced legislation to extend the freeze on the state’s renewable and energy efficiency standards for another three years.
Unfortunately, that’s not all. The bill – SB 320 – also expands the definition of renewable energy sources that may qualify for the Renewable Portfolio Standard, thereby diluting the demand for solar, wind, and other energy sources that would come to mind when one thinks Renewable Portfolio Standard. In addition to gutting the RPS, the bill introduces some bold net metering provisions that would jeopardize the ability of future homeowners and businesses to choose solar.
Put simply, SB 320 is bad news for the Ohio solar industry and the 235 companies that operate in the Buckeye State.
In June 2014, Ohio made history by becoming the first state to “freeze” its Renewable Portfolio Standard (RPS). Two years after the passage of SB 310, and the solar industry is still feeling its effects. Solar build rates have declined significantly from a high of 48.3MW in 2012, to a mere 10MW installed for 2015. Ohio has also missed out on economic growth as a result of the freeze, and its solar jobs ranking has dipped from #18 in solar jobs per capita across the country to a #22 ranking in solar jobs per capita for 2015.
How Does the Freeze Affect SREC Pricing?
After the passage of SB 310, the price of solar renewable energy credits (SRECs) plummeted immediately by over half, from $70/SREC to $30/SREC. Today, SREC pricing is even lower and has traded down to $13/SREC on the spot market. This is troublesome for solar consumers who have already made good faith investments in their solar installations with certain pricing expectations. The value of these good faith investments were compromised with the passage of SB 310, and would again be diminished if the legislature successfully tampers with current law…again.
SB 310’s pricing impact has been felt not only in Ohio, but also adjacent markets that sell their SRECs into the state given an RPS provision that formerly allowed 50% of compliance needs to come from out-of-state sources. The law removed the 50% cap, and bordering states such as Indiana, West Virginia, Michigan, and Pennsylvania quickly flooded the spot market.
Renewable Portfolio Standards = Good
Why else is preserving the RPS good for Ohio? Let us count the ways…
- Ohio is home to 235 solar companies and employs 4,800 people across the state, ranking 11th nationally in solar employment. Nearly 3,000 of these workers are solar installers, and another 834 solar jobs are in manufacturing. These jobs are at risk if the freeze is maintained.
- Four of the five top states in solar jobs per capita have a strong RPS: Massachusetts, Vermont, Hawaii, and California.
- Combined, renewable energy and energy efficiency saved ratepayers 1.4% in electricity bills between 2008 and 2012.
- If no legislation passes this year and the RPS is allowed to continue, economic activity could increase by $5.3 billion over the next 10 years.
- If PUCO’s recent decision to subsidize Ohio’s coal and nuclear fleet is upheld, it could cost ratepayers $6 billion over the next 8 years. Meanwhile, the cost of complying with the RPS is about 0.5% of that figure.
Bottom Line? Don’t Freeze the RPS.
Freezing the RPS would not only be uncool, it would be harmful solar consumers, businesses, and residents in a state that imports $490M in coal from out-of-state each year.
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