News Analysis: Developing Sun Power In Pennsylvania

For the first time, Pennsylvania has dedicated a sizable chunk of state funds to the development of solar energy. The Allegheny Front's Ann Murray joins host Matthew Craig to talk about what investing in sun power means in a state that has traditionally looked for energy deep underground.

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OPEN: For the first time, Pennsylvania has dedicated a sizable chunk of state funds to the development of solar energy. The Allegheny Front's Ann Murray joins me to talk about what investing in sun power means in a state that has traditionally looked for energy deep underground.

M: Governor Rendell recently signed a bill to use $650 million dollars to develop alternative and renewable energy. This is a continuation of the Rendell administration's push for nontraditional energy production, isn't it?

A: The fund is the second part of the administration's Energy Independence Strategy. The plan began in 2004 with the creation of new energy markets by mandating that utilities use alternative energy. 18 percent of the state's energy must come from alternative and renewable sources by 2020.

M: How much of the current $650 million dollar legislation will go to solar energy?

A: Almost a third of that funding.

M: How does that break down?

A: The bill allows for $100 million dollars for solar power and water heating for homes and small businesses. And $80 million dollars for bigger commercial projects.

M: Does that money pay for part of the actual installation like other states such as New Jersey and California do?

A: Yeah, it pays a portion. Up to 35 percent of the costs to install solar panels and water heating systems.

M: How does that translate into dollars?

A: A typical system that could provide half of a household's electricity costs anywhere from $20,000 to $35,000. A homeowner could get up to a $12,500 rebate. With 100 million dollars in this fund, about 8,000 homeowners could get money back on solar projects.

M: Where does this place Pennsylvania in terms of investing in solar power?

A: It's a considered to be a big investment but energy experts say it's hard to make a direct comparison because some states have invested in solar over time. For example, New Jersey has invested about $230 million dollars in home and business solar system rebates over the past seven years.

M: Does this mean that states are still outspending the federal government in terms of promoting solar energy?

A: Yes, definitely. The states are ahead of federal spending for solar projects.

M: That's been an argument among traditional energy companies and manufacturers that both kinds of alternative energy, solar and wind, are new and untested and aren't deserving of big investments from the state.

A: Pennsylvania's Manufacturers Association has issued statements saying that this funding shows a continuing bias by Governor Rendell for green energy and is misguided. The Rendell administration says debate over the state investing in alternative energy shouldn't be about whether it's OK for government to subsidize solar, wind or hydro power. They point to huge government subsidies such as the 1957 federal Price-Anderson Act made the nuclear power industry possible.

M:How much has the Rendell administration invested in alternative energies?

A: About $1 billion dollars since 2003 when Governor Rendell took office. He also says this investment has created about 3500 jobs.

M: How does the Governor think investment will impact manufacturing in the solar industry?

A: He says he thinks it will attract solar system manufacturers to the state and there will be a cost savings to consumers because transportation costs would be reduced.

M: But is an $80 million dollar investment really enough to attract manufacturers to Pennsylvania?

A: Most people in the solar industry say no but see this investment as a beginning in the state's real interest in solar energy.

M: M: Could Pennsylvanians who invest in solar systems actually save money?

A: Carnegie Mellon University scientists estimates the technology could help reduce electricity demand by five percent during the 100 most expensive hours of the year - typically, times when temperatures are highest and people are running their air conditioners.

M: Electricity rates are higher during peak demand so solar energy could have a bigger impact then, couldn't it?

A:Electricity rates can be 15 to 30 times more during periods when demand is highest, and university scientists estimate the net metering from solar power generation would save Pennsylvania ratepayers almost two billion dollars annually.

M: This savings could be important because rate caps on electricity in Pennsylvania are due to expire in 2011.

A: Yes, it's projected that electricity costs for consumers could increase by double digits with the expiration of the rate caps and increase in the cost of coal, natural gas and oil that fuel power plants.

M: Thanks for the information.

A: You're welcome.