On March 13, Pennsylvania House Bill 330 (HB 330) was proposed by Representative Perry Stambaugh. Titled “An Act providing for local solar program, for renewable energy credits and for powers and duties of the Pennsylvania Utility Commission,” the bill would legalize community solar in Pennsylvania.
Community solar is a solar energy project that allows multiple customers, such as individuals, businesses, nonprofits, and other groups to purchase energy from the project. Without community solar legislation, an individual customer cannot share in the direct benefits of solar power generation unless they are able to mount the solar arrays on their property. According to HB 330, many low-income households in Pennsylvania would be unable to purchase renewable energy through the retail market. Community solar allows customers to benefit from energy generated from solar panels located at an offsite array.
HB 330 creates a community solar program through existing Electric Distribution Companies (EDC). The EDC creates a "local solar program" allowing an EDC to contract directly with a third-party developer to create a "local solar facility". The local solar facility must: 1) generate electricity through a photovoltaic solar device (e.g. solar panels); 2) connect to the electric distribution grid serving Pennsylvania; 3) be in the service territory of an EDC under the jurisdiction of the Public Utility Commission; 4) deliver electricity to the distribution system of an EDC operating in Pennsylvania; and 5) have a nameplate capacity that does not exceed 30 megawatts.
Customers of an EDC that creates a local solar program may subscribe to the local solar facility and purchase some or all of their electricity from that facility. Those customers would be allowed to benefit from the offsite solar arrays. Under HB 330, a certain percentage of those subscribers must qualify as low-income. The local solar program can pass on its costs to develop and operate the facility to the solar energy rate that it charges its customers.
HB 330 is unlike other community solar bills proposed in the 2022 legislative session. One difference under HB 330 is the requirement that the developer of the local solar facility contract directly with the EDC. Other community solar bills allowed customers to subscribe directly with the developer and offset their electricity bills based on their subscription. If the EDC establishes a local solar program, HB 330 requires the EDC to consent to the creation of a local solar facility. Other bills allowed developers to create a community solar facility without the EDC’s consent. Another interesting difference is that HB 330 permits any EDC that establishes a local solar program to count the solar energy credits generated toward their compliance requirements under the Alternative Energy Portfolio Standards Act. Under that statute, an EDC must sell 8% of its electricity from sources that generate electricity through alternative sources that include solar. Moreover, that act specifically requires that an EDC sell no less than 0.5% of its electricity from solar power sources.
For assistance or questions about this legal insight, please contact the authors or any member of the Steptoe & Johnson Renewable Energy Team.