Pennsylvania installed 31.6 megawatts of photovoltaic (PV) capacity in the second quarter of 2011.  Of this installed capacity, 4.6 megawatts came from the residential segment and 27 megawatts came from the non-residential sector.

The Pennsylvania market is in a state of significant Solar Renewable Energy Credit (SREC) oversupply relative to its annual PV capacity targets. The Pennsylvania Alternative Energy Portfolio Standard calls for at least 0.5 percent of energy from solar PV generation by 2020 to 2021 and 18 megawatts of PV capacity by 2011.

Solar installations in the state were initially supported by an ARRA-funded rebate program overlaid on SREC revenue, causing project returns to be unusually high. Additionally, out-of-state SRECs qualifying for the Pennsylvania market led to project development well beyond SREC market needs. This oversupply has contributed to the continued decline of SREC prices to current levels of around $50 -- only about 10 percent of their price one year ago. But despite falling prices, installation rates during the second quarter of 2011 increased 60 percent from the first quarter.      

In May of this year, Pennsylvania Representative Chris Ross proposed amendments to the state’s RPS in order to address the oversupply and, in turn, to strengthen the market.  Ross, a member of the House Environmental Resources and Energy Committee, had two main suggestions. First, he suggested that after January 2012, Pennsylvania no longer registers solar technologies from out-of-state; second, Ross suggested that the capacity requirements for energy years 2013, 2014, and 2015 increase from 70 megawatts, 118 megawatts, and 205 megawatts to 207 megawatts, 238 megawatts, and 290 megawatts, respectively. These changes would focus opportunities on local business and projects, while making SRECs a relevant factor in the Pennsylvania solar market once again. However, the oversupply of 2011 and 2012 is expected to carry over into 2013, keeping prices low until the state is able to reduce the magnitude of the current oversupply.