Sun sets on Solar Funding in Pennsylvania
Solar developers are finding that Pennsylvania funding sources for solar development are drying up with no plans of replenishing the pool. The dearth of available solar grants could not come at a worse time. On May 17, 2012, the U.S. Commerce Department announced stiff tariffs on Chinese-made solar panels raising costs on most future solar projects.
PENNSYLVANIA’S DEPLETED SOLAR FUNDING SOURCES
On a state level, Pennsylvania once had a myriad of solar funding sources but now only is home to a very few specialized programs. The PA Sunshine Solar Program, administered by the Pennsylvania Department of Environmental Protection (“PA DEP”), is currently without funds and is only accepting applications for its waiting list in the unlikely event that funds would become available in the future. The Alternative and Clean Energy Program, administered jointly by the PA DEP and the Department of Community and Economic Development (“DCED”) under the direction of the Commonwealth Financing Authority (“CFA”), is undergoing a change in guidelines and hence is temporarily not accepting applications.
On a federal level, the most well-known grant source was the 1603 grant which allowed an applicant to apply for up to 30% of the total cost of a solar project. The 1603 federal grant program required an applicant to purchase up to 5% of the total cost of the project or to have performed a substantial amount of the project’s total construction by December 31, 2011.
Despite the expiration of these well-known programs, there are still a few specialized funding sources that should be considered when schools are planning a solar installation project.
STILL VIABLE SOLAR FUNDING FOR SCHOOLS IN PENNSYLVANIA
Although the above well-known programs are not currently viable sources of solar funding, there are a few lesser-known grant programs that may present solar funding opportunities. The first such solar grant funding opportunity can be found at the Governor’s Green Government Council (“GGGC”) where the High Performance Green School Planning Grant allows schools to be reimbursed for expenses incurred in the planning stages of construction for a new building designed to obtain LEED certification. The funds are not available for materials or construction costs, but are available for simulations, modeling, consultants, design fees and costs associated with obtaining LEED certification. In addition to assisting schools with new construction, the GGGC also provides increased funding for renovations which lead to LEED certification through the Planning and Construction Workbook process.
In addition to state-government grants such as those funded by GGGC, most utilities have solar grants available. An example of such a program is the one that the Metropolitan Edison Company (“Met Ed”) has in place. Met Ed offers funding up to $25,000 for the installation of a solar systems. Met Ed specifically states in its grant information that schools are eligible for solar funding.
PROGRAMS - FEDERAL
The federal 1603 grant is no longer available for entities that have not begun their projects or have not incurred at least 5% of their projects’ total costs prior to December 31, 2012.
However, depending on the location of the project, the Rural Energy for America Program (“REAP”) may still be available. The REAP is administered by the U.S. Department of Agriculture (“USDA”). The minimum grant amount under REAP is $2,500 and the maximum is 25% of the project or $500,000, whichever is less. When considering which solar funding source to apply for, an applicant should bear in mind that federal grants are normally more arduous to apply for and more competitive to obtain than state funded grants.
The tariffs affect two groups of Chinese manufacturers. The first group is comprised of 61 current exporters, which includes the well-known companies: Yingli Green Energy and Trina Solar. This group will suffer a 31% tariff rate.
The second group includes all other Chinese manufacturing companies not currently exporting to the U.S. and applies a 250% tariff rate in order to deter the companies in the first group from circumventing the tariff by shifting production to this second group.
Although the tariffs are seen as a boosting the U.S. solar manufacturing sector, the real job generator associated with solar in the U.S. - installation – is expected to suffer.
The ruling, if finalized by U.S. trade officials, could be finalized by the fall.
There are a few specialized sources still available for solar projects in Pennsylvania, but an applicant for such funding should carefully compare the requirements of each type of funding with the specific project specifications prior to spending the time and money involved in actually applying for any funds.
Look for a future blog on what New Jersey is doing to support solar construction in its state.