SEU Discusses Buying Dover Solar Credits

The SEU, the state-created, nonprofit energy efficiency organization, is negotiating a contract under which Delmarva Power would assume the purchase of the credits from a Dover solar park operator at the same price in about six years. Delmarva would also buy out the credits already purchased by the SEU.
The SEU Oversight Board met Tuesday at the University of Delaware, discussing the Dover Sun Park, which has been described as the first utility-scale solar power plant on the East Coast north of Florida. The plant will be built on 90 acres of the Garrison Oak Technology Park, owned by the city of Dover.
Dover is expected to buy all of the electricity generated by the installation, which is expected to deliver between 14,000 and 19,000 megawatt hours per year, when it turns on late next year or in 2011.
Solar power is generally more expensive to produce than power generated from a fossil fuel burning plant. So to make solar more cost-effective, for each unit of electricity created by a solar installation, the owner also gets a credit to sell on the open market.
Utilities can buy the credits to fulfill their state-mandated renewable energy power purchase requirements.
LS Power of East Brunswick, N.J., is building the solar project, and is negotiating with Delmarva Power, Delaware's municipal utilities and the SEU to buy the renewable energy credits generated by the project.
"We're thrilled to be a significant partner in the development of this solar power plant here in Delaware," said Bridget Shelton, Delmarva spokeswoman. She said negotiations between LS and Delmarva are close to concluding.
Delmarva is required by state law to buy about one-hundredth of one percent of its electricity load from solar sources this year. That percentage increases steadily each year, and goes up sharply in 2016. By 2019, Delmarva will need to buy 2 percent of its load from solar sources.
One of the SEU's chairmen, John Byrne, said the idea behind the SEU's purchase of the credits is to make sure Delmarva still needs to buy more solar credits from other sources between now and 2016.
That will help make it possible for Delaware homeowners and small business owners to put up solar installations, he said.
The SEU is still negotiating the purchase price for the credits, Byrne said. A typical price for credits from a large project would be $250 to $275 per megawatt hour, he said.
The SEU will buy 20 percent of the solar park's credits, meaning the annual value of the SEU's purchase in the early years could be $700,000 to $1 million, declining as the solar panels become less effective with time.