Here's the scoop on the most
confusing incentive to go solar. Solar REC’s
Maryland law SB 595, passed in 2007, requires that electricity suppliers must
purchase a certain percentage of their electricity from Renewable Energy
sources, and furthermore, that a certain percentage (increasing each year and
beginning with a measly 0.005% in 2008) must be from solar sources. The
goal is to have 2% of all electricity in Maryland generated by solar energy by
the year 2022.
Electricity suppliers must pay an
alternative compliance fee (ACP) if they do not meet the annual targets.
The fee for 2008 was $450 per Megawatt. It goes down to $400 in 2009 and
then decreases by $50 every two years until 2022, but remember - the percentage
utilities are required to buy each year goes up and up, so the total fees paid
by the electricity suppliers either to the government in the form of the ACP or
to small scale system owners like me.
The electricity produced by
grid-tied solar panel systems will generate Renewable Energy Credits
(RECs). A REC is a term used to describe
(and account for) the environmental attributes associated with one Megawatt of
clean power. Solar system owners can
sell these REC’s to the electricity suppliers to meet their compliance
requirements if the system owners jump through a few hoops. For instance,
PV system owners must register with the Public Service Commission (procedures
for this are not yet finalized) and also open an account with a service like GATS to verify the amount of solar RECs that are
actually created by their system. Credits generated by small system owners are
bundled together by third-party aggregators who will then resell them to the
electricity suppliers because, at the present, the electricity suppliers are
refusing to deal directly with small system owners. To learn why, check out this blog entry.
We recently sold our 2008 Renewable
Energy Credits, (REC’s). After months of waiting to be offered a 15
year contract for our REC’s from a utility, we gave up and decided to get what
we could for our 2008 REC’s. I received offers ranging from $280 - $350
per REC. For lots of reasons, but mostly because I already had a business
history with them, I sold the REC’s to Standard Solar, our PV installer.
They paid $315 per REC, which is 70% of the alternative compliance payment
(ACP) for 2008.