California Renewable Energy Credits 101

This is a quick reference guide on California Renewable Energy Credits (RECs).
One Renewable Energy Certificate (REC) represents the positive environmental attributes from one megawatt-hour (or 1,000 kWh) of renewable energy generation.  The California Energy Commission recently described RECs this way:

“When electricity is generated using an eligible renewable energy resource, two commodities are created.  The first commodity is the electricity, and the second is the renewable energy credits representing the non-energy, environmental attributes associated with the electricity”

 

 

There are two types of REC buyers: voluntary and compliance. Voluntary buyers are progressive organizations like Whole Foods, Intel, and PepsiCo that purchase RECs to offset their dirty energy consumption.  By purchasing the rights to green power, these organizations can offset their greenhouse gas emissions and further support the development of the renewable energy industry.

Compliance buyers of RECs are electric utility companies or energy suppliers, who are required to get a certain percentage of their energy from renewable sources; this is called a Renewable Portfolio Standard (RPS).  Currently about 30 states have some form of an RPS requirement.   California recently approved one of the most aggressive RPS mandates in the country requiring utilities to get 33% of their portfolio from renewable sources by 2020.

RECs have not started trading quite yet for the California RPS market.  We are waiting on a key piece of policy that will allow Distributed Generation (i.e. residential and commercial solar) facilities to sell their RECs into an RPS market.  The California Energy Commission (CEC) is expected to approve and implement this eligibility ruling in January of 2012.

In order participate and sell your RECs for income, you must register your system with WREGIS (Western Renewable Energy Generation Information Systems) and get certified by the CEC.  The Leaf Exchange provides a simple way for residential and commercial solar system owners to get educated, get registered, and get paid for their Renewable Energy Certificates.

Source:  Leaf Exchange

LADWP: Feed-In Tariff Update

30 years ago, Mayor Tom Bradley recommended that “The DWP should pay the highest justifiable cost for surplus power generated by its customers who invest in solar electric systems.”  Nothing happened.

14 years ago, Councilwoman Ruth Galanter and DWP General Manager David Freeman committed to “100,000 rooftop photovoltaic systems…by the year 2010.”  

LADWP’s mission is to provide clean, reliable water and power in a safe, environmentally responsible and cost-effective manner with excellent customer service to the communities we serve. Their vision is to be a world-class publicly-owned integrated utility, innovatively transformed to provide sustainable water and power to a green, robust and prosperous city. How they do this is in their plan. See https://www.piersystem.com/external/content/document/1643/280504/1/LADWP%20Strategic%20Planning.pdf

LADWP has had 6 General Managers in the past 4 years (9 in the past 10 years) which clearly shows that the Mayor and City Council do not and can not manage LADWP. Instead, LADWP career bureaucrats manage to keep the lights on and the water flowing and rates low while adding $200 million annually to the City General Fund. However, they do not support customer-owned renewable energy distributed generation beyond the legal mandate. They listen politely and follow their plan. So if you want LADWP to change their plan, then change the law.

Esteemed CLEAN LA Solar Coalition members and Solar Feed-in Tariff advocates,

Outcome of 11/2 City Council FIT hearing:

 The 11/2 hearing was a success in that each of the coalition members and FIT advocates had the opportunity express their grievances with the LADWP 6MW solar demonstration program in front of the entire Los Angeles City Council. And…the Councilmembers heard you loud and clear as expressed best when Council President Eric Garcetti recognized our “unparalleled coalition!”

 We will head back in the City Council Energy and Environment Committee (E2) on December 1st at 9am. E2 Chairwoman Perry has promised to address the following issues on 12/1:

  • establishing a fixed price or at least a floor for the demonstration program and the 75MW FIT program
  • streamlining the application
  • eliminating administrative overhead
  • implementation timeline for 75MW

LA Solar Electrical Systems

Many contractors have stopped installing solar electrical systems in LADWP territory because of expensive changes required by the LA Building and Safety Department and new requirements by LADWP. The new rules and regulations that started September  1, 2011 add thousands of dollars for on-site energy audits and special custom equipment built just for LADWP projects. The new safety requirements that cost thousands of dollars in equipment upgrades extend solar electrical systems payback periods by many years. LADWP union leaders cite safety concerns as the reason for the additional equipment that adds thousands of dollars to the price of a $10,000 solar electrical system. No other utility in the country has the same extreme requirements as LADWP.  SCE, Pasadena, Glendale and Anaheim electric utilities do not have these requirements. LADWP as usual has its way of managing their $40 million per year Public Benefit Fund for solar and is not answerable to Public Utility Commission oversight.  It is looking very dark for solar power systems in LADWP territory again.

Solar PV Breaks Records in 2010

Solar photovoltaic (PV) companies manufactured a record 24,000 megawatts of PV cells worldwide in 2010, more than doubling their 2009 output. Annual PV production has grown nearly 100-fold since 2000, when just 277 megawatts of cells were made. Newly installed PV also set a record in 2010, as 16,600 megawatts were installed in more than 100 countries. This brought the total worldwide capacity of solar PV to nearly 40,000 megawatts — enough to power 14 million European homes.

Graph on World Annual Solar Photovoltaics Production, 1985-2010

Made of semiconductor materials, PV cells convert solar radiation directly into electricity. Rectangular panels consisting of numerous PV cells can be linked into arrays of various sizes and power output capabilities — from rooftop systems measured in kilowatts to ground-mounted arrays of hundreds or even thousands of megawatts. (One megawatt equals 1,000 kilowatts.)

There are two main types of PV — traditional crystalline silicon and newer thin-film PV. In 2010, crystalline silicon production was more than double the output of 2009, accounting for over 80 percent of all PV produced. While thin-film production did not keep pace, it still grew by more than 60 percent. First Solar, a U.S. firm, maintained its leadership role in thin-film production, accounting for over 40 percent of world output, most of it produced in Malaysia.

Data provided to Earth Policy Institute by GTM Research show that Chinese manufacturers again dominated the global industry in 2010, with close to 11,000 megawatts of PV cell production. (See data at www.earth-policy.org.) This was the seventh consecutive year in which China at least doubled its PV output. Taiwan was a distant second with 3,600 megawatts produced, followed by Japan with 2,200 megawatts, Germany with 2,000 megawatts, and the United States with 1,100. The top five countries thus accounted for 82 percent of total world PV production.

While Germany ranks fourth in solar cell manufacturing, it towers above all other countries in terms of actual electricity generation from solar panels. Germany has widened its lead in this category each year since overtaking Japan in 2004 and, after adding 7,400 megawatts in 2010, now boasts 17,200 megawatts of installed PV. This is more than 40 percent of global capacity and over four times the 3,800 megawatts in Spain, the number two country. PV in Germany now generates enough electricity to meet the power demand of some 3.4 million German homes.

Graph on World Cumulative Solar Photovoltaics Installations, 1998-2010

Japan installed close to 1,000 megawatts of new PV capacity in 2010. It is the third-ranked country in installed PV, with a total of 3,600 megawatts. As solar adoption accelerates in Japan, its national target of 28,000 megawatts by 2020 may be easily surpassed, especially as the country weighs energy alternatives following the March 2011 Fukushima nuclear disaster.

By nearly doubling its total PV power capacity in 2010, Italy vaulted past the United States to claim the fourth position in the world solar rankings, with 3,500 megawatts. With an expected 8,000 megawatts of new PV in 2011, likely overtaking Germany in new installations, Italy will have already exceeded its official 2020 goal of 8,000 megawatts. Enel, Italy’s leading utility, sees the country reaching 30,000 megawatts by 2020 — enough to satisfy half of its current residential electricity needs.

PV capacity in the United States also saw strong growth in 2010, increasing by more than 50 percent to reach 2,500 total megawatts. California, which now has more than 1,000 megawatts connected to the grid, again led all states in new PV installations. But a number of other states, including New Jersey, Nevada, and Arizona, are ramping up their solar capacity as well, driven by programs and incentives at the state and federal levels.

Until very recently, China’s status as PV manufacturing powerhouse had not translated into much solar generation at home, as panels were seen as too expensive in the domestic market. While the vast majority of Chinese-made PV is sent abroad, a growing government commitment to increasing solar power as part of the energy mix is now catalyzing substantial PV capacity gains. Total installed PV in China grew 140 percent to nearly 900 megawatts in 2010. This was the first full year for the national Golden Sun program, which covers half the investment and grid connection costs of a solar project. It is expected to result in at least 1,000 megawatts of new installations each year after 2012.

Furthermore, in August 2011 China’s main economic planning agency announced it was implementing a national PV feed-in tariff. This policy tool, now used by more than 60 countries, is behind most of the PV already installed worldwide. A feed-in tariff typically guarantees generators of renewable electricity a long-term purchase price for each kilowatt-hour they produce and “feed into” the grid, providing a powerful incentive for installing such systems. Together the Golden Sun program and the new feed-in tariff are likely to push China’s PV capacity to at least double again in 2011 — and may help explain why the country’s solar power targets for 2015 and 2020 have reportedly risen to 10,000 and 50,000 megawatts, respectively.

Although the cost of PV has fallen substantially over the decades, solar-generated electricity is not yet widely price-competitive with electricity generated by heavily subsidized fossil fuels. If the full cost of burning fossil fuels, including health effects and the costs of climate change, were incorporated into the price of electricity, PV would quickly be revealed as one of the least expensive sources of power.

As system costs continue to drop, the PV landscape is evolving to include not only traditional small-scale PV installations but also utility-scale parks of tens, hundreds, or even thousands of megawatts. An 80-megawatt PV park completed in Canada in 2010 was the world’s largest until September 2011, when a newly-expanded PV complex of close to 150 megawatts in northeastern Germany claimed the title. As of late 2011, the United States had 48 PV projects of 100 megawatts or more in the pipeline, including a 5,000-megawatt park to be sited on degraded farmland in California’s San Joaquin Valley. At peak generation, this solar facility’s electricity output would rival that of five large nuclear power plants.

Multi-megawatt projects are also under development in India as part of the National Solar Mission that was announced in late 2009. Though the country had just 100 megawatts of installed PV capacity at the end of 2010, the goal is for some 22,000 megawatts of solar power — half PV and half concentrating solar power — to be installed by 2022. The western state of Gujarat alone plans to have 3,000 megawatts installed by 2015.

Part of the National Solar Mission’s PV expansion is destined for rural areas where millions lack access to electricity. As is the case in many other developing countries, there is vast potential in India for PV to provide power in places without an electric grid. Installing small solar systems on homes is often much less expensive than building a central power plant, with the added benefit of greatly reducing indoor air pollution from kerosene lamps.

Industry analysts forecast that some 21,000 megawatts of PV will be installed globally in 2011. This would be a marked slowdown from the doubling of the market in 2010, but the pool of countries with rising demand for PV still continues to grow. New markets such as Slovakia and the United Kingdom are among the 20 countries expected to add 100 megawatts or more in 2011, up from 13 countries in 2010.

As PV costs drop, as concerns about climate change grow, and as countries look to replace finite fossil fuels with energy sources that can never run out, the growth in solar power should continue. The potential is practically without limit: a 2011 article published in Energy Policy shows that solar PV deployed in suitable locations could generate 30 times the electricity currently produced worldwide.

Source: sustainablog

The City of Anaheim may be one of the happiest solar places on earth.

Known around the world as the home of Disneyland, Anaheim’s solar incentive program is a something of a better-kept secret. The program has received little publicity since its launch in 2008, but for Anaheim residents who want to enjoy deep (read: unheard of) discounts on a home solar system, the savings warrant far more attention.

Rebates offered through Anaheim’s electrical utility are among the most generous of all California solar rebates. The $3.72 per watt rebate is incredibly high, especially when compared to Northern California’s current PG&E rebates of $0.25 per watt in most areas.

The extent of the program, however, is limited. Anaheim residents should prepare now to take advantage of next year’s program. Applications will be accepted for the 2012-2013 fiscal year beginning on January 4, 2012.

How much money can be saved by going solar in Anaheim? Start with an average American home’s utility usage, which in 2009, was about 908 kilowatt hours each month, according to the U.S. Energy Information Administration. In Anaheim, that generates a monthly electrical bill of about $130.

Next, consider a typical residential solar system, sized at about 2.7 kilowatts, and covering about 360 square feet of roof area. The average cost for such a system would be about $29,040.

Through the form of a tax credit, the federal incentive program reduces the cost of a residential solar installation by 30 percent. For the Anaheim PV system, that’s about $8,712, reducing the installation cost to $20,328.

The Anaheim public utility rebate for this system would be about $10,044, making the final installation cost just $10,284. It would take just six years to pay for the $10,284 PV system through monthly savings on electricity. Compare that with the typical 10-12 years for most systems, and you’ve got yourself a steal.

  • Average Monthly Utility Savings: $109
  • Average Annual Utility Savings: $1,308
  • 25-year Utility Savings: $32,700

Anaheim also allows net metering, a process that automatically sends any excess electricity generated by your residential PV system back into the grid. Anaheim’s electric company then credits you, the customer, for that electricity. Since Anaheim enjoys sunny days for most of the year, you can expect your system to generate enough excess electricity to further reduce your payback period.

Why is Anaheim offering such a generous rebate program? Since 2007, California has expanded solar incentive programs from state-offered rebates to those offered through public utilities. The program is set up to reduce the amount of the rebates as participation increases. Smaller municipality-operated utilities must participate in the program as well, Anaheim included.

For the 2012-2013 fiscal year, Anaheim must offer solar rebates for a combined total of 330 kilowatts that are generated by residential PV systems.

The 330 kilowatt total means that only about 100 Anaheim households can take advantage of the program next year. Anaheim requires residents to work with a certified solar installer to verify certain installation specifications. The application is available through the City of Anaheim’s website. Once the application is submitted, residents can track progress through the city’s online PowerClerk application.

Source:  Calfinder Solar Blog

Are Home Solar Costs About to Plummet?

To predict the future costs of residential systems, it helps to understand not only how far prices have dropped in recent years, but what factors are behind those reductions in costs.

Two major organizations that track solar cost trends are the Solar Energy Industries Association (SEIA), an industry group, and the Lawrence Berkeley National Laboratory, funded by the federal government. Both organizations recently published studies that show reductions in all aspects of residential solar energy systems.

Overall, from 2009 to 2010, solar array installation costs have dropped by 17 percent. Costs for wafer and cells each dropped 25 percent, while the cost of a solar panel module dropped 12 percent. Non-module costs, which includes labor installation costs and the inverters that convert solar DC energy into household AC electricity, dropped 18 percent.

Both studies credited market growth as the major factor in achieving these across-the-board reductions. As the industry grows, more money is invested in cost-cutting technology and methodology. Creating solar panels with greater efficiency gives solar companies a competitive edge.

The better a solar panel becomes at converting every ray of available sunlight into energy, the more cost-efficient they become as well.

SEIA reports that the solar industry has now produced enough modules to double the current number of residential solar energy installations next year. It can take 18 months for a reduction in the cost of materials to affect installation costs.

The fastest-growing sector of the solar market in the United States is solar leasing.

The opportunity to lower monthly electrical bills without purchasing a residential system is a popular option for many homeowners.

SEIA predicts that the combination of solar leasing and dropping module costs will continue to drive the industry forward in the near term.

The Berkeley study noted that some of the solar rebate programs that have sparked market growth are starting to be cut or phased out. The federal incentive program that pays for 30 percent of the cost of a residential solar system is not scheduled to expire until the end of 2016.

Some states, however, are cutting or reducing their solar rebate programs. Also, as the price per watt of solar energy lowers, those incentives based on dollar-per-watt formulas are reduced as well.

When predicting future reductions, it’s important to recognize that it is primarily the growing market for solar that is driving down costs. While experts believe costs will continue to fall in the short term, continuing cost reduction is linked to future market growth.

Considering the wide variety of generous incentive programs that are available now, such as those in Los Angeles, San Francisco, Oakland, San Jose, San Diego, New Jersey, Arizona and much of the East Coast, and the current reduction in residential solar installation prices, there may be no better time to switch to the power of the sun than right now.

Source:  CalFinder Solar Blog

Berkeley, CA– New research by the U.S. Department of Energy’s (DOE) Lawrence Berkeley National Laboratory finds strong evidence that homes with solar photovoltaic (PV) systems sell for a premium over homes without solar systems.

“We find compelling evidence that solar PV systems in California have boosted home sales prices,” says the lead author Ben Hoen, a researcher at Berkeley Lab. “These average sales price premiums appear to be comparable with the average investment that homeowners have made to install PV systems in California, and of course homeowners also benefit from energy bill savings after PV system installation and prior to home sale.”

solar-roof-stock2-smThe research finds that homes with PV in California have sold for a premium, expressed in dollars per watt of installed PV, of approximately $3.90 to $6.40/watt. This corresponds to an average home sales price premium of approximately $17,000 for a relatively new 3,100 watt PV system (the average size of PV systems in the Berkeley Lab dataset), and compares to an average investment that homeowners have made to install PV systems in California of approximately $5/W over the 2001-2009 period.

“This is a sizeable effect,” says Ryan Wiser, a Berkeley Lab scientist and co-author. “This research might influence the decisions of homeowners considering installing a PV system and of home buyers considering buying a home with PV already installed. Even new home builders that are contemplating PV as a component of their homes can benefit from this research.”

Approximately 2,100 megawatts (MW) of grid-connected solar PV have been installed in the U.S. California has been and continues to be the country’s largest market for PV, with nearly 1,000 MW of installed capacity. California is also approaching 100,000 individual PV systems installed, more than 90% of which are residential. Though an increasing number of homes with PV systems have sold, relatively little research has been performed to estimate the impacts of those PV systems on home sales prices.

The Berkeley Lab research is the first to empirically explore the existence and magnitude of residential PV sales price impacts across a large number of homes and over a wide geographic area. The research analyzed a dataset of more than 72,000 California homes that sold from 2000 through mid-2009, approximately 2,000 of which had a PV system at the time of sale. “This is the most comprehensive and data-rich analysis to date of the potential influence of PV systems on home sales prices,” says co-author and San Diego State University Economics Department Chair Mark Thayer.

The research controlled for a large number of factors that might influence results, such as housing market fluctuations, neighborhood effects, the age of the home, and the size of the home and the parcel on which it was located. The resulting premiums associated with PV systems were consistent across a large number of model specifications and robustness tests.

The research also shows that, as PV systems age, the premium enjoyed at the time of home sale decreases. Additionally, existing homes with PV systems are found to have commanded a larger sales price premium than new homes with similarly sized PV systems.

“One reason for the disparity between existing and new homes with PV might be that new home builders also gain value from PV as a market differentiator that speeds the home sales process, a factor not analyzed in the Berkeley Lab study,” says Berkeley Lab researcher and co-author Peter Cappers. “More research is warranted to better understand these and related impacts.”

This work was supported by the Office of Energy Efficiency and Renewable Energy (Solar Energy Technologies Program) of the U.S. Department of Energy, by the National Renewable Energy Laboratory and by the Clean Energy States Alliance.

Lawrence Berkeley National Laboratory addresses the world’s most urgent scientific challenges by advancing sustainable energy, protecting human health, creating new materials, and revealing the origin and fate of the universe. Founded in 1931, Berkeley Lab’s scientific expertise has been recognized with 12 Nobel prizes. The University of California manages Berkeley Lab for the U.S. Department of Energy’s Office of Science.

Source:  Lawrence Berkeley National Laboratory

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