‘Groundswell’ of Support for Customer Ownership of RECs in California

When the California Public Utilities Commission (CPUC) issued a proposed decision in favor of 100% customer ownership of renewable energy credits (RECs) earlier this month, the California solar industry applauded the large number of letter writing campaigns waged by businesses, associations, environmental groups and individuals that affected the decision.

The debate over REC ownership surfaced in early November when the CPUC issued a proposed decision that would have granted 100% of the credits to utilities. The utilities said they needed RECs from distributed generators in order to fulfill their renewable energy procurement obligations under California’s renewable portfolio standard (RPS). But the solar industry strongly disagreed, saying that utilities had no right to claim ownership of a customer’s generated clean power. RECs are the value of the clean power produced by a distributed generation (DG) system. RECs for solar systems in California are currently priced at about 2 cents per kilowatt-hour (kWh) of generated energy. Owners can then sell those RECs to utilities and businesses on the voluntary and compliance markets, allowing for a faster payback for the system. Because RECs are such an important source of revenue for owners of solar systems and other DG systems, many people feared that utility ownership would deter consumers from investing in solar for their homes and businesses. It seems the CPUC finally agrees with this argument. On December 6, the Commission reversed the earlier proposed decision and issued another, stating that “renewable DG facility owners should retain 100% of the RECs associated with their facilities.” JP Ross, Policy Director for the Vote Solar Initiative, said that this latest proposed decision is a victory for the solar industry. “If the Commission had gifted solar RECs to the utilities, the California Solar Initiative would have suffered a blow before the program even started, with serious implications for creating a self-sufficient solar industry in 10 years,” he said. “Now the nation’s largest solar program can begin on the first of the year with all cylinders firing.” According to David Hochschild, Executive Director of PV Now, the CPUC’s reversal was influenced by the overwhelming response from new stakeholders. “There was a groundswell of support for customer ownership of RECs. A slew of parties joined the proceedings to oppose utility ownership of the credits,” he said. Those parties included Google, SunEdison, the California Building Industry Association, Global Greens, the Northern California Solar Energy Association (NorCal Solar), the Vote Solar Initiative and individual owners of solar systems. The collective voice of these parties sent a powerful message to the CPUC, said Hochschild. For example, SunEdison — one of the largest solar installers in the state — told the Commission that it would consider leaving the California solar market if RECs were gifted to utilities. Google also wrote to the Commission, saying that it would not have invested in solar if the company could not retain its generated RECs. Google announced plans in October to install a 1.5-megawatt (MW) photovoltaic array on its headquarters. “This decision allows solar customers who invest thousands, or even millions of dollars, in a solar energy system to retain the environmental attributes of that investment,” said Ross. Liz Merry, Executive Director of NorCal Solar, did not know exactly how many hand-written letters were sent to the CPUC as a result of NorCal’s campaign. But she said there were over 200 responses to their “email blast,” which surely had an effect on the “wonderful decision.” The decision is not final, however. It will be voted on during a Commission meeting on either January 11 or January 25. The public comment period will last until December 27. “We’re all hoping the decision sticks,” said Merry. “RECs will be the future of solar going mainstream, and it is absolutely vital that we keep those RECs in the hands of distributed generators.”
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I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep in touch through twitter! My profile name is: Stphn_Lacey

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