How Do I Cash-in My Renewable Energy Credits?
As a kid growing up in the Motor City, my parents did most of the family grocery shopping on Saturdays. As the oldest child, it was my job to watch my three younger siblings until mom and dad got back from the store. When the car pulled into the driveway and as paper bags filled with food were transported from car to kitchen, the four of us quickly inspected the haul for any evidence of pies, cakes or pop.
The other thing we did on grocery day was to find the S & H Green Stamps distributed by the store for our parents’ patronage, and paste the strips of stamps into the redemption book. We each had our own ideas about which toy, transistor radio or sports equipment we’d get once we filled out a sufficient number of books with the stamps. I don’t ever recall getting any of the stuff we eyed in the gift catalog – it seemed like all the stuff we wanted took too many stamp-filled books and too many shopping Saturdays to actually come true. And, if we shopped at the local A & P we got their Plaid Stamps rather than Green Stamps. But, to us, the stamps, green or plaid, seemed as good as money.
So, last week RUCO, hosted a workshop and invited organizations and individuals to speak about renewable energy credits (REC), a kind of S & H Green Stamps program for rooftop solar installations.
The way RECs work is that if you have installed a rooftop solar array on your house the amount of energy it generates also produces a paper credit, called a renewable energy credit. The credits are based on the number of kilowatt hours of electricity the solar panels produce. However, if the homeowner received a monetary incentive from the power company to help cover the costs of the rooftop system, the utility would claim the RECs as part of the deal and count them toward meeting the ACC-imposed renewable energy standard. Once the utility company counts a REC toward its renewable requirements, the REC is “retired”, i.e. can’t be used again.
But, as rebates paid by APS and other utility companies for solar installations are phased-down to zero due to the rapidly declining cost of solar panels, there is no inducement to hand over the RECs to the utility company. A homeowner could claim ownership of the REC for his or her own use – either to sell in a market for RECs (Arizona does not have such a market) or to convey to another party for use or sale. A question arises then as to whether and how the utility company can demonstrate compliance in meeting the renewable energy standard imposed by the ACC. Compliance under the ACC’s rules is based on RECs the utility claims and retires from these rooftop installations.
If this all seems rather confusing – it is.
On its face, it seems like a silly question, since a market does not exist in Arizona for the homeowner to cash-in any REC. There is no gift catalog or redemption store. Why not allow the utility to count the rooftop solar production in some fashion toward the renewable standard? It would seem the overall goal of producing cleaner energy by both homeowner and utility is clearly the more important point than attributing credit, especially if the homeowner has no place to redeem or trade the REC.