Hey Ohio! FirstEnergy Desperately Needs to Buy Your Rooftop Solar SRECs!

January 28th, 2011 by Susan Kraemer

Ohio utility FirstEnergy Corp claims it cannot meet the state mandates to get half of its 25% percent renewable electricity mandated by 2025, because there are not enough solar projects or credits within the state. Half the solar carve-out must come from in state.

When solar developers build solar projects in the state, or even homeowners in Ohio add solar panels to their own roofs, they can sell the credits to the utility (even if they use the power themselves) as Solar Renewable Energy Credits (SRECs).

But FirstEnergy says that there are not enough developers or homeowners offering solar credits to the utility to meet that mandate. So FirstEnergy has filed a request with the Ohio Public Utilities Commission to “declare a shortage of credits”. If they do, the mandate to get the power is vacated. It wants a SREC shortage declared by the Ohio PUC, which would let them off the hook.

Ohio must get 50% of its 25% mandated renewable electricity from solar projects or SRECs by the end of 2024. Half must come from inside the state.

Another Ohio utility has had no trouble finding the solar projects it needed to meet the mandate. American Electric Power has signed a power purchase agreement to buy all the power from a small local 12 MW solar array in Wyandot County, and has plans for getting a 500 MW project online by the deadline. So it does not need to buy SRECs.

FirstEnergy is not going the power purchase route. It is relying on SRECs. It claims that they could only find 125 SRECs, despite hiring a consultant. Of these, 85 come from solar developers, and 40 come from homeowners.

There are only 8 homeowners in Ohio making solar off their roofs and selling the 40 SRECs that they generate to FirstEnergy.

Each SREC represents 1 Megawatt-hour of electricity generated in a year. An average home array will generate about 4 to 8 megawatt-hours of renewable electricity a year, depending on how big your system is.

So a typical home solar array could generate 4 to 8 SRECs each year, and each SREC sells for $300 to $400 in Ohio, so the annual passive income you could expect to generate off an average Ohio rooftop would be somewhere between $1,200 to $3,200 every year.

SREC earnings vary from state to state. New Jersey SREC earnings are the best.

Even though you sell your credits, of course, solar also cuts or eliminates your own utility bill, so the financial benefit is doubled in the states where you can sell SRECs to your utility.

The credits are just a piece of paper indicating that someone in that utility district is contributing clean power for the grid. Makes no difference who uses it. (Off-grid solar on your log cabin upstate would not qualify as a SREC, because it has to be on the public grid for everyone.)

How much does this Ohio utility need to buy?

In a filing this week with the PUCO, FirstEnergy said it is unable to find the 3,170 credits it needs to buy from in-state sources. This includes SRECs from homeowners and professional solar developers. It can also buy SRECs from Indiana, Kentucky, West Virginia, Pennsylvania or Michigan.

But half have to come from instate. That is where the Ohio shortage is acute. “And we are interested in talking to developers of any renewable energy project in Ohio that would generate credits toward meeting the state’s goals,” said spokeswoman Ellen Raines.

Image: Green Energy Ohio

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About the Author

Susan Kraemer writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times. Follow Susan on Twitter @dotcommodity.

Sharon

Solar power would be WONDERFUL, as I live out in the country and the electric goes out repeatedly, but the cost is so high to achieve that it is out wayed by the dollar. If the power company is in such a demand for solar power, then why is the incentive done after the home owner has paid to do the install?
Charlie

Susan…your post is a little misleading. Or could at least some clarification.

You initially say Ohio needs to meet 25% of its electricity from solar projects or credits by 2024. But the goals is for “alternative energy”, not just solar. The solar carve-out is actually only one-half of one percent (0.5%) of their total electricity by 2024.

Later in post you say “50% of its electricity from solar projects and SRECs.”
- http://cleantechnica.com/author/susan Susan Kraemer
  
  Here is the source: 50 percent is written 0.5 and 0.50 in DSIRE RPS for Ohio:
  
  http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=OH14R&re=1&ee=1
  Sorry if my description is confusing:
  
  25% is the total renewables needed by 2025
  Half must be in-state, half of that must be solar
  - Al Rosenfield
    
    Charlie is correct. The 0.5% solar requirement is given in Section 4928.64(B) of the Ohio Revised Code, on-line at .
    - http://cleantechnica.com/author/susan Susan Kraemer
      
      Charlie is wrong. If it was five percent DSIRE – which lists all the renewable standards – would have written as 0.05% or 0.05. It lists it as fifty percent, or half, written as 0.5% or 0.50%, and elsewhere writes that out as “fifty percent”.
      
      But it is not fifty percent of all energy in Ohio.
      
      Let me explain it again. The total required renewable is twenty five percent. Half of the renewable requirement requires in state energy, or fifty percent of twenty five percent, which is twelve and a half percent. Half of that must come from solar, and half of twelve and a half percent is six and a quarter percent.
      
      My story is just about the solar in-state, that the utility is concerned enough about meeting, to file a lawsuit.
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