The Value of Renewable Energy Certificates (RECs) for Solar Power

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

RECs reward companies that deliver clean electricity successfully to market at competitive prices. Companies include the future value of the RECs when they do the financial analysis to decide whether to pursue developing a renewable energy project. Without RECs, many of the existing projects would not have been built. Additionally, many solar companies use RECs to lower the price of solar power to become competitive with grid pricing. Since the key to mass market adoption of solar is grid parity, this has the impact of increasing demand for and supply of additional solar power. Lastly, as more renewable energy is created, the market value of RECs will decline. Over time, only the most efficient projects (or those requiring the smallest subsidies) will be built. This will in turn free up taxpayer dollars to fund more clean energy.

That’s not to say the current system for awarding RECs is perfect, and there is vigorous debate about what shape the REC markets should ultimately take. Some argue that each green technology should have its own REC market. Others argue that extra credits should be awarded for distributed generation projects, because they reduce the need for grid repairs and result in less energy being “lost” in transmission. Others still believe that extra credits should be awarded for projects that operate during peak hours because the power they replace is typically dirtier than off-peak power generation. Some have shown frustration at the slow pace of the debate, but it’s a topic that’s worthwhile for everyone who supports renewable energy to investigate.

Learn more about SunRun’s Solar Financing.

Image Credit: david.nikonvscanon via Flickr under Creative Commons license.


Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Latest CleanTechnica TV Video


Advertisement
 
CleanTechnica uses affiliate links. See our policy here.