Posted by: jbarnesca | January 12, 2010

CPUC to allow Tradable RECs for Solar in CA

On December 23rd the proposal was published that will for the first time allow the Utilities to reach their long term RPS requirements by purchasing tradable RECs from projects that they do not have a combined PPA/REC assignment agreement.

This proposed decision is quite positive for the Utilities to reach their required goals; however, it may or may not spur more development within CA.  Up to 40% of the tradable renewable energy credits (TRECs) can come from projects outside the state, theoretically.

One positive would be the ability of commercial and residential customers owning their own solar to sell these RECs(one REC is defined as the energy from 1MWh) to the Utility and gain some additional revenue. This decision sets a maximum value for the REC at $0.05/kWh.

There a recent examples of other state utilities placing a much higher value on the RECs during their procurement process.  For instance Arizona Public Service had a program valuing the RECs at $0.18/kWh last year.

One personal speculation might be that the CPUC is signaling an interpretation of the maximum value of being GREEN as this REC maximum value.  This rate is also the penalty rate for non compliance to the California RPS goals.

It is foolish to believe that residential and commercial installations will add up to the necessary size to meet the RPS goals; therefore the larger distributed solar farms are necessary to get to the energy needed for full compliance.  So the huge >100MWp solar farm RPS programs will continue to produce the most benefit for the Utilities, while many other developers produce lots of distributed generation from solar farms in the 3-20MWp range.

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