Community Solar in New York has a messaging drawback. It is complicated, and even some business professionals have given up in disgust because of aggressive advertising and a scarcity of readability.
Luckily, aggressive advertising just isn’t common among group photo voltaic developers.
Sadly, the shortage of readability is nearly universal.
How Community Solar Works in New York
The system the New York utility regulator arrange for group distributed era (CDG, a time period which includes group hydropower and group wind as well as group solar) is counter intuitive for most potential clients.
As shown in the diagram above, the electric utility pays for a undertaking’s electrical manufacturing with credits which can be used to scale back the electrical bills of any of its clients in the identical load zone. The challenge sponsor can’t immediately monetize these credits, but as an alternative indicators up CDG members (additionally referred to as clients or subscribers) who pay the sponsor in return for the credits, which scale back the price of their electric payments.
These Darned Environmental Attributes
The confusion arises as a result of most individuals who join a CDG contract (which is usually a purchase or a subscription mannequin) think of it as buying photo voltaic (or hydro or wind) electrical energy. In many instances, the credits are even denominated in kWh. Others are denominated in dollars.
In reality, CDG invoice credit are that and solely that: invoice credits. CDG members are getting the monetary advantages of unpolluted energy, however not the environmental advantages. In line with Jeff Irish, VP and Common Supervisor of solar installer and group photo voltaic developer SunCommon, the utility gets the appropriate to say that it is utilizing solar power, a profit that it uses to satisfy state necessities beneath the Clear Power Commonplace. The Worth of Distributed Power Assets (VDER), which is used to calculate the value of the credits members obtain, includes a cost (“E”) for the environmental attributes of the power generated.
The CDG members receive the “E” cost as part of the invoice credits they obtain, while the utility will get the environmental attributes of the electricity. These attributes embrace the proper to say that it’s using photo voltaic (or different renewable) power equal to the quantity generated by the challenge. This renewable power becomes part of the power mix utilized by all of the utility’s power provide clients. The solar power generated is subsequently shared between all the utility’s power supply clients, and mirrored within the utility’s environmental disclosure. It also helps the utility meet its Clean power Normal necessities.
This will all sound like bureaucratic nonsense, and lots of readers are probably questioning why anyone ought to care if group photo voltaic member assume they are getting solar electrical energy, and never simply financial savings on their electrical bill. In any case, the photo voltaic electricity is being generated, and the group photo voltaic member helps the venture sponsor by permitting the sponsor to show CDG credits in to money. Without group solar members, there can be no approach for the sponsor to become profitable, and hence no group solar.
The issue comes from double counting. If group solar members enroll only for the financial benefits (which might be substantial – typical savings are a 10% discount on the utility bill) it doesn’t matter at all in the event that they assume they’re getting solar electricity. If, then again, the members signed up partially as a result of they need to advance photo voltaic power in New York by making sure that each one the electrical energy they personally use is renewable, they will be disenchanted if they study that “their” photo voltaic electricity is being utilized by their utility to satisfy its Clear Power Normal mandate.
When utilities can rely group photo voltaic in the direction of their state-mandated renewable power objectives, each kWh a utility will get from group photo voltaic permits it to purchase less renewable electricity from another supply. In any case where a utility is buying clean power solely to comply with the state Clen Power Normal, group solar clients of that utility won’t add to the whole quantity of renewable power utilized by the utility. As an alternative, their group solar will displace renewable power from another source.
This is the reason US EPA steerage relating to green energy claims clearly states that purchasers of green energy be sure that the contract “conveys the full rights to the environmental benefits of the generation source. In the United States, this is generally substantiated through the conveyance and ownership of renewable energy certificates (RECs).” With out the REC tracking mechanism, there is a danger that folks will declare to be utilizing extra renewable electrical energy than is definitely generated. For every megawatt-hour (MWh) of renewable electricity generated, just one individual can claim to have used it, and that individual is the one who purchased and retired the REC (or had the REC bought and retired on their behalf.)
Whereas New York group solar members do not get the correct to say that they’re using renewable power with their subscriptions, there’s a loophole.
Hydropower from amenities put in service earlier than 2015 does not meet the eligibility requirements of New York’s Clean Power Normal, with a number of exceptions. Some hydropower amenities smaller than 5 MW are switching over from previous power purchase agreements with their present amenities to compensation by way of the CDG mechanism and the Worth of Distributed Power Assets (VDER). Those amenities that don’t meet these eligibility requirements don’t get the “E” worth of VDER, and the hydropower operators retain the RECs, which are tracked by the New York Era Attribute Monitoring System (NYGATS.) These RECs can’t be bought, however they might be transferred to CDG members.
Natural Energy Group’s Wallkill Hydro facility
One such group hydro company is Pure Energy Group, Inc., which is signing up clients at its Wallkill Community Hydro, and Wappingers Falls amenities. Central Hudson clients receive bill credit on their electric invoice at a 10% discount. This small, family-owned firm does not receive the “E” worth in VDER, and so its clients are eligible to receive RECs and different environmental attributes of its era, however does not presently provide them to clients. Natural Energy Group’s contracts specify in the positive print that the client has “no right with respect to any attribute or commodity associated with the hydro, including any environmental attributes, renewable energy attributes or credits, carbon offset credits.”
When asked about this, Pure Energy Group proprietor Sarah Bower, replied that the contract was written when she and Central Hudson believed that the company can be receiving the “E” value. Newer rule modifications mean that Natural Power Group isn’t receiving the “E” worth. In response to Bower, “Although we are creating environmental certificates that are registered with NYGATS, they are going nowhere.” She had not previously appeared into transferring these certificates to clients as a result of she believed that “it would simply increase book keeping with no tangible results.”
Many New York group photo voltaic clients and group hydro clients don’t know if they need to be claiming to be using renewable power. On the photo voltaic aspect, a cleantech skilled wrote that when he requested for “more clarity on the REC question… the sales process fell apart” and the group solar developer misplaced what ought to have been a simple sale.
On the hydropower aspect, the present limbo has led totally different clients to succeed in totally different conclusions and make totally different claims. A gaggle of representatives of native governments collaborating in New Yorks’s Clear Power Communities Program lately gathered to share the end result from their climate action planning efforts. Several had signed up for group hydropower with Pure Power Group, however their interpretations of the impression on their carbon emissions different.
Ulster County and the City of Marbletown chose to strictly adhere to the EPA tips. In response to Amanda LaValle, Coordinator on the Ulster County Division of the Surroundings, “In line with the EPA guidance, we deem it necessary to own the environmental attributes in order to make green power claims. For electricity, this means owning the RECS. Ulster County has been buying 100 percent green power using voluntary RECs since 2014, and the County’s need for RECs has been decreasing since then due to energy efficiency upgrades. The County intends to acquire an increasingly larger portion of its RECs from local sources, such as through its contract with Natural Power Group.”
The City of Rosendale additionally spoke to Pure Energy Group about RECs, and concluded that, since Natural Power Group is just not promoting the RECs to anybody else, it could rely them in the direction of its carbon discount objectives. Whereas not on the assembly, the Town of Woodstock states in its March 25th environmental report back to the Ulster County Local weather Sensible Committee that Woodstock’s “recent subscription for hydroelectric power from the Natural Power Group will eliminate most of the carbon emissions attributed to electricity.” In an e-mail, Kenneth Panza, Woodstock’s Liaison to the committee, defined that he believes Woodstock has no need for RECs or different environmental attributes to make these claims.
Pure Energy Group is investigating what can be concerned in providing RECs to clients who want them. Its provide of RECs is excess of can be needed for this process. Without the “E” worth from VDER, the credits the company receives for its era are value less than half what retail clients are charged for a similar quantity of electrical energy utilized by its clients.
It is potential that the corporate might discover that it is able to provide its clients two to 3 occasions as many RECs as they need to cowl the electric use. This might be helpful to Cities comparable to Rosendale and Woodstock which additionally purchase electricity for road lights, as a result of street-lighting bills aren’t eligible clients for group photo voltaic or hydroelectric, and these Towns may have the ability to apply the additional to electricity utilization from streetlights or other bills which are signed up for group photo voltaic (and therefore don’t receive RECs.)
The likelihood that Pure Energy Group could possibly switch extra RECs to a buyer than their present usage additionally holds a danger for others claiming environmental advantages without truly proudly owning the RECs. RECs could be transferred at any time till they’re “retired” as a part of a customer’s claim to be using renewable power. While Pure Power Group’s RECs are presently in limbo, till Pure Power Group truly transfers these RECs, these of its clients who are claiming to be using renewable electricity are opening themselves as much as embarrassment. If used in promoting to sell a services or products (i.e. “made with 100% renewable electricity”), such claims may even invite authorized liability.[UPDATE: After researching the issue further, Natural Power Group has said, “We are receiving non-tradable certificates [RECs] (or might be formally as quickly as the account is transferred from Central Hudson.) These certificates are available to our clients beneath contract with us. This lets you declare that you’re buying renewable power within the form of hydroelectric.]
New York’s electrical energy regulator selected to separate the fitting to say to be utilizing photo voltaic electrical energy (RECs) from group photo voltaic as a result of permitting the utility to use the RECs to satisfy its Clear Power Normal mandate signifies that the utility pays more for the electricity than it might in any other case. Which means group photo voltaic clients get extra financial savings on their electric bill, and more group solar farms may be built.
No good deed goes unpunished, and the system has led to confusion. In some instances, confusion has led potential clients not to join group solar as a result of they don’t seem to be getting the RECs. Extra typically, it results in clients assuming that they’re getting renewable electrical energy when they don’t seem to be. This leads to double-counting and undermines the State’s renewable power objectives. Some clients who need to do their part by buying renewable electrical energy consider they are getting it once they join group solar or hydro-power, even when they don’t seem to be.
Clients need to understand that group solar and group hydropower are an ideal deal even if they do not embrace renewable electricity. Typical subscriptions provide utility bill credit at a worth of ninety cents on the greenback. Purchases of panels at a group photo voltaic farm (resembling these provided by SunCommon) can provide even larger monetary savings for patrons in a position to use the Federal tax credits.
Thankfully, there’s nothing to stop a group power buyer from also shopping for RECs by switching to a inexperienced power supply firm, urging their municipality to hitch a green Community Selection Aggregation program, or persuading their group hydro company to include RECs in their contract. The numerous financial savings from group solar and hydro can simply pay for the low value of RECs. While some retail clients might discover themselves using their complete savings from group solar to buy inexperienced electricity, giant and complicated consumers like Ulster County or Community Selection Aggregators should purchase RECs for a fraction of a penny per kWh, or less than one % of a typical electrical invoice.
DISCLOSURE: During an interview for this article, Pure Energy Group provided to pay the writer for assist navigating the NYGATS system. Particulars of the work and pay had not been mentioned as of the final draft of this article, and the writer doesn’t consider that the supply influenced his (already constructive) opinion or writing about Pure Energy Group. It and all the opposite entities written about in this article were given an opportunity to comment on a earlier draft. Pure Energy Group didn’t request any modifications.
Tom Konrad, Ph.D., CFA is an investment analyst and portfolio manager specializing in clean power shares. He is lively in selling clear power in New York’s Hudson Valley via his position because the Chair of the Town of Marbletown’s Environmental Conservation Fee. His writing may be found on Greentech Media and AltEnergyStocks.com.