What are Renewable Energy Certificates (REC)

A Renewable Energy Certificate, REC, or "Green Tag" is effectively a certificate representing the "green" attributes of the electrical energy generated via a renewable energy source such as photovoltaics, micro-hydro turbines, wind turbines, etc. REC's enable the green attributes of the energy to be separated from the energy itself such that they can be traded on an open market using the same metrics as electricity.

Why and how does this market exist? Every kilowatt hour your system produces whether you use it or it is exported to the grid accrues to making a REC which is equivalent to 1 megawatt hour or 1000 kilowatt hours. The most frequent end-purchasers of REC's are utility providers who must adhere to a Renewable Portfolio Standard (RPS), which is a set of requirements stipulating the allowable mix of electrical energy the utilities may supply in terms of minimum percentages of energy from renewable sources.

In states with an RPS requirement, like Delaware, utilities cannot purchase enough renewable generating capacity from electricity suppliers to meet the requirements, and so they are allowed to purchase the attributes of renewable energy. Alternately since supply of renewable energy and thus RECS is constrained, utilities pay a penalty for not meeting the RPS.

Can you sell your REC's directly to the utility? No; one REC amounts to the green attributes of one megawatthour (1000 kWh) of electrical energy, the amount of energy generated by a 1 kW PV system in almost a full year. RECS are authenticated in our area on the PJM Generation Attributes Tracking System (PJM-GATS) and are traded on the wholesale market for electricity. That is where buyers and sellers meet.

It is possible for small renewable generators to register their RECS and trade them on the open market but it is a cumbersome process and must be done annually. You cannot register anything less than 1 REC (1 megawatt-hour or 1000 kilowatt hours) and cannot carry over one year's production to the next. This is why there are REC aggregators, who work like brokers of the energy attributes, collecting them in small amounts of kilowatt-hours, registering these as RECS on PJM-GATS and selling them to buyers on the wholesale market. You can find contact information for REC aggregators at www.dsireusa.org. Or you can just let CMI Electric serve as your aggregator (more on that below).

What is CMI Electric’s policy on REC’s? We recognize that the true costs to society and the environment for "dirty" power are not reflected in your electric bill. To the extent that RECS help balance that iniquity, we support this infant market for green electricity and the Renewable Portfolio Standard. Thus every PV system we install includes a new "revenue grade" sealed kilowatt hour meter to tally your clean energy production and assure you eligibility to sell your RECS. We only use digital read out meters so you do not have to figure out kWh production from multiple analog dials.

You do not have to sell the "green attributes" of your electricity production. Some of our customers are not selling their REC's or are actively retiring them in order to maximize the environmental benefits of their PV systems.

For those customers who do wish sell their REC's, CMI will register your system as an eligible solar electrical renewable generator with the Public Service Commission in your area. Then we will establish and manage your PJM GAT account. When we have accumulated enough REC's from our customers (and our own systems), we sell them. We have a choice who to transfer the REC's to, and will focus on selling them to utilities who are required to purchase compliance REC's. We will not sell them to industries such as refineries, which purchase REC's because it is less expensive than installing available pollution control equipment.

REC aggregators often charge upwards of 25% or more to bundle and sell REC’s from small generators. CMI doesn’t intend to make a profit on the aggregation of REC's, nor do we need to cover our time. CMI does not charge its customers any kind of commission for aggregating their REC’s, however we are charged a $7 broker fee per REC and that comes out of the final price. CMI will aggregate REC’s for non-CMI installed customers at a 15% charge.

CMI sold Delaware’s first Solar REC's early in 2008. We aggregated our customer’s year 2007 REC's and were able to get $218 per REC for our customers. CMI sold $160,115 worth of REC’s for the 2008 REC year, getting increasingly higher amounts with each sale. The REC’s are dual certified in Delaware and Pennsylvania and being sold in both states to get the highest value. We hope to soon aggregate Delaware REC’s into Maryland as well where there is a booming REC market!

For more information about REC’s or if you would like CMI Electric to aggregate your REC’s please
visit our website at www.cmielectric.com or call us at 302-731-5556!