Tuesday, December 12, 2006

Utilities and installers fight over renewable energy credits

photo credit (c)Tomo.Yun

In California, the battle is on between renewable energy equipment owners and utilities as to who should benefit from renewable energy certificates, created when businesses or homeowners install solar power.

Renewable energy certificates are normally the equivalent of one megawatt hour (MWh) of electricity (one MWh powers about 1,000 homes for an hour), and are issued when entities have implemented enough renewable energy. These certificates can then be traded to entities that have not met the renewable energy standards set by the policymakers. Although the certificates aren't worth much yet, many believe they do have market potential, especially with an increasing number of states' incentives for renewable energy. A renewable energy credit system is expected to be operating in the Western U.S. in mid-2007, thanks to California's global warming legislation and the number of companies marketing themselves as climate-friendly.

It's up to California's Public Utilities Commission to decide whether utilities or solar equipment owners should be awarded the certificates. Solar energy companies and their customers say the solar companies should get the credits for the equipment they install, while the utilities argue that they should receive the certificates because their customers subsidize the solar power systems through the incentive programs. Utilities also want the certificates to help them meet CA's standard of purchasing 20% of their electricity from renewables by the year 2010 (perhaps increasing to 33% by 2020 in the near future).

The California Solar Initiative's goal is to get about one million homes powered by solar by the year 2017. This is a fight the utilities and the installers aren't going to back down from quickly.

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