Buyer beware: Solar power may be missing key ingredient

January 17, 2016 byDave Gram
In this April 29, 2013, file photo, Jon Kirkpatrick carries a solar panel up to Bevan Walker for an installation for SunCommon in Montpelier, Vt. The Vermont attorney general's office issued a warning letter to solar industry players in December 2015 saying some could face penalties for deceptive advertising if they are not clear when consumers are buying electrons but not environmental benefits. SunCommon, Vermont's largest seller of community solar, is taking renewable energy credits tied to community solar projects and selling those credits to utilities in Massachusetts and Connecticut so they can meet state renewable energy quotas. It's commonplace and legal for companies and governments to swap energy credits. (AP Photo/Toby Talbot, File)

Want to cut reliance on your fossil-fuel-burning utility, but don't have space for solar panels? Easy, the sales pitch goes, buy a share in the new "community solar array" being built on the outskirts of town.

But experts and regulators say there's a catch. Some of the biggest marketers of such deals are stripping the "green" benefits out of them and selling them elsewhere, leaving homeowners with a small discount on the same electricity they were using before.

It's commonplace and legal for companies and governments to swap energy credits. In this case, though, critics say it's a case of environmentalism meets the old Tom Waits line: "The large print giveth and the small print taketh away."

What SunCommon, Vermont's largest seller of community solar, is taking away are the credits, or RECs, tied to community solar projects. They're selling those credits to utilities in Massachusetts and Connecticut so they can meet state requirements that they get a certain percentage of their power from renewable sources.

Severin Borenstein, a business administration professor at the University of California at Berkeley, who has followed the issue, described it this way in a blog post this month:

"If you've installed solar at your home and are now basking in the I'm-saving-the-planet warm glow, you may be in for a splash of ice water. There's a good chance someone else has purchased your halo and is wearing it right now."

Duane Peterson, SunCommon's co-president, argued in an interview that selling the RECs separately is key to keeping energy affordable for his consumers.

"We're really clear with folks what's going on with renewable energy credits," he said.

Others disagree.

The Vermont 's office recently issued a warning letter to solar industry players saying some could face penalties for deceptive advertising if they are not clear when consumers are buying electrons but not environmental benefits.

The attorney general's warning says in part, "If your solar project sells the RECs, do not make any statements or suggestions that consumers are using renewable energy from your project."

SunCommon's website has four alternating front pages advertising "solar at no upfront cost," ''Ditch fossil fuels, invest in solar" and saying its "mission is to tear down the barriers to renewable energy." In a web-based ad for a community solar project in Bridport, posted in July, there was no mention that RECs would be sold out-of-state.

Since the attorney general's warning letter last month, SunCommon has added information about RECs to its website, but it's still on an inside page of the site, near the bottom.

The nation's largest solar marketer, San Mateo, California-based SolarCity, promises on its website that customers can "power your home with clean energy. ... Move to a cleaner, renewable energy today." But the contract notes that the green aspects of the power can go elsewhere.

Renewable energy credits tied to the customer's solar installation "are the property of and for the benefit of SolarCity, useable at its sole discretion," it says.

SolarCity has about a 34 percent share of the U.S. residential solar market, according to GTM Research, a market analysis firm. SolarCity expanded its footprint into Vermont this year, opening an office in Burlington.

"We're still reviewing what the attorney general has published on this and we've reached out to his office to make sure we understand all the requirements, but we will make sure that our contracts and advertisements comply with the law in Vermont," spokesman Jonathan Bass said in an email.

One difficulty is simply understanding what a REC, usually pronounced as "wreck," is.

The federal Environmental Protection Agency explains it this way:

A REC "represents the property rights to the environmental, social, and other nonpower qualities of . A REC, and its associated attributes and benefits, can be sold separately from the underlying physical electricity associated with a renewable-based generation source."

The electricity and the REC can be sold together or separately; the important thing is that the consumer knows the difference, said Bill Bender, president of Solaflect Energy, a White River Junction, Vermont, company that sells them together.

If the RECs are sold separately, a Vermont solar investor is getting what the attorney general calls "null electricity," and what Bender called "residual mix" from the New England grid, which as of last year was 39.4 percent natural gas-generated and 34 percent nuclear.

Vermont may soon have company in warning consumers to be wary. The Illinois Commerce Commission is reviewing possible rules, said Brad Klein, an attorney with the Chicago-based Environmental Law and Policy Center in Chicago.

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11 comments

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Eikka
2 / 5 (4) Jan 17, 2016
A similiar thing is happening in Europe as well. Renewable power produced in countries like Germany or Spain enables the sale of carbon credits to other countries, which use them to produce more electricity with coal to sell back to offset the variability of the renewable energy production.

No real CO2 reduction happens, or at least not due to the renewables.
cijbm
3 / 5 (6) Jan 18, 2016
Who cares as long as more solar power is being produced and as to no reduction in CO2 emission happening are you trying to say that the solar pannels are not producing any engery at all and if they are is that not mitigating CO2 emission. "Green credits" are not "green" solar panels are "green" really story is not science just bureaucratic non-speak.
bluehigh
3.2 / 5 (9) Jan 18, 2016
Is this a win-win?

The loonie greenies get some acceptable power generation and/or pollution reduction.

The rampant capitalists get to trade carbon credits for profit.

Thats all good, huh?
antialias_physorg
4 / 5 (4) Jan 18, 2016
Who cares as long as more solar power is being produced

Yes. The problem here is one of marketing, only (i.e. marketing to people who think that because they pay for 100% solar rate that only energy produced via solar will come out of their sockets). What you, as a consumer, are paying for is the obligation of the power company to source as much power from solar as you use. This still obligates energy producers to install solar panels somwhere and get their power on the grid.

It doesn't matter whether you, personally, therefore save on fossil fuels or whether the power goes to lower the fossil fuel percentage used to produce the energy for the nearby steel mill. The end result (for the environment) is the same.
Mike_Massen
1.9 / 5 (9) Jan 18, 2016
bluehigh the pig headed redneck bogan loon at it again with
Is this a win-win?
The loonie greenies get some acceptable power generation and/or pollution reduction.
The rampant capitalists get to trade carbon credits for profit.
Thats all good, huh?
Heard of Science bluehigh, Physics bluehigh, chem eng bluehigh, maths bluehigh, biology bluehigh, food science bluehigh, plastics bluehigh ? ? ? ? ? ? ? ?

Gawd you are such an full incompetent & impotent loon, why do you bother to embarrass yourself so very often AND whats more so make it clear to us in no uncertain terms you are "of no consequence (ONC) to Science", of ONC to mature debate, ONC to any science communication, ONC to anything at all to progress the human condition, ugh, splat ? ? ? ?

Why do you bother, why are you even here, ugh splat, dumb impotent kernel excuse for divergent evolution commensurate with 10 million bacteria, ugh, yuck !
Lord_jag
3.7 / 5 (9) Jan 18, 2016
All this shows is that there are too many carbon credits out there. We can be greener. Germany shows that.

So we should be greener. Everyone needs fewer carbon credits to trade making them ever more valuable.

So if Germany decides it would rather be green, they should be getting millions if not billions or trillions from the sale of carbon credits it doesn't need to use.

Want to pollute? Go right ahead. It'll cost you though.

This is the pathway to a world where polluting matters because it's hitting your pocket books.
Eikka
5 / 5 (3) Jan 21, 2016
We can be greener. Germany shows that.


If all the neighboring countries to Germany went as "green" as Germany, the European synchronized grid would collapse from the waves of power surplus and deficit. The major reason why Germany can have such a large portion of renewables is because it has strong interties to large neighbors which have not, which means they can absorb the power fluctuations caused by Germany.

Austria for example, being a small country just next to Germany, has installed phase shifting transformers at the borders to Germany to control the power going back and forth to Italy, to stop it from overloading their grid.

As more and more nations approach Germany's level of wind and solar power, the "virtual battery" vanishes and everyone's in trouble. The Nordpool grid area for example, if built to full wind capacity, will experience 50% swings in production with virtually no means to buffer it. It's just lights on, lights off.

antialias_physorg
5 / 5 (3) Jan 21, 2016
If all the neighboring countries to Germany went as "green" as Germany, the European synchronized grid would collapse from the waves of power surplus and deficit

So? We're not done yet with the chageover. Storage is already starting to be built to counteract this. It's only natural that production would come online before storage (the other way around would be rather pointless).

You're always doing these naivley, simplistic overgeneralizations that have nothing to do with how the real world works. You ever notice that?
bluehigh
3 / 5 (2) Jan 21, 2016
Anti-Thinking with a losing hand resorts to an unprovoked personal attack, again.

Wipe your chin, you're dribbling.
bluehigh
3 / 5 (2) Jan 21, 2016
@Mad Muttering Mike - kitchen appliance technician and Wikipedia reader.

Don't have a cow man.
Mike_Massen
1 / 5 (5) Jan 24, 2016
bluehigh claims
@Mad Muttering Mike - kitchen appliance technician and Wikipedia reader
Beg Pardon ?

What kitchen appliances, where, when, do you mean control systems I designed for temperature, speed or otherwise, the company which took them overseas ?

If you think you found them then post the links, you will see they are a heck of a lot more than mere kitchen appliances despite the fact the market is huge & there are a lot of potentially commercial viable design offerings there as well :-)

So to correct you, I designed Carbon Monoxide sensor amplifiers for triggering large fans in underground car parks to ensure air is safe to breath maintaining air quality...

Tell me bluehigh whats wrong with using wikipedia as a simple reference for uneducated here & address the many mindless claims that pop up especially in respect of Physics ?

Is it Mad bluehigh to have an education & defend against people who can't tell difference between ugly idle claim & Evidence ?

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