Renewable portfolio standards (RPS) have been responsible for the rousing upsurge of solar development in the US. Nearly 60% of all growth in green energy sources is accredited to state RPS requirements (Lawrence Berkeley National Laboratory). District of Columbia has RPS laws obligating local utility companies to supply a specific amount of electricity from renewable energy sources such as solar and wind. DC solar RPS requirements have recently been expanded to bring environmental, economic and social benefits.
How this impacts you
Over the past few decades, technology has made strides in perfecting solar panels in order to utilize the very source that has been free for billions of years, the sun. Installing a solar power system on your roof can free your wallet from the grid and curb unpredictable electricity prices. In fact, the more electricity prices rise, the greater your savings. DC is the perfect example of how a more aggressive RPS can bring with it more efficiency savings and offset the use of fossil fuels.
Here’s the rundown of DC solar RPS requirements
DC has had an RPS since 2005 with a renewable energy target of 20% by 2020. In October 2016, a greater green power production was added which expands the renewable energy target to 50% by 2032. There’s also a 5% “carve-out” for solar. These mandates are set by lawmakers in collaboration with experts in the science and energy communities as a way to drive renewable energy solutions. What’s more, RPS laws creates incentives to make a solar installation very affordable:
- Net Metering policies allow solar users to offset the cost of power drawn from the utility, hence, lowering your monthly electricity bills. You’ll always get credit for the power that your solar panels produce.
- Federal Tax Credit deducts 30% of the cost of your PV system installation, applicable to both residential and commercial. This major tax credit is available through the end of 2019 after which it will drop to 26% in 2020, and 22% in 2021.
- Solar Renewable Energy Certificates (SRECs) can be sold for up to $500 per MWh in the market. Utilities will buy SRECs to meet DC solar RPS requirements.
Making money with SRECs
SRECs are worth a lot of money; it’s important to understand how they work so that you can get the most benefit out of them. Basically, utility companies can buy electricity from solar owners in the form of SRECs. For utility companies, SRECs serve as purchasing proof of clean energy production in order to meet DC’s RPS laws. SREC prices are influenced by supply and demand – the more demand there is for SRECs from the utility, the higher the price. That said, SREC value in DC remain the highest due to undersupply, lingering at around $440 per MHh produced. For comparison, Massachusetts has the second highest SREC payout at around $277, following by New Jersey at around $230.
These unequivocal benefits of going solar make it a good investment if you act fast, which is as easy as scheduling a solar evaluation for your property.
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