Sure, we know that electricity is technically a quantifiable resource. But it's a bit hard to conceptualize processes like buying and selling it because, well, we just can't see it. Renewable energy certificates, or RECs, help to bridge that gap. RECs are certificates issued by the government establishing ownership of renewable energy. One REC is issued for every 1,000 kilowatt-hours (kWh) of energy funneled back into the grid.
PURPA requires that utilities purchase a certain amount of their electricity from renewable sources. RECs essentially serve as proof that they've fulfilled this obligation. So although RECs won't charge your laptop or keep the lights on in your apartment, they allow renewable electricity producers to profit while giving traditional producers an easy way to go green -- vicariously.
So how much money can you make selling electricity back to the grid? Since rates vary with the market value of electricity, there's no set dollar figure that you can expect to take home. However, many home producers make around $3,000 per year from a combination of REC sales and governmental clean energy incentives.
Sounds great, right? But before you commit to an investment in renewable energy, make sure you have the full story. Here are a few things you should ask your electric company before getting started:
- What kinds of systems can be connected to the grid? (Different utilities may have different restrictions on the types of generators that can be used. Your electric company's Web site should have a list of certified or pre-approved systems. If your system isn't on that list, you may still be able to connect, but with a few extra compliance steps. You should be able to find those on the Web site as well.)
- What is the authorization process for connecting your system to the grid? What are some possible safety concerns?
- What rate (usually paid per kWh) will you be paid for the electricity you produce?
Still can't get enough? Check out lots more links about electricity resale below.
More Great Links
- Brain, Marshall. "How Power Grids Work." HowStuffWorks. (Dec. 5, 2011) https://science.howstuffworks.com/environmental/energy/power.htm
- Environmental Protection Agency. "Green Power Market." (Dec. 5, 2011) http://www.epa.gov/greenpower/gpmarket/index.htm
- Environmental Protection Agency. "Renewable Energy Certificates (RECs)." (Nov. 23, 2011) http://www.epa.gov/greenpower/gpmarket/rec.htm
- Gangemi, Jeffrey. "Selling Power Back to the Grid." Bloomberg Businessweek. Nov. 25,2011. http://www.businessweek.com/smallbiz/content/jul2006/sb20060706_167332.htm
- Knier, Gil. "How do Photovoltaics Work?" NASA. (Dec. 6, 2011) http://science.nasa.gov/science-news/science-at-nasa/2002/solarcells/
- Locke, Susannah. "How does solar power work?" Scientific American. Oct. 20, 2008. (Dec. 2, 2011) http://www.scientificamerican.com/article.cfm?id=how-does-solar-power-work
- National Renewable Energy Laboratory. "Renewable Energy Basics." (Dec. 1, 2011) http://www.nrel.gov/learning/re_basics.html
- Sewall, Adam. "How Much Do Solar Panels Cost?" Get Solar. Nov. 1, 2010. (Dec. 7, 2011) http://www.getsolar.com/blog/how-much-do-solar-panels-cost/12707/
- Southern California Edison. "Renewable Energy." (Dec. 7, 2011) http://www.sce.com/PowerandEnvironment/Renewables/default.htm
- Southern California Edison. "Assembly Bill 920: Frequently Asked Questions." (Dec. 11, 2011) http://www.sce.com/customergeneration/nem-ab920.htm#Q12
- U.S. Energy Information Administration. "How much electricity does an American home use?" (Nov. 25, 2011) http://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3
- United States Department of Energy. "Frequently Asked Questions on Small Wind Systems." (Dec. 4, 2011) http://www1.eere.energy.gov/wind/small_wind_system_faqs.html#benefits
- United States Department of Energy. "Metering and Rate Arrangements for Grid-Connected Systems." (Dec. 23, 2011) http://www.energysavers.gov/your_home/electricity/index.cfm/mytopic=10600