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What are REPS and RECs?
In August 2007, North Carolina became the first state in the Southeast to adopt a Renewable Energy and Energy Efficiency Portfolio Standard (REPS) requiring North Carolina utilities to meet up to 12.5% of their annual electricity output with renewable energy by 2021. Rural electric cooperatives and municipal electric suppliers are subject to a 10% REPS requirement.
An electric utility can meet the REPS requirements by:
1. generating their own renewable energy or
2. purchasing electric power from another renewable energy facility or by purchasing Renewable Energy Certificates (RECs) from renewable energy generation sources.
A Renewable Energy Certificate (REC) is a tradable financial certificate (like a stock certificate) representing the positive environmental attributes associated with a unit of renewable energy over a unit of electricity generated by a non-renewable fuel facility.
How Can a Government or Non-Profit Organization Take Advantage of This Opportunity?
-North Carolina government organizations and non-profits can use this law to create a green power profit center by financing and installing a renewable energy system, such as a photovoltaic (PV) systems, at their own expense and selling the generated electricity and RECs to a willing utility through 10 to 20 year power and REC purchase agreement
-Financing and installing a solar thermal heating, cooling and/or water heating system at their own expense, capitalizing on the thermal energy for meeting their own facility’s needs, and selling just the RECs to a willing utility or another purchaser through REC purchase agreements lasting 10 to 20 years
-Engaging a private solar developer that will own, finance, install and maintain the solar application (either solar thermal or electric), alleviating the facility owner of these typical costs. Additionally, the solar developer leases the space where the solar system is placed providing immediate positive cash flow to the facility owner.
Because of federal and state tax incentives, it is advantageous for the solar developer to retain ownership of the system for approximately 6 to 7 years during which time the tax advantages are exhausted. During this period any benefits from REC or solar electricity sale would be retained by the solar developer.
However, typically around year seven it is advantageous for the solar developer to sell and the facility owner to buy the solar system for a fraction of the cost. Because the facility owner is also the recipient of the balance of the initial power and REC purchase agreement this revenue stream enhances even further the positive cash flow advantages for the facility owner. Given that today’s solar systems remain in operation for over thirty years, the net cash benefit to the facility owner will be substantial.
Who is an Eligible Non-Profit Organization?
Public entities and non-profit organizations that can take advantage of a solar developer project include:
-The State of North Carolina including all departments and divisions;
-The University of North Carolina System and constituent institutions;
-North Carolina Community Colleges;
-Municipal governments including cities, towns, villages; and counties;
-Local school systems;
-Private universities, colleges, and K-12 schools; and
-Tax-exempt organizations.
What Services Can Innovative Design Provide?
Innovative Design has over thirty years experience in the renewable energy field and is uniquely positioned to assist you in pursuing a solar development project. Our relationships with solar developers and utilities; experience incorporating renewable energy systems into many projects; and understanding of the REC requirements enables us to best represent you in pursuing this great opportunity.
Our services for assisting you in a Solar Developer projects can include:
-Facility surveys or energy audits to determine appropriate opportunities;
-Indentifying potential solar developers and REC purchasers;
-Developing appropriate documentation of scope and unique project requirements;
-Developing Requests for Proposals or Bid Documents;
-Evaluating Proposals and negotiation of lease agreements/contracts; and
-Representing you during construction.
Innovative Design’s solar projects involving REC and/or power purchase agreements:
-City of Raleigh - 1.3 MW PV system at the Neuse River Wastewater Treatment Plant;
-City of Raleigh - 250 kW PV system at the E.M. Johnson Water Treatment Plant;
-City of Raleigh - 500 kW PV system at the Convention Center;
-Wake Technical Community College - 158 kW PV system for the North Wake Campus;
-Haywood Community College - 108kW PV system and a 50 ton absorption cooling system;
-Mecklenburg County - Five solar thermal systems on County buildings using ARRA funds; and
-City of Winston-Salem - Identified potential applications for solar thermal systems
-City of Raleigh - 185 kW PV system at the Time-Warner Pavillion
-Buncombe County School - 206 kW PV system and solar water heating at Enka High School
In August 2007, North Carolina became the first state in the Southeast to adopt a Renewable Energy and Energy Efficiency Portfolio Standard (REPS) requiring North Carolina utilities to meet up to 12.5% of their annual electricity output with renewable energy by 2021. Rural electric cooperatives and municipal electric suppliers are subject to a 10% REPS requirement.
An electric utility can meet the REPS requirements by:
1. generating their own renewable energy or
2. purchasing electric power from another renewable energy facility or by purchasing Renewable Energy Certificates (RECs) from renewable energy generation sources.
A Renewable Energy Certificate (REC) is a tradable financial certificate (like a stock certificate) representing the positive environmental attributes associated with a unit of renewable energy over a unit of electricity generated by a non-renewable fuel facility.
How Can a Government or Non-Profit Organization Take Advantage of This Opportunity?
-North Carolina government organizations and non-profits can use this law to create a green power profit center by financing and installing a renewable energy system, such as a photovoltaic (PV) systems, at their own expense and selling the generated electricity and RECs to a willing utility through 10 to 20 year power and REC purchase agreement
-Financing and installing a solar thermal heating, cooling and/or water heating system at their own expense, capitalizing on the thermal energy for meeting their own facility’s needs, and selling just the RECs to a willing utility or another purchaser through REC purchase agreements lasting 10 to 20 years
-Engaging a private solar developer that will own, finance, install and maintain the solar application (either solar thermal or electric), alleviating the facility owner of these typical costs. Additionally, the solar developer leases the space where the solar system is placed providing immediate positive cash flow to the facility owner.
Because of federal and state tax incentives, it is advantageous for the solar developer to retain ownership of the system for approximately 6 to 7 years during which time the tax advantages are exhausted. During this period any benefits from REC or solar electricity sale would be retained by the solar developer.
However, typically around year seven it is advantageous for the solar developer to sell and the facility owner to buy the solar system for a fraction of the cost. Because the facility owner is also the recipient of the balance of the initial power and REC purchase agreement this revenue stream enhances even further the positive cash flow advantages for the facility owner. Given that today’s solar systems remain in operation for over thirty years, the net cash benefit to the facility owner will be substantial.
Who is an Eligible Non-Profit Organization?
Public entities and non-profit organizations that can take advantage of a solar developer project include:
-The State of North Carolina including all departments and divisions;
-The University of North Carolina System and constituent institutions;
-North Carolina Community Colleges;
-Municipal governments including cities, towns, villages; and counties;
-Local school systems;
-Private universities, colleges, and K-12 schools; and
-Tax-exempt organizations.
What Services Can Innovative Design Provide?
Innovative Design has over thirty years experience in the renewable energy field and is uniquely positioned to assist you in pursuing a solar development project. Our relationships with solar developers and utilities; experience incorporating renewable energy systems into many projects; and understanding of the REC requirements enables us to best represent you in pursuing this great opportunity.
Our services for assisting you in a Solar Developer projects can include:
-Facility surveys or energy audits to determine appropriate opportunities;
-Indentifying potential solar developers and REC purchasers;
-Developing appropriate documentation of scope and unique project requirements;
-Developing Requests for Proposals or Bid Documents;
-Evaluating Proposals and negotiation of lease agreements/contracts; and
-Representing you during construction.
Innovative Design’s solar projects involving REC and/or power purchase agreements:
-City of Raleigh - 1.3 MW PV system at the Neuse River Wastewater Treatment Plant;
-City of Raleigh - 250 kW PV system at the E.M. Johnson Water Treatment Plant;
-City of Raleigh - 500 kW PV system at the Convention Center;
-Wake Technical Community College - 158 kW PV system for the North Wake Campus;
-Haywood Community College - 108kW PV system and a 50 ton absorption cooling system;
-Mecklenburg County - Five solar thermal systems on County buildings using ARRA funds; and
-City of Winston-Salem - Identified potential applications for solar thermal systems
-City of Raleigh - 185 kW PV system at the Time-Warner Pavillion
-Buncombe County School - 206 kW PV system and solar water heating at Enka High School
SOLAR DEVELOPMENT - YOUR POWER PROFIT CENTER
850 West Morgan Street, Raleigh, North Carolina 27603 I Tel. 919.832.6303 Fax. 919.832.3339