Roll Your Own RECs
Last week I wrote an article titled "Real Renewable Energy vs. Renewable Energy Credits" where I looked at the issue of renewable energy credits (RECs) versus direct purchase of renewable energy. (For some followup to that story, a podcast of the WDET radio program ‘Detroit Today’ where the issue of the local REC program was discussed is now online. In addition to discussing the DTE Greencurrents program, the Austin (TX) green energy program was also explored and compared with the REC program.)
While buying renewable energy credits helps to support the development of alternative energy solutions, many times these programs are not specifically local. The credits you are buying may be for energy produced in a different region entirely. If part of your goal in purchasing RECs is to support and encourage the development of local renewable energy, then a generic REC may not be what you want.
The state of Michigan has recently started a new program called MI-REX (Michigan Renewable Energy Exchange), which is intended to bring together people interested in purchasing renewable energy credits with the owners of small renewable energy systems who have credits to offer. At this point the program is just in a pilot phase, and no RECs have been sold yet. The state website has an application form to gather more information about the systems people would like to register and offer credits.
This program would allow small energy producers (possibly even including individual homeowners) with wind or solar renewable energy systems from 1kW to 100kW in size to sell renewable energy credits from the power that they have produced. (A solar array of 4-5 panels or a wind turbine with a 10-12 foot diameter might be all that is needed to reach the 1 kilowatt threshold.)
This particular program is only available for producers in the state of Michigan, but other states may be developing or already offering similar programs. MI-REX RECs will be denominated in Megawatt hours or in tenths of a megawatt hour. Certificates will be issued annuallyfor the entire previous year’s production. Buyers will have to purchase the entire certificate (no partial certificates will be allowed) after which the MI-REX will be retired.
Selling RECs isn’t going to be a cash cow, but it could be a little bit more assistance in paying for a renewable energy system. A wind turbine that is generating an average of 500 kWh/month (a reasonable figure for a well situated household wind turbine ) could earn $120 from selling the RECs if they were sold for 2 cents per kWh (or $20 per MWh).
MI-REX credits are expected to first be available in early 2008 for RECs generated during 2007.
