Renewable Energy Credit Agreement

[djcasava]

Hi there. Can someone explain the Renewable Energy Credit Agreement?

I received payment details for a solar glass roof and in it is a Renewable Energy Credit of $x dollars. If I take this credit, am I basically giving these RECs away for Tesla to sell any RECs the PV system generates? Or is a one time credit/rebate and I still OWN any RECs my PV system generates after it is officially on and I can still sell to third party? FYI, I am located in NJ. When I talked to Tesla Energy, they said I STILL own the RECs but reading the agreement, it sounds like I give up the rights of any RECs generation to Tesla Energy to do whatever with it.

Thanks in advance.

 

[wjgjr]

This sounds like a credit for permanently selling your SRECs (Solar Renewable Energy Certificates) for a one-time payment from Tesla. In markets with SRECs (I am in MD, which also has them) it seems standard for Tesla to include SRECs as a credit/incentive on the proposal because it lowers the bottom line number. However, I and others have noted that even if you decline their offer and exclude it in the contract, in certain places on the Tesla website, the credit is still listed as an incentive.

So, I would suggest carefully reviewing the contract Tesla is providing. Ours had a section on RECs (titled "Renewable Energy Certificates (RECs)") that said we own them and can sell them to third parties. It also nowhere listed any credit from Tesla for RECs, even though that number had been provided to us as an option in the proposal stage.

Of course, you are free to sell your SRECs to Tesla for that one-time credit, but the general consensus seems to be that if you are willing to put in the relatively small amount of time to get your facility registered and then manage it, the financial benefit of selling them yourself vs. taking the Tesla payment is significant. The Tesla offer really only is good for the convenience of not having to deal with the setup or if the credit is needed to help make the purchase feasible.

Also looks like a very nice credit you get in NJ - about triple what MD is paying - so if Tesla is only offering half or less of what they are really worth (which seems to be their general strategy,) I would definitely keep them.

 

[TheTalkingMule]

If you can afford to pay for your entire system, keep the SRECs. The monetization up front probably gets you $.50 on the dollar or less of what you'd see in 5-10 years. If paying for this is a squeeze on the budget, go ahead and do it. Your TSLA stock will go up! win-win-win!

 

[djcasava]

Ok. Have an update. Called Tesla Solar again this afternoon and they did confirm that if I do take the Renewable Energy Credit, I will give up any rights to sell any (RECs) that I generate. I told them to take that credit out. It's a 10kW system and cost is $47K before any ITC tax credit.