As California considers more policies to reduce greenhouse gas emissions, green energy projects like solar become critical to the adoption of these policies. Changes to the Low Carbon Fuel Standard (LCFS) for California does more than just offset your power bills. It lets you earn additional revenue through the sale of the renewable attributes of your solar by virtue of a Renewable Energy Certificates (REC).
California allows solar energy generated on its grid to be “minted” as a REC, then sold to entities needing to purchase green energy for LCFS compliance. Compliance requirements for LCFSs will grow more rigorous each year (see chart), as the state permits less conventional fuel consumption and demands more low-carbon fuel consumption. Working with Coldwell Energy’s energy experts means we’ll register your system, then broker the credits to parties in need of the credits.
What’s the length of the LCFS Program?
The LCFS program targets specific compliance levels by 2030 (see chart). With each passing year, compliance will become more rigorous, and the value per REC is predicted to increase.
What if I need the RECs for my business?
If you need the credits for compliance with state or federal regulations, you may exit the agreement without penalty. Upon providing us notice, we ask only for up to 12 months to unwind any buyers we’ve lined up for your credits.
Will the RECs go up/down in price?
It is difficult to say in which direction the credit price will go since the market is based on supply and demand. More solar and other LCFS-compliant “fuels” mean more supply, lowering the price per REC. But as more drivers adopt the use of electric cars, and as the LCFS places greater emphasis on green energy, there will undoubtedly be more demand, leading to price increases. Though there are no guarantees, we remain hopeful credit prices will increase, providing greater returns for our customers.
Can I procure RECs myself?
Yes, but the process of registering and finding buyers for the credits can be cumbersome for a single project. We find that counterparties want greater scale generally, which makes it likely they’d get either a reduced rate per REC or need to work with a broker who’d take a hefty cut for the transaction. Moreover, the process of compliance is rigorous, so staying compliant with the program’s governing parties can be challenging. Our suggested alternative is to let us handle the headache and seek out rates on your behalf per REC that would most likely be unattainable were you to take this on yourself.
How Coldwell Energy Helps
Coldwell Energy maintains relationships with an extensive portfolio of clients. Entities in need of LCFS compliance help benefit significantly from the diversity of our client portfolio and breadth of experience, limiting hassles associated with the need for multiple transactions. The scale we offer delivers fewer headaches and better “buying power” in the value you earn per REC.
Next Steps
Given the presence of both the REC buyers and the need to stay compliant with the LCFS program, there is a lot of documentation associated with managing your credits. We handle it for you, while developing and maintaining your new revenue stream, so you can stay focused on your business.
- Contact Coldwell: Coldwell will manage the process of bringing your system into compliance with the LCFS program through the state-mandated tracking system known as WREGIS.
- Become LCFS Compliant: Once registered, your solar-powered system will begin accumulating RECs on WREGIS, which will go through a 3-month “minting” period, where the state will ensure your credits are LCFS-compliant.
- Sell the Credits: Once the RECs have “minted,” we’ll bring them to our LCFS “credit-hungry” counterparties to see who will give you the best rate. Once we find an agreeable buyer, we will sell the credits.
- Get Paid: Coldwell will pay you the generated revenue from your RECs on an annual basis!