The debate continues and much of it is political rhetoric and posturing. Does the SREC system work? The numbers released for 2010 show a system that is still in its infancy that may or may not be the best way to handle the distribution of profits on electricity generated by residential and commercial solar panels. There are currently 7,700 solar generators in SREC states and only twenty of them produce more than one megawatt. Of those, only two are over ten megawatts, a 10MW facility in Illinois and a 12 MW plant in Ohio. By comparison, the Blythe Project in California, which is not an SREC state, will be producing 1.25 Gigawatts of power by the end of the year.
Some would say that’s comparing apples to oranges, but the complexities of the SREC system might be the greatest obstacle to its success. In order to cash in, generators of solar electricity need to hit a certain level of production before they’re eligible to do anything with their certificates. The State of New Jersey, where the SREC program originated, has a total solar capacity of 145 MW and a minimum SREC requirement of 260 MW for 2011. The requirements were put in place to encourage growth in the solar industry, but they are going up faster than solar installations are.
Why do states without SREC offer a better opportunity for solar development? Some of it is climate. The Mojave Desert is certainly one of the best venues for commercial solar installers to place PV panels. Another reason is the installation incentives offered by the state legislatures. The SREC program was put into effect in New Jersey when the state ran out of money to invest in renewable energy. Tax rebates were taking their toll and grants were out of the questions. SREC was the supposed solution.
In the UK, a system called FIT (feed-in tariffs) is being used as incentive for solar development. During the first six months of feed-in tariffs, over eleven thousand generators have registered for the tariff, marking the largest surge in solar photovoltaic installations to date. With 11,352 renewable systems now installed, it suggests that the scheme has been more successful than predicted, with enough output to power thirty five thousand homes. Feed-in tariffs work by offering fixed, premium rates for both the energy generated from renewable systems (which is then fed-back into the grid), and the energy used. So far, it’s proving to be more effective than the SREC system.