What’s Next for Leaf Exchange
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We published a blog in December about the bad news we got from the California Public Utilities Commission (CPUC) on 12/15/11. The CPUC ruled that Renewable Energy Credits (RECs) produced by California solar systems are not classified into the in-state ‘bucket 1′ category; but instead categorized into the less desirable ‘bucket 3′ category. As a point of reference, ‘bucket 3′ RECs are currently trading around $2/REC, whereas ‘bucket 1′ RECs are being quoted between $20 and $40/REC. This was a key ruling that we had been waiting on for a long time, and it went decidedly against us. Small scale California solar system owners got screwed over big time, which we believe was an unintended consequence.
There is a realistic chance that this discriminatory decision gets corrected though a revised bill in the state legislature, but that will take a while. We are currently working with a number of parties to submit a letter to the Governor’s office and state legislature to gauge the support of a reversal decision. There were over 20 parties who submitted formal comments to the CPUC in support of our position, including: SDG&E, PG&E, SoCal Edison, LADWP, Calpine, Duke Energy, Shell, Solar Alliance and CalSEIA to name a few. Hopefully we are able to coordinate with some of these big allies to try and get this reversed.
For the time being Leaf Exchange will continue to process new registrations and do ongoing reporting for our existing clients. So from a customer’s perspective it’s business as usual; although we may take a bit longer to respond to customer inquiries as we have gone down to a smaller staff. We do acknowledge that if California REC values stay in the $2 per REC range, our business model is not viable. The revenue gained from selling RECs does not overcome the cost of getting registered, and it will not make sense for small generators to participate. Lastly we want to reassure our customers that you 100% own your banked RECs and they are safe and sound. If we later decide to shutter Leaf Exchange we will be responsible in returning your RECs in a practical way, at no cost to you. We will share any important updates as they become available.
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