27 Oct Rebate vs. Portfolio Energy Credits (PECs)
Solar Energy Incentives: Rebate vs. Portfolio Energy Credits Comparison
State Rebates and Portfolio Energy Credits or PECs (also called Solar Renewable Energy Certificates or SRECs in many states) have been fundamental in the development of the Solar industry. The rebate seems like a no-brainer- a couple of thousand dollars off the total project cost of your system can make or break a deal when it comes to Solar. But – what are you giving up by taking this rebate? Below are some tips on making the decision to take the rebate or keep your PECs from an expert on the subject.
In Nevada, NV Energy is currently offering a rebate of $0.40/watt for rooftop solar installations*. This amounts to $1,000 to $3,000 for an average-sized system. Nevada opened up this rebate with the intention of leaving it open until all the money in the State fund has run out. As more people sign up for the rebate the amount offered ($0.40/watt) will decrease, giving you a smaller incentive for the same size system.
When you accept the NV Energy rebate you hand over your PECs to NV Energy. One PEC is equivalent to 1 kWh of generation from a qualifying renewable energy source. As your solar system continues to generate energy, you will accumulate PECs that have value at NV Energy.
NV Energy uses these PECs to meet state standards for renewable energy production (Nevada’s Renewable Portfolio Standard or RPS requires NV Energy to be 25% renewable energy by 2025). In the past, NV Energy has paid out $300 to $800 for an average size system for a single year of generation. Over the life of your system, it’s clear that you can earn more money back from PECs than from the rebate. The issue with PECs (or if you’re into economics – an interesting issue) is that it’s a market-based policy, meaning that it’s based on supply and demand so getting money back every year is not guaranteed.
Pros and Cons of Rebates and PECs
|Reduces your out of pocket cost||It’s a one-time thing- once you accept the rebate you don’t have the opportunity to earn more later the way you do with PECs|
|Most companies will apply for your rebate for you- saving you time.||When you purchase a system, the rebate must be reserved before work can begin. That means, if NV Energy is backed up it could be a month before work is approved!|
|Right now, the rebate is as high as it will ever be and will only decrease in the future.||The rebate is lower than it was previously and there’s a chance you could earn more back in the future with PECs.|
|Gives you the opportunity to earn a small amount of money annually as your system produces energy. Over the long run, if managed properly, you could earn more back from these PECs than you might with the rebate.||Higher upfront cost for the system because with this incentive, your return is spread out over a long period of time.|
|Sol-Up will sign you up and manage your PECs for you!||If you’re on your own with managing these PECs it can be challenging to go through the PUCN process of application and reporting.|
|In Nevada Solar PECs have a higher value than for other credits, making it more worthwhile for NV Energy to purchase these credits from solar owners.||The future value of PECs is difficult to estimate because it’s based on State and National policies and market demand for non-polluting resources.|
|Using PECs as an incentive is less expensive to the state and the rate payer. Because the seller, buyer and state benefit it’s a win win win!|