602 W. Fir Street, #302 San Diego, CA 92101 (619) 255-0487, fax (619) 255-0758 www.theleafexchange.

com

Explaining RECs
Here is a simple, high-level way to explain RECs to someone who has not previously heard of them: 1. Completely separate from electricity, your solar system produces Renewable Energy Certificates (RECs). One REC represents the green attributes of 1 MWh (or 1,000 kWh) of renewable energy. 2. RECs have monetary value because utilities need to purchase them to meet state clean energy mandates. California is in the process of implementing one of the most aggressive Renewable Portfolio Standards (RPS) in the country that requires they get 33% of their energy from renewables by 2020. 3. In order to sell your RECs for income, your system must be registered into WREGIS - the state REC tracking system and registry, and also RPS certified by the California Energy Commission (CEC). 4. RECs are crated based on gross system production. Every 1,000 kWh of energy produced = 1 REC. How much energy someone consumes (or if they are net user for the year) is irrelevant. Selling RECs for income is in addition to the CSI rebate program, the federal tax credit, and the Net Metering Agreement. Other important points: You must own your solar system to participate. The RECs from leased and PPA financed systems are typically owned by the financier. RECs are not a new concept. RECs currently act as the primary incentive for solar in 7 states: NJ, MA, PA, OH, DE, MD and Washington DC.

The sample math: Average sized residential 5 kW AC solar system in SoCal produces ~10/RECs year. We anticipate that RECs will be worth ~$20/each (or $0.02/kwh). Thats $200 a year of annual income that the solar system owner is entitled to. Leaf Exchange will charge a $3/REC transaction fee, so we would send a check for $170.

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