Hi Bob,
This point is often debated but it does have a bit of a “how many angels can dance on the head of a pin” quality to it. At the end of the day, RECs and SRECs help to fight climate change and I am not about to argue against them.
The generalized version of the debate over who owns the zero carbon claim on a REC is: whoever pays for the carbon footprint reduction is the rightful owner of the claim that they have cut that carbon footprint. This has some logical sense to it, if I pay for a car I own it including the right to brag about how good I look while driving it. The federal government subsidized 30% of the cost of my arrays. The SREC subsidy was for about another 30%. Net metering subsidized more than the remaining 40%. Net metering is the biggest of the subsidies because I am paid 23c/kWh for my electricity when the wholesale price for electricity is about 12c/kWh. I paid very little of the overall cost of my arrays. An economist would argue that since the NPV is positive at a 3% discount rate that I have actually paid nothing for my arrays. The total subsidies exceed the total cost. I agree with the economist. I have not paid anything for my solar panels, I been paid to own my solar panels.
By this logic, the cut in my carbon footprint should be owned 30% by the federal government, 30% by the purchaser of the SRECs (whoever that may be) and about 40% by Eversource because it pays the excess price to me for the net-metering. Logic then, requires that Eversource claims it owns 40% of my carbon footprint reduction, not 100%. And the 40% claim is because of the net-metering subsidy not because I have sold the SREC. Unless Eversource can prove that is has actually bought my SRECs (and not somebody else’s) it has absolutely no basis for claiming that I cannot claim my zero carbon production.
So, logically the argument that Eversource owns 100% of my claim to zero carbon electricity is invalid. At best it has a claim to 40% and not because it bought SRECs.
An exception to this would be if the various parties had contractually agreed to split the bragging rights. Some contracts do explicitly say who has the bragging rights. But mine do not. The federal government could have claimed to have 30% (or 100%) of the bragging rights in return for the tax credit, but I have not made any such agreement with the federal government. Neither have I made any such contractual obligation when selling my SRECs through my aggregator, nor with Eversource in my net-metering contract.
Furthermore, the argument that Eversource owns the bragging rights to my zero carbon electricity is not only logically flawed, it does not pass a basic legal test of ownership. A restaurant does not claim it owns half my meal if it gives me half off the usual price. The fact is that I get to eat the meal no matter who pays for a subsidy in order to buy it for me. By analogy, the owner of the array (not the one who subsidizes it) is the one who has the right to make the claim about cutting the carbon footprint. I am indisputably the owner of my solar panels. I wrote the check to the installer for the full $75,000 purchase price. My solar panels are not owned 30% by the federal government, 30% by the owner of my SRECs and 40% by Eversource. I own my array lock, stock and barrel, including the right to sell it to someone else, and all bragging rights associated with the zero carbon electricity it produces.
So, in my opinion, the argument that the purchaser of an SREC (in the absence of an explicit agreement to allocate the bragging rights) has the right to claim that it has cut its carbon footprint fails both the logical test and the legal test of ownership. I own my solar panels and I have the sole right to claim that I have produced electricity with a zero-carbon footprint. No one else has any such claim, even those who have subsidized the cost of buying the solar panels.
Again I look forward to your response Bob.