Opportunities for UI Customers to add Renewable Generation to their homes or businesses
Public Act 11-80, which was signed into law by Gov. Dannel P. Malloy in July of 2011, has substantially
expanded the opportunities for customers to develop renewable energy at their homes and businesses.
Residential Solar Investment Program
For residential customers seeking to add solar energy to their homes, the Connecticut Clean Energy
Finance and Investment Authority (CEFIA) runs a Residential Solar Investment Program that seeks to
create 30 megawatts of new residential solar installations by 2022. The program offers options for
customers who want to buy and own solar energy systems, and also for customers who would prefer to
lease systems to minimize their up-front investments. Customers may choose between up-front
incentives (rebates) and incentives received over time. Details are available at the link below.
http://www.ctcleanenergy.com/YourHome/ResidentialSolarInvestmentProgram/tabid/616/Default.aspx
CEFIA may also be contacted at (860) 563-0015.
LREC and ZREC Program
The Low Emissions Renewable Credit (LREC) and Zero Emissions Renewable Credit (ZREC) program is
more expansive than the Residential Solar Investment Program, allowing for the development of
different types of behind-the-meter renewable energy. It is available to all customer classes. . Under this
program, UI and The Connecticut Light & Power Company (CL&P) are required to purchase Renewable
Energy Credits from owners of small, behind-the-meter renewable generation under 15 year contracts.
This new program was created in Public Act 11-80, and will provide funding to owners of small
renewable energy generation projects that are located at customer sites. The program creates an
opportunity for UI customers to “go green” by installing renewable generation on-site. Renewable
Energy Credits (RECs) created by the projects would be purchased by UI under 15-year contracts. These
15-year contracts provide predictable revenue streams from renewable generators, which greatly assist
in obtaining project financing. In addition, excess energy produced can be sold back to UI at tariff rate
NE.
UI expects that the majority of residential customers who are seeking to install solar energy panels on
their homes will find the CEFIA program to be a better approach from an economic standpoint.
However, should customers choose, the LREC/ZREC program is open to all customer classes, including
residential.
Renewable Energy Credit (REC): To best understand the opportunity created by the LREC/ZREC
program, it is helpful to know what a “REC” is. A Renewable Energy Credit, or REC, is the marketable
attribute that distinguishes renewable generation from conventional generation. The REC is an
electronic certificate that accompanies the energy production at a renewable generation facility. All
generation produces Energy as a commodity. Qualified renewable generation produces two
commodities, energy and RECs. The REC product allows the renewable attribute to be separated from
the actual flow of energy. This is the instrument that allows qualified renewable generation to receive
more revenue than conventional generation.
RECs were introduced to New England in the year 2001 to provide an additional revenue stream for
renewable generation to incentivize development and ease financing of new projects. Utilities or thirdparty competitive suppliers are required to purchase RECs to meet established state Renewable
Portfolio Standards (RPS). The proceeds from the REC sales go to renewable generators. There is a
system that tracks the production, transfer and “consumption” of RECs in New England called the
“NEPOOL GIS” system (http://www.nepoolgis.com/). When renewable generation is metered, electronic
certificates (RECs) are created in the NEPOOL GIS, and the renewable generation owners can then sell
these RECs to obtain revenues.
The number of RECs that are created by a qualified resource is in direct proportion to amount of energy
that is produced by the resource. For every one megawatt-hour of renewable energy produced, one REC
is produced. One Megawatt hour equals 1,000 kilowatt (kW)-hours. To produce Connecticut-qualified
RECs, the project must obtain certification from the Public Utilities Regulatory Authority.
LREC/ZREC projects are specifically behind-the-meter renewable generators that qualify as Class I
renewables under Connecticut’s RPS law. Class I RECs are the most valuable RECs in the Connecticut
market. The Connecticut Class I RPS requirement is currently 9% and will be 20% by 2020. This means
that by 2020, utilities and third party competitive suppliers will need to purchase Class I RECs in an
amount equal to 20% of their customer load.
LRECs & ZRECs Defined
LRECs and ZRECs are not separate products in themselves. They are simply Connecticut Class I RECs.
However, they are distinguished from other Class I RECs through certain qualification criteria, and
through long-term contracts to sell RECs to UI or CL&P, which are the exclusive means for procurement
of LRECs and ZRECs. Below are specific qualification criteria for LREC and ZREC projects.
Requirements for both LREC & ZREC Projects:
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Project construction completed on or after July 1, 2011
Projects must be located behind the customer revenue meter
Projects must not receive ratepayer funding through CEFIA, or its predecessor, the Connecticut
Clean Energy Fund (CEFIA financing is permitted)
Projects must obtain Connecticut Class I certification from the Public Utilities Regulatory
Authority prior to payment for RECs
Requirements Specific to LREC Projects:
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Projects may not be larger than 2 megawatts (2,000 kW) in installed size
Projects must meet low emissions requirements set forth in Public Act 11-80
Projects must be selected for 15 year contracts through a competitive bidding process
Requirements Specific to ZREC Projects:
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Projects may not be larger than 1 megawatts (1,000 kW) in installed size
Projects must emit no emissions
Projects larger than 100 kW in installed size must be selected for 15-year contracts through a
competitive bidding process
Projects that are 100 kW or smaller in installed size may qualify for 15-year contracts through a
tariff mechanism on a first-come, first-served basis
LREC/ZREC Program Overview
On April 4, 2012 in Docket No. 11-12-06, the Public Utilities Regulatory Authority approved the joint
Solicitation Plan filed by UI and CL&P. On May 1, 2012, UI and CL&P issued a joint Request for Proposals
for LRECs and ZRECs from projects larger than 100 kW. UI also offers a tariff-based rate for Small ZREC
projects of 100 kW and less. Details regarding all aspects of the program, including active requests for
proposals, the approved form of 15-year contract, metering requirements, and other relevant
documents are available at:
http://www.uinet.com/powerprocurement
Click on “RFP for LRECs and ZRECs” for information regarding low emission projects and zero emission
projects over 100 kW in size, or click on “Small ZREC Program” for information regarding zero emission
projects 100 kW or smaller.
The complete record of Public Utilities Regulatory Authority Docket No. 11-12-06 is available at:
http://www.dpuc.state.ct.us/dockhist.nsf/(Web+Main+View/All+Dockets)?OpenView&StartKey=11-1206
The program was designed for direct participation by renewable energy developers and customers that
are experienced in wholesale power & REC transactions. UI anticipates that the majority of customers
will need to partner with experienced renewable energy developers to take full advantage of the
program. UI cannot offer advice or assistance to customers seeking to develop projects beyond general
information such as this web page. Also, UI does not provide assistance on how to select a renewable
contractor, but the State of Connecticut provides the following information:
CEFIA has an approved contractor list found at the link below:
http://www.ctcleanenergy.com/YourHome/ResidentialSolarInvestmentProgram/FindanApprovedContra
ctor/tabid/85/Default.aspx
Additional renewable contractors:
The Builders/Developers/Construction Management Green Product and Services Listing of The
Connecticut Chapter of the US Green Building Council
http://www.ctgbc.org/Default.aspx?pageId=1106826