November 2015 issue: Top Products Issue

Are your clients using green energy?

Maybe not, according to the FTC

Let’s talk about your solar clients, and how they aren’t really your solar clients.

Well, that’s half true. They may be your clients because they paid you, I hope. But are they your solar clients? Turns out, the FTC says your customers can only speak or print words like, “I’m using solar energy,” if they own the RECs, or Renewable Energy Certificates, that go along with their system.

RECs were a major topic at Renewable Energy Markets 2015, a conference in Washington, D.C., that I attended last month. According to the EPA, RECs assign property rights to the environmental, social and other non-power qualities of renewable electricity generation. RECs were created more than a decade ago to help stimulate the solar market.

Importantly, the EPA goes on, a REC can be sold separately from the underlying physical electricity associated with a generation source. In other words, the idea of a solar system and the electricity it creates are separate commodities, and each can be sold independently. Large corporations, such as Google, Apple and Starbucks, purchase RECs to offset their carbon footprints and show they are “green.” A big problem (at least among the companies that deal in RECs and the FTC) called “double counting” occurs when the owner of a system’s RECs and the owner of the actual, physical system each claim the non-power benefits of the same array.

Confused? Let me offer an example: Joe Sunny installs a 250-kW system on the roof of his business. He proudly advertises this fact on his website. Joe Sunny doesn’t know about RECs, and why would he? There is a good chance the standard contract Joe signed with his contractor gave away his right to them. Nevertheless, he tells all his friends, family and customers that he is creating his own solar energy. It sure seems like it, too: He’s getting credits on his electricity bill. He feels good about his contribution to the health of the planet. And the array has been a good marketing tool, landing him a business deal.

Steven BushongThe problem is, if Joe Sunny doesn’t own the RECs for his system, he just landed that deal in direct violation of Federal Trade Commission rules. And if someone, perhaps his competitor or a website reader, complains to authorities, he could receive a warning letter in the mail. If he fails to change his “messaging,” legal consequences can follow from the FTC or the party that actually owns the RECs. From now on, according to the FTC, Joe Sunny will have to tell his potential customers, friends and family that he “provides the physical space for the production of clean to furrow brows.

Is this right, wrong, somewhere in between? Let us know what you think on Twitter (@SolarPowerWorld). To learn more about RECs and making legitimate claims about the use of solar energy, find the FTC’s Green Guides on Google.