Florida Utility Trades Green Certificates Derived from Solar Hot Water Heaters

October 29, 2004

Lakeland Electric made history this month when it became the first company to sell green energy credits derived from solar water heaters. Other companies have been selling credits (also known as green certificates) from electricity derived from solar photovoltaics (PV) for several years. Lakeland Electric, a municipal utility serving Lakeland, Florida, generates these credits from its solar hot water program that began in 1998 with financial support from the Florida Energy Office of the Department of Environmental Protection. For more on the project, see a May 2002 SEP case study.

Here is how the credits work. The certificates are separated from the energy generation and represent the renewable portion of the commodity. They can then be traded separately from the energy because the use of renewable energy eliminates the need to combust fossil fuels in conventional generation to meet customers' energy needs. This green commodity is not delivered to the home of the purchaser. Instead, these credits can be traded to other utilities for their retail green programs. For more information, see an online explanation from EERE's Green Power Network titled Renewable Energy Certificates.

Earlier this year Lakeland Electric assigned 330,000 kilowatt-hours (kWh) of certificates it had generated in its solar programs to Sterling Planet (a developer and marketer of renewable energy in the Northeast). In September Sterling Planet sold certificates from 25,000 kWh of electricity generated from PV and 25,000 kWh of thermal energy generated from solar thermal panels for $0.04 per kWh.

Lakeland Electric's Green Energy Coordinator Jeff Curry said the transaction is notable because it did not result from a regulatory mandate. Curry said, "It was 100% driven by supply and demand market forces."