How many credits you can make depends on the amount of energy your site produces. In Alberta the number of credits you are entitled to create is calculated using a simple formula:
Number of credits, stated in metric tons of CO2-equivalent emissions (tCO2e) = Megawatt hours x Emissions Factor
So, let’s say your site produces 1,000 megawatt hours in solar energy this year. With the current emissions factor set at 0.57, this would entitle you to create 570 credits.
Solar offsets in Alberta trade at a 15 – 30% discount to the price of carbon. As of January 31, 2022, the price of carbon in Alberta was $50/tCO2e. It is true that prices fluctuate, however environmental mandates and federal pressure have meant that carbon prices have risen over time.
What influences the discount amount? In general buyers are looking for newer projects and larger bulk purchases of credits. Older generation is typically discounted more heavily, as are smaller batches of credits. This is one reason it’s valuable to work with Rewatt: our larger pool of credits can attract larger buyers looking for more volume.
The credit offset period is the timeframe when your site is entitled to create solar offsets. For solar emissions offsets in Alberta this period is eight-years. In some cases renewal is possible and that provides an extension of another five years.
It’s important to understand that this period begins when your site is first attached to a project (a regulatory vehicle) NOT when your site is first operational.
We require an exclusive contract with sites over their offset period. In practice this means that if you onboard a site to Rewatt Market and begin to create credits with us, then this site will exclusively create credits through Rewatt for its eight year term.
Once the credit creation period is over, if you wish to remain on the platform, you can choose to either create and sell renewable energy certificates (RECs) or apply for a renewal – if granted, the renewal will entitle you to five more years of offset credit creation.
You own the right to your environmental credits, so long as you haven’t given or traded them away. This is usually not a problem unless you received grant funding or participate in other environmental programs.
It depends. Some grants require that you transfer the rights to the environmental credits produced from your solar project, while others do not. The answer will be in the terms and conditions you signed. Contact us if you have questions about eligibility.
Note: We look for a clause in your contract that “conveys environmental attributes” or “conveys environmental credits” to the government.
Funding that enables eligibility for carbon credits:
Canada Greener Homes Grant (NRCAN)
Green Inclusive Building Grant (GICB)
Pre-2019 Alberta Municipal Solar Program (MCCAC) (Please check your terms and conditions because a switch occurred halfway through 2019)
Growing Forward 2 (Alberta On-Farm Solar PV Program)
Clean Energy Improvement Program (CEIP)
Funding that restricts environmental attributes, making a system ineligible for carbon credits:
Residential and Commercial Solar Program (EEA) aka NDP Grant
Post-2019 Alberta Municipal Solar Program (MCCAC) (Please check your terms and conditions because a switch occurred halfway through 2019)
City of Edmonton Change Homes for Climate Solar Program (Solar Rebate Program)
City of Edmonton Building Energy Retrofit Accelerator program
Emissions Reduction Alberta Grant (ERA)
Energy Savings for Business (ESB): Comprehensive Energy Savings Program
Renewable Energy Certificates (RECs)
City of Medicine Hat’s HATSMART Program
Adding new sites or expanding the capabilities of existing solar sites can extend the offset period for an additional five years.
While both solar offset credits and RECs incentivize positive environmental impact, these instruments differ in some material ways:
Since the purpose of these instruments differs, demand for them differs too. For sellers it is important to appreciate that one solar offset credit tends to trade at a higher value than one REC on an energy equivalent basis.
Alberta TIER Offset System: the system in Alberta that regulates the creation and trading of emission offset credits.
Carbon Offset Credit: commonly referred to as offsets, these environmental credits represent a verified quantity of greenhouse gas (GHG) emissions reductions from a project based activity. Offsets are purchased by organizations to reduce their overall net emissions footprint and are measured in one metric ton of CO2-equivalent emissions (tCO2e).
Emissions Factor: the coefficient which converts energy data (MWh) into GHG emissions (tCO2e). It is the average emission rate of a given source, relative to units of activity or process/processes. In Alberta, emission factors are published in the carbon offset emission factors handbook
Offset Period: the period of time for which carbon offsets can be claimed by a project under the Alberta TIER Offset Trading System.
Renewable Energy Certificate (REC): an environmental credit. RECs are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from renewable energy resources.
Spot Price: the spot price is the current price for the credits in the marketplace at which the credits can be bought or sold for immediate delivery.