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CLEAN Contracts a Cheaper Solar Policy than Solar REC Markets
With lower risk and increased transparency, CLEAN Contracts make solar power cheaper than other solar policies like solar REC markets, says a new report from the Institute for Local Self-Reliance.
The report also models the potential impact of New York’s proposed solar Solar Industry Development & Jobs Act of 2011 and finds that “the CLEAN Contract Program provides 40 percent greater ratepayer savings than an SREC program while providing 13 percent more solar power.”
CLEAN Contracts finance solar power development by requiring utilities to offer long-term (e.g. 20-year) contracts on a first-come, first-served basis at per-kilowatt-
“Many states were attracted to SRECs by the deceptive allure of the market,” said John Farrell, ILSR senior researcher and report author, “but this report highlights the irony: the volatility and cost of SRECs make this ‘market-based’
The report details the major differences in the two solar policies, focusing on the risk factors for developers. In all categories – including policy transparency, longevity and certainty – CLEAN Contracts make the process of developing solar projects less complicated and less risky. CLEAN Contracts also more accurately price solar power than SRECs, because the former provides a modest return on investment based on the actual cost of installing solar power projects while the latter represent the surplus or shortfall of solar relative to a state-mandated demand for solar (and can fluctuate wildly).
The result is that CLEAN Contracts deliver more solar power at a lower cost.
CLEAN v. SREC: Finding the More Cost-Effective Solar Policy can be downloaded on ILSR’s Energy Self-Reliant States website at http://energyselfreliantstates.org/
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