Virginia Renewable REC Market: New Classification and Opportunity to Monetize RECs

Virginia stands among the states with multiple classifications of Renewable Energy Certificates (RECs). The state's Renewable Portfolio Standard (RPS) has refined requirements by classifying RECs. In Virginia, there are two primary classifications: Distributed Generation (DG RECs) and Virginia Renewable (Ren RECs).

Given that Virginia's RPS is relatively new, certain systems previously registered in other markets may now have the opportunity to generate VA Ren RECs. This is particularly relevant for systems with solar generation that was ineligible for certification in their primary market. A notable scenario is observed with Pennsylvania systems, where retroactive allowability is not permitted, and RECs can only attain certification upon system registration. Consequently, previously uncertified systems in Virginia can now generate RECs.

For instance, a Pennsylvania system interconnected on 2/15/2022 and registered for PA SRECs on 9/1/2022 could now have newly certified VA Ren RECs for the generation that occurred between 2/15/2022 and 9/1/2022.

The DG classification, often referred to as VA SRECs, primarily targets solar energy technology and is widely discussed in Virginia. Most solar owners in the state fall under this classification, with the stipulation that the system must have a revenue-grade meter for tracking purposes.

On the other hand, Ren RECs encompass a broader spectrum of renewable energy technologies, including solar, wind, biomass, geothermal, and low-impact hydropower. Unlike DG, this classification is open to all eligible systems located in the PJM Grid, covering parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Tennessee, Pennsylvania, West Virginia, and the District of Columbia. The inclusive nature of Ren RECs fosters flexibility, encouraging the development of diverse clean energy projects. Importantly, a revenue-grade meter is not mandatory for this classification.

In conclusion, Virginia's multi-classification approach has opened up new possibilities for monetizing RECs. The distinctions between DG and Ren RECs provide avenues for solar and other renewable technologies to contribute to the RPS.