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Dreaming the Impossible Dream:

A Regional SREC Market for the Northeast

While it would be natural to think of strong solar resources as being the major driver for the installation of solar, that is not the case. The major drivers are: (1) high electricity rates; and (2) strong policy incentives. Which is why Germany is the world’s solar leader, despite solar resources that are about as dismal as Alaska’s.

It’s also why the Northeast could become a national solar powerhouse. As a region, the Northeast (including the nine New England and five Middle Atlantic states) has some of the nation’s highest electricity rates and many of its states have enacted — or are in the process of enacting — innovative solar incentives. New Jersey, in particular, has become a national solar leader as a result of its widely imitated solar program, which rewards businesses and homeowners that generate solar energy with Solar Renewable Energy Certificates (SRECS), performance-based financial instruments representing the environmental benefits of solar that are purchased by utilities in order to meet state-mandated requirements for solar electricity generation.

These state-mandated requirements, called Renewable Portfolio Standards (RPSs), when implemented in connection with SREC markets, are the most effective incentive for solar. In order to promote the implementation of solar, the RPS in many states includes a “solar carve-out,” which stipulates that a certain amount of electricity be generated from solar. In the Northeast, five states — Delaware, New Jersey, Maryland, Massachusetts and Pennsylvania — have implemented SREC markets as a means of meeting solar carve-outs; two others, Connecticut and New York, are considering them. While still a relatively new concept, SREC markets are expected to grow nationwide from approximately 520 MW in 2011 to nearly 7,300 MW in 2025, according to the National Renewable Energy Laboratory.

The major reason behind this anticipated growth is that the states recognize that solar is good for business. Solar helps businesses compete by reducing operating costs. Many businesses that install solar are able to offset most, if not all, of their electricity load, resulting in savings of tens or even hundreds of thousands of dollars annually. Solar also serves as a hedge against future rate increases, which are a given considering the Northeast’s overburdened distribution systems and outdated generation facilities. The financial benefits of solar have spurred the installation of commercial solar in states with strong incentives. New Jersey, for instance, has surpassed sunny California as the nation’s leader in commercial solar installations. Also, because solar production is greatest during periods of peak demand — i.e. during the day — the widespread installation of solar also helps utilities cope with increased demand during these periods, thus contributing to grid reliability.

The Northeast needs the economic shot in the arm that solar can provide. Since the loss of its industrial base in the mid-20^th century, the region has lagged behind the rest of the nation in economic development as a result of its older demographics, high cost of doing business and inadequate and congested infrastructure. The widespread implementation of solar could give the region a competitive edge, not only nationally, but globally as well. Just as Germany is betting on its commitment to solar to stimulate economic development, so can the Northeast. German Chancellor Angela Merkel believes her country’s transition to a renewable energy economy will bring opportunities in the form of “exports, developing new technologies and jobs.” Similarly, solar could become the catalyst that turns the Northeast into a renewable energy powerhouse. The Northeast could become the nation’s “renewable energy belt,” just as the energy-rich states that supply the nation’s gas and oil are its “energy belt.”

In order for this to occur, however, there has to be long-term stability and transparency in the SREC markets: businesses and investors are discouraged by incentives that are here one day and gone the next, or SREC values that bounce all over the place. Innovative new policies also need to be implemented to promote solar in sectors ignored by existing policy initiatives. Finally, holdouts such as Maine and New Hampshire have to get on board. Much of this is already happening. Recognizing the need to iron out the kinks in New Jersey’s groundbreaking solar legislation, policymakers recently enacted a solar “resurrection bill” to address some of the problems. New policy initiatives such as virtual net metering, which promotes solar in the public, multi-family and other sectors, are also being enacted. Finally, the holdout states will soon have stronger incentives to implement SREC-type incentives once electricity rate hikes associated with upgrading the grid that are now in the works take effect.

Although these achievements are commendable, it will take regional cooperation to get to the next level. The Northeast needs to promote a regional SREC market by doing away with fractured, state-specific regulations and replacing them with a single, unified SREC market. Eliminating geographic barriers to SREC trading will create a consistent, long-term SREC market that will accelerate regional investment in solar. While this might seem as daunting a task as getting the European Union countries on board with regard to fiscal policy, the major requirement — the commitment of many of the region’s states to an SREC market — has already been accomplished. Moreover, the precedent for such a regional initiative exists in the form of the Regional Greenhouse Gas Initiative, a cooperative cap-and-trade effort to reduce greenhouse gas emissions among nine of the 11 New England and Middle Atlantic states.

Those who may consider a regional SREC market an impossible dream should look back at how far we have come. As of Aug. 31, 2012 my home state of New Jersey had nearly 18,000 solar installations, compared to only 3 in 2001. In Germany, renewables now supply more than 25 percent of the nation’s energy. In order to get where you are going, you have to have a destination in mind. If we don’t look ahead to establishing a regional SREC market, we will never get there. — Stefanie Matteson

In addition to our stellar reputation for strategic cleantech communications, we at Antenna are known for throwing some amazing shindigs. And after a year full of challenges for the renewable energy industry, the phrase “work hard, play hard” never felt more appropriate.

So, along with sponsors Tioga Energy, Yingli Solar, PV Group and Vote Solar, we toasted to our perseverance as the solar industry converged in San Francisco for the Intersolar North America conference.

The Shrine at Prana was filled with 900 of our closest friends from across the industry, including C-level executives, engineering geniuses and distinguished members of the cleantech media.

Fantastic conversation, delicious food and a superb soundtrack made for a memorable evening.

Antenna Senior Vice President Caroline Venza, Senior Account Executive Christine Bennett and Account Executive Kimberly Setliff with Ellen White of 3M’s Renewable Energy Division

Yum!

Did we mention the World Cup mascot made an appearance?

Zakumi loves solar!

Many thanks to everyone who helped us make this event a tremendous success. We can’t wait to do it again next year!

Compass

If you are concerned, as I am, that climate instability is a critical issue, then you are very lucky to be a PR pro. Your craft gives you the power to make a difference. No scientific finding will be acted on unless someone has the skill to explain and transmit it. Solutions will go unused unless thousands of PR pros like you and I direct our skills to create understanding and the will to try.

Challenge equals opportunity. There is a ground swell now: Flagship businesses are proving that sustainable practices are safer and more profitable, especially as new policies include the real costs of wastefulness.

Scientists, entrepreneurs and policy-makers are searching for improvements to every practice of civilization. Governments on every continent face the need for transformation. And citizens want to do more than spend their lives as unconscious consumers. Green is good business; it’s industry; it’s life.

Four PR paths

There are four PR paths: Cleantech, Corporate Sustainability, Green Lifestyle and Government Relations. Build on the brand you have. If you excel at corporate counsel, then learn the principles of corporate sustainability. If your expertise is in consumer products, lifestyle or healthcare, then you can shift toward green lifestyle and LOHAS (lifestyles of health and sustainability).

If you’re in government relations, you may already be experiencing a boom in demand. Modern energy and efficiency have been designated the saviors of our economy and environmental woes.

My passion is cleantech. Emerging technology has always excited me: I love being at the edge of change and am willing to accept the business risk that comes with that.

Guidelines for going green

Like a good physician, above all, do no harm. Entrenched power players will keep acting in their short-term self-interest. You don’t have to help them. The knowledge you may have of a dirty business can get you a good job or client engaged in cleaning it up.

Avoid greenwashing, for your company or your clients. Do your homework and bring your heart to your work: How satisfying that is!

Don’t be afraid to set sail in a new direction.  Antenna Group was founded in dotcom days. I met our first solar client at a cleantech venture-capital event. Go meet new people and perspectives.

Build community. If there aren’t useful green networking events in your area, you can organize them for your clients as a way of refocusing their practices and brands. Antenna started our Power Hours three years ago – now we host seven or eight receptions a year, each with a different co-host to spice up the guest list. We also sponsor events.

Extend from your base of strength. Building on one good client in the solar space, we now represent about a dozen solar companies (and many more in other cleantech areas). The first one is still a happy client, five years later. We’re now attracting Fortune 500 clients seeking guidance in areas new to them.

High-tech PR with industrial gunk

Like the technology PR of recent decades, cleantech PR works with wildly creative scientists and entrepreneurs. We try to win our clients a temporary suspension of disbelief so they have a chance to turn their dreams into reality. Using our technical and business knowledge, we paint their products into the landscape and translate their technology’s features into the audience’s benefits.

Unlike Web 2.0 and software high-tech, cleantech is about the messy physical stuff of our world. It spans many different industrial and manufacturing sectors and is overlaid with complex issues of public policy and finance.

For each client at least one audience will be extremely technical, yet you also have to be able to communicate to business, finance, government and community audiences, internationally. If your practitioners do not genuinely enjoy the constant learning about science, technology and policy, you will lose either them or your clients.

In hiring I aim to create a mix of people to learn from each other. Those with strong technical affinity collaborate with skilled PR pros, as everyone grows. My ideal entry-level candidate arrives with a dual-major degree in Communications and Environmental Science or Economics.

Purpose at a premium

While these people are deeply purpose-driven, they are talented high-achievers who expect to be rewarded well. I’m still trying to figure out how to charge the premium the craft deserves. The traditional industrial sector hasn’t invested much in marketing, other than IR or crisis communications.

But marketing spends will grow as the young cleantech industry sees more big successes and becomes increasingly competitive. Companies get the best leverage on their PR investment when pursuing a large market opportunity in the midst of substantial competition. And there’s never been a larger market opportunity than modern energy.