A solar carve-out is a portion of a state’s Renewable Portfolio Standard (RPS) that establishes a particular objective for solar-panel-generated power. 

Solar carve-outs in the United States allow for solar to account for between 0.3 percent and 14.5 percent of total energy output in each state, with goal dates ranging from 2025 to 2041. Solar carve-out laws frequently contain incentives that compensate solar owners for the energy their panels generate. 

Solar Renewable Energy Credits, or SRECs, are a type of incentive that system owners receive for each megawatt-hour (MWh) of power generated by their panels. 

Utilities purchase SRECs as “evidence of renewable generation,” which helps them satisfy their RPS and solar carve-out requirements. If those targets aren’t fulfilled, utilities face steep fines, so SRECs are so valuable: it’s cheaper to acquire clean energy credits than it is to design, get approval for, and build large-scale solar projects. 

A performance payment (also known as a feed-in tariff) is a type of solar carve-out incentive that pays for each kilowatt-hour (kWh) of energy generated, either instead of SRECs or handing over all SRECs generated by the system. These more direct payments cut out the middleman—in this example, an SREC broker or bundler—and directly compensate solar panel owners regularly. 

It’s worth noting that solar carve-outs don’t always result in SRECs or performance bonuses. Despite the lack of an RPS, several states without carve-outs (such as Rhode Island) have performance rewards for solar. 

It’s also worth noting that SRECs and performance bonuses aren’t the only incentives available in states with solar carve-outs. In addition to their SREC programs, Delaware and Maryland give rebates.

• Uncategorized