In a major victory for the DC solar market earlier this afternoon, the Council of the District of Columbia unanimously voted in favor of The Distributed Generation Amendment Act of 2011.  This bill is expected to be signed by the mayor within the next 10 days, and its passage will significantly improve the market for DC Solar Renewable Energy Credits (SRECs) and solar energy generally.  The legislation will amend the District of Columbia’s Renewable Energy Portfolio Act to significantly increase the demand for solar energy and ensure the RPS benefits the residents of the District.

The Distributed Generation Amendment Act of 2011 is expected to create over 1500 new green jobs[1] and direct around a billion dollars in investment into the District of Columbia over the next 10 years.  This investment stream will generate revenue opportunities for the city and mitigate up to 53,000 tons of carbon dioxide, making for a cleaner, safer, and healthier Washington, DC.  Perhaps most importantly, this legislation will facilitate innovative business models that will allow District residents and businesses of all economic backgrounds to adopt solar energy that will provide them with reduced energy bills over the next 30 years. 

Projected Solar Growth

The legislation comes at a time when the substantial decrease in SREC prices coupled with the exhaustion of the DC Renewable Energy Grant program appeared potentially fatal to a previously booming DC solar market.  Energy suppliers (who are mandated by the RPS to procure a certain percentage of solar electricity or pay an alternative compliance fee) could easily fill their quota for solar electricity by purchasing SRECs from systems in states outside the District.  This oversupply drove down prices, which led to DC solar businesses and potential customers losing faith in SRECs, one of the key financing tools for a solar system (Income from SRECs typically covers 20 to 40% of a solar system’s cost).

The passage of the Distributed Generation Amendment Act will catalyze the DC solar market.  Starting in 2011, the solar requirement for energy suppliers in DC will increase annually to higher percentages than the original RPS.  Furthermore, energy suppliers will no longer be able to purchase out of state SRECS to meet their demand.  With solar module prices continuing to drop, the passage of this amendment puts DC in a great position to take advantage of one of the fastest growing industries in the country.  Solar energy businesses in the District can rely on SRECs for financing, which will lead to significant employment opportunities, stimulate direct commercial investments in the city, and raise the profile of Washington, DC as a leader in green industry.

“This is a huge victory for DC and the solar industry at large,” notes Yuri Horwitz, CEO of Sol Systems, a solar finance company based in the District.  “This legislation is a direct result of the hard work and dedication of the local solar community working in concert with District’s City Council to craft a piece of legislation that is both realistic and game changing.  We have all seized the future.”

[1] Job creation estimates vary widely, and depend on the nature of solar development (residential or commercial). This paper has utilized an estimates of 10-25 full time jobs for each MW of solar installed.  See for a calculator and reference citations.