City of Palo Alto Utilities - Renewable Energy Credit Purchase Program

June 10, 2011


City of Palo Alto Utilities (CPAU) currently purchases Solar Renewable Energy Credits (SRECs) to meet the demand for the solar portion of their retail green power program, PaloAltoGreen, through a third-party contract with 3-Degrees, Inc. PaloAltoGreen is a voluntary program through which CPAU customers can support renewable energy development by paying an extra 1.5 cents per kilowatt-hour (kWh) for their electricity needs. CPAU then uses this money to purchase wind and solar power Renewable Energy Credits, or directly install city-owned systems.

Current demand for the solar portion of PaloAltoGreen is approximately $60,000 per year, expected to increase to $120,000 or more per year in the next three to five years. In an effort to support solar development within CPAU's service territory, rather than purchasing SRECs from outside sources, the City Council voted unanimously in December 2007 to enter into contracts with their commercial and industrial customers for the purchase of the SRECs associated with their solar installations. CPAU currently pays $50/MWh for SRECs through 3 Degrees, Inc and prices are expected to vary between $30/MWh and $150/MWh in the future. The price that CPAU will offer their local customers will be at or below these expected costs.

To expedite the application and contractual process, the City Council has delegated the contractual authority to the City Manager. To ease the administrative burden of the program, only systems that exceed 100 kW are being considered initially, which is the same minimum size requirement for the performance-based incentives in the PV Partners Program. Contract terms can not exceed 20 years and the contracted amounts can not exceed $600,000.

As of June 2009, CPAU is purchasing SRECs from a 906 kW DC photovoltaic (PV) system on the rooftops of several buildings on the Roche Palo Alto campus which generates up to 1.4 million kilowatt hours in electricity each year.

Program Overview

Implementing Sector: Utility
Category: Financial Incentive
State: California
Incentive Type: Performance-Based Incentive
Web Site:
Start Date:
Eligible Renewable/Other Technologies:
  • Solar Photovoltaics
  • Wind (All)
  • Wind (Small)
Maximum Incentive: $600,000 per contract
Terms: Maximum term of 20 years


Name: City Council Resolution 8773
Date Enacted: 12/3/2007


Name: Customer Service
Address: 250 Hamilton Avenue, 3rd Floor
Palo Alto CA 94301
Phone: (650) 329-2241

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.