Observing the forecasted increase in carbon pricing, solar photovoltaic (solar PV) system owners often believe that waiting a few years before creating carbon offset credits will result in higher revenue from their systems. There is, however, no guarantee that the price of carbon will increase as forecasted, nor is there any guarantee of continued eligibility for solar PV systems to produce carbon offset credits; both considerations are politically dependent.
Already, these clarifications argue for the immediate enrolment into carbon offset credit generation; however, there is further reason:
On January 1st, 2024, the Electricity Grid Displacement Factor (EGDF) will decrease. This is guaranteed.
What is the EGDF? The EGDF is a factor used to calculate the quantity of carbon offset credits generated by an eligible offset project; it equates to the number of carbon credits created per MWh of solar electricity generation, and the Government of Alberta dictates its value. Solar-generated electricity displaces utility grid electricity, and the forecasted greenhouse gas emissions intensity of the displaced grid electricity determines the EGDF.
Why does this is matter? The EGDF decreases on January 1st of each year due to increasing amounts of renewable energy contributing to the utility grid and more efficient fossil fuel generation. This decrease means fewer carbon credits are created per MWh of solar electricity generation. Solar PV systems contracted with Solar Offset in 2023 are eligible to lock in an EGDF of 0.55 tCO2e/MWh (i.e., 0.55 carbon offset credits per MWh of generation) for the full 10-year crediting period. Any solar PV system contracted with us in 2024 or later will be subject to a series of EGDFs, which decrease each year. Ultimately this amounts to 30% less revenue generated from the exact same system if it is registered in 2024 instead than 2023.
For example: Consider a 6KW solar PV system installed and enrolled with Solar Offset in 2023. The revenue to the system owner is considerably higher if they sign with Solar Offset in 2023 compared to delaying until 2024.
Date Agreement signed | Estimated revenue to the system owner (for the full 10-year crediting period) |
Dec 20th, 2023 | $2,558 - $3,289 |
January 1st, 2024 | $1,738 - $2,234 |
The solution: Don’t delay! Sign up with Solar Offset before December 22nd, 2023 (before we power down for the holidays).