Renewable Energy Certificates (RECs)

Renewable Energy Certificates (RECs), also known as Green tags,  or Renewable Energy Credits, are tradable, non-tangible energy commodities in the United States that represent proof that 1,000 kilowatt hours (kWh) or 1 megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource.  These resources may include solar and wind energy. RECs in Oklahoma are predominantly based on wind power production.

Once in the grid, renewable energy is impossible to separate from electricity generated by fossil fuels. This makes the purchase of a REC equivalent to purchasing a claim that the REC owner consumed energy from the renewable energy generator. Thus, if a consumer purchases sufficient RECs to offset their electric usage, then the REC owner can claim that all of their electricity is generated from renewable resources. In the case of wind REC purchases that completely offset consumption, buyers can claim all of the electricity they used was produced from emission free resources. The purchase of a REC does not affect how much renewable energy was made at a precise moment, but it does provide funding for the utility to enter into additional long term renewable energy purchase agreements.

Incentives

Oklahoma offers a variety of incentives for renewable energy technologies.  For a complete listing, including links to reference statues and legislation, please visit the Database of State Incentives for Renewables and Efficiency (DSIRE).

Net Metering

In 1988 the Oklahoma Corporation Commission (OCC) adopted terms and conditions of purchase that govern the supplying and delivering of power to a cooperative/utility’s electric system by a small power producer or cogenerator (as the terms are respectively defined under the Public Utility Regulatory Policies Act of 1978) of 100 kilowatts or less.

Under the adopted rules, net metering is available to all customer classes. There is no limit on the amount of aggregate net-metered capacity, and utilities are not allowed to require new liability insurance as a condition for interconnection.

In April 2014 Oklahoma’s governor signed S.B. 1456, allowing utilities and regulated electric cooperatives to apply to the Oklahoma Corporation Commission for approval to apply a fixed charge to customer-generators who install net-metered distributed generation on or after November 1, 2014.

In May 2019, the Oklahoma Corporation Commission adopted new net metering rules raising the system size limit to 300 kW, removing the 25,000 kWh annual generation limit, and requiring utilities to compensate net excess generation at their avoided cost rate.

Net Excess Generation

Utilities and regulated electric cooperatives are  required to purchase monthly net excess generation (NEG) from customers at the avoided cost rate.

Under provisions in S.B. 1456 utilities are allowed to apply to the OCC for permission to apply a fixed charge to customer-generators who install net-metered distributed generation on or after November 1, 2014. Previously, utilities had not been allowed to impose extra charges for customers signed up for net metering. The accompanying Executive Order 2014-07 clarified that S.B. 1456 does not mandate increased charges for distributed generation customer-generators and directed the OCC to consider alternative rate reforms such as time-of-use, minimum bills, and demand charges before allowing the implementation of a fixed charge for net-metered systems.

Eligible technologies include: Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Geothermal Electric, Municipal Solid Waste, CHP/Cogeneration, and Small Hydroelectric.

You should check with your electric utility provider for their specific programs and rules around net metering.

Energy Efficient Residential Construction Tax Credit

Oklahoma allows a contractor who is the primary builder of an energy efficient home or manufactured home substantially completed after December 31, 2005 to claim an income tax credit beginning in tax year 2006. The home must be under 2,000 square feet. Improvements eligible for the credit include: energy efficient heating and cooling systems, windows, doors, roofs and insulation to minimize heat loss and gain.

The contractor can take a tax credit for the amount of the eligible expenditures, not to exceed $2,000 for a home that is between 20% and 39% above the International Energy Conservation Code 2003 or $4,000 for a home that is 40% or above of the Code. In addition, the heating and cooling efficiencies must meet the minimum requirements established by the National Appliance Energy Conservation Act of 1987 and building envelope improvements must account for a certain percentage of the reduced annual heating and cooling energy consumption levels.

The contractor can carry over any unused portion of the tax credit for up to four subsequent years. As the result of a 2006 amendment, credits earned after August 25, 2006 are freely transferable to any taxpayer upon the filing of a transfer agreement.

Commercial Property Assessed Clean Energy (PACE) financing

Commercial Property Assessed Clean Energy (C-PACE) is a financing mechanism designed to encourage energy and water efficiency improvements, renewable energy systems, and building resiliency projects for commercial properties. As a voluntary, open-market financing model, C-PACE allows commercial property owners to secure private low-interest, long-term loans for eligible permanently affixed energy source or energy-efficiency, water conservation, or resiliency improvements whereby the loan is placed on the property in the county land records as a special assessment. The financing is repaid annually by the property owner over the useful life of the improvements. As a property special assessment, the financing arrangement then remains with the property even if it is sold, facilitating long-term investments in building performance. The longer-term payback allows the efficiency improvements to pay for themselves over time.

In Oklahoma, C-PACE financing may be made available for commercial building improvements which include HVAC upgrades, boilers, chillers and furnaces, automated building controls, high efficiency lighting, building envelopes (insulation, windows, etc.), low-flow fixtures, solar, geothermal, electric vehicle charging stations, and other energy source, energy-efficiency, water conservation, and resiliency improvement projects.

In early 2020, during the shortest legislative session in state history, an amendment to the C-PACE statute was approved by the legislature and signed by the Governor, establishing the legal groundwork for the C-PACE program that operates today.

Continuing through 2020 and with assistance from the Oklahoma Department of Commerce, Tulsa County officials, private sponsors, and many C-PACE stakeholders throughout the state and country, the Indian Nations Council of Governments (INCOG) with PACE Financial Servicing worked to design, develop and launch the Oklahoma C-PACE Program early 2021.

The first counties to become enabled, authorizing the Oklahoma C-PACE Program were Tulsa and Cleveland County. Tulsa County closed the first C-PACE project in May 2021. Canadian County then became the third Oklahoma C-PACE enabled county, in July 2021.  As of Spring 2024, there are 19 counties in the program and we are actively working to expand C-PACE to counties throughout the state.  See the Participating Counties page for an updated county map.

Regarding residential PACE programs, the Federal Housing Financing Agency (FHFA) issued a statement in July 2010 concerning the senior lien status associated with most PACE programs. S.B. 102 amends the law to make PACE loans junior and inferior to other liens. Effective November 1, 2011, this law should allow local governments to adopt PACE programs that are within the acceptable parameters established by the FHFA. In 2014, the FHFA issued a statement clarifying that it would not allow either Fannie Mae or Freddie Mac to purchase single-family home loans that are subject to a primary lien assessed through a PACE lending program.

Find more information on the Oklahoma C-PACE website.

Avoided Emissions and Generation Tool (AVERT)

AVERT is a free tool with a simple user interface designed to meet the needs of state air quality planners and other interested stakeholders. Non-experts can easily use AVERT to evaluate county-level emissions displaced at electric power plants by EE/RE policies and programs. AVERT is designed to use public data, which is accessible and auditable.