A Beginner’s Guide to Carbon Credits
Carbon tax, Carbon pricing, carbon credit, carbon offset. We hear these terms often but who understands them? Aside from some extra cash or another expense, the truth about carbon “anything” eludes the majority of us.
Let us help by simplifying Carbon Credits! Why? Well, if you install solar, you will be generating carbon credits and you might want to know the value of them!
What are Carbon Credits and Carbon Offsets?
First… carbon credits and carbon offsets are essentially the same thing.. “climate currency”. They are a “dollar” or “point” for positive climate action.
A Carbon Credit is a free pass or permission to produce a single ton of carbon emissions or equivalent polluton.
Carbon Offsets are the same permission slip, but these ones are created by a) reducing carbon emissions in the atmosphere by 1 ton or b) preventing 1 ton of carbon emissions from being produced (“off-setting ” carbon production).
The Purpose of Carbon Credits...
Carbon credits and offsets reward those who make an effort to reduce their greenhouse gas emissions. They function as a tool to set emission limits and baselines. When you pollute less, someone else can purchase your carbon offset credits (unused polluting permission slips) allowing them to pollute more.
Carbon credits are not just for business! Homeowners with solar systems can sell their carbon offset credits with the help of a Carbon Broker. A Carbon Broker does the paperwork in selling carbon credits and can pool credits together from smaller systems so that the cost to verify credits is greatly reduced. In summary, even homeowners with small solar systems can see an annual paycheck for selling their carbon credits.
The over-arching goal of carbon systems is to reduce pollution and stimulate action on environmentally-conscious solutions.
What are Carbon Credits Worth?
The value of carbon credits is rising.
The Federal government has released their intentions to increase the cost of carbon pollutions by $15/ton per year from 2023 to 2030 which a start rate of $65/ton in 2023. (1 Carbon Credit permits the polution of 1 ton of carbon.) These costs reflect the MINIMUM amount each province is expected to their for carbon credits.
How much money can you make?
As you might expect, a larger solar system usually produces more renewable energy thus more carbon credits. However, there is still a financial gain with residential size systems.
EXAMPLE. A 10kW solar PV system can earn you between CA$4,168 and CA$5,359 after brokerage fees over your eligible term of up to 10 years. If we average this range to $4,763.50 over 10 years, you could earn $476.35 pocket change per year just by having a solar PV system. (All numbers are based on 2023 estimate data.)
How to sell your carbon credits:
We recommend connecting with our Partners, Solar Offset. As carbon brokers, they complete the work for you and can pool your renewable energy production with other microgenerators to reduce fees and provide you with a higher return.
As a private owner of a residential Solar PV System, you could earn anywhere from $1310 to $12,862 through the sale of your carbon credits depending on your production.
Visit our partners at https://www.solaroffset.ca/how-it-works for more information.
