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Photovoltaic (PV) cells use semi-conducting materials to convert sunlight directly into electricity. The size of a solar PV array needed depends on the amount of sunlight available in a particular location, the area available to install the necessary panels, and the needs of the consumer. The modules of the array make up the major part of a PV system, which also includes electrical connections, mounting hardware, power-conditioning equipment, and, if desired, batteries that store solar energy for use when the sun isn't shining.[i] Unless the array is located in a remote setting, however, most arrays are connected to the electric grid so any available surplus power can then be sold to the local electric utility.

The major advantages of solar PV include:
      1. a modular design that allows it to be relatively easily scalable as power needs change;
      2. no moving parts to wear out;
      3. little required maintenance; and
      4. quick installation compared to other technologies.

The major drawback of solar PV is the large initial cost of installation. However even costs are decreasing as utility, non-profit, and government subsidies help defray these. Over time, solar PV has become a mature and stable technology. Its efficiency and reliability have increased and should continue to increase into the foreseeable future.

For more information, see:
U.S. Department of Energy, Solar Energy Technologies Program. Focuses on developing solar energy technologies through partnerships with industry participants, universities, and government and nongovernmental agencies.

[i] Department of Energy. Solar Energy Technologies Program. PV Physics.

Taking on the Challenge of Measuring the Carbon Footprint of Your Products
As awareness about global warming grows, many businesses are beginning to consider becoming “carbon neutral” or achieving zero net carbon emissions. The first step toward this goal is to assess the carbon-footprint (the total CO₂ emissions) of an operation. Typically, the majority of carbon emissions are generated from energy use. Therefore, the primary focus should be to conserve energy and transition to renewable energy in facilities wherever possible. A growing number of companies are looking to emissions trading and renewable energy credits as key parts of their strategies to achieve “carbon neutrality.”

The Greenhouse Gas Protocol (GHG Protocol) is the most widely used international accounting tool for business leaders to understand, quantify, and manage greenhouse gas emissions. The GHG Protocol is well respected, created out a decade of work in a partnership between the World Resource Institute and the World Business Council for Sustainable Development. In 2005, a Corporate Accounting and Reporting Module was developed for businesses to inventory and report all of the GHG emissions they produce. The online-calculation tools provided are FREE to the public, providing spreadsheets that allow users to assess the emissions from multiple types of energy use. The calculation tools are available at http://www.ghgprotocol.org/standards.

There are three generally accepted levels to measuring carbon footprint that come from the GHG Protocol. By adding all of these emissions sources together, you can calculate a total carbon footprint for your operation:
1. Direct Emissions occur from sources that are directly controlled by the company onsite (generation
      of heat or electricity on site: boilers, furnaces, trucks company-owned vehicles carrying emplyees,
      products, and waste,etc)
  2. Indirect Emissions occur from the energy purchased through the grid from utilities (electricity,
      natural gas, propane, etc)
  3. Other Indirect Emissions occur from the activities not directly controlled by the company (the
      activities of the food supply chain before the products we vend reach our facilities—like the energy
      used in growing food, trucking it to a packaging shed, the packaging itself, etc).

Carbon Credits as a Tool for Addressing Global Climate Change
Carbon markets are a mechanism for buying and selling greenhouse gas (GHG) emissions, which, when traded, are known as “carbon credits.” Six GHG are generally included in such markets: carbon dioxide (CO₂), methane, nitrous oxide, sulfur hexifluoride, hydro fluorocarbons and perfluorocarbons. All carbon credits represent the reduction of GHG in metric tons of CO₂, the most common GHG.

“Environmental markets” have been created to set up market-like mechanisms for environmental protection. Environmental markets are the most innovative and cost-effective means that society has of creating market-pull for new environmentally benign technologies, and, at the same time, putting a price on pollution. Thereby, they provide financial incentives not to degrade environmental resources. In the 1980s, the United States launched the first large-scale market in an environmental commodity - sulfur dioxide (SO₂) - which was successful in mitigating acid rain. Since then, multi-million dollar markets have emerged to trade environmental commodities such as pollution (GHGs and water pollution) and valuable “ecosystem services” (water and endangered species) in countries such as Costa Rica, Mexico, Australia, Colombia, Ecuador, and South Africa.

The Structure of Carbon Markets: Carbon markets can be separated into two major categories: voluntary markets and compliance (regulatory) markets.

Compliance Carbon Markets: Compliance carbon markets are cap-and-trade regimes that have been established by regulators. In a cap-and-trade regime, regulators cap the quantity of emissions that participants are allowed to emit; they then issue a set number of tradable allowance units. Participants who reduce their emissions internally beyond required levels have the ability to sell unused allowances in the marketplace. This type of trading is called “allowance-based transactions.” There are a number of cap-and-trade markets around the world; the Kyoto Protocol underpins most of these markets. Ratified by 163 countries, the Kyoto Protocol requires industrialized countries to reduce their collective GHG emissions by 5.4% below 1990 levels by 2012.

Voluntary Carbon Markets: Voluntary carbon markets do not rely on legally mandated reductions and therefore do not operate under a universal cap. All carbon credits purchased in the voluntary market are project-based transactions—emissions credits that are the result of a specific carbon offset project. (The exception is the Chicago Climate Exchange [CCX] whose members voluntarily commit to a mandatory reductions policy. Unlike most of the voluntary markets, the CCX involves allowance-based trading with other CCX members to meet voluntary targets.) Voluntary carbon markets predate the regulated carbon markets; more than a decade ago, leading corporations began purchasing offsets to reduce their “carbon footprints.”

Renewable Energy Credits (RECs): Renewable Energy Credits (RECs) - also know as “green tags” or “green power”- represent the environmental benefits of the creation of electricity derived from renewable energy sources. One REC is equivalent to the benefits associated with one megawatt of renewable power. The U.S. REC market features both compliance and voluntary segments. The compliance market has been initiated by emerging state standards that mandate that utilities maintain a minimum renewable portfolio standard. The U.S. voluntary REC market is fragmented and has begun to converge with the voluntary market for carbon offsets.

There is longstanding debate about whether RECs should be used as an equivalent to carbon offsets. The amount of carbon dioxide displaced by a REC is generally determined by calculating the amount of CO₂ emitted by local fossil fuel-burning power plants per kWh. The main debate about RECs is whether they can satisfy the additional GHG offset requirements. Critics argue that many renewable energy projects would have come to fruition regardless of prospective REC sales because of the high price of fossil fuel energy, various tax breaks, the existing desire for more diversified energy, and the availability of renewable energy sources (e.g., hydropower in the Northwest). Advocates argue that RECs are an important offset tool because they change the energy mix by displacing use of fossil fuel energy and can be more reliable than some other offset projects such as reforestation.

The Retail Voluntary Carbon Market: Understanding Supply and Demand: There are no federal GHG emission regulations in the United States, but voluntary carbon markets are playing an increasingly significant role in both citizen and business efforts to show leadership in addressing global warming. Going “carbon neutral” refers to the idea of reducing GHG emissions and ultimately “neutralizing” one’s “carbon footprint” through purchasing offsets. Unlike the compliance-based market, the voluntary market does not rely on mandated reductions to generate demand. Since voluntary credits do not have to be registered with any central body, the market remains fragmented and unregulated. In the voluntary market, both for-profit and not-for-profit organizations sell a range of offset types that are certified to an array of standards. Because of this fragmentation, prices in the voluntary market vary widely from $1 to $35 per ton of CO2. Prices are affected by two main factors:
1. the cost of the offset - technical reduction cost plus administrative fees, and
2. the market price, which varies with supply and demand.

Today the voluntary carbon market is driven by several factors. These include rising consumer concern about climate change, institutional investors who consider a firm’s carbon footprint a business risk, and governments that are addressing their constituents’ desire for action on climate change.

Sources:
~ Ecosystem Marketplace. http://ecosystemmarketplace.com/
~ Deborah Stowell. 2005. Climate Trading: Development of Greenhouse Gas Market. Hampshire, N.Y. Palgrave Macmillan.
~ Richard Bayon et al. 2007. Voluntary Carbon Markets: An International Business Guide to What They Are and How They Work. Sterling, VA: Earthscan.
~ Katherine Hamilton et al. Offsetting Emissions: A Business Brief on the Voluntary Carbon Market. December 2006, Business for Social Responsibility http://www.bsr.org/
~Franck Lecocq. 2004. State and Trends of the Carbon Market 2004. Washington, D.C.: The World Bank.