Small-Scale Solar Power Operators Express Difficulties Due to Falling REC (Renewable Energy Certificate) Prices

# Small-Scale Solar Power Operators Express Difficulties Due to Falling REC (Renewable Energy Certificate) Prices

### Current Status of Small-Scale Solar Power Generation Business

Small-scale solar power generation plays an important role in the Korean energy market and has steadily grown in line with the government's eco-friendly energy policies. Generally, solar power plants with a generation capacity of less than 100kW are classified as small-scale solar power generation businesses, and these businesses are often led by individuals, farmers, and small businesses. As cases of installing solar power generation facilities using idle land in rural areas increase, it also contributes to increasing farm household income. As of the end of 2023, tens of thousands of small-scale solar power plants are operating in Korea, accounting for a significant portion of the total solar power generation capacity. Small-scale operators heavily rely on the sale of RECs (Renewable Energy Certificates) to recover initial investment costs and generate profits. However, due to the recent drop in REC prices, profitability has deteriorated, causing many operators to face difficulties. In particular, operators who have not entered into fixed-price contracts are directly exposed to market price fluctuations, facing even more severe situations. The government is implementing various support policies to promote small-scale solar power generation, but it is urgent to find a fundamental solution to REC price volatility. In addition, issues such as environmental destruction due to the increase in the installation of solar power generation facilities and problems with grid interconnection remain to be resolved. For the sustainable growth of small-scale solar power generation businesses, it is necessary to stabilize the REC market, establish an efficient transmission system, and introduce environmentally friendly power generation methods.

### What is a REC (Renewable Energy Certificate)?

A REC, or Renewable Energy Certificate, is a certificate issued by the government to Renewable Portfolio Standard (RPS) obligated parties in proportion to the amount of renewable energy generated. The RPS (Renewable Portfolio Standard) system mandates that power generators of a certain size or larger (RPS obligated parties) supply a certain percentage or more of their total power generation from renewable energy sources, aiming to expand the adoption of renewable energy. RECs are a core element in the operation of this RPS system and an important means of guaranteeing the income of renewable energy power generators. For example, power generation public corporations, subsidiaries of Korea Electric Power Corporation, and private power generation companies are RPS obligated parties. They must either operate renewable energy power generation facilities directly or purchase RECs from other renewable energy power generators to meet their mandatory supply volume. 1 REC corresponds to 1 MWh of renewable energy power generation and can be issued for electricity generated from various renewable energy sources such as solar, wind, hydro, and biomass. RECs are traded in the market, and the price fluctuates according to supply and demand. Small-scale solar power generators can earn additional income by selling RECs in addition to selling the electricity they produce. Therefore, REC prices directly affect the profitability of small-scale solar power generators. The Korea Energy Agency is responsible for issuing and trading RECs and is working to operate a transparent and efficient market. However, the recent increase in excessive REC supply has led to a price drop, increasing the difficulties faced by small-scale solar power generators.

### REC Price Determination Mechanism

REC prices are basically determined by the principles of supply and demand. RPS obligated parties generate REC purchase demand according to the amount of renewable energy they are obligated to supply, and renewable energy power generators supply RECs to the market according to their power generation volume. The REC market can be broadly divided into the spot market and the long-term contract market. The spot market is a market where prices fluctuate according to short-term supply and demand, and transactions are conducted through the REC trading platform operated by the Korea Power Exchange. The long-term contract market refers to contracts in which RPS obligated parties and renewable energy power generators trade RECs at a fixed price for a certain period. Long-term contracts reduce the risk of REC price volatility, making them a preferred method for many small-scale solar power generators. However, competition for long-term contracts is high, and contract terms are often demanding. Various factors affect REC prices. First, as the RPS obligation ratio increases, the demand for RECs increases, acting as a price increase factor. Conversely, if the renewable energy power generation facility capacity increases, increasing the REC supply, it acts as a price decrease factor. In addition, government policy changes, technological advancements, and energy price fluctuations can also affect REC prices. The recent drop in REC prices is mainly attributed to the oversupply caused by the rapid increase in solar power generation facilities. The government is promoting various policies to stabilize the REC market, but it is facing difficulties in finding a fundamental solution.

![친환경 에너지](https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving166.webp)

### Difficulties of Small-Scale Solar Power Operators

Small-scale solar power operators are experiencing significant difficulties due to the decline in REC prices. The main difficulties are as follows:

- **Deterioration of Profitability:** The decline in REC prices directly leads to a decrease in revenue. Small-scale operators face difficulties in recovering initial investment costs, and some even consider closing down due to a lack of operating funds.
- **Difficulty in Raising Funds:** Deterioration of profitability makes it more difficult to raise funds from financial institutions. Difficulties in securing funds for additional investment or maintenance can disrupt business operations.
- **Unstable Future:** REC price volatility makes it difficult to establish business plans and amplifies uncertainty about the future. It acts as a factor in hesitating to invest in business expansion or enter new businesses.
- **Increased Maintenance Burden:** Reduced revenue can lead to reduced maintenance costs, which increases the possibility of reduced power generation efficiency and safety problems. In particular, the maintenance burden is even greater for old facilities.
- **Vulnerability to Policy Changes:** Small-scale operators have limited access to information on government policy changes and lack the ability to respond, making them more vulnerable to policy changes. Policy changes such as changes in REC weighting and reorganization of the RPS system can have a significant impact on business profitability.

These difficulties threaten the sustainability of small-scale solar power generation businesses and can negatively affect the achievement of the government's eco-friendly energy policy goals.

### REC Price Drop, Actual Damage Cases

The drop in REC prices is causing real damage to small-scale solar power operators. Here are some actual damage cases.

| Case | Business Scale | Damage Details |
|---|---|---|
| Mr. A | 50kW | Monthly income decreased by more than 50% due to the drop in REC prices. Facing difficulties in repaying loans and completely suspended additional investment plans. |
| B Farmer | 30kW | Started a solar power generation business to supplement the decrease in agricultural income, but did not earn the expected income due to the drop in REC prices. Worried about leading to an increase in farm debt. |
| C Small Business | 80kW | Installed solar power generation facilities on the factory roof to reduce electricity bills and expect REC sales revenue, but the investment recovery period is much longer than expected due to the drop in REC prices. Acting as a burden on business operations. |
| D Power Generation Cooperative | Multiple less than 100kW | Members operated small-scale solar power plants and shared REC sales revenue, but it became difficult to pay dividends to members due to the drop in REC prices. Disruption in cooperative operation. |

As can be seen in the above examples, the drop in REC prices is exacerbating the economic difficulties of small-scale solar power operators. In particular, operators who have installed solar power generation facilities with loans are suffering from repayment burdens, and in the case of farmers or small businesses, the decrease in REC sales revenue is directly affecting household income or business operations. In addition, in the case of power generation cooperatives, they are experiencing difficulties in operating the cooperative because they cannot distribute profits to the members. These damage cases further emphasize the need for REC price stabilization.

![친환경 에너지](https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving050.webp)

### Government's REC Price Stabilization Policy

The government is implementing various policies to solve the problem of falling REC prices and support small-scale solar power operators. The main policies are as follows:

- **REC Weight Adjustment:** Adjusting REC weights by renewable energy source to prevent excessive concentration on specific energy sources and to promote balance in the REC market. For example, promoting measures to suppress oversupply by adjusting the REC weight of solar power generation and to expand the adoption of other renewable energy sources.
- **Increasing RPS Obligation Ratio:** Promoting a policy to expand REC demand and stabilize REC prices by gradually increasing the RPS obligation ratio. Increasing the RPS obligation ratio can increase REC purchase demand from RPS obligated parties and induce an increase in REC prices.
- **Expanding Fixed-Price Contracts:** Expanding opportunities to conclude fixed-price contracts so that small-scale solar power operators can secure stable income. Fixed-price contracts reduce the risk of REC price volatility, which is of great help to small-scale operators.
- **Improving REC Trading Market:** Improving the trading system to increase the transparency and efficiency of the REC trading market, and striving to resolve information asymmetry between market participants. In addition, monitoring and sanctioning unfair trading practices to establish market order.
- **Supporting Energy Self-Sufficient Islands:** Supporting the installation of renewable energy power generation facilities to support energy self-sufficiency in island areas, and supporting them to contribute to revitalizing the local economy through REC sales revenue. The energy self-sufficient island project increases the energy accessibility of local residents and expands the adoption of eco-friendly energy.

Despite these government efforts, there are still difficulties in stabilizing REC prices. To find a more fundamental solution, a review of the overall renewable energy policy and continuous monitoring of market situation changes are needed.

### Support Measures for Small-Scale Power Generators

Practical support measures for small-scale solar power operators struggling with falling REC prices are as follows:

- **Expanding Low-Interest Loan Support:** Expanding low-interest loan support to ease the burden of initial investment costs, and easing repayment conditions to reduce the financial burden on operators. In particular, it is necessary to consider providing emergency management stabilization funds to operators struggling with falling REC prices.
- **Strengthening Tax Benefits:** Strengthening tax benefits for the installation and operation of solar power generation facilities to reduce the economic burden on operators. It is possible to review measures to expand local tax reduction benefits such as acquisition tax and property tax reduction, and strengthen corporate tax or income tax reduction benefits.
- **Providing Technical Consulting and Education Support:** Providing consulting and training programs to improve power generation efficiency and acquire maintenance technology to strengthen the technical competitiveness of operators. Develop professional technical training programs in cooperation with related institutions such as the Korea Energy Agency and encourage operators to participate.
- **Supporting REC Long-Term Contract Conclusion:** Strengthening information provision and contract negotiation support for REC long-term contract conclusion to help operators secure stable income. It is possible to consider establishing a matching system between RPS obligated parties and small-scale power generators and providing expert assistance in the contract condition negotiation process.
- **Supporting Energy Storage System (ESS) Linkage:** Linking solar power generation facilities with energy storage systems (ESS) to improve power generation efficiency and support additional REC acquisition. The ESS linkage project can be activated through ESS installation cost support and REC weight preference.
- **Activating Local Energy Communities:** Activate local energy communities to strengthen cooperation between small-scale power generators and improve business efficiency through joint sales and purchases. Expand support for the establishment and operation of local energy communities and encourage information sharing and technology exchange among community members.

These support measures will enable small-scale solar power operators to overcome the difficulties caused by falling REC prices and enable sustainable business operations.

![친환경 에너지](https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving041.webp)

### Challenges of Eco-Friendly Energy Transition

Korea is actively promoting a transition to eco-friendly energy to respond to climate change and achieve sustainable development. However, the following challenges remain in the process of transitioning to eco-friendly energy.

- **Securing Energy Supply Stability:** It is important to secure energy supply stability in the process of reducing dependence on fossil fuels and expanding the proportion of renewable energy. Since renewable energy power generation may fluctuate depending on external factors such as weather, it is necessary to establish a stable energy supply system through the establishment of energy storage systems (ESS) and the introduction of smart grids.
- **Construction and Improvement of Power Grid:** As the number of renewable energy power generation facilities increases, the construction and improvement of the power grid is necessary. In particular, investment should be made in strengthening regional power grids and developing technologies to minimize transmission losses to build a distributed power system.
- **Securing Social Acceptability:** It is important to minimize opposition from local residents and secure social acceptability in the process of promoting eco-friendly energy policies. In addition to providing sufficient information on issues such as environmental destruction and noise generation due to the installation of power generation facilities, procedures should be established to gather the opinions of local residents.
- **Easing Economic Burden:** Efforts should be made not to pass on the economic burden generated in the process of transitioning to eco-friendly energy to the public. Economic burden should be alleviated through the development of renewable energy power generation cost reduction technology, the establishment of efficient energy management systems, and the strengthening of support for the energy poor.
- **Strengthening Technological Competitiveness:** Technological competitiveness in renewable energy should be strengthened to lead the global market. Investment in the development of core technologies such as solar power, wind power, and hydrogen should be expanded, and related industrial ecosystems should be fostered.

To solve these challenges, the government, businesses, and civil society must cooperate to build a sustainable energy system.

![친환경 에너지](https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving016.webp)

### Successful Small-Scale Solar Power Generation Business Model

Successful small-scale solar power generation business models are developing not only to rely on REC sales revenue but also to create various added values and contribute to the local community. Some successful examples are as follows.

- **Farming-Type Solar Power Generation:** Parallel cultivation of crops and solar power generation: This model installs solar power generation facilities so as not to interfere with crop cultivation and secures both agricultural income and REC sales revenue. It is possible to achieve both increased farm household income and energy production, and it can contribute to revitalizing the rural economy.
- **Building Integrated Photovoltaics (BIPV):** Installing solar panels on the exterior walls or roof of a building: This can increase the energy independence of the building and improve the building design. Energy can be produced without damaging the urban landscape, and the introduction of policies that mandate the installation of BIPV in new buildings can also be considered.
- **Bicycle Path Solar Power Generation:** Installing solar panels on bicycle paths: This is an eco-friendly model that provides shade to bicycle users and produces energy. Convenience can be provided to bicycle path users while producing energy, and it can instill a positive perception of renewable energy in citizens.
- **Village Community Solar Power Generation:** Village residents jointly operate a solar power plant: This model returns REC sales revenue to the village community and increases energy independence. Participation of local residents can be encouraged, and the understanding of renewable energy can be increased through education on the energy production process.

These successful models show that small-scale solar power generation businesses can contribute to local community development beyond simple energy production. In the future, these models should be expanded and new business models should be developed to increase the sustainability of small-scale solar power generation businesses.

### Small-Scale Solar Power Generation Business FAQ

Q: What procedures do I need to follow to start a small-scale solar power generation business?

A: To start a small-scale solar power generation business, you must go through procedures such as establishing a business plan, selecting a site, applying for a power generation business license, installing facilities, pre-use inspection, and applying for REC issuance. You can contact the Korea Energy Agency or related organizations for detailed information on the necessary documents and procedures for each step.

Q: What is the profitability of a small-scale solar power generation business?

A: The profitability of a small-scale solar power generation business varies depending on REC prices, power generation volume, initial investment costs, maintenance costs, etc. Since REC price volatility is high, it is important to review the business feasibility from a long-term perspective and secure income stability through fixed-price contract conclusion.

Q: Are there any environmental problems when installing solar power generation facilities?

A: Environmental problems such as forest damage and soil contamination can occur during the installation of solar power generation facilities. Therefore, an environmental impact assessment should be conducted and power generation facilities should be installed in an eco-friendly manner. In addition, countermeasures for the problem of recycling solar panels must be prepared.

Q: What are the coping strategies for the drop in REC prices?

A: Coping strategies for the drop in REC prices include linking energy storage systems (ESS), concluding REC long-term contracts, improving power generation efficiency, and reducing maintenance costs. In addition, actively using government support policies and participating in local energy communities to increase business efficiency is also a good way.

Q: Where can I get information on small-scale solar power generation businesses?

A: Information on small-scale solar power generation businesses can be obtained from the websites of related organizations such as the Korea Energy Agency, the Korea Power Exchange, and the Korea Energy Agency's Renewable Energy Center. In addition, you can also obtain useful information from the Solar Power Association and energy-related civic groups.

<h1>Small-Scale Solar Power Operators Express Difficulties Due to Falling REC (Renewable Energy Certificate) Prices</h1>
<h3 class="alert alert-dark my-3">Current Status of Small-Scale Solar Power Generation Business</h3>
<p>Small-scale solar power generation plays an important role in the Korean energy market and has steadily grown in line with the government's eco-friendly energy policies. Generally, solar power plants with a generation capacity of less than 100kW are classified as small-scale solar power generation businesses, and these businesses are often led by individuals, farmers, and small businesses. As cases of installing solar power generation facilities using idle land in rural areas increase, it also contributes to increasing farm household income. As of the end of 2023, tens of thousands of small-scale solar power plants are operating in Korea, accounting for a significant portion of the total solar power generation capacity. Small-scale operators heavily rely on the sale of RECs (Renewable Energy Certificates) to recover initial investment costs and generate profits. However, due to the recent drop in REC prices, profitability has deteriorated, causing many operators to face difficulties. In particular, operators who have not entered into fixed-price contracts are directly exposed to market price fluctuations, facing even more severe situations. The government is implementing various support policies to promote small-scale solar power generation, but it is urgent to find a fundamental solution to REC price volatility. In addition, issues such as environmental destruction due to the increase in the installation of solar power generation facilities and problems with grid interconnection remain to be resolved. For the sustainable growth of small-scale solar power generation businesses, it is necessary to stabilize the REC market, establish an efficient transmission system, and introduce environmentally friendly power generation methods.</p>
<h3 class="alert alert-dark my-3">What is a REC (Renewable Energy Certificate)?</h3>
<p>A REC, or Renewable Energy Certificate, is a certificate issued by the government to Renewable Portfolio Standard (RPS) obligated parties in proportion to the amount of renewable energy generated. The RPS (Renewable Portfolio Standard) system mandates that power generators of a certain size or larger (RPS obligated parties) supply a certain percentage or more of their total power generation from renewable energy sources, aiming to expand the adoption of renewable energy. RECs are a core element in the operation of this RPS system and an important means of guaranteeing the income of renewable energy power generators. For example, power generation public corporations, subsidiaries of Korea Electric Power Corporation, and private power generation companies are RPS obligated parties. They must either operate renewable energy power generation facilities directly or purchase RECs from other renewable energy power generators to meet their mandatory supply volume. 1 REC corresponds to 1 MWh of renewable energy power generation and can be issued for electricity generated from various renewable energy sources such as solar, wind, hydro, and biomass. RECs are traded in the market, and the price fluctuates according to supply and demand. Small-scale solar power generators can earn additional income by selling RECs in addition to selling the electricity they produce. Therefore, REC prices directly affect the profitability of small-scale solar power generators. The Korea Energy Agency is responsible for issuing and trading RECs and is working to operate a transparent and efficient market. However, the recent increase in excessive REC supply has led to a price drop, increasing the difficulties faced by small-scale solar power generators.</p>
<h3 class="alert alert-dark my-3">REC Price Determination Mechanism</h3>
<p>REC prices are basically determined by the principles of supply and demand. RPS obligated parties generate REC purchase demand according to the amount of renewable energy they are obligated to supply, and renewable energy power generators supply RECs to the market according to their power generation volume. The REC market can be broadly divided into the spot market and the long-term contract market. The spot market is a market where prices fluctuate according to short-term supply and demand, and transactions are conducted through the REC trading platform operated by the Korea Power Exchange. The long-term contract market refers to contracts in which RPS obligated parties and renewable energy power generators trade RECs at a fixed price for a certain period. Long-term contracts reduce the risk of REC price volatility, making them a preferred method for many small-scale solar power generators. However, competition for long-term contracts is high, and contract terms are often demanding. Various factors affect REC prices. First, as the RPS obligation ratio increases, the demand for RECs increases, acting as a price increase factor. Conversely, if the renewable energy power generation facility capacity increases, increasing the REC supply, it acts as a price decrease factor. In addition, government policy changes, technological advancements, and energy price fluctuations can also affect REC prices. The recent drop in REC prices is mainly attributed to the oversupply caused by the rapid increase in solar power generation facilities. The government is promoting various policies to stabilize the REC market, but it is facing difficulties in finding a fundamental solution.</p>
<div class="tw-text-center"><center><img src="https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving166.webp" alt="친환경 에너지" class="tw-inline-block" loading="lazy"></center></div>
<p><br><br></p>
<h3 class="alert alert-dark my-3">Difficulties of Small-Scale Solar Power Operators</h3>
<p>Small-scale solar power operators are experiencing significant difficulties due to the decline in REC prices. The main difficulties are as follows:</p>
<ul>
<li><strong>Deterioration of Profitability:</strong> The decline in REC prices directly leads to a decrease in revenue. Small-scale operators face difficulties in recovering initial investment costs, and some even consider closing down due to a lack of operating funds.</li>
<li><strong>Difficulty in Raising Funds:</strong> Deterioration of profitability makes it more difficult to raise funds from financial institutions. Difficulties in securing funds for additional investment or maintenance can disrupt business operations.</li>
<li><strong>Unstable Future:</strong> REC price volatility makes it difficult to establish business plans and amplifies uncertainty about the future. It acts as a factor in hesitating to invest in business expansion or enter new businesses.</li>
<li><strong>Increased Maintenance Burden:</strong> Reduced revenue can lead to reduced maintenance costs, which increases the possibility of reduced power generation efficiency and safety problems. In particular, the maintenance burden is even greater for old facilities.</li>
<li><strong>Vulnerability to Policy Changes:</strong> Small-scale operators have limited access to information on government policy changes and lack the ability to respond, making them more vulnerable to policy changes. Policy changes such as changes in REC weighting and reorganization of the RPS system can have a significant impact on business profitability.</li>
</ul>
<p>These difficulties threaten the sustainability of small-scale solar power generation businesses and can negatively affect the achievement of the government's eco-friendly energy policy goals.</p>
<h3 class="alert alert-dark my-3">REC Price Drop, Actual Damage Cases</h3>
<p>The drop in REC prices is causing real damage to small-scale solar power operators. Here are some actual damage cases.</p>
<table class="table table-bordered table-striped mb-4">
<thead>
<tr>
<th class="table-dark text-white px-3 py-2">Case</th>
<th class="table-dark text-white px-3 py-2">Business Scale</th>
<th class="table-dark text-white px-3 py-2">Damage Details</th>
</tr>
</thead>
<tbody>
<tr>
<td class="px-3 py-2">Mr. A</td>
<td class="px-3 py-2">50kW</td>
<td class="px-3 py-2">Monthly income decreased by more than 50% due to the drop in REC prices. Facing difficulties in repaying loans and completely suspended additional investment plans.</td>
</tr>
<tr>
<td class="px-3 py-2">B Farmer</td>
<td class="px-3 py-2">30kW</td>
<td class="px-3 py-2">Started a solar power generation business to supplement the decrease in agricultural income, but did not earn the expected income due to the drop in REC prices. Worried about leading to an increase in farm debt.</td>
</tr>
<tr>
<td class="px-3 py-2">C Small Business</td>
<td class="px-3 py-2">80kW</td>
<td class="px-3 py-2">Installed solar power generation facilities on the factory roof to reduce electricity bills and expect REC sales revenue, but the investment recovery period is much longer than expected due to the drop in REC prices. Acting as a burden on business operations.</td>
</tr>
<tr>
<td class="px-3 py-2">D Power Generation Cooperative</td>
<td class="px-3 py-2">Multiple less than 100kW</td>
<td class="px-3 py-2">Members operated small-scale solar power plants and shared REC sales revenue, but it became difficult to pay dividends to members due to the drop in REC prices. Disruption in cooperative operation.</td>
</tr>
</tbody>
</table>
<p>As can be seen in the above examples, the drop in REC prices is exacerbating the economic difficulties of small-scale solar power operators. In particular, operators who have installed solar power generation facilities with loans are suffering from repayment burdens, and in the case of farmers or small businesses, the decrease in REC sales revenue is directly affecting household income or business operations. In addition, in the case of power generation cooperatives, they are experiencing difficulties in operating the cooperative because they cannot distribute profits to the members. These damage cases further emphasize the need for REC price stabilization.</p>
<div class="tw-text-center"><center><img src="https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving050.webp" alt="친환경 에너지" class="tw-inline-block" loading="lazy"></center></div>
<p><br><br></p>
<h3 class="alert alert-dark my-3">Government's REC Price Stabilization Policy</h3>
<p>The government is implementing various policies to solve the problem of falling REC prices and support small-scale solar power operators. The main policies are as follows:</p>
<ul>
<li><strong>REC Weight Adjustment:</strong> Adjusting REC weights by renewable energy source to prevent excessive concentration on specific energy sources and to promote balance in the REC market. For example, promoting measures to suppress oversupply by adjusting the REC weight of solar power generation and to expand the adoption of other renewable energy sources.</li>
<li><strong>Increasing RPS Obligation Ratio:</strong> Promoting a policy to expand REC demand and stabilize REC prices by gradually increasing the RPS obligation ratio. Increasing the RPS obligation ratio can increase REC purchase demand from RPS obligated parties and induce an increase in REC prices.</li>
<li><strong>Expanding Fixed-Price Contracts:</strong> Expanding opportunities to conclude fixed-price contracts so that small-scale solar power operators can secure stable income. Fixed-price contracts reduce the risk of REC price volatility, which is of great help to small-scale operators.</li>
<li><strong>Improving REC Trading Market:</strong> Improving the trading system to increase the transparency and efficiency of the REC trading market, and striving to resolve information asymmetry between market participants. In addition, monitoring and sanctioning unfair trading practices to establish market order.</li>
<li><strong>Supporting Energy Self-Sufficient Islands:</strong> Supporting the installation of renewable energy power generation facilities to support energy self-sufficiency in island areas, and supporting them to contribute to revitalizing the local economy through REC sales revenue. The energy self-sufficient island project increases the energy accessibility of local residents and expands the adoption of eco-friendly energy.</li>
</ul>
<p>Despite these government efforts, there are still difficulties in stabilizing REC prices. To find a more fundamental solution, a review of the overall renewable energy policy and continuous monitoring of market situation changes are needed.</p>
<h3 class="alert alert-dark my-3">Support Measures for Small-Scale Power Generators</h3>
<p>Practical support measures for small-scale solar power operators struggling with falling REC prices are as follows:</p>
<ul>
<li><strong>Expanding Low-Interest Loan Support:</strong> Expanding low-interest loan support to ease the burden of initial investment costs, and easing repayment conditions to reduce the financial burden on operators. In particular, it is necessary to consider providing emergency management stabilization funds to operators struggling with falling REC prices.</li>
<li><strong>Strengthening Tax Benefits:</strong> Strengthening tax benefits for the installation and operation of solar power generation facilities to reduce the economic burden on operators. It is possible to review measures to expand local tax reduction benefits such as acquisition tax and property tax reduction, and strengthen corporate tax or income tax reduction benefits.</li>
<li><strong>Providing Technical Consulting and Education Support:</strong> Providing consulting and training programs to improve power generation efficiency and acquire maintenance technology to strengthen the technical competitiveness of operators. Develop professional technical training programs in cooperation with related institutions such as the Korea Energy Agency and encourage operators to participate.</li>
<li><strong>Supporting REC Long-Term Contract Conclusion:</strong> Strengthening information provision and contract negotiation support for REC long-term contract conclusion to help operators secure stable income. It is possible to consider establishing a matching system between RPS obligated parties and small-scale power generators and providing expert assistance in the contract condition negotiation process.</li>
<li><strong>Supporting Energy Storage System (ESS) Linkage:</strong> Linking solar power generation facilities with energy storage systems (ESS) to improve power generation efficiency and support additional REC acquisition. The ESS linkage project can be activated through ESS installation cost support and REC weight preference.</li>
<li><strong>Activating Local Energy Communities:</strong> Activate local energy communities to strengthen cooperation between small-scale power generators and improve business efficiency through joint sales and purchases. Expand support for the establishment and operation of local energy communities and encourage information sharing and technology exchange among community members.</li>
</ul>
<p>These support measures will enable small-scale solar power operators to overcome the difficulties caused by falling REC prices and enable sustainable business operations.</p>
<div class="tw-text-center"><center><img src="https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving041.webp" alt="친환경 에너지" class="tw-inline-block" loading="lazy"></center></div>
<p><br><br></p>
<h3 class="alert alert-dark my-3">Challenges of Eco-Friendly Energy Transition</h3>
<p>Korea is actively promoting a transition to eco-friendly energy to respond to climate change and achieve sustainable development. However, the following challenges remain in the process of transitioning to eco-friendly energy.</p>
<ul>
<li><strong>Securing Energy Supply Stability:</strong> It is important to secure energy supply stability in the process of reducing dependence on fossil fuels and expanding the proportion of renewable energy. Since renewable energy power generation may fluctuate depending on external factors such as weather, it is necessary to establish a stable energy supply system through the establishment of energy storage systems (ESS) and the introduction of smart grids.</li>
<li><strong>Construction and Improvement of Power Grid:</strong> As the number of renewable energy power generation facilities increases, the construction and improvement of the power grid is necessary. In particular, investment should be made in strengthening regional power grids and developing technologies to minimize transmission losses to build a distributed power system.</li>
<li><strong>Securing Social Acceptability:</strong> It is important to minimize opposition from local residents and secure social acceptability in the process of promoting eco-friendly energy policies. In addition to providing sufficient information on issues such as environmental destruction and noise generation due to the installation of power generation facilities, procedures should be established to gather the opinions of local residents.</li>
<li><strong>Easing Economic Burden:</strong> Efforts should be made not to pass on the economic burden generated in the process of transitioning to eco-friendly energy to the public. Economic burden should be alleviated through the development of renewable energy power generation cost reduction technology, the establishment of efficient energy management systems, and the strengthening of support for the energy poor.</li>
<li><strong>Strengthening Technological Competitiveness:</strong> Technological competitiveness in renewable energy should be strengthened to lead the global market. Investment in the development of core technologies such as solar power, wind power, and hydrogen should be expanded, and related industrial ecosystems should be fostered.</li>
</ul>
<p>To solve these challenges, the government, businesses, and civil society must cooperate to build a sustainable energy system.</p>
<div class="tw-text-center"><center><img src="https://nomadwr.kr/aiwrpro/aiimg/%EC%9D%B4%EC%82%AC/moving016.webp" alt="친환경 에너지" class="tw-inline-block" loading="lazy"></center></div>
<p><br><br></p>
<h3 class="alert alert-dark my-3">Successful Small-Scale Solar Power Generation Business Model</h3>
<p>Successful small-scale solar power generation business models are developing not only to rely on REC sales revenue but also to create various added values and contribute to the local community. Some successful examples are as follows.</p>
<ul>
<li><strong>Farming-Type Solar Power Generation:</strong> Parallel cultivation of crops and solar power generation: This model installs solar power generation facilities so as not to interfere with crop cultivation and secures both agricultural income and REC sales revenue. It is possible to achieve both increased farm household income and energy production, and it can contribute to revitalizing the rural economy.</li>
<li><strong>Building Integrated Photovoltaics (BIPV):</strong> Installing solar panels on the exterior walls or roof of a building: This can increase the energy independence of the building and improve the building design. Energy can be produced without damaging the urban landscape, and the introduction of policies that mandate the installation of BIPV in new buildings can also be considered.</li>
<li><strong>Bicycle Path Solar Power Generation:</strong> Installing solar panels on bicycle paths: This is an eco-friendly model that provides shade to bicycle users and produces energy. Convenience can be provided to bicycle path users while producing energy, and it can instill a positive perception of renewable energy in citizens.</li>
<li><strong>Village Community Solar Power Generation:</strong> Village residents jointly operate a solar power plant: This model returns REC sales revenue to the village community and increases energy independence. Participation of local residents can be encouraged, and the understanding of renewable energy can be increased through education on the energy production process.</li>
</ul>
<p>These successful models show that small-scale solar power generation businesses can contribute to local community development beyond simple energy production. In the future, these models should be expanded and new business models should be developed to increase the sustainability of small-scale solar power generation businesses.</p>
<h3 class="alert alert-dark my-3">Small-Scale Solar Power Generation Business FAQ</h3>
<p class="alert alert-dark my-3">Q: What procedures do I need to follow to start a small-scale solar power generation business?</p>
<p>A: To start a small-scale solar power generation business, you must go through procedures such as establishing a business plan, selecting a site, applying for a power generation business license, installing facilities, pre-use inspection, and applying for REC issuance. You can contact the Korea Energy Agency or related organizations for detailed information on the necessary documents and procedures for each step.</p>
<p class="alert alert-dark my-3">Q: What is the profitability of a small-scale solar power generation business?</p>
<p>A: The profitability of a small-scale solar power generation business varies depending on REC prices, power generation volume, initial investment costs, maintenance costs, etc. Since REC price volatility is high, it is important to review the business feasibility from a long-term perspective and secure income stability through fixed-price contract conclusion.</p>
<p class="alert alert-dark my-3">Q: Are there any environmental problems when installing solar power generation facilities?</p>
<p>A: Environmental problems such as forest damage and soil contamination can occur during the installation of solar power generation facilities. Therefore, an environmental impact assessment should be conducted and power generation facilities should be installed in an eco-friendly manner. In addition, countermeasures for the problem of recycling solar panels must be prepared.</p>
<p class="alert alert-dark my-3">Q: What are the coping strategies for the drop in REC prices?</p>
<p>A: Coping strategies for the drop in REC prices include linking energy storage systems (ESS), concluding REC long-term contracts, improving power generation efficiency, and reducing maintenance costs. In addition, actively using government support policies and participating in local energy communities to increase business efficiency is also a good way.</p>
<p class="alert alert-dark my-3">Q: Where can I get information on small-scale solar power generation businesses?</p>
<p>A: Information on small-scale solar power generation businesses can be obtained from the websites of related organizations such as the Korea Energy Agency, the Korea Power Exchange, and the Korea Energy Agency's Renewable Energy Center. In addition, you can also obtain useful information from the Solar Power Association and energy-related civic groups.</p>