Archive for July, 2011

50 MW Ohio Solar Project Secures Further Financing

Posted July 28th, 2011 by SRECTrade.

In October of 2010, American Electric Power (AEP) Ohio announced plans to partner with Turning Point Solar to build a 50 MW solar project in southeastern Ohio.  The first panels are expected to go online in late 2012, and the final panels should be operational in late 2014.  A project of this size is expected to cost approximately 200 million dollars, some of which has already been secured.  AEP Ohio plans to invest 20 million in the project, and Agile Energy, the developer for the project, has also secured $37 million from Good Energies Capital, up from the previous commitment of $13 million.  Low-interest loans and tax credits are coming from the Rural Utilities Service, and the state of Ohio is providing $7 million in assistance.  This project is not falling under the umbrella of the DOE loan guarantee program, and thus will not be subject to any potential federal budget cuts.

According to projected construction schedules, the first 20 MW will begin construction in the summer of 2012 and online in late 2012, with another 15 MW coming online in late 2013, and the final 15 MW in late 2014.  This will significantly increase the number of SRECs available in the Ohio market, and will assist in providing the necessary SRECs for AEP to reach its solar RPS requirements.  Currently, AEP obtains a significant number of required SRECs from the 12 MW Wyandot Solar Facility in Upper Sandusky, Ohio.  With both facilities scheduled to be online for the entire 2013 reporting year, this will make up approximately 24% of the total Ohio SREC requirement and approximately 48% of the In-State Ohio SREC requirement.  It remains to be seen as to whether the constructoin of such a large generating facility in addition to other in state and out of state OH project development will drive down the prices of Ohio SRECs, but the construction of large solar farms moves the market away from the decentralized, local power generation that solar is capable of providing.

The chart below shows the projected SREC requirements for Ohio through 2015.  As the Turning Point Solar Facility capacity increases, SRECs controlled by AEP will comprise approximately 25% of the solar RPS requirement in each of 2013-2016 compliance years.  Because these are in-state SRECs, approximately half of the in-state solar requirement will be controlled by AEP.  How this will play out in terms of SREC prices is yet to be seen, but in other state markets organizations have stepped in to buy the SRECs from large producers to avoid SREC oversupply.  However, there has been no indication that this may happen in Ohio.

Ohio SREC Requirements and AEP controlled SRECs

50 MW Ohio Facility - Blog Post Chart2

Note: SREC forecast based OH RPS requirements and SRECTrade estimates. Turning Point Facility online dates based on projected construction schedules. Forecast assumes majority of generation produced in first full year following online date. Project assumed to generate 1,200 MWhs annually per 1 MW installed.

PA Market Update

Posted July 28th, 2011 by SRECTrade.

The Pennsylvania 2011 SREC compliance year has seen a substantial amount of solar development. Solar capacity registered within the state has lead to a significant oversupply resulting in an 85% decline in spot market trading throughout the course of the 2011 reporting year.

Since September of 2010, PA SRECs have dropped from $300/SREC to $50/SREC.  As of July 25, 2011, the 115.7 MW of registered generation has far outpaced the 2011 RPS requirements of 18 MW.  This has been the result of additional PA solar incentives, on top of the SREC program, and a large influx of out-of-state systems; of the 115.7 MW registered in PA, 24.7 MW are located out-of-state.

Fortunately, Representative Chris Ross has proposed an amendment to the PA Alternative Energy Portfolio Standard.  The amendment would modify the eligibility criteria so that only in-state systems could register in Pennsylvania after January 1, 2012.  Furthermore, the solar carve-out requirements for energy years 2013, 2014, and 2015 would increase from approximately 71 MW, 118 MW and 205 MW to 207 MW, 238 MW, and 290 MW, respectively.  These proposed changes should strengthen the market by increasing solar requirements and closing off out of state supply.  However, the oversupply of SRECs in 2011 and 2012 will carry over into the 2013 solar year and may keep prices low.  Given the legislature is out of session until October, further development will not occur until late 2011.

If new legislation does get passed, the market may shift from an oversupplied market to an undersupplied market.  This shift could result in an increase in future SREC pricing. One of the determining factors for price is the Alternative Compliance Payment (ACP).  In some states, NJ for example, the ACP is set by law and is known for future years.  Buyers know exactly what the alternative payment will be, and thus have a basis for the maximum value of an SREC.  In PA however, the future ACP is not known.  The ACP is calculated based on the average price paid for an SREC during the current year with weighting to include solar rebates.  For Chris Ross’s amendment to be truly successful, it will not only have to address the oversupply, but the ACP price as well.

To get involved with advocating for solar legislation, the Pennsylvania Division of the Mid-Atlantic Energy Industries Association (PASEIA) is a group of solar professionals who advocate for the interests of solar energy and a strong local PA industry.  Their blog has some good information on the status of the bill.

PA SREC Market – Proposed Legislation and Current Capacity

PA MW Forecast

Note: Capacity (MW) forecast based on PA RPS requirements and SRECTrade estimates.  Capacity (MW) figures presented for May 2010, May 2011, and July 2011 based on registered systems in GATS as of date listed. The current requirements (i.e. green line) as of July 2011 demonstrates the capacity (MW) required for the 2012 reporting year; approximately 44 MW. Figures for 2013-2015 represent the estimated amount of installed capacity (MW) needed on average throughout the compliance year.

Tennessee Market Update

Posted July 27th, 2011 by SRECTrade.

After the Council of the District of Columbia recently voted to close the DC SREC market to out-of-state systems, Tennessee sellers find themselves without SREC options (solar system owners in American Electric Power territory may sell in to PA).

Tennessee does not have an in-state SREC market and we don’t see any activity in the state’s General Assembly to implement an RPS. The lack of an RPS and the rules of Tennessee’s regulated utility companies limits the state’s ability to create a traditional SREC market.

The state has, however, recently doubled their total solar capacity, up from 4.3 MW in 2010 to 8.8 MW through March 2011. In addition to two 1 MW solar farms installed by Efficient Energy of Tennessee, around 250 kW have been installed in Chattanooga through a program headed by Green Spaces, a local community organization promoting sustainable building practices. The program utilized an urban development grant along with other government incentives to install 10 systems totaling 248 kW. The program partnered with Sustainable Future, a Knoxville-based installation company.

Solar Capacity in the SREC States – July 2011

Posted July 26th, 2011 by SRECTrade.

SRECTrade SREC Markets Report: July 2011

The following post outlines the megawatts of solar capacity certified and/or registered to create SRECs in the SREC markets SRECTrade currently serves.

For a PDF copy of this table click here.

Capacity_July11

PJM Eligible Systems

As of the end of July, there were 17,106 solar PV (16,792) and solar thermal (314) systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS) registry. Of these eligible systems, 70 (0.40%) have a nameplate capacity of 1 megawatt or greater, of which only 4 systems are greater than 5 MW. The largest system, currently located in New Jersey, is 18.3 MW, and the second largest, located in Ohio is 12 MW. The third largest system, at 10 MW, is located in IL and eligible for the MD, PA, and DC SREC markets. The fourth largest, at 6.2 MW, is located in New Jersey.

New Energy Year To Begin for DE, NJ, and PA

June 1, 2011 marks the beginning of the new energy year for DE, NJ, and PA. All requirements for these markets increase given their RPS solar carve out schedules. SRECs for the month of June, the first creation period for the new reporting year, will be minted at the end of July.

Delaware: The reporting year 2011-2012 requirement for DE equates to approximately 21 MW being online for the entire year or approximately 25,600 SRECs created. As of July 25, 2011, 9.1 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS.

New Jersey: The reporting year 2012 requirement for NJ equates to approximately 368 MW being online for the entire year with a fixed SREC requirement of 442,000 MWhs. As of July 25, 2011, 347.5 MW of solar capacity was registered and eligible to create NJ SRECs in PJM GATS. While this figure represents all projects registered in GATS, there are recently installed projects awaiting issuance of a New Jersey state certification number. This delay results in a portion of installed projects not yet represented in the 347.5 MW figure. On July 26, 2011 the NJ Office of Clean Energy (NJ OCE) reported that as of June 30, 2011 more than 380 MW (10,086 projects) of solar had been installed in NJ. The news release noted that 40 MW were installed in the month of June.

Pennsylvania: The reporting year 2012 requirement for PA equates to approximately 44 MW being online for the entire year or approximately 53,000 SRECs created. As of July 25, 2011, 115.7 MW of solar capacity was registered and eligible to create PA SRECs in PJM GATS.

Massachusetts DOER Qualified Projects

As of July 11, 2011, there were 682 MA DOER qualified solar projects; 649 operational and 33 not operational. Of these qualified systems, 11 (1.6%) have a nameplate capacity of 1 megawatt or greater, of which only 3 are between 1.5 and 2 MW. Three of the projects greater than 1 MW are currently operational.

Capacity Summary By State

The tables above demonstrate the capacity breakout by state. Note, that for all PJM GATS registered projects, each state includes all projects certified to sell into that state. State RPS programs that allow for systems sited in other states to participate have been broken up by systems sited in state and out of state. Additional detail has been provided to demonstrate the total capacity of systems only certified for one specific state market versus being certified for multiple state markets. For example, PA includes projects only certified to sell into the PA SREC market, broken out by in state and out of state systems, as well as projects that are also certified to sell into PA and Other State markets broken out by in state and out of state systems (i.e. OH, DC, MD, DE, NJ). PA Out of State includes systems sited in states with their own state SREC market (i.e. DE) as well as systems sited in states that have no SREC market (i.e. VA). Also, it is important to note that the Current Capacity represents the total megawatts eligible to produce and sell SRECs as of the noted date, while the Estimated Required Capacity – Current and Next Reporting Year represents the estimated number of MW that need to be online on average throughout the reporting period to meet the RPS requirement within each state. For example, New Jersey needs approximately 368 MW online for the entire 2012 reporting year to meet the RPS requirement. Additionally, the data presented above does not include projects that are in the pipeline or currently going through the registration process in each state program. This data represents specifically the projects that have been approved for the corresponding state SREC markets as of the dates noted.

Mass DOER releases July statistics, SRECTrade continues to lead in Mass SREC market

Posted July 20th, 2011 by SRECTrade.

With the August SREC auction coming next Friday, July 29th, SRECTrade will post the first sale for 2011 SRECs in Massachusetts. Last week, the DOER released the most recently updated list of qualified and installed solar projects (excel download) in the state that are eligible for the solar carve-out. This gives us a unique opportunity to look behind the curtains and see what is going on in the SREC market.

Of the 649 projects that are operational, SRECTrade’s aggregation is by far the largest in the state, representing 36% of all facilities that are operational in Massachusetts. In terms of installed capacity, with nearly 3 MW of 19 MW installed as of July 11, the 16% share of capacity is second only to the state’s largest utility, National Grid who has installed 4 projects totaling 3.4 MW which represents 18% of the solar capacity in the market. That said, 16% understates SRECTrade’s presence in the Massachusetts since signing up for SRECTrade’s aggregation service is not a pre-requisite for selling through the platform.

Largest SREC Aggregations in Massachusetts

% of
Capacity

Capacity Rank

% of
Facilities

Facility Rank

National Grid

17.7%

#1

0.6%

#16

SRECTrade

15.8%

#2

36.1%

#1

Totals: 649 Facilities / 19.0 MW

Although key features like transparent, competitive market pricing, low fees, no contracts to sign and online access to the SRECs that are not lumped together with other facilities have made SRECTrade an attractive option to solar owners, the success of the platform can ultimately be attributed to the network of installers that recommend it to their customers. According to the DOER’s report, 42 of the 111 installers with facilities in the ground have customers with SRECTrade, including 8 of the top 10 installers by volume.

Top Installers In SRECTrade’s Network as of July 11, 2011 (as published by DOER)
– My Generation Energy, Inc., Brewster, MA
– SunBug Solar, Somerville, MA
– Sunlight Solar Energy, Waltham, MA
– E2 Solar Inc., Hyannis, MA
– Alteris Renewables Inc., Natick, MA
– NorthEast Solar Design Associates, West Hatfield, MA
– South Mountain Company, Inc., West Tisbury, MA
– SolarFlair Energy, Inc., Framingham, MA

The SRECTrade aggregation is not a prerequisite to participate in the SRECTrade market. The platform is open to anyone in the market looking to sell SRECs. The improved fee structure makes SRECTrade a simple and inexpensive option for aggregations with SRECs to sell. The combination of an open platform and guaranteed volume coming from the state’s largest aggregation makes SRECTrade the top destination in Massachusetts for entities with compliance obligations.

New Jersey SREC market experiences volatility for first time in 3 years

Posted July 14th, 2011 by SRECTrade.

The July New Jersey SREC auction on SRECTrade.com cleared at $555 earlier this week, an $85 drop from $640 where NJ SRECs have traded since the beginning of the year. Today, the results of the NERA SREC auction on behalf of the four regulated Electric Distribution Companies (EDCs) closed at $475 per SREC. This is the auction used by PSE&G, ACE, JCP&L and RECO to sell the SRECs they purchase from the solar facilities that contracted in the various long-term SREC RFPs, such as the Solar Loan Program.

Meanwhile, the most recent data on SRECs created in New Jersey was reported by the Office of Clean Energy through May (generation through April). After 11 months, the state has created 220,000 2011 SRECs. The requirement is 306,000 SRECs. In April, there were about 40,000 SRECs created by the installed capacity and with one month to go, and over 80,000 SRECs short, it is highly unlikely that the state will meet its target. New Jersey will probably end up with somewhere between 85% and 90% of the requirement – which is pretty successful given how low relative capacity was at the beginning of the year.

That said, SREC prices have fallen despite the under-supply. The market could either keep falling to levels similar to the $475 price in the NERA auction or it could turn out to be a lull in the market before 2011 trading comes to a close in September. Here are few possible explanations as to why prices might fall at this time of year despite a shortage:

1. The 4th of July holiday coupled with a large influx of supply from May SRECs created July 1 means buyers may not been as active, while the volume of sellers increased.
2. At this point in the year, the aggressive buyers have purchased the SRECs they need, leaving the market to less-competitive buyers, who will pay less or opt for the fine.
3. Since New Jersey has a fixed SREC requirement, the BPU must notify each buyer what their total SREC requirement is based on their pro rata share of electricity sales. Without that information, buyers have a harder time estimating their requirement than in past years when it was based on their own electricity sales. Until the BPU publishes the final requirements, buyers will likely hold off on their final purchases.

Either way, 2011 trading will end in September and 2012 trading will pick up next month as the first 2012 SRECs are created. Next year will be a big year for the SREC concept in general. For the first time since 2008, SREC prices in New Jersey will be set by the market, not by the SACP. The SREC market concept will be tested on a large scale with a pure SREC-only policy – something that was missing in Pennsylvania when supply shot through the roof last year. If dropping SREC prices have the intended effect, the rate of installation in New Jersey will slow down to 10-12 MW per month for the next few years. If it doesn’t slow down, prices could be in trouble.

For now, the immediate concern has to do with whether or not buyers will return to the 2011 market before the trading period ends. Given what 2012 has in store, at the very least, it would be prudent to make sure to sell 2011 SRECs before September 30.

DC Closes Borders to Out-of-State Solar Systems

Posted July 12th, 2011 by SRECTrade.

The Council of the District of Columbia unanimously voted, today July 12th, to close the DC SREC market to out-of-state systems. The Distributed Generation Amendment Act of 2011 (Bill 19-10) increases the SREC requirement in 2011 as well as establishes an SACP schedule through 2023.  Once in effect, the bill will allow out-of-state systems registered prior to 1/31/2011 to continue to sell SRECs in the DC market. The DC Public Services Commission has not provided clarification on how the bill will affect out of state systems that have already granted DC registrations after the January 31st 2011 grandfather date. For more information on the bill please refer to our previous blog postings here and here.

The bill is not yet law. It first must go through a 30-day Congressional Review process before it can go in to effect. Given these mechanistic delays we don’t expect the bill to go in to effect for at least another month.

The following chart illustrates which out-of-state systems will be effected by the legislation.


State Eligible Markets (after B19-10 is effective)
DE DE, PA
IN OH; PA (if in American Electric Power territory)
IL PA (if in Com Ed territory)
KY OH; PA (if in American Electric Power territory)
MD MD; PA
MI OH; PA (if in American Electric Power territory)
NC NC; PA (if in Dominion Electric Territory)
NJ NJ, PA
NY
OH OH; PA
PA PA; OH
TN PA (if in American Electric Power territory)
VA PA
WV OH; PA
WI

New Jersey Senate votes to advance solar RPS

Posted July 5th, 2011 by SRECTrade.

While the New Jersey Governor has recently raised some uncertainty over the state’s commitment to solar energy in the Energy Master Plan, there certainly is no doubt where the state Senate stands on the subject. Last week the Senate voted 30-7 to pass S2371 to accelerate the solar renewable portfolio standard. This Bill was originally intended to create a requirement for long-term SREC contracts in the New Jersey market, but that measure was shot down fairly quickly given the strong opposition from the deregulated energy industry in New Jersey. A later version of the Bill included a mechanism for a floor price, similar to the one introduced in Massachusetts in 2010. The version of the Bill that was passed only increases the SREC requirement in 2013, moving forward all the SREC requirements by one year in each year after 2012.

Though the initial intent of this Bill was to provide stability and lower long-term SREC prices to a fluctuating SREC market, the revised Bill will essentially double the additional capacity required in 2013. With a pending oversupply in New Jersey (the state installed 145 MW last year and needs only 115 MW before it hits an oversupply), the increase in 2013 will help support the current rate of solar adoption. The change will allow for 275 MW of additional capacity in 2013, allowing the state to maintain its current build rate. That said, it is only a temporary fix to what will continue to be a problem past 2013 as the requirements in 2014-2016 only allow for approximately 150 – 175 MW of solar per year. The bottom line is that the rate of solar development in New Jersey needs to slow down. Whether this bill passes or not only effects how fast the industry must apply those brakes.

If development doesn’t slow down, SREC prices will not only fall, but many sellers will not be able to find buyers in an oversupplied market. Hopefully the current drop in SREC prices are providing the intended signal to would-be solar projects that the market can’t handle continued development. This past month, an additional 23 MW became active in the NJ SREC market. Moving forward, the market cannot handle any more than 10-12 MW per month for the next 5 years if it is to reach an equilibrium.

Solar Capacity in the SREC States – June 2011

Posted July 5th, 2011 by SRECTrade.

SRECTrade SREC Markets Report: June 2011

The following post outlines the megawatts of solar capacity certified and/or registered to create SRECs in the SREC markets SRECTrade currently serves.

For a PDF copy of this table click here.

Capacity_June2011_1

PJM Eligible Systems

As of the end of June, there were 16,381 solar PV (16,069) and solar thermal (312) systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS) registry. Of these eligible systems, 65 (0.40%) have a nameplate capacity of 1 megawatt or greater, of which only 4 systems are greater than 5 MW. The largest system, currently located in New Jersey, is 18.3 MW,  and the second largest, located in Ohio is 12 MW. The third largest system, at 10 MW, is located in IL and eligible for the MD, PA, and DC SREC markets. The fourth largest, at 6.2 MW, is located in New Jersey.

New Energy Year To Begin for DE, NJ, and PA

June 1, 2011 marks the beginning of the new energy year for DE, NJ, and PA. All requirements for these markets increase given their RPS solar carve out schedules. SRECs for the month of June, the first creation period for the new reporting year, will be minted at the end of July.

Delaware: The reporting year 2011-2012 requirement for DE equates to approximately 21 MW being online for the entire year or approximately 25,600 SRECs created. As of June 30, 2011, 9.1 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS.

New Jersey: The reporting year 2012 requirement for NJ equates to approximately 368 MW being online for the entire year with a fixed SREC requirement of 442,000 MWhs. As of June 30, 2011, 332 MW of solar capacity was registered and eligible to create NJ SRECs in PJM GATS. As of April 30, 2011, the NJ Office of Clean Energy (NJOCE) reported that 330.5 MW (9,181 projects) of solar had been installed in the state. The NJOCE data shows that from November 2010 – April 2011, the average installed capacity per month was 18 MW. Forecasts prepared by the NJOCE, show the monthly rate of installation through September 2011 ranging between 17 – 30 MW per month depending on different scenarios.

Pennsylvania: The reporting year 2012 requirement for PA equates to approximately 44 MW being online for the entire year or approximately 53,000 SRECs created. As of June 30, 2011, 104.8 MW of solar capacity was registered and eligible to create PA SRECs in PJM GATS.

Massachusetts DOER Qualified Projects

As of May 6, 2011, there were 524 MA DOER qualified solar projects; 467 operational and 57 not operational. Of these qualified systems, 11 (2.1%) have a nameplate capacity of 1 megawatt or greater, of which only 3 are between 1.5 and 2 MW. Three of the projects greater than 1 MW are currently operational.

Capacity Summary By State

The tables above demonstrate the capacity breakout by state. Note, that for all PJM GATS registered projects, each state includes all projects certified to sell into that state. State RPS programs that allow for systems sited in other states to participate have been broken up by systems sited in state and out of state. Additional detail has been provided to demonstrate the total capacity of systems only certified for one specific state market versus being certified for multiple state markets. For example, PA includes projects only certified to sell into the PA SREC market, broken out by in state and out of state systems, as well as projects that are also certified to sell into PA and Other State markets broken out by in state and out of state systems (i.e. OH, DC, MD, DE, NJ). PA Out of State includes systems sited in states with their own state SREC market (i.e. DE) as well as systems sited in states that have no SREC market (i.e. VA). Also, it is important to note that the Current Capacity represents the total megawatts eligible to produce and sell SRECs as of the noted date, while the Estimated Required Capacity – Current and Next Reporting Year represents the estimated number of MW that need to be online on average throughout the reporting period to meet the RPS requirement within each state. For example, New Jersey needs approximately 255 MW online for the entire 2011 reporting year to meet the RPS requirement. Additionally, the data presented above does not include projects that are in the pipeline or currently going through the registration process in each state program. This data represents specifically the projects that have been approved for the corresponding state SREC markets as of the dates noted.