Archive for the ‘SREC Markets’ Category

Massachusetts DOER Announces Revised 2018 and Preliminary 2019 SREC Minimum Standards

Posted July 10th, 2018 by SRECTrade.

On July 10, 2018, the Massachusetts Department of Energy Resources (DOER) announced both preliminary 2019 SREC I and SREC II Minimum Standards and a revised version of the original 2018 SREC II Minimum Standard calculation. The 2018 SREC II Minimum Standards were reduced from 2.7802% to 2.6823% for load executed under contract between April 25, 2014 and May 8, 2016 and from 4.1661% to 4.0683% for contracts executed after May 8, 2016.

The DOER estimates a 2019 SREC I Minimum Standard of 1.1189% for load executed under contract prior to June 28, 2013 and, if the auction clears in the first or second round, 1.7809% for load executed under contract on or after June 28, 2013.

The DOER estimates a 2019 SREC II Minimum Standard of 2.3680% for load executed under contract between April 25, 2014 and May 8, 2016, and 3.9697% for load executed under contract on or after May 8, 2016. This also only applies if the auction clears the first or second round.

Details regarding this announcement can be found here. SRECTrade will be assessing the implications of this adjustment and informing our constituents accordingly.

Washington, D.C. SREC Market Update

Posted July 8th, 2018 by SRECTrade.

In recent months, the Washington D.C. SREC market has seen a relative lack of liquidity compared to prior compliance years and a resulting downward impact on pricing. This dynamic has developed as a result of the Renewable Portfolio Expansion Act of 2016, which allowed for electricity load signed under contract prior to October 8, 2016 to be grandfathered under the old Solar Alternative Compliance Penalty (SACP). With the current Calendar Year 2018 (CY2018) SACP at $500/MWh and the old CY2018 SACP at $300/MWh, electricity suppliers with grandfathered load have opted to pay the lower SACP fee instead of purchasing SRECs for each MWh of compliance associated with load under a grandfathered contract. As such, effective SREC demand has been temporarily reduced.

In CY2017, 28.8% of the compliance obligation was met through retirement of DC-eligible SRECs. This implies that 71.2% of the compliance obligation was met through SACP payments and, correspondingly, 71.2% of 2017 load obligation was grandfathered under the old SACP. Details of this can be found in the DC Public Service Commission’s Report on the Renewable Energy Portfolio Standard for Compliance Year 2017 (see pages 15-17 specifically). With each subsequent year up through 2021, a portion of this load will roll off of contract, incrementally increasing SREC demand. The enclosed analysis assumes that these contracts will roll off in equal intervals each year over the next three years. As such, the analysis assumes that beginning in CY2020, there will be no load remaining under a grandfathered contract. While this may not be the case (since it is possible there were five year load contracts signed in 2015/2016), we assume that the majority of grandfathered contracts have a three year term and will expire by CY2020.

Reflective of the $200 difference between the previous program’s and current program’s SACP for CY2018, the price of SRECs have decreased from $470 in February 2017 to approximately $370 in July 2018. Under our assumption, approximately 40% of electric load remains under grandfathered contracts for CY2018. We can gather from this statistic that approximately 40% of compliance from CY2018 will be met through SACP payments and the remainder will be met through the purchase of SRECs. The enclosed analysis demonstrates a likely oversupply in the current 2018 compliance year. At current build rates of 1.14 MW/month, the market would be approximately 30% oversupplied in 2019, nearly balanced in 2020, and move to a state of under supply in 2021, 2022, and 2023. The presentation also demonstrates the expected supply relative to RPS solar demand at greater build rates from the last twelve month average.

Please click on the preview below to see the full analysis:

Should you have any questions about the enclosed analysis or need transaction and management services, please contact us.

Disclaimer. This document, data, and/or any of its components (collectively, the “Materials”) are for informational purposes only. The Materials are not intended as investment, tax, legal, or financial advice, or as an offer or solicitation for the purpose or sale of any financial instrument. SRECTrade, Inc. does not warranty or guarantee the market data or other information included herein, as to its completeness, accuracy, or fitness for a particular purpose, express or implied, and such market data and information are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Any comments or statements made herein do not necessarily reflect those of SRECTrade, Inc. SRECTrade, Inc. may have issued, and may in the future issue, other communications, data, or reports that are inconsistent with, and reach different conclusions from, the information presented herein.

Copyright. This document is protected by copyright laws and contains material proprietary to SRECTrade, Inc. This document, data, and/or any of its components (collectively, the “Materials”) may not be reproduced, republished, distributed, transmitted, displayed, broadcasted or otherwise disseminated or exploited in any manner without the express prior written permission of SRECTrade, Inc. The receipt or possession of the Materials does not convey any rights to reproduce, disclose, or distribute its contents, or to manufacture, use, or sell anything that it may describe, in whole or in part. If consent to use the Materials is granted, reference and sourcing must be attributed to the Materials and to SRECTrade, Inc. If you have questions about the use or reproduction of the Materials, please contact SRECTrade, Inc.

PJM GATS Solar – Registered Capacity Update as of June 2018

Posted July 3rd, 2018 by SRECTrade.

The following post is a monthly update outlining:

  1. The megawatts of solar capacity certified to create SRECs in the PJM GATS SREC markets that SRECTrade serves
  2. The relationship between supply and demand of SRECs in the PJM GATS SREC markets that SRECTrade serves

Solar capacity data is based on the information available in PJM GATS as of June 13, 2018. Certificate data is based on the information available in PJM GATS as of June 29, 2018 (incorporates May SREC issuance data).

Note: In the past, we have used a 1% annual load growth rate to estimate load in current and future compliance years. Taking into account recent load trends, we have come to the conclusion that a flat load growth is more appropriate for all PJM states. As such, load and compliance numbers may be lower than previously estimated to more accurately reflect actual compliance obligations.

PJM GATS Registered Solar Facilities Summary

There are 175,434 facilities across 4,467.3 MW registered in PJM GATS as of June 13, 2018.

506 facilities are 1 MW or larger in capacity, representing 1,966.2 MW or 44.0% of the qualified capacity. There are 104 facilities that are 5 MW or larger, representing 1,194.9 MW or 26.7% of all qualified capacity.

Note: SREC requirements for markets without fixed SREC targets have been forecast based on the EIA Report “Monthly Electric Power Industry Report”. Projected SRECs required utilizes the most recent EIA electricity data with a flat growth rate forecast. The state RPS’s solar carve-out is then multiplied by forecast total electricity sales to arrive at projected SRECs required. Projected capacity required is based on a factor of 1,200 MWh generated per MW of installed capacity per year.

Capacity Update

The chart above compares the megawatts (MWs) registered in PJM GATS as of the date noted (the light and dark blue bars) to the estimated RPS solar MWs needed to be operational through the duration of the current reporting year (the gray bar) to meet each market’s RPS targets. The Estimated RPS MW figure can be interpreted as the amount of capacity that would need to be online throughout the year in order to produce the obligatory megawatt hours of electricity mandated by each state’s RPS schedule. For Delaware, the gray bar represents the estimated EY2017 (Jun ’17 – May ’18) compliance obligation. For Ohio, Washington D.C., and Maryland, the gray bar represents estimated CY2018 (Jan ’18 – Dec’18) compliance obligations. For Pennsylvania and New Jersey, the gray bar represents estimated EY2018 (Jun ’17 – May ’18) compliance obligations.

OH2018: Represents all OH eligible solar facilities. If any facilities were eligible in higher priced markets, such as DC, the capacity was excluded from OH eligibility as it could be sold at a higher price in DC. The drop of OH capacity from last month represents the capacity that was “deactivated” due to non-reporting for 2+ years.

DE2018: Represents all solar facilities eligible for the DE solar RPS requirement. The drop of DE capacity from last month highlights the capacity that was “deactivated” due to non-reporting for 2+ years.

DC2018: Represents all facilities eligible for the DC SREC market. If a facility was eligible in another market, it was not included there given the current pricing for DC SRECs.

PA2019: Represents all solar facilities eligible for the PA SREC market. Please note that ALL out of state facilities previously certified in PA were stripped of their certification in May. You can read more about this policy change here. ALL PA-TIER I ELIGIBLE FACILITIES THAT ARE NOT ELIGIBLE FOR ANY OTHER SREC MARKET ARE NOT INCLUDED IN THIS ANALYSIS. The drop in PA capacity from last month represents the capacity that was “deactivated” due to non-reporting for 2+ years.

MD2018: Represents all MD eligible solar capacity registered in PJM GATS, except facilities that are cross-registered in Washington D.C.

NJ2019: Represents all NJ eligible solar capacity registered in PJM GATS. 

This chart is not meant to be a final representation of SREC supply for a given compliance period, but instead a visualization of the relationship between installed capacity relative to each state’s estimated RPS requirements converted from a MWh to MW basis. Note that the registered MW figures do not consider eligible SRECs carried over from previous reporting years and are only used as one aspect of current market supply drawn from the current MWs registered in PJM GATS. The installed capacity operating over the indicated time period will produce SRECs which, in addition to any eligible unsold SRECs from previous periods, will make up the final supply present in the market.

SREC Supply and Demand

The following charts depict SREC supply and demand dynamics, including banked SRECs available for compliance.

Assumptions:

  • All assumptions for the capacity analysis above apply to the analysis below as well. In addition:
  • The compliance obligation is based on flat load growth from 2017 electricity load data for each respective state. (Source: EIA)
  • Build rates in each state are equal to that state’s Last Six Month (LSM) average monthly build rate.
  • The bulk of EY2017 supply numbers for Delaware and EY2018 numbers for New Jersey and Pennsylvania were issued on June 29, 2018. While some 2018 SRECs may have not yet been issued, this analysis assumes that all 2018 SRECs have been issued as of June 29, 2018.
  • The CY2018 supply numbers for Maryland, Ohio, and Washington D.C. add the actual issued credits through June 29, 2018 to the projected SRECs generated through the end of CY2018.

 

 

 

 

Disclaimer. This document, data, and/or any of its components (collectively, the “Materials”) are for informational purposes only. The Materials are not intended as investment, tax, legal, or financial advice, or as an offer or solicitation for the purpose or sale of any financial instrument. SRECTrade, Inc. does not warranty or guarantee the market data or other information included herein, as to its completeness, accuracy, or fitness for a particular purpose, express or implied, and such market data and information are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Any comments or statements made herein do not necessarily reflect those of SRECTrade, Inc. SRECTrade, Inc. may have issued, and may in the future issue, other communications, data, or reports that are inconsistent with, and reach different conclusions from, the information presented herein.

Copyright. This document is protected by copyright laws and contains material proprietary to SRECTrade, Inc. This document, data, and/or any of its components (collectively, the “Materials”) may not be reproduced, republished, distributed, transmitted, displayed, broadcasted or otherwise disseminated or exploited in any manner without the express prior written permission of SRECTrade, Inc. The receipt or possession of the Materials does not convey any rights to reproduce, disclose, or distribute its contents, or to manufacture, use, or sell anything that it may describe, in whole or in part. If consent to use the Materials is granted, reference and sourcing must be attributed to the Materials and to SRECTrade, Inc. If you have questions about the use or reproduction of the Materials, please contact SRECTrade, Inc.

Massachusetts SREC-II Application Timeline

Posted June 27th, 2018 by SRECTrade.

While the Solar Massachusetts Renewable Target (SMART) Program Effective Date is still to be announced by the Department of Energy Resources (DOER), the application timelines for SREC-II have been set.

As a reminder, the SMART Program Effective Date will be the deadline for facilities smaller than or equal to 25 kW DC to be interconnected and facilities larger than 25 kW DC to be mechanically complete. This means that documentation must be dated on or before the Effective Date, but applications can be submitted for some time after.

Facilities larger than 25 kW DC will have two weeks after the SMART Program Effective Date to submit their documentation demonstrating mechanical completion. Once granted, mechanically complete extensions are indefinite – facilities should simply submit their Permission to Operate (PTO) documents once they are received to complete their statement of qualification application.

Facilities smaller than or equal to 25 kW DC will have until November 15th to submit an application demonstrating authorization to interconnect. In other words, the PTO must be dated on or before the effective date, but the applications can be submitted to the DOER up through November 15th.

For more information please reference the DOER’s Current Status of the Solar Carve Out II Program page.

SRECTrade and USPV Combine as SRECTrade Launches its Portfolio Partnership Program

Posted June 13th, 2018 by SRECTrade.

SRECTrade is excited to announce the completion of the merger of U.S. Photovoltaics’ (USPV) Renewable Energy Certificate (REC) management, aggregation, and transaction services business. USPV is one of the largest SREC aggregators in Washington, D.C. and Maryland. USPV’s decision to combine with SRECTrade demonstrates our leadership and expertise in managing distributed generation renewable energy assets. SRECTrade’s agency management services now cover 415 Megawatts across more than 31,500 projects in the PJM and NEPOOL REC markets. Additionally, SRECTrade-X, the Company’s institutional REC management software, provides services to 1.1 Gigawatts across more than 104,000 projects. SRECTrade-X also provides REC management solutions to electricity suppliers and environmental commodity trading firms.

SRECTrade looks forward to working with other managers and aggregators as we launch our new Portfolio Partnership Program.  This new program allows REC managers and aggregators to utilize SRECTrade’s platform and technology to address a variety of environmental commodity management and transaction solutions.

We are pleased to welcome USPV’s clients and partners and look forward to facilitating the management of their REC assets. USPV client and partner accounts have been migrated onto the SRECTrade platform. All clients can login and view their historic REC transactions, renewable energy facilities, and REC sales preferences.

A copy of the full press release can be found here.

Pennsylvania SREC Market Update

Posted May 29th, 2018 by SRECTrade.

The Pennsylvania Solar Renewable Energy Credit (SREC) market has been through some changes since the fall of 2017. In October 2017, Governor Wolf signed Act 40 into law. On May 3, 2018, the PA Public Utilities Commission entered its final implementation order. The order clarified two main items:

  1. PA certified SRECs issued for October 2017 generation and prior would maintain their PA SREC certification regardless if the generator was sited in the state or out of the state
    • Out of state generators with RECs generated from November 2017 onward were reclassified as PA Tier I eligible. The PA program administrator and PJM GATS made these updates in the tracking registry in early May 2018.
  2. Some out of state generators would be eligible to temporarily maintain SREC eligibility if their SRECs were sold under a preexisting contract, executed before Act 40 became law. For the generator to maintain eligibility the contract would have to be signed directly with an Electric Distribution Company (EDC) or Electric Generation Supplier (EGS). The contracting EDC or EGS would need to file a petition for approval with PUC within 60 days of the May 3, 2018 final implementation order. If approved, the out of state generator would only be able to maintain PA SREC eligibility for the term and quantity of the contract.
    • On May 17, 2018, the PA PUC issued a follow on order that they will be taking into consideration comments filed by Community Energy to reconsider the requirements of who generators are contracted with in order to maintain PA SREC eligibility for out of state solar projects. Additionally, the PA PUC noted that it would stay the 60 day period for EDCs and EGSs to petition to qualify their contracts with out of state generators, pending further review and consideration of the comments filed by Community Energy. All PA PUC documents and comments can be found by searching Docket #2017-2631527 on the PA PUC site.

One of the most meaningful components of these changes in the PA SREC market has been the change in the price of PA SRECs. The spot market has increased more than 2.5x since this time last year (i.e. from ~$5/SREC in May 2017 to ~$13/SREC in May 2018). Pricing on a forward basis has also been positively impacted with more participants starting to show interest in transacting out the curve.

Fundamentally, the PA SREC market remains oversupplied. A very large bank of eligible SRECs from RY2016, 2017, and 2018 from sited and out of state projects (generation from October 2017 and prior) is the main driver of oversupply. Additionally, Pennsylvania’s solar carve-out is relatively small (0.50% by reporting year 2021) as compared to Maryland’s current 1.5% requirement in calendar year 2018 and New Jersey’s 3.2% requirement in reporting year 2018. For more specific details on potential supply scenarios click here for our latest PA SREC Market Update presentation.

Expected oversupply for reporting year 2018 is by nearly 2 million SRECs. While the analysis shows the oversupply becoming less meaningful moving forward, assuming relatively modest in-state build rates, the market could still expect varying degrees of oversupply (i.e. ~40-70% even in reporting year 2023). One potential factor that could change this oversupply dynamic dramatically would be market participants willingness to purchase PA certified out of state SRECs from the existing SREC bank (i.e. generation from October 2017 and prior). Since the PA PUC final implementation order has been clarified and PJM GATS and the PA AEPS administrator adjusted the SRECs in the tracking registry, demand for in-state SRECs has been much more prevalent than for out of state certified SRECs. The presentation enclosed herein includes a scenario demonstrating what supply would look like relative to demand if none of the out of state certified bank from October 2017 generation and prior were used in meeting current and future RPS obligations. It does not appear likely that this preference for in-state only demand would remain prevalent for a long period of time. It has been presented simply to show a scenario that would lead to one scenario of under-supply that would likely be recognized by the market and quickly corrected.

Lastly, due to the PA PUC staying the petition to qualify of out of state PA forward contracts for continued eligibility during the contract term, it is still unknown how these contracts will impact future supply. The enclosed analysis notes that this has not been taken into consideration in the scenarios presented herein, but please keep this in mind as you are reviewing this information.

As more updates become available we’ll provide more information. Should you have any questions about the enclosed analysis or need REC transaction and management services, please contact us.

NJ Gov. Murphy Signs AB-3723 / SB-2314 Increasing State RPS

Posted May 25th, 2018 by SRECTrade.

On Wednesday, May 23rd, New Jersey Governor Phil Murphy (Dem) signed Assembly Bill 3723 (AB-3723) and Senate Bill 2314 (SB-2314), increasing the state’s Renewable Portfolio Standard (RPS) requirements. The bill establishes renewable energy goals of 21 percent by 2020, 35 percent by 2025, and 50 percent by 2030, making the New Jersey RPS one of the highest in the nation.

Notably, the state’s solar carve-out requirement is raised and accelerated to 5.1 percent of total electricity sales by EY2021 before beginning to ramp-down in 2024. The requirement ramps down in consideration of solar facilities that will be reaching the end of their 15-year SREC production eligibility term.

On the other hand, the bill lowers the solar alternative compliance payment (SACP) schedule to $268.00 in EY2019 with an additional $10.00 reduction each following year.

The bill also shortens the 15-year period that qualified solar projects can generate solar renewable energy credits (SREC) to ten years, effective for all New Jersey SREC Registration Program applications received as of the enactment date. Lastly, the bill mandates that the current SREC program be closed upon reaching the 5.1 percent target and no later than June 1, 2021. It is anticipated that a supplemental “SREC-II” program will follow shortly after the closure of the first program.

The bill also introduces other clean energy initiatives, including:

  • Community Solar: establishes the Community Solar Energy Pilot Program to allow utility customers access to solar projects that are located away from their properties, but within their utility’s service territory. The pilot program is planned to be converted to a permanent community solar program within 36 months.
  • Energy Efficiency: requires individual utilities to implement energy efficiency measures to reduce electricity usage by 2 percent and natural gas usage by 0.75 percent.
  • Energy Storage: mandates Gov. Murphy’s goal of achieving 600 MW of energy storage by 2021 and 2,000 MW by 2030.
  • Offshore Wind: establishes a goal of 3,500 MW of offshore wind by 2030 that will be supported by an offshore wind renewable energy credit (OREC) program.

Simultaneously, Gov. Murphy signed Executive Order No. 28, requiring state agencies to update the Energy Master Plan (EMP) that prepares a strategy for achieving 100 percent clean energy by January 1, 2050. The new EMP is scheduled to be finalized and published by June 1, 2019.

For more information on the bill and its passage through the New Jersey legislature, please visit our previous blog post on the topic here. SRECTrade expects to publish a detailed New Jersey supply and demand analysis reflecting this new legislation soon.

PA PUC Enters Final Implementation Order of Act 40

Posted May 10th, 2018 by SRECTrade.

On Thursday, May 3rd, the Pennsylvania Public Utilities Commission (PUC) entered its Final Implementation Order of Act 40 of 2017, clarifying some questions that remained from its adoption of the Final Implementation Order. Notably, the entry confirmed that PA-certified but out-of-state facilities would not be grandfathered with solar renewable energy credit (SREC) eligibility (i.e. Tier I solar), since the PUC found that grandfathering these facilities would result in minimal improvement for state SREC prices and fail to effectuate the intentions of the PA General Assembly.

The entry also clarified that PA SRECs associated with energy generated after October 30, 2017 would be re-certified to non-solar RECs (i.e. Tier I non-solar). The PA REC Program Administrator and PJM GATS have already worked together to modify the Tier I certification numbers attributed to all out-of-state facilities and SRECs that no longer qualify for Tier I solar eligibility. This means that SRECs with a Month of Generation of November 2017 and later have now been re-certified as Tier I non-solar RECs.

Some facilities that were re-certified with Tier I non-solar eligibility will be permitted to temporarily maintain SREC certification if under an SREC contract with an electric distribution company (EDC) or electric generation supplier (EGS) serving PA customers. EDCs and EGSs seeking to qualify contracted RECs as Tier I solar-eligible under the Final Implementation Order’s ruling must file a petition within 60 days of the entry date of the Order (May 3rd). Please note that such facilities will only be permitted to maintain certification until the expiration of the SREC contract.

Moving forward, it appears that the PA REC Program Administrator will be responsible for working with PJM GATS to re-certify SREC-contracted facilities for Tier I non-solar REC generation once their contract term expires.

Additionally, the entry clarified that:

  • Solar facilities interconnected in PJM service territory are permitted to continue generating RECs eligible to be used toward Tier I non-solar requirements in the AEPS.
  • Out-of-state grid-supply solar facilities must be serving end-use electricity load in PA to continue to generate energy and SRECs eligible for compliance under the Tier I solar requirement. Specifically, solar facilities must meet one of the following criteria:
    • Physical connection to a PA EDC customer’s internal electrical system
    • Physical interconnection to an EDC’s distribution system
    • Physical connection to a PA electric cooperative’s or municipal electric system’s distribution network
    • Physical connection to any PA-located transmission system, including utility-scale solar facilities that are within a PA EDC’s service territory and operating under PJM wholesale generator rules
  • SRECs generated by out-of-state facilities prior to October 30, 2017 will maintain their Tier I solar certification

PA PUC Adopts Final Implementation Order of Act 40 – Impacts Out-of-State PA-Certified Solar Projects

Posted April 19th, 2018 by SRECTrade.

On Thursday, April 19th, the Pennsylvania Public Utilities Commission (PUC) adopted its Final Implementation Order of Act 40 of 2017. The Order amends the qualifications to certify Tier I solar photovoltaic facilities under Pennsylvania’s Alternative Energy Portfolio Standards (AEPS) Act. As summarized in our previous blog post, ambiguous language in Section 2804(2)(i) and Section 2804(2)(ii) of Act 40 made it unclear whether certified but out-of-state facilities would retain their certifications under the AEPS. The Order clarified the PUC’s interpretations of Section 2804(2)(i) and Section 2804(2)(ii) which are as follows:

  • Section 2804(2)(i) – “[a] certification originating within the geographical boundaries of this Commonwealth…” shall mean a facility located within PA having received an AEPS Tier I solar photovoltaic certification.
  • Section 2804(2)(ii) – shall only permit out-of-state facilities that are 1) already certified as AEPS Tier I Solar Photovoltaic and 2) entered into an SREC contract with a PA electric distribution company (EDC) or electric generation supplier (EGS) serving PA customers to maintain certification until the expiration of the contract.

Solar facilities that meet the two Section 2804(2)(ii) criteria listed above are limited to maintaining certification only for the applicable amount of Solar Renewable Energy Credits (SRECs) contractually committed to an EDC or EGS. EDCs and EGSs seeking to qualify SRECs under this interpretation must file a Petition with 60 days of the entry date of the Order.

In addition, the Order clarified that SRECs generated by certified but out-of-state facilities prior to October 30, 2017 will retain their Tier I solar qualification for their standard banking lifetime (current reporting year and following two). The Order did not clarify whether SRECs generated by such facilities after October 30, 2017 will also be able to retain their Tier I solar qualification.

At this time, it is unclear how implementation of these interpretations will be administered. SRECTrade will continue to monitor the proceedings and provide updates as they become available.

NJ Solar RPS Increase – New Jersey Assembly and Senate Pass AB-3723 / SB-2314

Posted April 13th, 2018 by SRECTrade.

On Thursday, April 12th, the New Jersey Assembly and Senate passed Assembly Bill 3723 (AB-3723) and Senate Bill 2314 (SB-2314). The bill now sits on the desk of Governor Phil Murphy (Dem) waiting to be signed, after passing the Assembly by a margin of 49-20-2 and the Senate by a margin of 29-8. The bill requires a number of action items to be carried out, including:

  • Requiring the New Jersey Board of Public Utilities to:
    • Administer an energy storage analysis
    • Advance, increase, and extend the solar carve-out schedule and reduce and extend the solar alternative compliance payment schedule
    • Introduce structural changes to the state SREC program
    • Implement energy efficiency and peak demand reduction programs
    • Implement a “Community Solar Energy Pilot Program”
    • Offer tax credits for specified offshore wind facilities
  • Requiring the Department of Labor and Workforce Development to establish job training programs for professionals in manufacturing and maintenance of offshore wind facilities

The bill requires 21% of statewide electricity sales to be derived from Class I renewable energy sources by January 1, 2020, 35% by January 1, 2025, and 50% by January 1, 2030. The cost of this requirement shall not exceed 9% of the electricity purchased by all NJ ratepayers for each energy year 2019-2021 and shall not exceed 7% in each energy year thereafter. In addition, all facilities filing SREC applications after the bill’s enactment date will be subject to a reduced SREC eligibility term of 10 years, down from 15.

No later than 180 days after the enactment of the bill, the board will implement rules to close the SREC program to new systems upon reaching the 5.1% solar carve-out target. The legislation intends to close the existing SREC program to new projects on or before June 1, 2021. Within 24 months from signing the legislation, the Board of Public Utilities will be required to conduct a study that evaluates how to modify or implement a new solar incentive program. A variety of market stakeholders will be consulted in the process to determine the next best steps forward for the NJ SREC market.

As shown below, the bill brings forward and raises the state’s solar carve-out requirements beginning with EY2019 and extends the requirements through EY2033. The requirement peaks at 5.10% in EY2021-2023 before gradually declining through EY2033. The reduction mechanic was introduced to account for solar facilities that will be reaching the end of their SREC production eligibility term.

The bill also reduces the solar alternative compliance payment (SACP) beginning with EY2019 and extends the SACP schedule through EY2033. The SACP level drops to $268 in EY2019 and then gradually decreases by $10 each year following.

For more information on the historical progress of the bill, please view our previous blog post on the topic here. SRECTrade will be publishing an updated New Jersey Supply and Demand Analysis to its blog shortly in consideration of this bill.