Archive for the ‘Pennsylvania’ Category

SRECTrade at Solar Focus 2016: Maryland SREC Update and Pennsylvania RPS Overview

Posted November 21st, 2016 by SRECTrade.

Last week, members of the SRECTrade team attended MDV-SEIA’s Solar Focus Conference in Washington, D.C.  The conference’s focus was on “cracking the code for East Coast solar”, and the subject matter covered a wide variety of issues relevant to the solar industry across the Mid-Atlantic region.  In particular, the conference provided a forum for in-depth conversations around the future of critical, although challenged, state markets such as Pennsylvania and Maryland.

SRECTrade’s Director of Environmental Markets, Brett Waikart and our Director of Regulatory Affairs and General Counsel, Allyson Browne were invited to speak about the Maryland and Pennsylvania markets, respectively.  Brett’s presentation covered the fundamentals of the Maryland SREC market and laid out hypothetical future scenarios assuming various RPS carve-out schedules and build rates.  Allyson’s presentation focused on the composition of Pennsylvania’s electricity market and emphasized different aspects of the state’s Alternative Energy Portfolio Standard (AEPS) structure that could be adjusted in order to improve market conditions.  Their presentations are included below, along with a brief synopsis of the analysis provided.

Maryland SREC Update – November 2016

Little has changed in the overall degree of oversupply in the Maryland spot market since our last post in September. There have been no changes to official RPS policy, and supply continues to far outstrip the demand levels set by the RPS compliance schedule.  As can be seen in the snapshot below, as of November 15th there were approximately 156k CY14 and CY15 SRECs still available for sale and another 477k CY16 SRECs that had been generated in the current year.  Assuming that recent build rates continue through the end of 2016, we anticipate another 89k SRECs to be generated before the year is over.  When compared to the MD16 RPS obligation of  approximately 431k SRECs, these numbers indicate that we are oversupplied by a little more than 291k SRECs, or 68% of the current RPS demand requirement. MD16 snapshot

While this degree of oversupply is substantial, the monthly build rate numbers confirm that weaker project economics, caused by depressed SREC prices, have indeed slowed the installation of new capacity significantly.  The average amount of new capacity added over the last three months has slowed to just less than 10MW/month, as compared to just less than 30MW/month in the first quarter of 2016.  Also notable is that we have not seen the installation of a single asset greater than 1MW in capacity reports since June.  You can clearly see the trend lower in the graph below, which illustrates the quarterly sum of new capacity brought online over the last year.

Q4_15 to Q3_16

With the MD SREC market now fully reflecting the current degree of oversupply, and the effects now being felt by the asset development industry, stakeholders can agree that the time has come to find a solution.  The Maryland market has now fully outgrown the trajectory previously laid out for it through the current RPS schedule.  With that in mind, we now present a third scenario in our MD Capacity Presentation.  In addition to our typical supply and demand projections under the current RPS and the RPS proposed through HB1106, we now include an analysis illustrating the potential market conditions that would result from a more aggressive RPS schedule.  You will find our results in the slide deck provided below.

Our full capacity presentation can be found here.

Pennsylvania Policy Update

The concept of oversupply is even more familiar to Pennsylvania’s SREC market. Although the state’s AEPS targets exceed those of other PJM state RPS targets on an absolute basis, the state has been fundamentally oversupplied for years due to the design of its program.

In her presentation, Allyson takes a holistic look at Pennsylvania’s electricity market and generation mix and applies this foundation to the state’s AEPS design. The result is a structural oversupply that will require several supply- and demand-side adjustments before the market will be able to rebound and achieve supply-demand balance.

After providing this framework for the panel’s discussion, Allyson addresses Pennsylvania’s work towards compliance with the EPA’s Clean Power Plan (despite its now uncertain future) and identifies possible routes for reinvigorating Pennsylvania’s solar market.

Allyson’s full presentation can be viewed here.

 

As always, please feel free to reach out to your coverage on the SRECTrade brokerage desk to discuss any observations or comments you may have regarding our analysis or your view of the SREC markets.  We will continue to update our analysis and provide you with any new information we receive as it becomes relevant.

 

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.

Environmental Markets Association – PA, NJ, and MD SREC Presentation

Posted May 28th, 2015 by SRECTrade.

Last week, SRECTrade was invited to present at the Northeast Renewable Energy Credit Round Table hosted by the Environmental Markets Association (EMA).  The presentation provides a fundamental look into the PA, NJ and MD SREC markets.

The presentation covers the following topics on each state SREC program.

  • Current Installed Solar Capacity
  • Supply and Demand
  • Recent Pricing

Feel free to contact us with any questions.

Screenshot_052815_084018_PM

PA and OH SREC Market Update Posted

Posted April 8th, 2014 by SRECTrade.

SRECTrade hosted a webinar on April 8, 2014, covering the PA and OH SREC markets. The webinar is approximately 25 minutes long and is broken in to three main categories:

  1. PA and OH SREC market capacity and supply
  2. PA and OH SREC market pricing
  3. Question and Answers

The slides from the webinar are available here and the webinar recording can be viewed by clicking the image below.

Presentation Cover

 

 

 

 

 

OH and PA SREC SREC Market Webinar: Tuesday, 4/8 @ 2 pm ET

Posted March 27th, 2014 by SRECTrade.

SRECTrade will host a webinar covering the latest pricing and supply numbers for the OH and PA SREC markets.

The webinar is open to the public and will be held on Wednesday, 4/8/14, at 2 pm ET.

Click here to register

OH and PA SREC market update

Pennsylvania Legislative Update

Posted November 14th, 2012 by SRECTrade.

In July 2012 Pennsylvania State Senator Dave Argall (R-29th District) introduced PA Senate Bill (SB) 1350 with 18 co-sponsors. The bill was then submitted to the Pennsylvania Consumer Protection and Licensure Committee in August. The earliest the Bill could be reviewed is in the 2013 legislative session, so there is little to report right now.

Senator Argall’s website describes SB 1350 as an updated adoption of Representative Chris Ross’ (R-Chester) failed House Bill 1580 which we described in these previous blog posts.

Key points proposed in SB 1350 are:

  • Accelerates the existing Pennsylvania Renewable Portfolio Standard (RPS) over 3 years, starting with RY 2013.
  • Establishes a cap on the SREC prices through a set Alternative Compliance Payment (ACP) of $285 per SREC out to 2019 (currently PA does not have an ACP), followed by a decline of 2% per year.
  • Allows for solar thermal facilities to qualify for SRECs along with solar photovoltaic systems.
  • Adds consumer protection language for educating stakeholders about SREC prices.
  • Does not include a clause to prevent qualified out of state photovoltaic facilities from selling SRECs in the Pennsylvania market.

Last minute push to revive Pennsylvania HB 1580

Posted May 21st, 2012 by SRECTrade.

**Update: As of this writing (Tuesday, June 12th) HB 1580 has not gone up for vote. However, the PA legislator extended the legislation session through the end of June, allowing for some hope that with enough grassroots pressure from supporters of the PA solar industry the bill will go up for vote. PASEIA encourages supporters of HB 1580 to continue to call into the offices of the PA House leadership. The applicable phone numbers are listed below. 

A coalition of solar industry groups led by PASEIA, SEIA, PennFuture and Vote Solar are making one last push to revive Pennsylvania House Bill (HB) 1580 before the close of the work week on Friday, 5/25. HB 1580 was first introduced in October 2011 by Rep. Chris Ross (R-Chester) as a fix for what many in the PA solar industry view as an SREC market with prices trading at unsustainable levels. The bill’s core proposal is to move forward the Pennsylvania SREC requirement by three years – effectively accelerating SREC requirements in an attempt to stabilize the market. A hearing was held in the Pennsylvania House Consumer Affairs Committee in January 2012 and 108 (enough to pass the bill in the House) committed to vote for the bill if it passed out of committee. Lobbyists were also able to garner a substantial amount of support in the Senate.

Why hasn’t the bill passed yet?

Despite the January hearing on HB 1580 the bill was never put up for vote in the House Consumer Affairs Committee. The decision to do so is the responsibility of Committee Chair Rep. Bob Godshall (R-Montgomery) who has taken counsel from stakeholders both for and against the bill.  The coalition of groups supporting HB 1580 emphasize in their communication with stakeholders that HB 1580 is meant to provide support for jobs created by the nascent Pennsylvania solar industry at little to no additional cost to ratepayers. However, the Pennsylvania Chamber of Commerce along along with other groups representing natural gas and other interests are opposed to the bill.  Furthermore, strong pressure for and against the bill has made it a tough topic to address amid the latest election cycle.

Another push

Pennsylvania stakeholders that support HB 1580 have the option to lobby key members of the Pennsylvania legislator to get the bill put up for vote. HB 1580 advocates are encouraged to call the following three members of the PA House leadership.

Why are Pennsylvania SREC prices so low?

Posted February 16th, 2012 by SRECTrade.

SRECTrade has printed auction prices for Pennsylvania ranging from a high of $310 in June 2010 and a low of $20 for SRECs created in the same energy year. The drop in Pennsylvania SREC prices is due to a severe over-supply of SRECs above the amount of SRECs that buyers (electricity producers) need to acquire each year, but how did the market become over-supplied and is anything being done to address the over-supply?

Background

The Pennsylvania SREC market was created as a state-level, long-term incentive for homeowners and businesses to go solar, but around the same time that the SREC market was created, other, more generous solar rebate programs like the Pennsylvania Sunshine Program were created that caused a short-term boom in solar installations. In addition to this, the Pennsylvania SREC market is one of two markets (OH is the other) that accept SRECs from out-of-state sited solar systems, including from states that don’t have their own SREC markets. This means that Pennsylvanians are effectively subsidizing solar in other states and ensuring that Pennsylvania SREC prices remain low.

The Proposed Fix

The Pennsylvania SREC market was created by the state legislature and amendments to the market must go through the legislature first. In the spring of 2011, Rep. Chris Ross (R-Chester) proposed House Bill (HB)-1580 to address some of the key factors behind low Pennsylvania prices. The crux of HB 1580 is a proposal to move up the SREC requirement by three years. This would mean that if the bill passed, Pennsylvania SREC requirements would increase beginning in 2013. A detailed schedule of the proposed increase can be found in the bill.

We’ve followed the progress of HB 1580 over the last year and periodically posted updates to our blog.  Most recently the bill went before the House Consumer Affairs Committee on January 11, 2012 where it met resistance from Committee Chair Rep. Bob Godshall (R-Montgomery) and various entrenched groups representing the Pennsylvania electricity industry. Since the January hearing Rep. Chris Ross has worked hard to develop compromise amedments to HB-1580 that might help the bill survive a tough Committee vote. If the bill makes it out of Committee it has 110 co-sponsors in the House and substantial Senate support in a companion bill.

According to PennFuture, a Pennsylvania environmental and renewable energy advocacy group, Ross’ proposed the following compromises:

  • Capping the Alternative Compliance Payment (ACP) for solar at $325, with a 2% annual decline
  • Offsetting early-year increases in the solar requirement with decreases in later years and extending the SREC program through 2026
  • Allowing solar hot water (SHW) systems to qualify for SREC sales
  • Making slight adjustments to the language of the in-state requirement, aimed at preventing net-metered systems from inadvertently being disqualified
  • Ensuring that utilities cannot procure any AEPS resource above the ACP price

What Can You Do?

Pennsylvania solar advocates are hoping that they can convince the House Consumer Affairs Committee to vote on HB 1580 when the legislature reconvenes in mid-March. If you are a Pennsylvania resident, please feel free to contact House Majority Leader Turzai at 717-772-9943 to express your support for seeing the bill go up for vote.

Pennsylvania Solar Bill Goes to Committee

Posted January 17th, 2012 by SRECTrade.

On Wednesday, 1/11/12, Pennsylvania House Bill (HB) 1580 sponsored by Rep. Chris Ross (R-Chester) was presented to the House Consumer Affairs Committee for debate.  HB 1580 is a proposal to move forward the Pennsylvania SREC requirement to the current compliance requirement for 2015 without changing the overall number of SRECs required after 2015. This would alleviate the over-supply of SRECs and increase the value of Pennsylvania SRECs.  While the hearing was a critical first step for HB 1580, followers of the Pennsylvania solar industry will have to wait on the Consumer Affairs Committee’s vote before the fate of the bill is known. Should the bill make it out of committee it will also need to pass the House and Senate where both the House and Senate have voiced initial majority support for bill.

During the hearing solar industry representatives and solar consumers testified in support of the bill while utility groups and the Pennsylvania Chamber of Business spoke against it. The PA Environment Digest put together a detailed account of the testimonies. Generally those in support of the bill argue: 1) that the bill is essential for maintaining highly skilled solar jobs in Pennsylvania; 2) doesn’t increase the overall requirement for SRECs; 3)merely accelerates the requirement and 4) brings Pennsylvania’s SREC market more in line with the design of other SREC markets by closing the market to out-of-state sited systems (currently PA accepts SRECs from anywhere in the PJM region i.e most states in the mid-Atlantic and some states in the Midwest). Utility companies that testified against the bill argue that it would place an undue burden on rate payers by forcing utilities to charge more for the electricity that they supply. According to the PA Environment Digest article, there was some disagreement over the actual cost of the bill to rate payers, but on the high side utilities estimate that it would be an increase of $120 million over four years to four million Pennsylvania rate payers, which equates to an increase of about $3.33 per year to each rate payer.

SRECTrade will continue to closely monitor the development of HB 1580. Stay tuned to our blog for updates.

New Pennsylvania SREC Application Requirements

Posted January 9th, 2012 by SRECTrade.

The PA Alternative Energy Program Administrators (AEPS) have changed the requirements for applying for SREC certification numbers. Any systems that apply for PA certification after 1/1/2012 must now provide the following:

Photos of the array- The photos must show the entire array. Multiple photos should be provided if necessary.

Photos of the meter- The photos of the solar production meter or inverter (if no solar prooduction meter is installed) must show the kW-hr production at the time that the application is submitted. This meter reading will be the starting point for earning SRECs. For example, if the meter reads 500 kW-hrs at the time that the application is submitted then any future meter readings submitted will have 500 kW-hrs subtracted from them to determine SREC production.

Pennsylvania House Bill 1580 Update

Posted January 9th, 2012 by SRECTrade.

House Bill (HB) 1580 will go before The Pennsylvania Commerce Committee on Wednesday, 1/11/12. This is the third date that has been scheduled for the committee hearing. HB 1580 is a proposal to accellerate the Pennsylvania SREC requirement by three years from 2013 to 2015. If the Bill passes committee on Wednesday then it will also need approval by the House and Senate. Currently the House is majority in favor of the current bill and the Senate looks to be in favor of passing a similar version should the House come to a resolution. SRECTrade will post a blog update once we get word on the Commerce Committee decision.