State RPS « SRECTrade Blog

Archive for the ‘State RPS’ Category

California – State Senate Unable to Pass 33% Renewable Portfolio Standard Target

Thursday, September 2nd, 2010

On August 31st, the California state senate was unable to vote on the country’s most aggressive renewable portfolio standard (RPS) program due to the session coming to at close at midnight. The bill, SB 722, which passed the state assembly, would have required California to produce 33% of its electricity from renewable sources by 2020.

Governor Schwarzenegger had made it clear he would not have signed the bill even if it passed the senate. The governor’s main concerns were that SB 722 did not allow for enough electricity to be imported from out of state. Additionally, the Governor wanted the bill to include a solution to streamline California’s siting and permitting process for renewable energy projects. Back in June, the Governor commented that he would not, “sign legislation mandating a higher requirement without ensuring that the necessary projects can be built.”

The two main arguments here have to do with developing a vibrant renewable energy market in the state of California while also maintaining competitive electricity pricing. Importing electricity from outside of California doesn’t help increase the number of in state jobs required to build the renewable energy projects needed to meet the 33% RPS target. On the other hand, allowing for greater amounts of electricity to come from out of state will increase competition and hopefully keep prices down, something to be mindful of considering the current economic environment in California.

While Governor Schwarzenegger signed an executive order to reach the 33% target, the order could be over turned by any future governor. Although SB 722 didn’t pass, the governor could call a special session of the legislature to pass the bill before the upcoming election. This could be the only chance for the ambitious 33% target as both California Governor candidate Meg Whitman and U.S. Senate candidate Carly Fiorina are opposed to it.

California – State Senate Unable to Pass 33% Renewable Portfolio Standard Target

Tags: CA renewable portfolio standard, CA RPS, California, California renewable portfolio standard, California RPS, renewable portfolio standard, RPS
Posted in California, State RPS | 1 Comment »

FERC Rules Against Feed In Tariffs

Thursday, August 19th, 2010

Several states have been exploring an alternative to solar renewable energy credits with laws establishing feed-in tariffs (FIT). A FIT law works by requiring utilities to purchase electricity from certain sources, like solar, at a fixed rate. This rate is higher than the utilities normal wholesale electricity purchase price in order to subsidize their higher cost. Unlike SREC laws, the FIT is a relatively blunt policy instrument. By setting a fixed tariff, the state legislature must exactly calculate the cost needed to incentivize new solar installations. If the rate is set too high, ratepayers unnecessarily oversubsidize solar (remember cash for clunkers?) and if it is set too low the solar build-up is too slow. An SREC program, by contrast, allows the market to determine the exact price necessary to incentivize solar, leading to the desired amount of solar at the minimum cost to ratepayers.

State FIT laws were recently dealt a setback by the Federal Energy Regulatory Commission (FERC) who determined that a California Feed-in Tariff for combined heat and power (CHP) was preempted by Federal Law. The ruling specifically determined that FERC has exclusive jurisdiction to set rates, terms, and conditions for the sale or resale of electricity, and that feed-in tariffs are a means of setting rates for the sale or resale of electricity. The ruling goes on to state that feed-in tariffs would be allowed for certain facilities in certain circumstances, but not at rates above the utilities avoided cost. Since avoided cost is far below FIT levels, this ruling effectively ends solar FITs in the U.S.

Existing programs in California, Oregon, Connecticut, and Vermont will probably be impacted immediately, while pending legislation in several states will have to be re-examined. The good news is that most of these states have existing renewable portfolio standard laws, they only lack a solar carve-out. By adding a solar component to these existing laws, they can join states like NJ, MD, DE, DC, PA, OH, and MA using a market based approach to drive solar growth.

Some other coverage:
Full ruling can be found at FERC’s website under dockets EL10-64 and EL10-66

FERC deals blow to above-market rates (Feed-In Tariffs)

SEIA makes plans to appeal to congress to give states authority to implement FITs

Share||Subscribe

FERC Rules Against Feed In Tariffs

Posted in California, Connecticut, Federal SRECs, International Markets, SREC Markets, State RPS | 1 Comment »

New York bill to create NY SREC program

Friday, June 4th, 2010

The New York state legislature has proposed a renewable portfolio standard with a solar carve out. Bill No. A11004 in State Assembly and Bill No. S7093 in the State Senate (jointly know as New York Solar Industry Development and Jobs Act of 2010) would require electric suppliers to purchase SRECs for 0.05% of their electric sales 2012, increasing gradually to 2.50% in 2025.

New York has traditionally used solar rebates and utility level solar incentives and is now considering in light of their success in states like New Jersey and Pennsylvania.

The SREC requirement proposed for NY are similar to those enacted in NJ and MD although NY is a significantly bigger population and power consumer. This RPS would dramatically increase the demand for solar renewable energy credits and take some of the pressure of the markets like DC that are currently the only home for the SRECs produce by solar PV installations in New York State.

Share||Subscribe

New York bill to create NY SREC program

Posted in New York, State RPS, Washington, DC | No Comments »

PA considers strengthening solar requirements in RPS

Friday, June 4th, 2010

The Pennsylvania House of Representatives is set to consider strengthening the renewable portfolio standard next Tuesday. House bill 2405, known as the Clean Energy and Job bill would set the alternative compliance payment to $450, raise the ultimate solar carve out from 0.5% to 3.0% and exclude solar facilities outside of Pennsylvania from qualifying to sell into PA. These change are remarkable for a number reasons:

1. This follows states like NJ and MD who updated their renewable portfolio standards by increasing the SRECs required.

2. PA has a very unique alternative compliance payment which currently resets to twice the average trading price of SRECs in the previous year. This potentially unlimited ACP could potentially be the most forceful incentives to ensure PA utilities actually meet their RPS requirements rather than pay the fine (despite impressive solar development in NJ, NJ utilities dramatically under performed the RPS requirements and paid million in ACP fines last year).

3. It’s unclear whether or not out of state systems currently registered in PA will be grandfathered in and would certainly hinder solar development in states like VA and NC who would likely sell SRECs into PA.

Pennsylvania solar installers, solar trade groups (e.g. msiea.net) and environmental groups (e.g. PennFuture) have all come out in support of the legislation while developer and solar owners within the PJM region (PJM map) might be amongst the naysayers.

Share||Subscribe

PA considers strengthening solar requirements in RPS

Posted in North Carolina, Pennsylvania, State RPS, Virginia | No Comments »

Kerry and Lieberman Propose Energy Bill

Friday, May 14th, 2010

The American Power Act has been proposed by Senators Kerry and Lieberman in an effort to reform the energy economy. The bill proposes to put power generation back into U.S. control, clean up the carbon footprint and increase the use of clean technologies. You can learn more on Kerry’s website.

Questions arise around the impact such a bill might have on the SREC markets that currently exist. Our read of the proposed legislation is that it does not impact renewable portfolio standards and would not preclude any established state RPS. The proposed law does preempt state and regional carbon reduction laws (currently RGGI and AB32), but the renewable portfolio standards would not fall under the definition of that section.

Section 1601 of the bill is essentially a placeholder for federal portfolio standard legislation, which is contained in another senate bill that passed out of the Committee on Energy and Natural Resources some time ago. That bill specifically allows any state RPS that is stricter than the federal program to continue, so none of the markets where we currently operate would be impacted. The climate bill the House passed does contain a federal RPS and it has similar language protecting state programs.

The bottom line is that passage of the climate bill is still uncertain, but even if it does pass SREC markets will remain alive and well. If the overall climate bill doesn’t pass, the energy bill with the federal portfolio standard may be a compromise everyone can agree on, which would be good for SREC and REC markets throughout the country.

The bill can be read here: http://kerry.senate.gov/americanpoweract/pdf/APAbill.pdf

Share||Subscribe

Kerry and Lieberman Propose Energy Bill

Tags: Climate Bill, Federal RECs, Federal Renewable Energy Credits, Federal RPS, Federal Solar Renewable Energy Credits, Federal SREC Market, Kerry-Lieberman
Posted in Federal SRECs, State RPS | No Comments »

NJ Solar Energy Advancement and Fair Competition Act

Friday, February 5th, 2010

Senate Bill A3520: The Solar Energy Advancement and Fair Competition Act was passed on January 17, 2010 and represents another big step forward for the New Jersey solar market. The state that is leading the way with its SREC program is upping the requirement in the Solar Renewable Portfolio Standard. Here are the key additions included in this legislation:

The RPS for solar increases through 2026 and will remain at or above the 2026 level indefinitely after.
Starting in June, 2010, the SREC requirement will be changed from a percentage to an absolute number of required SRECs each year.
The annual SREC requirement will increase by approximately 20% on average over current requirements.
The RPS shall increase by 20% in any given year if the SREC requirement is met in the each of the previous 3 years AND the average LSE purchase price decreases in 3 consecutive years.
The BPU will be required to establish a new SACP level that shall not reduce previously published SACP levels.
As previously reported, the requirement that a facility be below 2MW to be eligible for SRECs has been lifted.
In the final version of the bill, the legislation disqualifying public utility solar projects from SRECs was removed in favor of the following: “For projects which are owned, or directly invested in, by a public utility, the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.”

Here are the new requirements listed by year will be posted here:
http://www.srectrade.com/new_jersey_srec.php

This is a huge step forward for all participants in the SREC market as it not only indicates an increase in the potential of the solar market and the number of SRECs that will be traded in the year, but more importantly that the state is committed to developing a viable competitive market for SRECs. This legislation sets out to ensure that all segments of the market can have access to the value created by the market and limits the influence that any single public entity can have over the market.

The Bill can be read in its entirety here: http://www.njleg.state.nj.us/2008/Bills/A4000/3520_R3.HTM

For an explanation of the bill: DSIRE New Jersey RPS

NJ Solar Energy Advancement and Fair Competition Act

Posted in New Jersey, State RPS | 5 Comments »

State SREC Markets

Thursday, January 28th, 2010

The following map shows all the SREC markets in the U.S. along with the states that have a solar requirement as part of the state renewable porfolio standard (RPS). There are three conditions that must be present in order for a state to implement an effective SREC market:

RPS Solar Carve-Out: The RPS solar requirement distinguishes solar from other renewable energy resources and in most cases will value solar electricity at a higher rate than other renewables. Most states will set a target for solar, either as a percentage of the total electricity sold into the state, as a fixed capacity target in megawatts (MW) or as a solar energy target measured in megawatt hours (MWh) or SRECs produced in a year.
Unbundled, Tradeable RECs: A state must allow the SRECs to be owned and traded by the generating facility. In some states, your utility company owns your SRECs. This is a common stipulation in state solar grant or rebate programs. Other states have a budget for solar. For example, California is currently not a viable SREC market because the state requires that utilities purchase the SRECs bundled with the electricity that the system produces. The SRECs cannot be unbundled and sold separately.
Penalty for Non-Compliance: Finally, in order to have a robust SREC market, your state must implement some sort of fine or penalty for non-compliance. This is commonly known as a solar alternative compliance payment (SACP). The SACP is what drives the values of SRECs above any other type of REC. Without the SACP, it is difficult to incentivize buyers to pay prices that promote solar growth.

The states with robust SREC markets have the three criteria of a solar requirement, SREC ownership and the SACP. This map shows all the states that have solar requirements and those that specifically have SREC markets. In addition, we’ve added states that don’t necessarily have their own solar requirements, but are eligible to sell into the SREC markets of other states. The states that they are eligible for are listed in the map under each state.

SREC States and Solar RPS States