On July 12, SRECDelaware announced the results of the Delaware 2017 SREC Procurement auction. Delaware’s SREC Procurement Program allows for facilities to secure 20-year SREC contracts with Delmarva Power through a competitive bidding process. Delmarva holds auctions every spring separately from the open-market SREC transactions that occur on an ongoing basis.
SREC contracts awarded through the procurement are allocated according to different capacity-based “tiers”. In previous years, the auction consisted of three tiers for new systems and two tiers for existing systems. This year’s SREC procurement introduced two new tiers, representing systems over 2 MW for new and existing systems, respectively.
In this year’s Spring Procurement, Delmarva Power purchased 20,000 SRECs at the following price levels:
1. The highest successful bid price at each respective tier.
2. The lowest successful bid price at each respective tier.
3. The weighted average bid price of all successful bids at each respective tier.
As a whole, the 2017 Procurement was oversubscribed, as an excess of bids were submitted to the auction due to oversupply of solar in the market. In effect, the overall weighted average bid price dropped to $21.26 from last year’s $66.56.
We expect oversupply to remain an issue in the DE SREC market and with it, suppressed SREC values in the DE open-market, pending a major policy change in the state. As always, our team will continue to work closely with Delmarva Power and policymakers to ensure our clients get the best value for their SRECs in the open market.