Friday, July 22, 2016, the Massachusetts Department of Energy Resources (DOER) announced the preliminary 2017 Solar Carve-out (SREC-I) and Solar Carve-out II (SREC-II) Compliance Obligations and Minimum Standards. Customarily, the DOER estimates these values prior to administering the Solar Credit Clearinghouse Auction each year. The final 2017 Minimum Standards will be announced on or before August 30th, after both the SREC-I and SREC-II Auctions have concluded.
Solar Carve-out (SREC-I)
Notably, the DOER projects that the final 2017 Compliance Obligation for the SREC-I program will be approximately 783,181 MWhs and that the Minimum Standard will be approximately 1.6313%. These values will be increased to 785,077 MWhs and 1.6352%, respectively, if the SREC-I auction does not fully clear in the first two rounds. The 2017 Minimum Standard for load under contracts signed before June 28, 2013 will be 0.9861%.
The DOER published a resource outlining its calculation of the preliminary SREC-I Minimum Standard.
Solar Carve-out II (SREC-II)
Regarding the SREC-II Program, the DOER established a baseline Compliance Obligation and Minimum Standard that would have applied to Retail Electricity Suppliers had the RPS Class I Emergency Regulation not been filed on April 8, 2016; these suppliers are exempt from any additional obligations resulting from the expansion of the SREC-II Program Capacity Cap.
To calculate this baseline Minimum Standard, the DOER first determined the expected MWh/year that would have resulted had the SREC-II Program Capacity Cap remained 947 MW by:
- Identifying the percentage shares of MW currently qualified under each SREC-II Market Sector;
- Multiplying these percentages by the original 947 MW SREC-II Program Capacity Cap;
- Multiplying these totals by (1) their respective SREC Factors, (2) a 13.51% expected capacity factor, and (3) 8,760 hours/year.
The DOER then summed these values and combined the auction volume and banked SREC-II volume from the 2015 Compliance Filings, resulting in a baseline Compliance Obligation of 1,102,311 MWhs and a Minimum Standard of 2.2960%. These values will be increased to 1,169,357 MWhs and 2.4357%, respectively, if the SREC-II auction does not fully clear in the first two rounds.
Additionally, the DOER calculated the preliminary 2017 SREC-II Compliance Obligation and Minimum Standard for load under contracts signed after May 8, 2016 – 1,496,188 MWhs and 3.1164%, respectively. These values will be increased to 1,563,234 MWhs and 3.2561% if the SREC-II auction does not fully clear in the first two rounds.
The DOER also published a resource outlining its calculation of the preliminary SREC-II Minimum Standard.
Solar Credit Clearinghouse Auctions
The first rounds of the SREC-I and SREC-II Solar Credit Clearinghouse Auctions are scheduled for July 29, 2016. A second and third round will be held as needed the following week should these auctions not fully clear.
The DOER has also provided slight updates to the volumes of SRECs available in the Auctions: 1,896 in SREC-I and 67,046 in SREC-II.
SRECTrade will continue to monitor the proceedings of the Solar Credit Clearinghouse Auctions and will report the outcomes of the Auctions once the results become readily available.