The Pennsylvania Solar Alternative Compliance Payment (SACP) is structured a bit differently than the rest of the states in our auction. Most states have a set SACP that is known at the beginning of each year. Pennsylvania releases their SACP six months after the Energy Year ends. The 2008 Pennsylvania SACP of $528.34 was released in December of 2008 for the Energy Year ending May 31, 2008. It is calculated as 200% of the PJM area average SREC price. This means that from June 1, 2007 – May 31, 2008, the average PJM area SREC price was $264.17. The interpretation used by the program is that this is an average of the price paid for SRECs used to comply with the Pennsylvania state RPS. So in reality, it is an average of PA SRECs.
PA SRECs are valued based on speculation of what the SACP will be in December. PA utilities should be willing to pay more for SRECs if they are struggling to meet the solar requirement in Pennsylvania. In the early years of this program, that requirement may be attainable, but it ratches up pretty quickly, so it may not be long before the SREC values in Pennsylvania increase above all the other states in the region.
For reference, our July 10th auction saw PA close at $300. DE closed at $245, and MD closed at $375.
This is good news for solar owners in Delaware, Maryland, Ohio, West Virginia and the other surrounding states who may be eligible to sell into Pennsylvania. Of course the influx of supply of SRECs into PA might at some point depress the price of SRECs. It will be interesting to see how the market plays out. One thing is certain—as a seller, it doesn’t hurt to be registered in as many states as you can. See our post on cross-listing to learn how.