Posts Tagged ‘RPS’

Maryland SREC Market Update

Posted July 13th, 2021 by SRECTrade.

On June 1, 2021, Maryland Governor Larry Hogan allowed Senate Bill 65 (SB 65) to pass into law without his signature. SB 65 revises Maryland’s Renewable Portfolio Standard (RPS), decreasing the solar carve-out from 2022-2029 while increasing its solar alternative compliance payment (SACP) from 2023-2029. The new law still requires 50% of MD electricity sales from Tier I renewable energy resources with a 14.5% solar carve-out by 2030.

This adjustment to Maryland’s RPS should bring a more gradual increase to the solar carve-out requirement. Our enclosed analysis projects the 2021 market and forward years to be undersupplied – we expect the degree of undersupply to increase in years 2022 and 2023 and show a moderate decrease in year 2024. The forecasted degree of undersupply seen in years 2022-2024 has seen a substantial decrease from our previous analysis due to the recent reductions in RPS. While we project that the new changes to Maryland’s RPS will decrease the degree of undersupply seen in forward years, build rates still must show a substantial increase in order to keep up with the new RPS schedule.

Current MD SREC pricing has been consistent over the last few months with 2021 SRECs pricing around $77.50, 97% of the ACP and 2022 SRECs pricing around $57.00, 95% of the ACP.

Final 2021 MD SREC production, final 2021 MD load figures, and actual grandfathered load could impact the degree of undersupply seen in 2021 and forward years.



Maryland Renewable Portfolio Standard Updated Without Governor’s Signature

Posted June 4th, 2021 by SRECTrade.

On Tuesday, June 1st, Maryland’s updated Renewable Portfolio Standard (RPS) took effect after Governor Larry Hogan allowed Senate Bill 65 (SB 65) to pass into law without signature. The new law still mandates that Maryland source 50% of its electricity sales from Tier I renewable energy sources by 2030, with a 14.5% solar carve-out. Notably, the law decreases Maryland’s solar carve-out from 2022-2029 and increases its solar alternative compliance payment (SACP) rate from 2023-2029. The bill originally cleared the Maryland legislature on April 12th by significant majorities.

The new law also removes black liquor, a paper mill byproduct, from the list of eligible Tier I REC resources.

SRECTrade plans to publish an analysis on the impacts that this law could have on Maryland’s SREC market in the coming weeks.

Pennsylvania Governor Tom Wolf Announces Support For AEPS Expansion

Posted May 3rd, 2019 by SRECTrade.

On Monday, April 29th, Pennsylvania Governor Tom Wolf declared his support for Senate Bill 600 (SB 600). In conjunction, Gov. Wolf released the fourth iteration of the state’s Climate Action Plan, providing recommendations for how the state can mitigate climate change, and also announced that Pennsylvania joined the U.S. Climate Alliance, a bipartisan coalition of 24 states committed to reducing greenhouse gas emissions.

Initially introduced in the Pennsylvania General Assembly on April 10th, SB 600 was referred to the Consumer Protection and Professional Licensure Committee on April 29th. The bill updates the state’s Alternative Energy Portfolio Standards (AEPS) for the first time since the AEPS was established in 2004, calling for four primary changes:

  1. Expand the AEPS Tier I requirement from 8% by 2021 to 30% by 2030
  2. Expand the AEPS solar carve-out from 0.5% by 2021 to 10% by 2030, including 7.5% for grid-supply solar and 2.5% for distributed generation (DG) solar
  3. Minimize rate increases for electricity customers by introducing fixed alternative compliance payment (ACP) schedules and a 15-year SREC eligibility term for solar facilities (beginning on June 1, 2021)
  4. Direct the PA Public Utilities Commission (PUC) to explore a program for renewable energy storage
Table 1.
Table 2.
Table 3.

SB 600’s introduction of solar carve-out compliance categories between “customer-generators” and “non-customer-generators” marks a first for the state. Tables 2 and 3 above display the proposed solar carve-out requirements and solar alternative compliance payment (SACP) schedules between the two respective categories. The bill defines customer-generators as solar facilities that were certified on or before May 31, 2021 and also appears to define them as “behind-the-meter” facilities. Conversely, it appears that non-customer-generators are defined as grid-supply facilities, although the exact definitions of both categories may be subject to change.

NJ Gov. Murphy Signs AB-3723 / SB-2314 Increasing State RPS

Posted May 25th, 2018 by SRECTrade.

On Wednesday, May 23rd, New Jersey Governor Phil Murphy (Dem) signed Assembly Bill 3723 (AB-3723) and Senate Bill 2314 (SB-2314), increasing the state’s Renewable Portfolio Standard (RPS) requirements. The bill establishes renewable energy goals of 21 percent by 2020, 35 percent by 2025, and 50 percent by 2030, making the New Jersey RPS one of the highest in the nation.

Notably, the state’s solar carve-out requirement is raised and accelerated to 5.1 percent of total electricity sales by EY2021 before beginning to ramp-down in 2024. The requirement ramps down in consideration of solar facilities that will be reaching the end of their 15-year SREC production eligibility term.

On the other hand, the bill lowers the solar alternative compliance payment (SACP) schedule to $268.00 in EY2019 with an additional $10.00 reduction each following year.

The bill also shortens the 15-year period that qualified solar projects can generate solar renewable energy credits (SREC) to ten years, effective for all New Jersey SREC Registration Program applications received as of the enactment date. Lastly, the bill mandates that the current SREC program be closed upon reaching the 5.1 percent target and no later than June 1, 2021. It is anticipated that a supplemental “SREC-II” program will follow shortly after the closure of the first program.

The bill also introduces other clean energy initiatives, including:

  • Community Solar: establishes the Community Solar Energy Pilot Program to allow utility customers access to solar projects that are located away from their properties, but within their utility’s service territory. The pilot program is planned to be converted to a permanent community solar program within 36 months.
  • Energy Efficiency: requires individual utilities to implement energy efficiency measures to reduce electricity usage by 2 percent and natural gas usage by 0.75 percent.
  • Energy Storage: mandates Gov. Murphy’s goal of achieving 600 MW of energy storage by 2021 and 2,000 MW by 2030.
  • Offshore Wind: establishes a goal of 3,500 MW of offshore wind by 2030 that will be supported by an offshore wind renewable energy credit (OREC) program.

Simultaneously, Gov. Murphy signed Executive Order No. 28, requiring state agencies to update the Energy Master Plan (EMP) that prepares a strategy for achieving 100 percent clean energy by January 1, 2050. The new EMP is scheduled to be finalized and published by June 1, 2019.

For more information on the bill and its passage through the New Jersey legislature, please visit our previous blog post on the topic here. SRECTrade expects to publish a detailed New Jersey supply and demand analysis reflecting this new legislation soon.

NJ Solar RPS Increase – New Jersey Assembly and Senate Pass AB-3723 / SB-2314

Posted April 13th, 2018 by SRECTrade.

On Thursday, April 12th, the New Jersey Assembly and Senate passed Assembly Bill 3723 (AB-3723) and Senate Bill 2314 (SB-2314). The bill now sits on the desk of Governor Phil Murphy (Dem) waiting to be signed, after passing the Assembly by a margin of 49-20-2 and the Senate by a margin of 29-8. The bill requires a number of action items to be carried out, including:

  • Requiring the New Jersey Board of Public Utilities to:
    • Administer an energy storage analysis
    • Advance, increase, and extend the solar carve-out schedule and reduce and extend the solar alternative compliance payment schedule
    • Introduce structural changes to the state SREC program
    • Implement energy efficiency and peak demand reduction programs
    • Implement a “Community Solar Energy Pilot Program”
    • Offer tax credits for specified offshore wind facilities
  • Requiring the Department of Labor and Workforce Development to establish job training programs for professionals in manufacturing and maintenance of offshore wind facilities

The bill requires 21% of statewide electricity sales to be derived from Class I renewable energy sources by January 1, 2020, 35% by January 1, 2025, and 50% by January 1, 2030. The cost of this requirement shall not exceed 9% of the electricity purchased by all NJ ratepayers for each energy year 2019-2021 and shall not exceed 7% in each energy year thereafter. In addition, all facilities filing SREC applications after the bill’s enactment date will be subject to a reduced SREC eligibility term of 10 years, down from 15.

No later than 180 days after the enactment of the bill, the board will implement rules to close the SREC program to new systems upon reaching the 5.1% solar carve-out target. The legislation intends to close the existing SREC program to new projects on or before June 1, 2021. Within 24 months from signing the legislation, the Board of Public Utilities will be required to conduct a study that evaluates how to modify or implement a new solar incentive program. A variety of market stakeholders will be consulted in the process to determine the next best steps forward for the NJ SREC market.

As shown below, the bill brings forward and raises the state’s solar carve-out requirements beginning with EY2019 and extends the requirements through EY2033. The requirement peaks at 5.10% in EY2021-2023 before gradually declining through EY2033. The reduction mechanic was introduced to account for solar facilities that will be reaching the end of their SREC production eligibility term.

The bill also reduces the solar alternative compliance payment (SACP) beginning with EY2019 and extends the SACP schedule through EY2033. The SACP level drops to $268 in EY2019 and then gradually decreases by $10 each year following.

For more information on the historical progress of the bill, please view our previous blog post on the topic here. SRECTrade will be publishing an updated New Jersey Supply and Demand Analysis to its blog shortly in consideration of this bill.

House Economic Matters Subcommittee Votes Against Maryland RPS Bill

Posted March 15th, 2018 by SRECTrade.

On Wednesday, March 14th, the Maryland House Economic Matters subcommittee voted against the Clean Energy Jobs Act of 2018 (HB 1453), a bill that would have expanded the state’s Renewable Portfolio Standard (RPS). Among other measures, the bill aimed to increase the state’s RPS solar requirement to 14.5% by 2030 and its total RPS requirement to 50% by 2030; at present, the state’s RPS solar requirement is 2.5% by 2020 and total RPS requirement is 25% by 2020. A majority of the Public Utilities Subcommittee voted for an “unfavorable motion” on the bill.

The bill’s lead sponsor, House Majority Leader C. William Frick (Dem), announced the night of the 14th that he was withdrawing the bill before a full vote of the Economic Matters Committee. The 100% Clean Renewable Energy Equity Act of 2018 (HB 878), a bill designed to raise the state’s RPS to 100 percent by 2035, was also withdrawn on the 14th.

The Clean Energy Jobs Act of 2018 was supported by more than 660 faith groups, environmental organizations, unions, and civic leaders. Proponents of the bill are looking to pass the bill in 2019 after making it an important election issue this year.

For our latest Maryland SREC Market update click here. For more information on the Maryland Clean Energy Jobs Act’s proposal, please view our previous blog post on the topic here.

New Jersey Senate Passes Concurrence on S-2276

Posted January 10th, 2018 by SRECTrade.

Update: Governor Chris Christie pocket vetoed Senate Bill 2276 (S-2276) when he left office on January 16, 2018.

Please note that the original blog post was slightly revised on January 11, 2018.

On Monday, January 8th, the New Jersey Senate passed the amended Senate Bill 2276 (S-2276), following the Assembly Telecommunications and Utilities Committee’s amendments from mid-2017. The bill now rests on the desk of outgoing Governor Chris Christie (R) for a decision. Although it appears likely that Gov. Christie will pocket veto the legislation when his term ends on Tuesday, January 16th, Governor-Elect Phil Murphy (D) has his eyes set on New Jersey accomplishing 100 percent clean energy by 2050 and leading New Jersey to regain its status as a national leader in solar.

The bill passed by a considerable margin (26-8), demonstrating a strong consensus for support of the Garden State’s renewable energy industry, and also sending an important message to Governor-Elect Murphy regarding the urgency of this legislation.

If signed into law, the bill would establish the New Jersey Solar Energy Study Commission and increase the state’s solar renewable energy portfolio standard. The commission is intended to analyze all aspects of New Jersey’s solar industry and report findings and recommendations to the Governor and Legislature, specifically:

  1. As to whether New Jersey’s solar renewable portfolio standard (RPS) should be modified and extended through a prescribed period, but at least through energy year 2031;
  2. The current trends in utility interconnection study processes and costs; and
  3. The status and future of the state’s solar renewable energy credit market

In the bill, the Legislature speculated that New Jersey’s current statutory solar RPS could result in the loss of over 120 MW of solar per year through 2021, over $240 million per year in lost solar projects, and 5,000 clean energy jobs per year. To ensure the continued success of New Jersey’s solar industry, it is critical that the state pass both interim and future long-term measures to stabilize the industry and promote long-term, sustainable growth.

SRECTrade will continue to provide updates on this and other New Jersey legislative efforts.

SRECTrade to Speak at GTM U.S. Power & Renewables Summit – November 8, 2017

Posted November 6th, 2017 by SRECTrade.

On Wednesday, November 8, SRECTrade’s Director of Regulatory Affairs, Allyson Browne, will be speaking on a panel at GTM’s U.S. Power & Renewables Summit in Austin, Texas.

Allyson will join moderator Colin Smith, Analyst, Solar at GTM Research and fellow panelists Terry Grant, Managing Director at Marathon Capital, and Peter Mathews, General Manager, North America at Solar Edge, to discuss solar cost trends and long-term market implications. Allyson will focus on the interplay between the cost per watt of solar (including the impact of possible tariffs resulting from the Section 201 trade case), federal tax incentives like the ITC, and solar renewable energy credit markets, and how these cost and revenue streams contribute to development (or lack thereof) in the residential and C&I sectors.

The panel, How Low Can They Go: What is Driving Down Solar Cost and What are Longer-Term Market Implications?, will be held at 11:20 am on Wednesday morning. See the full agenda here.

SRECTrade at the Environmental Markets Association – Chicago Round Table: Illinois RPS Update

Posted July 7th, 2017 by SRECTrade.

On June 21, 2017, members of the SRECTrade team attended the Environmental Markets Association (EMA) round table event in Chicago.   The event featured presentations and discussions on a variety of environmental issues and new developments in Illinois environmental markets.   SRECTrade’s Manager of Business Development and Operations, Tom MacKenty was invited to speak about the new IL RPS and upcoming Adjustable Block Program.

Tom’s full presentation can be viewed HERE

While there are many details about the RPS and Adjustable Block Program forthcoming, SRECTrade has been actively monitoring the progress and posting information as it has become available.  A recent SRECTrade blog post with an outline of the program can be found HERE.

We will continue to provide updates as the rule making proceeds. As always, please feel free to reach out to us if you have specific questions.

Market Implications of Recent D.C. RPS Bill

Posted June 9th, 2017 by SRECTrade.

SREC market structure is primarily determined by two major policy levers: Renewable Portfolio Standards (RPS) and the Alternative Compliance Payment (ACP). RPS schedules determine the amount of energy coming from various renewable generation sources, solar included. ACP schedules set the maximum possible price that credits such as SRECs can reach in the market. When a state adjusts the RPS or ACP, market participants on both the demand and supply sides of the SREC market need to adapt to the new environment defined by these two factors. This transition often takes time to complete and can create market instability and uncertainty in the interim.

The Washington, DC market is currently in the midst of such a transition. The Renewable Portfolio Standard Expansion Act of 2016 (B21-0650), signed last July and put into effect on Oct 8th, 2016, has already made waves in the Washington D.C. SREC market. As stipulated in the legislation, state renewable generation and solar carve-out targets have increased to 50% and 5% respectively by 2032. The bill complements this RPS expansion with an increase in the ACP or the financial penalty for non-compliance by electricity suppliers. The side-by-side comparison of the ACP schedule before and after the recent policy shift is as follows:

dc-acp-schedules

While in theory this ACP increase bodes well for owners of photovoltaic systems selling SRECs into the market, we have seen a slower demand adjustment from the utilities and power providers, the DC market’s natural compliance buyers. As a result, sellers have experienced a lack of liquidity for their SRECs during a time of seemingly favorable market conditions. The lack of demand for SRECs at the current spot market price can be partially attributed to a clause in B21-0650 which states that the new ACP schedule does not apply to any utility load contract entered into before October 8th, 2016. This grandfathering of competitive electricity supply contracts means utilities and load serving entities (LSEs) have two different RPS programs they are simultaneously subject to, as some of their contracts are subject to the old $350 ACP and some subject to the new $500 ACP. In effect, SREC demand is split between the old and new program.

Reflective of the $150 difference between the previous program’s and current program’s ACP for calendar year 2017, the price of DC17 SRECs increased from $320 to $480 from October 2016 to February of 2017. However, due to compliance buyers balancing their purchases between the $350 and $500 obligation levels, the market has settled to levels that reflect a balance between the two separate ACP levels for calendar year 2017.

While prices may continue to decrease slightly as compliance buyers better understand their future SREC needs, we expect that over the coming months the market will begin to stabilize and recover.  Buyers will inevitably adapt to the policy changes and assess their positions with regards to the two RPS obligations. The brokerage desk at SRECTrade has been working closely with buyers to better understand their obligations and ensure that the market remains liquid and accessible to all sellers.

As always, please feel free to reach out to the SRECTrade client services team, or your brokerage desk contact, to further discuss the current status of the market and our outlook on SREC pricing.

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