Posts Tagged ‘RPS’

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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SRECTrade Attends IPA’s 2017 RPS Workshops

Posted May 30th, 2017 by SRECTrade.

On May 17th and 18th, SRECTrade attended the Illinois Power Agency’s Renewable Resources Workshops. These workshops centered around the state’s new RPS and its components, including the Adjustable Block Program, Community Solar incentives, and the Illinois Solar For All Programs.

Overview of the New Illinois RPS and the Long-Term Renewable Resources Plan

The new RPS moves to a single compliance regime rather than having separate mechanisms for customers serviced by the alternative retail electricity suppliers (ARES). Under the old RPS, this retail choice lead to budget and target uncertainties. The goal of the new RPS will still be 25% renewables by 2025, but this target will now apply to all retail sales. The Future Energy Jobs Act, Public Act 099-0906, was signed into law on December 6, 2016 and can be read here.

The new law will take effect on June 1, 2017. Please see below for a draft timeline for the implementation of the RPS programs, as provided by the IPA in its Overview presentation:

il-rps-implementation-timeline

Under the new RPS, Illinois is moving away from structured procurements for non-utility scale solar. Projects up to and including 2 MW in size will instead be eligible for participation in the new RPS’ Adjustable Block Program, or ABP, which will provide for 15-year REC contracts.

Key components of the ABP are:

  • Blocks have set sizes and prices that adjust between blocks, which the IPA may review
  • Eligible systems are those energized after June 1, 2017 (emphasis on new projects)
  • Transparent, upfront schedule of REC prices
  • 15 year REC contracts
    • Paid upfront and in full for systems 10 kW and below
    • 20% of contract price paid at interconnection/energization and the remaining portion paid over subsequent 4 year period for systems 10 kW-2 MW (DG or community)
  • The utility will be the counterparty to the executed contracts

The goal of the ABP is to ensure that solar projects are developed in diverse locations and that they are not overly concentrated. The IPA has yet to determine the number, size, categories, and prices of blocks as well as the application, contracting and delivery process. These issues will be resolved during the implementation process.

Community Solar

Community Solar will operate as a subset of the ABP with similar features and the same goal. Under community solar, an electric generating facility credits the value of electricity generated to the subscribers of the facility. A subscriber has a subscription of no less than 200 watts to a community renewable generation project and may total no more than 40% of the nameplate capacity of an individual project. At a high level, the provision for Community Solar Projects will mirror those for larger DG systems, but may differ in project development and application requirements.

Illinois Solar for All Programs

The goal of the Illinois Solar for All Programs is to bring solar PV to low-income communities in Illinois. The programs are distinct but will share aspects with the Adjustable Block Program for DG and Community Solar. The four programs are as followed:

  1. Low-Income Distributed Generation Incentive (22.5%)
  2. Low-Income Community Solar Project Initiative (37.5%)
  3. Incentives for Non-Profits and Public Facilities (15%)
  4. Low-Income Community Solar Pilot Projects (25%)

SRECTrade will continue to participate in the implementation proceedings for the new RPS. In addition, SRECTrade will server as an aggregator in the Fall 2017 DG Procurement. You can see the results from the Spring Utility DG Procurement here.

RPS Evolving: States Take On U.S. Climate Goals

Posted April 19th, 2017 by SRECTrade.

This article by Allyson Browne was originally published in the American Bar Association’s Natural Resources & Environment Spring 2017 Issue: Science & The Law. It provides an in-depth look into how states across the U.S. are carrying the country’s torch towards Paris pledges with impactful RPS programs. In addition, the article breaks down the Clean Power Plan to illustrate how states could evaluate and implement similar obligations in harmony with existing RPS policies. These state actions will be increasingly important as the EPA endeavors to review the Clean Power Plan under President Trump’s recent Executive Order

As the Clean Power Plan (CPP) undergoes judicial review and faces a likely unsupportive Trump administration on the federal stage, states across the country are bringing their renewable portfolio standards (RPS) back to the top of their legislative agendas. Although the CPP is not the primary driver of today’s RPS reformation, its future will undoubtedly impact the future of RPS policies across the country, if not cause an RPS revolution—one way or the other. Historically, federal policies, including the federal production tax credit and the investment tax credit, have served primarily to support RPS programs and renewables deployment. Moreover, the Federal Energy Regulatory Commission’s (FERC) regulation of the wholesale electricity market has increased competition in the renewables sector by reducing barriers to project development and market participation, particularly with respect to requirements placed upon electricity suppliers and utility companies for renewables integration. Examples of such regulation are FERC Order 2003, Standardization of Generator Interconnection Agreements and Procedures (issued July 24, 2003), and FERC Order 764, Integration of Variable Energy Resources (issued June 22, 2012). As states look beyond their RPS target years and goals, the CPP has the ability to influence RPS program design much more heavily than did its federal predecessors. The CPP could prompt states to more closely align renewable energy goals with emissions reduction goals, thereby minimizing legislative and regulatory overlap and enabling states—and the nation as a whole—to recognize the maximum benefits of these broader climate change policies. But this is not to say that RPS programs will weaken if the CPP is struck down. Conceivably, the rejection of the CPP could lead to a great awakening of state leadership in our clean energy and climate future.

Renewables technology has progressed significantly since the first RPS was enacted in Iowa in 1983. Iowa Code § 476.41, et seq. And RPS programs, which require retail electricity suppliers to supply a minimum percentage or amount of their retail load with eligible sources of renewable energy, are constantly playing catch-up to these ever-evolving market dynamics. Technological innovations and the diversification of financial products have driven down project costs and broadened accessibility. States have provided incentives such as rebates or net metering credits. Project developers and service providers have adapted to meet the varied conditions of their markets. The result is a diverse portfolio of U.S. RPS policies, as states across the country have designed, implemented, revised, frozen, annulled, or otherwise modified their individual RPS programs as the renewables sector has matured over the course of the past 33 years.

Today, 29 states and the District of Columbia have compliance RPS programs. Altogether, the obligations apply to 55 percent of total U.S. retail electricity sales. See Galen L. Barbose, U.S. Renewables Portfolio Standards: 2016 Annual Status Report, Lawrence Berkeley National Laboratory No. 1005057 (April 2016). And these figures do not include states with voluntary renewable energy goals, such as North Dakota, Utah, and Virginia. See Jocelyn Durkay, State Renewable Portfolio Standards and Goals, Nat’l Conf. of State Legislatures (Dec. 28, 2016).

Although most RPS programs share common elements (such as imposing penalties for lack of compliance and utilizing some form of tradable renewable energy credit (REC) to track compliance), no two states share an identical RPS. States differentiate their RPS policies with unique targets and time frames, entities obligated and exemptions, eligibility rules and definitions, carve-outs, contracting or procurement requirements, and the use of cost caps and floors. Barbose, supra. This differentiation has empowered states to design programs that best fit their needs, market dynamics, and renewables goals. Modifications can be made when and where the barrier to entry is too high, or if the RPS imposes exorbitant costs on ratepayers. Consequently, the majority of states with RPS have hit their targets, with 94 percent achievement in 2013 and 95 percent achievement in 2014. Id.

While few new RPS policies have been enacted in recent years, states continue to modify existing policies in response to changing market conditions, program success and end-dates, and federal policies. As states begin to approach their target years or achieve (or exceed) target goals, states are evaluating whether and how to extend targets into the future. Under currently enacted laws, 20 states will reach the terminal year of their RPS by 2026. Id.

Recent legislative activity evidences this period of reformation. State legislatures have introduced and enacted more than 200 RPS-related bills since the beginning of 2015. See EQ Research, available at http://eq-research.com/. Most notable are the five jurisdictions (California, Oregon, New York, Vermont, and D.C.) that have adopted policies requiring at least 50 percent renewables, and Hawaii—the first U.S. state to establish a 100 percent RPS goal. Id. In addition to extending and expanding RPS time frames and goals, states have modified RPS programs by introducing resource-specific or distributed generation carve-outs, refining resource eligibility rules and definitions, and relaxing geographic preferences or restrictions. Barbose, supra.

As we approach common terminal years in 2020 and 2025, we are likely to see continued legislative and gubernatorial action on RPS programs and renewables goals. But approaching targets are not the only reason why states are revisiting and revising their RPS policies. Endogenous factors, including compliance costs, legal challenges, and other state- and local-level market and policy conditions are the primary internal drivers of RPS reevaluation. On the federal front, continued FERC regulation and the impending decision on CPP are making states rethink—and redesign—RPS policies to ensure continued compliance with federal law. Even before CPP leaves the bench, some states are planning ahead to ensure that their RPS programs will support their CPP-compliance programs. Pennsylvania, for instance, is already designing its CPP state plan, undeterred by the U.S. Supreme Court’s February 2016 decision granting a stay on the CPP pending the resolution of legal challenges. See Susan Phillips, Wolf says PA will move forward on Clean Power Plan, StateImpact Pennsylvania (Feb. 10, 2016); and Chamber of Commerce v. EPA, 136 S. Ct. 999 (2016) (order in pending case).

The CPP is the first-ever national standard aimed toward reducing carbon pollution from power plants, the nation’s largest source of emissions. See EPA, Fact Sheet: Overview of the Clean Power Plan (2015). Recognizing that fossil fuels will “continue to be a critical component of America’s energy future,” the EPA put forth the CPP to ensure that fossil fuel-fired power plants operate “more cleanly and efficiently, while expanding the capacity for zero- and low-emitting power sources.” Id. The CPP establishes interim and final carbon dioxide (CO2) emission performance rates for two subcategories of fossil-fuel-fired electric generating units (EGUs): fossil fuel-fired electric steam generating units (i.e., coal- and oil-fired power plants) and natural gas-fired combined cycle generating units. Id.

Under the CPP, states and utilities can implement the standards and meet these goals through one of three methods: a rate-based state goal measured in pounds per megawatt hour (MWh), a mass-based state goal measured in total short tons of CO2, or a mass-based state goal with a new source complement measured in total short tons of CO2, also known as a state measures plan. States need to develop and implement plans which, when combined with other state or regional initiatives, will ensure compliance with the CO2 emissions performance rates over the 2022–2029 compliance period, and with the final CO2 emissions performance rates, rate-based goals or mass-based goals by 2030 (or later, if the CPP is further delayed). The EPA estimates that the pollution reductions required by the CPP will yield climate benefits of $20 billion, health benefits of $14–34 billion, and net benefits of $26–45 billion. Id. Complementary or additive RPS programs will amplify these benefits by incentivizing additional renewable deployment, implementing stronger energy efficiency standards, and more.

Under any of the three methods, compliance will be tracked via emissions trading. See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662 (Oct. 23, 2015) (to be codified at 40 C.F.R. Part 60). How an existing RPS and its tracking mechanism will interplay with a state’s CPP plan and its emissions trading will depend on the state’s CPP compliance path. Under a rate-based state goal, renewable energy facilities, energy efficiency units, new nuclear facilities, or performance upgrades at existing nuclear, hydro, and natural gas combined cycle power plants will produce emission rate credits (ERCs), which represent one MWh of zero-emission generation. These ERCs will be added to the denominator of the pounds per MWh until the EGU (either individually or on a state average basis) satisfies the required rate.

A state with an existing RPS that uses RECs to track compliance will need to decide whether and how ERCs and RECs will be issued, tracked, and retired together or separately. In its guidelines, the EPA clarifies that ERCs were intended to be unique and separate from RECs, and that a single generating unit could produce both an ERC and a REC for each MWh generated where eligibility overlap exists. But in practice, managing ERCs and RECs in the same compliance universe will be no easy undertaking—there will be issues with double-counting, existing forward contracts, and whether a facility can still claim its renewable attributes if it keeps its RECs, but trades away its ERCs. Id.

Emissions trading under a mass-based state goal is much more straightforward—states will be issued emissions allowances, which can be auctioned (traded) or given away. Compliance will be determined solely on total tons of CO2 emitted. As designed, there is no direct relationship between a state’s CPP plan and its RPS; rather, the two plans would exist contemporaneously. Id.

States with RPS, energy efficiency standards, and other related programs are best suited for a mass-based state measures plan. The state measures plan allows a state to leverage its existing policies, programs, and compliance mechanisms to meet the standards imposed by the CPP. And, rather than being the primary enforcement mechanism, the mass-based emissions standard acts as a federally enforceable backstop that only kicks in if the state measures fail to achieve the required reductions. There are no ERCs under this plan, and states can continue to utilize RECs to track RPS compliance, focusing CPP compliance efforts on bolstering their existing RPS and other programs instead of establishing entirely new programs and tracking tools. Id.

It is evident that the EPA carefully crafted the CPP to exist in harmony with state RPS programs and to provide a path for all states to reduce overall emissions while incentivizing renewable energy development—including those already on the right track. And although the CPP or similar federal policies would be instrumental in accelerating America’s timetable for achieving its Paris Agreement goals, states have proven willing to push for progress on their own. Now more than ever, it is imperative that states renew their commitments to renewable energy, promoting a sustainable renewables industry that supports continued job creation, grid resiliency efforts, and energy independence. As we enter into the era of Trump—and with it, an uncertain federal position on climate policy—states will take hold of the power to determine and define the nation’s stance for renewable energy and against the threat of climate change. Will we stand united?

Allyson Browne, Director of Regulatory Affairs & General Counsel

© 2017. Published in Natural Resources & Environment, Vol. 31, No. 4, Spring 2017, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Maryland RPS Bill Passes in the Senate

Posted April 7th, 2016 by SRECTrade.

On Wednesday, April 6th, Maryland’s Senate passed SB0921 31-14 with a bipartisan vote. The “Clean Energy Jobs – Renewable Energy Portfolio Standard Revisions” increases the Renewable Portfolio Standard to 25 percent by 2020 – up from the current obligation of 20 percent by 2022. The House version of the bill, HB1106, passed on March 21st. The consolidation of these two bills is anticipated to occur by Monday, April 11th, before advancing to Governor Larry Hogan’s desk.

On a related note, Gov. Hogan signed the Greenhouse Gas Emissions Reduction Act (SB0323) into law on Monday, April 4th, requiring the state to decrease greenhouse gas emissions by 40 percent from 2006 levels by 2030.

Maryland RPS Bill Passes in the House

Posted March 21st, 2016 by SRECTrade.

On Monday, Maryland’s House of Delegates voted to pass HB1106 with a 92-43 vote. The bill previously known as the Maryland Clean Energy Jobs Act of 2016 was divided into two bills last week, and HB1106 was distilled to focus on the RPS components of the original bill. HB1106, which was retitled to “Clean Energy – Renewable Energy Portfolio Standard Revisions”, schedules an increase to the state’s existing Renewable Portfolio Standard (RPS), including slight increases to the solar carve-out. The increases to the solar carve-out would result in increased demand for MD SRECs. Now that the bill has passed in the house, it will cross over to the Senate for review by the Senate Finance Committee. If SB0921 comes out of the Senate Finance Committee with a favorable report, it will go to the Senate Floor for a vote.

HB1106 was bifurcated from the jobs appropriation component of the Maryland Clean Energy Jobs Act of 2016 last week. On March 16th, the Maryland Public Utilities Subcommittee of the Economics Matters Committee passed three significant amendments to HB1106 to narrow the bill’s focus to the RPS. Notably, these amendments involved:

  • Dividing the RPS increase and workforce development components of the bill, leaving the Clean Energy Jobs Act as a stand-alone RPS bill. The Cove Point settlement funds, which would finance the workforce development processes, would be parsed into another bill, HB1404. HB1404 aims to provide funding for construction and vocational work through a new “Center for Education and Innovation.”
  • Excluding the Choptank Cooperative from state RPS requirements.  This is an extension of the RPS’s current language and allows Choptank to meet its contractual obligations with Old Dominion Electric Cooperative (ODEC), a power supply co-op in Virginia.
  • Adding sponsors to the new stand-alone RPS bill, in an effort to achieve bipartisan support of the bill.

The isolation of the RPS legislation from the workforce development components of the bill was received favorably in the House, and the bisection may help to secure the bill’s passage through the Senate Finance Committee and on the Senate Floor.

SRECTrade will continue to provide updates on the status of the Maryland RPS as we acquire new information. For more information on the Clean Energy Jobs Act, please view our previous blog post on the topic here.

Clean Power Plan: 2016 & Beyond

Posted March 9th, 2016 by SRECTrade.

On February 9th, the U.S. Supreme Court ordered in a 5-4 decision to issue an unprecedented emergency stay on the Environmental Protection Agency’s (EPA) Clean Power Plan (CPP), as states and other stakeholders continue to present legal challenges before lower courts. The Clean Power Plan calls for a 32% reduction of carbon dioxide emissions by 2030 (from a 2005 baseline), requiring states to present their initial compliance plans to the EPA by 2022.

The implementation of the CPP could encourage the states to consider instituting new–or to improve existing–state Renewable Portfolio Standards (RPS) to help meet their goals. Today, only twenty-nine states, Washington, D.C., and two territories have adopted an RPS. Seven of these RPS states have a solar carve out, where a specific percentage of renewable energy requirements must be satisfied with solar energy resources. In addition, eight states and two territories have set some form of renewable energy goals. The CPP’s call to action will mandate all 50 states to develop cost-effective plans to combat climate change, improve air quality and create new jobs.

Twenty-nine states, the U.S. Chamber of Commerce and other entities invested in fossil fuels are challenging the CPP. Many of these CPP opponents argue that the EPA is acting beyond its authority and that, at a minimum, the CPP’s merits must be fully reviewed before imposing federally mandated plans upon the states. CPP opponent Wyoming Governor Matt Mead stated that he is “thrilled” that the EPA’s climate rule was stayed, because the stay may leave the door open for the new administration to evaluate whether there is a “better way to go” than what the CPP would require. However, it is possible that the issue will be brought back to the Supreme Court for a decision before the new president is sworn in on January 20, 2017, leaving time for President Obama to make the Plan law before he leaves the White House.

Litigation in the lower courts is scheduled to begin on June 2, 2016, and a ruling from the Court of Appeals is expected by the end of 2016. Once an appellate decision is made, the case is expected to go back to the Supreme Court. But the sudden passing of Supreme Court Justice Antonin Scalia adds additional uncertainty and complexity to the future of the CPP, as the late Justice Scalia’s successor may very well shape the future of the Clean Power Plan. A new voice on the Court could result in a vote in favor of the CPP, which could swing the 5-4 decision in favor of lowering carbon dioxide emissions and fostering a sustainable change.

Alas, it remains to be seen if President Obama will successfully appoint a new Justice before the end of his term, potentially leaving the appointment to the next President. And if a new Justice is not appointed before the Court revisits the CPP, there is a chance we could see 4-4 decision from the Court on the issue, which would mean that the Court of Appeal’s ruling would be automatically upheld. As D.C. plays tug-of-war over the Supreme Court vacancy, CPP opponents are working to convince the lower courts that the CPP would spell economic disaster for the nation, while CPP’s proponents assert that the Plan would guide our nation away from coal-fired electricity and forestall millions of metric tons of greenhouse-gas emissions.

The Obama Administration vowed to press forward with the President’s climate policy. If approved, the Clean Power Plan would set a historic precedent on how environmental laws are structured and serve as an example for national and global policies. The CPP was instrumental in influencing heavily polluting nations such as China and India to sign the Paris Agreement at the 2015 United Nations Climate Change Conference.  The Paris Agreement aims to prevent, mitigate and respond to climate change. If the Clean Power Plan is ultimately struck down, the decision would challenge the implementation of national and worldwide environmental policies. Evermore, the selection of our next President and Supreme Court Justice will greatly influence the future of clean energy and shape how environmental issues are prioritized and responded to in the years to come.

Clean Energy Jobs Act Introduced to Maryland’s General Assembly

Posted February 10th, 2016 by SRECTrade.

Since its introduction to the public on December 8th, 2015, the Maryland Clean Energy Jobs Act has made its way to the front doors of the Maryland General Assembly, with the recent introduction of the bill into the Senate under SB0921 and the upcoming introduction into the House of Delegates this coming Friday, February 12th. The Act proposes an increase to the state’s existing Renewable Portfolio Standard (RPS), which would include slight increases to the solar carve-out. The Act schedules a gradual increase in the state’s RPS obligation to satisfy 25 percent of its energy needs with Tier 1 renewable energy sources by 2020 – a significant advancement of the current goal of 20 percent by 2020. The solar carve-out is scheduled to increase incrementally from the current goal of 2.0 percent by 2020 to 2.5 percent by 2025.

Senator Majority Leader Catherine Pugh (D-Baltimore), Delegate Dereck Davis (D-Prince George’s), Senator Brian Feldman (D-Montgomery), and Delegate Bill Frick (D-Montgomery) have championed the concept of the bill since its inception months ago. The bill was first filed in the Senate by Senator Pugh, and was referred to the Finance Committee in its First Reading on February 5th. The bill’s introduction to the House will be this Friday, which will just beat the state’s House Bill Introduction Date, allowing the bill to bypass referral to the House Rules and Executive Nominations Committee.

While we monitor the progress of this bill on the House and Senate floors, we are continuing to project and analyze the impact that its passage could have on the Maryland solar renewable energy credit (SREC) market. Increasing the annual RPS obligation schedule will also increase the demand for SRECs and support prices in the market. In addition, the Act is anticipated to source $40 million from unallocated contributions from the state’s Strategic Energy Investment Fund, create an estimated 2,000 additional clean energy jobs, and help Maryland address climate change with clean energy.

For more information on the early stages of the Clean Energy Jobs Act, please reference our previous post on the topic from December 11th, 2015.

Congress Passes Extension of Investment Tax Credit (ITC) for Solar

Posted December 18th, 2015 by SRECTrade.

Earlier today, Congress passed the FY 2016 Omnibus Appropriations bill, which includes tax extenders and $1.1 trillion in government funding. The spending package includes a pivotal extension of the federal investment tax credit (ITC) for solar energy. The bill is the result of a bicameral and bipartisan compromise, by which Congressional Democrats pursued the extension of this federal subsidy as partial compensation for lifting the ban on US crude oil exports. At first, Democrats believed that the bill would be a loss for the environment, but Democratic leaders urged their party members to recognize the net benefits of extending support for renewable energy development.

“May the force be with you,” quipped Senator Dianne Feinstein (D-CA), encouraging her fellow Senators to vote in favor of the package just hours after the House passed the bill. The bill passed both chambers of Congress by impressive majorities. The House approved by a 316 to 113 vote, and the Senate approved by a 65 to 33 vote.

While existing law provided the 30% solar ITC through the end of 2016, the extension guarantees 30% through 2019, declining to 26% in 2020 and 22% in 2021. After 2021, the 10% credit for Section 48 (commercial) projects will remain in place, per existing law. However, the bill includes “commence-construction” provisions that allow projects to qualify if they come on-line by the end of 2023. These extensions will help states to meet their Renewable Portfolio Standard and other renewable energy goals by helping project owners offset the cost of investing in renewable energy. The federal ITC, coupled with additional incentives, such as Solar Renewable Energy Credits (SRECs), encourages investment in renewable technologies across the country.

The ITC extension will undoubtedly have a significant impact on the solar industry. Experts project that the extension will increase solar installations by 54 percent (compared to a non-extension scenario) and create a 20 GW annual solar market through 2020. The extension is expected to impact utility-scale solar the most, where installations could increase by as much as 73% through 2020. Comparatively, residential installations are expected to experience a 35% growth, and commercial installations are expected to grow by 51%. This anticipated development will spur economic growth and an anticipated incremental investment of $40 billion in the solar industry.

After proposing an extension of the ITC in his 2016 budget earlier this year, the passage of this bill reinforces President Obama’s inaugural commitment to addressing climate change and protecting the planet for future generations. The bill also follows the historic adoption of the Paris Climate Agreement, which was made at COP21 in Paris earlier this month. Although the Agreement still needs to be adopted by the U.S. Government, the President is resolute that the Agreement will survive Republican opposition and become law. In a statement following COP21, President Obama said that “this moment can be a turning point for the world[,]” and this bill is certainly a step in the right direction for America’s commitment to the new international goal.

SRECTrade SREC Markets Report: June 2013

Posted July 14th, 2013 by SRECTrade.

SRECTrade SREC Markets Report: June 2013

The following post is a monthly update outlining the megawatts of solar capacity certified to create SRECs in the Solar REC markets SRECTrade serves. All PJM data is based on the information available in PJM GATS as of the date noted. All MA data is based on the information provided by the DOER as of the date noted. This analysis does not include projects that are not yet registered and certified with the entities noted herein.

A PDF copy of this table can be found here.

Capacity_June2013

Overview of PJM Eligible Systems

As of July 10, 2013 there were 36,115 solar PV and 720 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these, 247 (0.67%) have a nameplate capacity of 1 megawatt or greater. Twenty-seven of these projects have a nameplate capacity of 5 MW or greater. New Jersey continues to host most of the larger scale facilities, claiming home to 63.0% of the projects, 17 of 27 facilities, that are equal to or greater than 5 MW. The three largest projects are a 29.1 MW FirstSolar project in MD, the 25.1 MW PSE&G utility pole mount project located in NJ, and the 16.1 MW Mount St. Mary’s project in MD.

NJ Office of Clean Energy Estimated Installed Capacity Through 6/30/13: On July 09, 2013, the New Jersey Office of Clean Energy announced total installed solar capacity reached 1,094 MW; an increase of approximately 15.7 MW over May’s total capacity.

Massachusetts DOER Qualified Projects

As of June 28, 2013, there were 6,326 MA DOER qualified solar projects; 6,165 operational and 161 not operational. Total qualified capacity is 401.9 MW; 221.6 MW of which is operational and 180.3 MW is not operational under the current 400 MW SREC program. Also on July 12, 2013, the MA DOER published a new Pending SQA list demonstrating the projects that are currently under review for a statement of qualification under the current solar carve-out program.  There are 1,435 projects (862 operational and 573 not operational) totaling 277.3 MW on this list (21.3 MW operational and 256.0 MW not operational). Fore more information refer to our blog posts covering the current SREC program.

How to Interpret This Table

The tables above demonstrate the capacity breakout by state. Note, that for all PJM GATS registered projects, each state includes all projects certified to sell into that state. State RPS programs that allow for systems sited in other states to participate have been broken up by systems sited in-state and out-of-state. Additional detail has been provided to demonstrate the total capacity of systems only certified for one specific state market versus being certified for multiple state markets. For example, PA includes projects only certified to sell into the PA SREC market, broken out by in-state and out-of-state systems, as well as projects that are also certified to sell into PA and Other State markets broken out by in state and out of state systems (i.e. OH, DC, MD, DE, NJ). PA Out-of-State includes systems sited in states with their own state SREC market (i.e. DE) as well as systems sited in states that have no SREC market (i.e. VA). Also, it is important to note that the Current Capacity represents the total megawatts eligible to produce and sell SRECs as of the noted date, while the Estimated Required Capacity – Current and Next Reporting Year represents the estimated number of MW that need to be online on average throughout the reporting period to meet the RPS requirement within each state with only that particular compliance period vintage. For example, New Jersey needed approximately 496.7 MW online for the entire 2013 reporting year to meet the RPS requirement with 2013 vintage SRECs only. SRECs still available from prior eligible periods can also impact the Solar RPS requirements. Additionally, the data presented above does not include projects that are in the pipeline or currently going through the registration process in each state program. This data represents specifically the projects that have been approved for the corresponding state SREC markets as of the dates noted.

Note: SREC requirements for markets without fixed SREC targets have been forecast based on EIA Report “Retail Sales of Electricity by State by Provider” updated 10/1/12. Projected SRECs required utilizes the most recent EIA electricity data applying an average 1.5% growth rate per forecast year. The state’s RPS Solar requirement is then multiplied by forecast total electricity sales to arrive at projected SRECs required. Projected capacity required is based on a factor of 1,200 MWh in PJM states and 1,130 MWh in MA, generated per MW of installed capacity per year.