Massachusetts

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The Massachusetts Department of Energy Resources (DOER) launched the first Massachusetts SREC market in January 2010. The program now referred to as SREC-I was created as a Massachusetts specific solar carve-out of the New England REC market. SREC-I was originally set with a capacity limit of 400 MW, but this was reached in the spring of 2013. Certain projects continued to be able to qualify for the SREC-I program through the first half of 2014 after the initial 400 MW limit was reached. On April 25, 2014 the SREC-II program was launched to bridge Massachusetts to its goal of installing 1,600 MW of solar capacity by 2020. Facilities qualified under both the SREC-I and SREC-II program are granted up to 10 years of SREC production under their respective program rules.

Markets for MA systems

MA

Tracking Registry

NEPOOL-GIS

Energy Year

Jan - Dec

Production tracking

PTS

Market prices

Eligibility period

Massachusetts SRECs are defined by eligibility for the DOER Solar Credit Clearinghouse Auction. Eligible facilities may produce DOER Solar Credit Clearinghouse Auction eligible SRECs for no more than 40 calendar quarters (10 years) of generation. Applications submitted after certain program deadlines may either truncate the eligibility period or delay the start of eligibility until after the date of interconnection. After a facility’s SREC eligibility period ends, the facility produces RECs eligible for the Massachusetts Class I market.

Solar requirement

Instead of a pre-determined increase in the number of SRECs required year over year (used in every other SREC market), the DOER utilizes a formula that takes into consideration how much capacity was installed in previous years and the results of the annual DOER administered Solar Credit Clearinghouse Auction (SCCA).

The formula for determining the SREC requirement under both the SREC-I and SREC-II programs is as follows:

  • Total Compliance Obligation = Total Compliance Obligation (Current Year) + [Total Projected SRECs Generated (Current Year) - Actual SRECs Generated (Previous Year)] x 1.3 + Banked Volume (Previous Year) + Auction Volume (Previous Year)

"Auction Volume" refers to the number of SRECs deposited in each program's Solar Credit Clearinghouse Auction Account. Also, when the program reaches its MW capacity limit (i.e. the “Sunset Period”) the components of the formula are adjusted as outlined in the regulation.

Solar Credit Clearinghouse Auction

The Massachusetts SREC programs are built around a price support mechanism called the Solar Credit Clearinghouse Auction (SCCA). In over-supplied years (more SRECs are available than required) buyers are incentivized to purchase SRECs through the SCCA, if they believe that the SCCA price is at or below the potential future price of the SRECs.

The SREC-I and SREC-II programs each have their own SCCA. The performance of the SCCA for the SREC-I program is not tied to the performance of the SREC-II SCCA, but the rules governing each SCCA are similar. SRECs from the SREC-I program may only be deposited in an SREC-I SCCA and SRECs from the SREC-II program may only be deposited in an SREC-II SCCA. Furthermore, the program rules do not require buyers to purchase SRECs through the SCCA, so there is no guarantee that SRECs deposited in the SCCA will be purchased. Buyers purchasing SRECs in the SCCA must pay pre-determined purchase prices. However, the DOER takes a 5% administration fee for each sale. Thus, the value to a seller with SRECs in the SCCA is the pre-set SCCA price, less 5%.

SREC issuance schedule

SRECs in Massachusetts are issued once a quarter with a three and a half month delay.

Power production period Date SRECs issued
Q1 (Jan to Mar) July 15th
Q2 (Apr to Jun) October 15th
Q3 (Jul to Sep) January 15th
Q4 (Oct to Dec) April 15th

Meter readings

Facilities must report generation from revenue grade meters to the Massachusetts Clean Energy Center (MA CEC) Production Tracking System (PTS). Facilities with a nameplate capacity > 10 kW must report automatically using an MA CEC approved revenue grade meter online monitoring system, also known as a Data Acquisition System (DAS).

Eligibility begins

Upon date of interconnection, as long as the system is certified by the DOER before that quarter's SRECs are generated. A system owner should apply for certification around the date of interconnection to assure they receive full credit for their generation.

SACP

The Solar Alternative Compliance Payment (SACP) is the penalty price electricity suppliers must pay per SREC if they are unable to retire the required number of SRECs at the end of the compliance period. The SACP price decreases over time with both the SREC-I and SREC-II programs.

SREC useful life

SRECs unsold by the end of each trading year (June 15th) must be deposited in the DOER Solar Credit Clearinghouse Auction (SCCA). If an SREC deposited in the SCCA is not purchased, then it is re-issued and must be sold within three years, however, the SREC may not be deposited in future Solar Credit Clearinghouse Auctions, effectively stripping the SREC of its SCCA eligibility. The risk of an unsuccessful SCCA sale and the time value of money are two reasons sellers will sell SRECs below the SCCA price in over-supplied years.

SREC-II market sectors

The SREC-II program divides project eligibility into market sectors. With the exception of the Managed Growth category, there are no limits on how much capacity can qualify within each market sector. A project’s market sector eligibility determines how many SRECs it can create from each megawatt hour it produces. This is meant to allow for a diverse portfolio of projects to be developed in the Commonwealth. For example, a residential project or large carport will create 10 SRECs for every 10 megawatt hours it produces, whereas a project in the Managed Growth category will only create 7 SRECs for every 10 megawatt hours it produces.

Sector Description Factor
A Generation Units with a capacity <=25 kW, Solar Canopies, Emergency Power Generation Units, Community Shared Solar Generation Units, low or moderate income housing units. 1.0
B Building Mounted Generation Units, ground mounted Generation Units with a capacity > 25 kW with 67% or more of the electric output on an annual basis used by an on-site load. 0.9
C Generation Units on Landfills or Brownfields, or Generation Units with a capacity of <= 650 kW with less than 67% of the electrical output on an annual basis used by an on-site load. 0.8
Managed Growth (MG) Unit that does not meet the criteria of Market Sector A, B, or C. 0.7

Program comparison

A summary of SREC-I and SREC-II program details.

Feature SREC-I SREC-II
Adjustable Compliance Obligation Yes Yes
Decreasing SACP Rate Schedule Yes Yes
SCCA Opt-in Schedule Yes Yes, all projects get 40 quarters from qualification date
Decreasing SCCA Sale Price Schedule No (fixed at $285/SREC) Starts at $285/SREC and decreases over time
Program Cap Capped at 660.5 MW on 6/30/2014 1,600.0 MW less final SREC-I qualified capacity
Market Sectors No Yes
SREC Factors No Yes
Project Size Maximum Yes, 6 MW DC Yes, 6 MW DC

Market requirements

Breakdown of the state SREC market requirements as currently set by state legislation.

SREC-I

Energy Year Estimated Capacity (MW)1 Estimated SRECs Required (MWh) SACP Net SCCA Price
2010 18.2 21,054 $600 $285
2011 57.7 66,886 $550 $285
2012 66.8 77,472 $550 $285
2013 157.9 183,124 $550 $285
2014 395.0 458,226 $523 $285
2015 658.92 1,054,933 $496 $285
2016 To be determined $472 $285
2017 To be determined $448 $285
2018 To be determined $426 $285
2019 To be determined $404 $285
2020 To be determined $384 $285
2021 To be determined $365 $285
2022 To be determined $347 $285
2023 To be determined $330 $285
2024 To be determined $330 $285
  • 1 SREC-I capacity estimates are determined by dividing the number of SRECs required, after taking into consideration the exempt load contracted prior to the implementation of the SREC-I program, by a conversion factor of 1160 (assumes that a facility will produce 1.16 SRECs for every kW installed).
  • 2 The 2015 estimated capacity figure of 660.5 MW is based on total final qualified capacity under the SREC-I program

SREC-II

Energy Year Estimated Capacity (MW) Estimated SRECs Required (MWh) SACP Net SCCA Price
2010 Program not available
2011 Program not available
2012 Program not available
2013 Program not available
2014 85.0 41,279 $375 $285
2015 230.0 161,958 $375 $285
2016 To be determined $350 $285
2017 To be determined $350 $271
2018 To be determined $350 $257
2019 To be determined $333 $244
2020 To be determined $316 $232
2021 To be determined $300 $221
2022 To be determined $285 $210
2023 To be determined $271 $199
2024 To be determined $257 $189

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