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
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.
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:
"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.
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%.
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|
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).
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.
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.
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.
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.
|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|
A summary of SREC-I and SREC-II program details.
|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|
|Project Size Maximum||Yes, 6 MW DC||Yes, 6 MW DC|
Breakdown of the state SREC market requirements as currently set by state legislation.
|Energy Year||Estimated Capacity (MW)1||Estimated SRECs Required (MWh)||SACP||Net SCCA Price|
|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|
|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|
|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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