Archive for August, 2009

Twitter Weekly Updates for 2009-08-30

Posted August 30th, 2009 by SRECTrade.

Pennsylvania SACP Clarification

Posted August 28th, 2009 by SRECTrade.

According to the Pennsylvania state RPS, the SACP (Solar Alternative Compliance Payment) or fine paid by utilities that do not purchase enough SRECs to comply is set as:

200% of the “average market value for solar photovoltaic alternative energy credits sold during the reporting period in the RTO control area where the noncompliance occurred.”

The RTO control area referenced is the PJM region, so we were previously under the impression that the SACP is determined by the average SREC price in the region – which includes Delaware, Maryland and New Jersey among others. However, the interpretation used by the state when implementing this program is that the SACP could only be based on the average price of SRECs used to meet the Pennsylvania RPS. This is considered regional because residents in other PJM region states can register and sell their SRECs into the Pennsylvania market. Apparently that justifies the requirement that it is an average of the RTO region. Therefore, the Pennsylvania SACP is NOT impacted by the price of SRECs that are used to meet the RPS in New Jersey, Maryland, Delaware or any other states within the region.

In conclusion, the SACP in Pennsylvania for SRECs created through May 2009 will be posted in December of 2009 and will be double the average price of SRECs counted towards the Pennsylvania RPS.  In 2008, the average price was around $264, resulting in a 2008 SACP of $528.  Since this average price is taken from data provided by the utilities (end-buyers), it doesn’t reflect the actual price that generators recieved for their SRECs when markups and broker fees are taken into consideration.  Therefore if generators are getting prices of $300+ in Pennsylvania for their SRECs, it’s possible that the average price paid by the end-buyers is much higher.  On the flip-side, a good portion of what the end-buyer procures may also come from previously negotiated long-term contracts that have locked sellers in at low prices.  So it could go either way. Sometimes rulemakers are experts at layering complexity upon complexity!

The silver lining in all this is that we hope that the monthly Pennsylvania SREC auctions hosted at SRECTrade will help bring stability and fairness to this market, making it easier for individuals to make the decision to go solar! We can’t tell you where the market is going, but soon enough, we’ll be able to tell you where it has been.

Pennsylvania SACP by energy year (June 1 – May 31):
2010 – TBD 12/10
2009 – TBD 12/09
2008 – $528

West Virginia SRECs

Posted August 28th, 2009 by SRECTrade.

For people interested in the West Virginia SREC market, unfortunately there is currently no market within West Virginia for solar RECs (SRECs). The existence of SRECs, as opposed to regular RECs, is predicated on specific renewable portfolio legislation that says x% of the state’s energy has to come from solar.  West Virginia has a generic renewable standard, but no specific solar carve-out.  This means that the RECs that are applied to the West Virginia renewable portfolio standard are not considered SRECs, but rather generic RECs.  RECs trade at a fraction of the price of SRECs because the alternative compliance payments for solar tend to be higher when there is a carve-out. This is primarily because solar is still more expensive than other renewable energies and needs additional incentives in order to compete.

In addition, the renewable portfolio standard requirement of 10% in West Virginia does not come into effect until 2015.  Utility companies have until 2011 to develop a plan for procuring renewable energy to meet the requirements beginning in 2015.  An SREC market in West Virginia, if it were to develop would both take time and adjustment to the state legislation as it is today.  Even the REC markets won’t pick up in West Virginia until 2015.

However, West Virginia is within the PJM regional transmission organization which means that residents may be able to certify their solar systems in Pennsylvania.  We highly recommend doing this because they would be considered SRECs in PA and therefore have a much higher value than they ever would in West Virginia.  You can find the information to register here on our Pennsylvania Cross-List Blog.  North Carolina and DC are two other markets where West Virginia residents may consider selling their SRECs.  Our Cross-Listing section covers most of this information.

See also the West Virginia Renewable Porfolio Standard.

Twitter Weekly Updates for 2009-08-23

Posted August 23rd, 2009 by SRECTrade.

Twitter Weekly Updates for 2009-08-16

Posted August 16th, 2009 by SRECTrade.

Maryland SREC Registration Details

Posted August 14th, 2009 by SRECTrade.

Here is some information we’ve collected from the Maryland Public Service Commission (PSC) on how the SREC registration process in Maryland works.

1. Install your solar system: Work with your installer to complete the system and connect the net meter to the grid.

2. Obtain a state certification number: Once your solar system is installed, you must submit an application for certification with the Maryland PSC. The application can be found here: Application for MD Certification Excel file. Instructions for certification can be found on the first tab of the application titled “Instructions” and the second tab “Solar REF Application” is to be completed and submitted via Maryland’s online portal. When the application is approved, you will get a state certification number that looks like: MD-70302-SUN-01.

3. Sign up for EasyREC with SRECTrade (within 30 days): On SRECTrade, you have two options, you can sign up for the EasyREC service and we’ll post your SRECs on the PSC website (a state requirement), register your system in GATS (Note: This must be done within 30 days of obtaining a state certification number), generate your SRECs, place them in auction and transfer them to buyers on your behalf, you do nothing more than set your minimum price and check your bank account for the direct deposits.

Alternatively, you can also do it yourself by posting the credits on the PSC website (see below), learning to navigate the GATS platform, generating your own credits and then placing them in the SRECTrade auction manually.  However, we created the EasyREC service to make this all as painless as possible!

About the state requirement to post your credits for sale on the PSC website: This requirement is unique to Maryland. All solar generators must make their SRECs available to the utilities to purchase in a 15-year contract. (Note: As of 8/2009, no utilities are purchasing SRECs in long term contracts because Maryland has offered no protection if the SREC program were to be dissolved).  To do this, either sign up for the EasyREC service and SRECTrade will do this for you, or go to the REC Supplier Registration page, create an account and list your SRECs for sale for a minimum of 5 days.

How long can your system generate SRECs?: Your Maryland solar system can generate SRECs for the life of the system. Unlike New Jersey, where a system can only generate SRECs for 15-years, there is no specific rule in the Maryland law that limits the length that your system is eligible.

What is the life of a single SREC?: SRECs in Maryland have a 3-year useful life. An SREC is good for the current energy year and the two following years.  If you do not sell your SREC now, you can still sell it next year or the year after. If a utility buys your SREC now, it can apply to this year’s requirement or any of the next two years.

Can I sell my Marlyand SRECs out-of-state?: Yes, you can sell into other states that will allow you to get your system certified. For most Maryland generators, Pennsylvania is a viable market.  See our cross-listing section for more details.

Can I sell SRECs from an out-of-state system into Maryland?: No, Maryland recently changed the RPS to close the state off to out-of-state generators. See more information on where else you may sell your SRECs in the cross-listing section.

August SREC auction commentary

Posted August 11th, 2009 by SRECTrade.

SRECTrade recently closed the August auction with a price of $680 for 2009 SRECs in New Jersey, as well as prices of $663 for 2010 NJ SRECs, $245 for Delaware, $300 for Pennsylvania and $308 for Maryland.

2009 NJ SRECs
This was a new high for the 2009 NJ SREC market which closes next month. If you still have 2009 SRECs available, your last chance to sell them will be in our September 11th auction. Get on it!

2010 NJ SRECs
The reason for a distinction between 2010 and 2009 NJ SRECs and their relative values was highlighted in an earlier posting we did on the new energy year. We were concerned that there might be a significant drop in the pricing as the new year started, but the $663 clearing price is extremely encouraging for several reasons.  First, the fact that prices remained above $600 indicates that the New Jersey market has stabilized. In previous years, legislative changes led to instability in pricing. Brokers and other intermediaries benefited from such instability. Today, with a better educated seller-base and buyers who have now been able to develop a strategy from the experience gained in recent years, perhaps we will see a more stable market.  Second, in previous years, sellers would have been incentivized to hold their SRECs until the end of the year to get the best price.  Considering that last August, our auction yielded a price of $461 and then later topped out at $680 for 2009, that strategy made sense.  However, given that the SACP has dropped to $693 for this year, $663 is actually a better price in 2010 than $680 was in 2009 relative to the SACP. We can only speculate how the New Jersey market will evolve through 2010, but it is definitely not the same market we saw in 2009. Since 2009 SRECs are only good in 2009, they held no value if the state solar requirement was achieved. In 2010, SRECs can be applied in both this year and 2011. This has two effects. First, sellers can hold onto their credits if they don’t like the price they get now. In addition if the solar requirement is met, SRECs will still hold value in the following year, so the market does not drop to zero. Finally, from a buyer’s perspective there are two approaches that can be taken. Either buy what you can now for as low a price as possible and then drive prices up at year end if you don’t complete your requirement, or start out with a high price and lower it as you get closer to achieving the requirement. In that latter scenario, what you might see is more volume early in the year as sellers are disincentivized to wait, and perhaps less of a scramble at the end. It still is way early to tell how the prices will hold over the next few months. From our perspective, we’re hoping to see stability for the benefit of sellers, buyers and anyone thinking about getting into solar. As this market matures, the easier it will be to make that decision to bet on the value of SRECs in New Jersey.

New state markets
The fluctuation from $375 to $308 in the Maryland market is a confirmation of the obvious: these are all still very immature markets. The Pennsylvania market should see an increase above the $300 price as more buyers get into the mix. When the 2009 SACP gets published in December, it will likely be even higher than the 2008 SACP of $528 that was published in December of 2008 for the 2008 energy year. Considering that it is tied to 200% of the average trading price in the PA and prices are only increasing, 2010 should be an even better year to sell SRECs to utilities that may be struggling to meet the growing solar requirement. The way the SACP is set in Pennsylvania further complicates an already complex market. Meanwhile, Delaware and Maryland have more stable markets, but face their own challenges. In Delaware, most of the solar requirement is applied to energy supplied by Delmarva Power. Therefore, they feel the most pressure to deliver solar energy in the state. With few buyers, it may be a difficult market for small generators to navigate, so many will turn to Pennsylvania and other markets where they could be eligible. Maryland, meanwhile has been trying to encourage long term contracts, but buyers have been reluctant to enter into any long term SREC programs because of their own uncertainty over the state of deregulation in the state. However, there is a lot of potential in the Maryland market. Both these states and many others may eventually turn to Pennsylvania to sell their SRECs into that market. Even this comes at a risk. Pennsylvania currently has two pieces of legislation being considered. First is the House Bill 80 which, as currently written, would change the law so that Pennsylvania would no longer accept out-of-state SRECs, unless captured in a existing contract.  In PA, there is also a senate version of the bill, SB92.  The senate has to pass their version and then reconcile with the house before the bill can be sent to the governor for approval.  In SB92, it states that 50% of SRECs must come from within PA.  The other 50% can come from outside of the commonwealth (from states like DE, MD, OH). Our take: The House Bill was presented by Vitali, Ross, George, and DePasquale, along with a host of other liberal Democrats.  The senate is 29/50 republican, while the house is democratic majority.  So far, in the house, the votes have split party line with republicans against.  The senate bill has yet to get out of first committee, and if the votes go anyway like they did in the house, the 29/50 republican block in the senate will shut the bill down.  Even if a bill does pass, it is possible that the 50% out-of-state clause will be included in the final version. We hope that if something like that is implemented that the government would at least grandfather in anyone who was registered and certified prior to the legislation. As we all know, since this is a form of subsidy for solar, we all remain at the mercy of the state governments.

Maryland Cross-Listing Update

Posted August 10th, 2009 by SRECTrade.

MD electricity suppliers must buy SRECs generated within the state of MD before purchasing from out of state. Systems located in other states should not count on cross-listing their SRECs for sale in MD. The only viable market for systems located in MD to cross-list their credits into is Pennsylvania, but the system must also be registered in PA.

August Auction Closes!

Posted August 7th, 2009 by SRECTrade.

Our August 7th Auction just closed here at The clearing prices are as follows:

New Jersey ’09 SRECs: $680
New Jersey ’10 SRECs: $663
Maryland SRECs: $308
Pennsylvania SRECs: $300
Delaware: $245

Thanks to everyone who participated. Our next auction is September 11th!