Archive for May, 2010

Maryland follows New Jersey and raises RPS levels

Posted May 17th, 2010 by SRECTrade.

Maryland Governor Martin O’Malley has said he will sign into law a new Renewable Portfolio Standard that increases the Alternative Compliance Payments (ACP) due if utilities don’t buy enough SRECs. Higher ACPs support higher SREC prices which in turn encourage more solar development.

While rebate programs have proven unreliable as state budgets are stained, SREC programs have proven to be a stable incentive for solar. New Jersey recently suspended their solar rebate program but has increased their ACP levels and the percentage of solar electricity required three times. Maryland is following suit, increasing the ACP to $400 through 2014 and slowing the pace that they lower ACP.

Compare the old and new Maryland RPS:

Year Solar RPS % Old ACP New ACP
2009 0.01% $400
2010 0.025% $400 $400
2011 0.05% $350 $400
2012 0.10% $350 $400
2013 0.20% $300 $400
2014 0.30% $300 $400
2015 0.40% $250 $350
2016 0.50% $250 $350
2017 0.55% $200 $200
2018 0.90% $200 $200
2019 1.20% $150 $150
2020 1.50% $150 $150
2021 1.85% $100 $100
2022 2.00% $100 $100
2023 2.00% $50

Kerry and Lieberman Propose Energy Bill

Posted May 14th, 2010 by SRECTrade.

The American Power Act has been proposed by Senators Kerry and Lieberman in an effort to reform the energy economy.  The bill proposes to put power generation back into U.S. control, clean up the carbon footprint and increase the use of clean technologies.  You can learn more on Kerry’s website.

Questions arise around the impact such a bill might have on the SREC markets that currently exist.  Our read of the proposed legislation is that it does not impact renewable portfolio standards and would not preclude any established state RPS.  The proposed law does preempt state and regional carbon reduction laws (currently RGGI and AB32), but the renewable portfolio standards would not fall under the definition of that section.

Section 1601 of the bill is essentially a placeholder for federal portfolio standard legislation, which is contained in another senate bill that passed out of the Committee on Energy and Natural Resources some time ago.  That bill specifically allows any state RPS that is stricter than the federal program to continue, so none of the markets where we currently operate would be impacted.  The climate bill the House passed does contain a federal RPS and it has similar language protecting state programs.

The bottom line is that passage of the climate bill is still uncertain, but even if it does pass SREC markets will remain alive and well.  If the overall climate bill doesn’t pass, the energy bill with the federal portfolio standard may be a compromise everyone can agree on, which would be good for SREC and REC markets throughout the country.

The bill can be read here:

NJ solar rebate program suspended

Posted May 14th, 2010 by SRECTrade.

This week, the New Jersey Board of Public Utilities announced they are suspending their popular solar incentive program. The rebate paid $1.00 per watt to commercial systems upto 50,000 watts and as high as $1.75 to residential systems.

New Jersey’s actions parallel those the cuts to solar incentives in Spain and the reduction of feed-in tariffs (FiT) in Germany. Fixed rebate programs and feed-in tariffs lack a market mechanism and don’t have the feedback mechanism inherent in a REC or SREC trading program. If legislators set the solar incentives too low, they don’t inspire any development. But when legislators set incentives too high, there is a gold rush — developer overwhelm the rebate or FiT programs that was engendering the frenzy.

These dramatic cuts highlight difference between rebates and feed-in tariffs and an SREC program. SRECs prices move according to supply and demand and are not subject to on-again, off-again whim of legislators and have proven to be a stable, long-term incentive that has been very effective stimulating solar development.

In New Jersey, SRECs are now an even bigger determinant of the economics of a project. With clear, transparent long-term contracts, solar investors and developers have clarity in the cash flows associated with solar. And for smaller systems looking to offset the high upfront costs of installation, prepaid SREC contracts are an interesting alternative to rebate programs – the current bids in New Jersey prepaid SRECs equivalent to approx. $2.27 per installed watt.

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Solar Thermal SRECs in DC

Posted May 13th, 2010 by SRECTrade.

SRECTrade recently began registering solar thermal facilities in Washington DC and North Carolina.  The North Carolina program is in the final stages of being setup and we will provide more information when it is available.  Meanwhile, we’ve already sold our first solar thermal SRECs in the DC market at $290.  Here are some guidelines and information in regards to the requirements to register solar thermal systems in Washington DC:

Are solar thermal SRECs valued the same as solar photovoltaic SRECs sold in auction?
Yes, in DC and NC, solar thermal facilities can be approved to generate SRECs that have the same value to buyers purchasing to meet state compliance requirements.  Any auction for SRECs in DC will include solar PV and solar thermal SRECs sold at the same price.

What if my facility is not eligible in Washington, DC or North Carolina?
Both DC and NC allow out-of-state facilities to qualify, so many states are eligible to sell into these markets.  If your state is not eligible to sell into DC or NC, then the RECs produced by your facility have no value to buyers in the state compliance markets (i.e. our buyers).  You may still however be able to find ways to sell the RECs in voluntary or non-solar compliance markets – also known as generic REC markets.  There are companies out there that may help.

What else should I know about selling SRECs as a solar thermal facility?
Keep in mind the DC SREC market is a relatively small market and could someday be oversubscribed.  We are hopeful that the market for solar thermal SRECs will grow beyond DC as other states follow suit, however, as with any markets, there are risks associated with the market value of SRECs in DC.

What are the requirements for reporting production and generating SRECs?

System must be SRCC-300 rated.  Here’s the link to the approved systems if you don’t already have it:  DC will used the energy saved in kWh as your generation for the year.  For example, a 2400 kWh system would receive 200 kWh per month and once the accumulation hits 1000kWh an SREC will be credited to their account

1.  Displaces < 10,000 kWh per year – can use SRCC 300 rating, SRCC-100 panel rating, or use an OIML meter
2.  Displaces > 10,000 kWh per year – must use OIML approved meter

Here are the exact details of the requirements from the Clean and Affordable Energy Act of 2008:

(1) For nonresidential solar heating, cooling, or process heat property systems producing or displacing greater than 10,000 kilowatt hours per year, the solar systems shall be rated and certified by the SRCC and the energy output shall be determined by an onsite energy meter that meets performance standards established by OIML.
(2) For nonresidential solar heating, cooling, or process heat property systems producing or displacing 10,000 or less than 10,000 kilowatt hours per year, the solar systems shall be rated and certified by the SRCC and the energy output shall be determined by the SRCC OG-300 annual system performance rating protocol applicable to the property, by the SRCC OG-100 solar collector rating protocol, or by an onsite energy meter that meets performance standards established by OIML; and
(3) For residential solar thermal systems, the system shall be certified by the SRCC and the energy output shall be determined by the SRCC OG-300 annual rating protocol or by an onsite energy meter that meets performance standards established by OIML.”.

Hopefully this clarifies the solar thermal process in Washington DC.

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Additional Info for DC SREC registrations

Posted May 10th, 2010 by SRECTrade.

DC Eligibility
For customers looking to register systems in the DC SREC market, as we have previously stated, DC will accept applications from customers sited in the PJM regions and states adjacent to the PJM region where electricity is eligible to be transmitted into the PJM region. SRECTRADE will manage the application process for our EasyREC customers to ensure the system is approved.

DC Facility Rejections
We previously reported that a facility was rejected out of New York state and have learned that the application provided that the electricity was not capable of being transmitted into the PJM region. The DC PSC was subsequently unable to get clarification in order to approve the facility.

A second facility in New York has also been rejected because there was “no basis to conclude that the facility generates electricity consumed within the PJM Interconnection region.”  We are currently seeking clarity on how these determinations are made and will post them when we have more information.  In the meantime, here are some details:

DC rule 945-E-1764 ( defines a renewable energy credit as “a credit representing one megawatt hour of electricity consumed within the PJM interconnection region that is derived from a tier 1 renewable source, a tier 2 renewable source, or a solar source that is located:

“In the PJM Interconnection region or in a state that is adjacent to the PJM Interconnection region.”

The same document describes New York as an “Adjacent PJM State” and the New York Independent System Operator (NYISO) as an “Adjacent Control Area”.  The crux of the issue seems to be the wording “consumed within the PJM interconnection region”.  Electricity flows bidirectionally between PJM and NYISO every day, the amount varying based on supply and demand in the two ISOs.  An electron generated in NYISO clearly can’t be tracked (Heisenberg and all), so there is no way to know if a given electron generated by the grid-tied solar installation makes its way into PJM and is consumed. In fact there is no way to know if a given electron generated by any installation in any “Adjacent PJM State” makes its way to PJM and is consumed there, although it is possible that any electron generated in an adjacent PJM state will. Going even further, an electron generated by a system located in DC might actually be consumed outside PJM! As we see it, this leaves two choices on how to interpret the DC RPS rules. Either every grid tied generator in an “Adjacent PJM State” could be delivering their electrons to be consumed in PJM and therefore all are eligible to create DC renewable energy credits, or none can prove that their specific electrons where consumed in PJM and so none are eligible.

How far back will DC accept SREC generation?
We also get questions about systems that were installed prior to the application date in DC. Customers and installers will ask how far back DC will count solar generation for SRECs. DC will only count SRECs created in the current energy year (same as calendar year) as long as generation is inputted before the last business day in January. This means that, as of this blog post, any generation for a facility in 2009 will not count. Only generation from January 2010 onwards will be eligible for the creation of SRECs.

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SRECTrade announces SREC Forwards Exchange

Posted May 5th, 2010 by SRECTrade.

In 2008, SRECTrade launched the SREC auction as an innovative way to connect sellers directly to buyers in the nascent SREC markets that lacked liquidity and transparency. Since then the auctions have grown substantially, providing publicly available market pricing and fulfilling a missing piece in the SREC program. With the expansion of new SREC markets in adjacent states, SRECTrade is now the leading online platform for anything related to SRECs.

With the launch of the SREC Forwards Exchange, SRECTrade has become a one-stop shop for all participants in the  SREC markets.  The service now includes long-term SREC price discovery and contracts, in addition to the spot transactions available in the auction. The Forwards Exchange will provide a mechanism to match sellers in need of long-term contracts or upfront payments for financing solar projects to parties interested in the return opportunities available in buying and trading forward contracts.

In the Forwards Exchange, sellers and buyers will have two options.  Prepaid Forwards are available to smaller facilities using estimated generation.  These users will be able to sell any strip or individual SREC scheduled to be produced by their facility for an upfront payment from a buyer.  For larger facilities, traditional Forward Contracts are available in the exchange with payment terms on delivery.  Both sellers and buyers entering into the payment-on-delivery forwards will be required to post some form of collateral, whether it be maintaining a margin requirement for buyers or withholding a portion of the SRECs generated for sellers.  Buyers in both markets will own the rights to the SRECs and can choose to hold onto them until maturity or close their positions in the market at any time.

For more information, visit our main website for each market:

Prepaid Forwards – Upfront payments for SRECs

Forward Contracts – Long-term SREC contracts with payment-on-delivery

For questions or comments on the SREC Forwards Exchange, please email