Archive for June, 2010

California TREC Market Held Up

Posted June 29th, 2010 by SRECTrade.

On May 6, 2010, the California Public Utilities Commission (CPUC) released its decision to stay the prior decision authorizing the use of tradable renewable energy certificates (TRECs) for compliance with the state’s renewable portfolio standard (RPS) program. This decision came after the April 23, 2010 workshop presentations, in which California’s IOUs discussed the valuation components and calculation of REC pricing.

The decision will be stayed pending resolutions of two petitions 1) the joint petition filed by Southern California Edison Company, Pacific Gas and Electric Company, and San Diego Gas & Electric Company (the utility petition) and 2) the petition filed by the Independent Energy Producers Association (IEP).

As outlined in the CPUC’s decision, the petitions filed look to address the following points:

The utility petition seeks to:

  • Revise the criteria for what transactions are bundled and what can be unbundled for TREC trading
  • Apply the criteria only to contracts submitted for approval after the effective date of the decision
  • Eliminate the temporary limit on TRECs for compliance with the RPS by the large utilities
  • Expand the rules for “earmarking” TREC contracts to address current short-fall with future generation

The IEP petition seeks to:

  • Revise the criteria for bundled and unbundled transactions with revisions different from the utility’s petition
  • Expand the review of the least-cost best-fit methodology for RPS bid evaluation and set a time for its completion

In addition to the subjects the petitions seek to address, the decision also included the concurrences and dissents of the CPUCs commissioners. The full document can be viewed here.

SRECTrade will continue to watch the CPUC’s decision making process and provide updates as they become available.  We will maintain everything we know about it on our California SREC page.

Mountain View Solar & Wind to have Installation Aired on BBC

Posted June 22nd, 2010 by SRECTrade.

BBC world news is scheduled to feature the installation of solar panels on a home in Morgan County on BBC World News America’s 7 p.m. broadcast tonight. The piece was filmed on Thursday at the home of Dr. Donald and Selma Straus. The panels for the installation were provided by Mountain View Solar & Wind LLC, the largest solar and wind energy system installer in West Virginia. MVSW installs for both private homes, and for businesses, and hopes to use the publicity from the showing to get the word out about home and community-based renewable energy.

We are excited to see our partners at Mountain View Solar & Wind receive this recognition for their strong efforts in developing the solar industry in West Virginia. MVWS has been a pioneering force for solar in the state, helping their customers sell into the Washington DC and Pennsylvania platforms.

For more information on this story, see here, and be sure to tune in tonight to BBC World News America at 7:00 to see!

New Mexico SREC Information

Posted June 17th, 2010 by SRECTrade.

Note: Visit our New Mexico SREC page for specifics about any SREC potential.

New Mexico’s Renewable Portfolio Standard (RPS) requirements have a solar renewable energy target, but the current structure does not allow for a vibrant SREC market. The RPS requires that Investor Owned Utilities (IOUs) derive at least 20% of the state’s renewable energy from solar generation. While this is a step in the right direction, New Mexico has not put in place a Solar Alternative Compliance Payment (SACP) to drive a market price for SRECs. IOUs are required to purchase RECs to meet the RPS requirements, but if the requirements are not met within the year, the utilities have to make them up in the following year. Penalties can be implemented, but are in the form of retiring additional RECs within a designated generation category.

Although the current structure does not allow for monthly auctions, similar to what SRECTrade has created in other markets, New Mexico’s IOUs offer SREC purchase incentive programs. Below is an overview of their offerings.


Small PV Program: PNM will pay 13 cents/kWh ($130/SREC) for systems up to 10 kW. The system owner must enter into a 12 year agreement, but the agreement can be terminated upon 30 days written notice.

Large PV Program: PNM will pay 15 cents/kwh ($150/SREC) for systems greater than 10kW up to 1 MW. The system owner must enter into a 20 year agreement, but the agreement can be terminated upon 30 days written notice.

In addition to the SREC buy-back program, PNM offers a Net Metering program. This means that when your PV system produces more electricity in a given billing period than your facility uses, PNM will credit your account for the excess.

SPS (Xcel)

Solar*Rewards Small Program: SPS will pay 20 cents/kWh ($200/SREC) for systems between 0.5kW and 10kW. The system owner must enter into this agreement for a set term of 14 years.

Solar*Rewards Medium Program: SPS will pay 20 cents/kWh ($200/SREC) for systems between 10.1kW and 100kW. The system owner must enter into this agreement for a set term of 10 years.

Solar*Rewards Large Program: For systems greater than 100kW, SPS requests a proposal for REC buy-back. The contract term is negotiable for systems of this size.

In addition to the SREC buy-back program, SPS offers a Net Metering program. This means that when your PV system produces more electricity in a given billing period than your facility uses, SPS will credit your account for the excess.

El Paso Electric (EPE)

Small System Renewable Energy Certificate (REC) Purchase: systems 10kW and less are eligible to receive 12 cents/kWh ($120/SREC). System owners must enter into this agreement for a 12 year term.

Medium System Renewable Energy Certificate (REC) Purchase: systems between 10kW and 100kW are eligible to receive 15.5 cents/kWh ($155/SREC). System owners must enter into this agreement for a 12 year term.

Additionally, EPE offers a Net Metering program that will credit customer accounts for the excess energy produced by their solar panel systems.

SRECTrade will continue to watch the New Mexico market and keep participants up to date on the best methods for maximizing the value of their SRECs.

Massachusetts DOER Raises Solar Requirement for 2011

Posted June 17th, 2010 by SRECTrade.

The Massachusetts DOER made its final changes pertaining to the implementation of the solar carve-out program in the state’s RPS class I revised regulation. Most noteworthy of the changes, the DOER increased the solar requirement for the 2011 energy year to 69MW, or a total of 78,577 MWh. The increase in the solar requirement is a welcome development for SREC markets in Massachusetts, coming on the heels of the TransCanada legislation, which reduced the solar requirement for Massachusetts (more information on the TransCanada legislation here). This is a good indication that the state has levers it can pull to ensure the state supports a thriving SREC market, providing the market with some stability.

This should serve to counterbalance the change prompted by the TransCanada settlement that exempts certain buyers from the solar carve-out.

To see the all the changes made to the legislation see the RPS Class I Revised Regulation with Tracked Changes.

Solar Bill Could Create New York SREC Market

Posted June 16th, 2010 by SRECTrade.

A strong solar bill currently moving through the state senate has the potential to make New York a national solar leader. The New York Solar Jobs Act of 2010 establishes aggressive annual solar capacity targets, reaching 2.5% of the state’s total energy–an estimated 5GW–by 2025.

The legislation would also provide a strong economic opportunity in the state. According to NREL’s Job and Economic Development model, the program will support about 22,000 jobs. On top of this, New York is expected receive a $20 billion boost to its economy. Independent energy consultants from Crossborder Energy estimated the cost of the program to be a 39 cent increase in each NY resident’s energy bill.

If this bill is passed into law, New York will be in position for a robust SREC market. SRECTrade already has a presence with many New York solar companies, and as soon as this bill is passed we will be working toward establishing a market for SRECs in the state.

For more information on the bill, find the complete article here.

Solar on the White House Movement

Posted June 16th, 2010 by SRECTrade.

We thought this was an interesting piece recently posted in Renewable Energy World: A group of solar installation companies and advocacy organizations have come together to offer a $107,000 PV solar system to the white house in an effort to prove that the U.S. is serious about developing renewable energy technology.

The white house first installed solar panels in 1979, when Jimmy Carter put in a large solar hot water system, but these were famously removed by Ronald Reagan in 1986 when they were discovered to have a leak. If anything, we hope the publicity created by this movement will draw attention to the plight of solar in any federal legislation that gets passed!

Here is a link to the full article on the movement to put solar on the White House.

DE SRECs trading at prices above ACP

Posted June 11th, 2010 by SRECTrade.

SREC auctions in Delaware have been closing at a price of $300. This is higher than Delaware’s solar ACP, which begins at $250 per MWh. This discrepancy is caused by increases in the penalty for electricity suppliers after the first time they fall short of their solar requirement. The solar ACP increases to $300 after the first time an electricity supplier falls short, and then increases to $350 for any subsequent penalties.

So in summary, the reason you might see prices higher than $250 is because buyers are forced to pay a higher fine if they have previously fallen short on their requirement.

Proposed Finance Rules Emphasize Centralized Trading

Posted June 9th, 2010 by SRECTrade.

As Barney Frank, Chris Dodd and Tim Geithner draft the new rules of engagement for Wall Street, centralized trading’s virtues are taking a center stage. Centralized exchanges, like London Medal Exchange or Chicago Mercantile Exchange, bring transparency, price clarity and reduced counterparty risk. All the trades are collateralized and the exchange stands in the middle to guarantee contract performance.

SRECTrade’s long-term contract market has introduced these benefits to the SREC market. You can see live, tradable SREC prices updated in real-time.

Impact of TransCanada Settlement on Mass SREC Market

Posted June 9th, 2010 by SRECTrade.

Statement from the Massachusetts DOER

While DOER realizes as a practical matter that providing a reduced ACP Rate for pre-existing contracts will result in a reduction in the demand for SRECs in the early years of the program, that exact percentage is unknown at this time.  The demand will be a direct reflection on that percentage of load that was contracted for prior to January 1, 2010 which is data that DOER does not generally collect.  DOER did discuss this issue with a handful of competitive retail suppliers, and under a confidentiality agreement, obtained contract information from 8 suppliers serving about 1500 GWh in 2009.  DOER provides the following information with no warranty of its accuracy beyond the above stated parameters.

Approximately 50% of the retail load in Massachusetts is served by competitive suppliers, and of that portion, DOER estimates that about 70-90% of that load will be served in 2010 under a pre-2010 contract.  This percentage decreases dramatically in the following years as contracts expire or are renewed, such that in 2011 only 40% of the competitive supply load will be served by pre-2010 contracts.  This trend continues with 20% in 2012, 10% in 2013, and under 5% in 2014.

It is important to remember that combined with the growth in the Minimum Standard each year, the overall percent of applicable load relative to the Standard diminishes even more substantially.

While DOER hopes this very limited analysis provides some information to the solar development community but will not assure its accuracy beyond the given parameters or be responsible for any further conclusions drawn by any market participant.  DOER will receive additional information on load under contracts by retail suppliers as part of the 2009 Annual Compliance Filing and will report that information, in the aggregate, as soon as it is available.

SRECTrade Comment

Essentially what this is saying is that the settlement exempts suppliers under previous supply contracts from the SREC requirement.  This will impact 35-45% of the demand in the Massachusetts SREC market.  This means that if the requirement in 2010 was 30 MW of solar to meet the RPS, with these exemptions, the actual requirement will be 17-20 MW of solar.  In the following 3 years the impact is reduced to 20% of the total demand, 10% and 5%, respectively.  Fortunately, DOER has several levers it can pull to ensure that pricing of SRECs stays within the $300-$600 range. For example, if there is a surplus in 2010, the requirement for 2011 will likely be increased to adjust for the surplus. This should mitigate the impact of this settlement. Finally, even with the reduced demand, the state needs to get to an average solar capacity of 17-20MW in 2010.  This is no small task.

Massachusetts SRECs 101

Posted June 8th, 2010 by SRECTrade.

What is an SREC? Solar Renewable Energy Certificates (SRECs) are created for every megawatt hour of electricity produced by solar generators. A 10 kW system produces about 12 SRECs a year. SRECS are sold separately from electricity, and the solar power generated does not need to be used for the SREC to be created.

Who buys SRECs? Electricity suppliers must buy SRECs to meet the Massachusetts RPS requirement. Threatened by a Solar Alternative Compliance Payment (SACP) of $600 per megawatt hour if they do not comply, these companies will pay up to this price for SRECs.

How do I sell SRECs? Since individual solar owners do not produce enough SRECs to sell direct to buyers, an intermediary mechanism must exist. SRECTrade created the SREC auctions to connect sellers directly to the buyers in the market in a simple, efficient and effective way. The closing price of each auction represents the fair market price based on supply and demand.

Massachusetts SREC Pricing: State has set up a controlled market for SRECs that creates a price range of $300-$600 per SREC. There are several levers available to the state to ensure that pricing stays within this range.  First, the electricity suppliers who fall short of their SREC requirements must pay a fine of $600 per SREC. This sets a ceiling price of $600. In years where there is an SREC shortage, pricing will be close to $600. If there is an oversupply of SRECs, then market prices will be at or near $300. The state ensures this floor price by having a last chance fixed-price auction at the end of the year. Buyers can bid to purchase the SRECs that are available at $300 per SREC. If there are still unsold SRECs remaining after this auction, the state will adjust the capacity requirements for the following year to compensate for this surplus and allow increase the life of the unsold SRECs from 2-years to 3-years. This will ensure a stable SREC price and give solar owners an assurance that prices will be above $300.

Massachusetts Solar Requirement: The state has set the requirement for the SREC program at 30 megawatts of solar in 2010. That is the equivalent of approximately 36,000 SRECs that need to be produced and purchased by suppliers in 2010.

Massachusetts SREC Program Logistics

  1. SRECTrade will submit PV project application to the DOER. Once this application is approved, their solar facility will be added to the NEPOOL GIS tracking platform, where SRECs will be created and transacted.
  2. Solar electricity generation is reported to the Production Tracking System (PTS).
  3. SRECs are generated quarterly in NE-GIS and are then posted in the SREC auctions.
  4. The state has committed to the program for 10 years. Each SREC is valid for 2 years, so an SREC created in 2010 can also be sold in 2011.

SRECTrade Aggregation Logistics

  1. Fill out the forms to enroll in EasyREC
  2. SRECTrade will submit your application to the DOER for approval and set up your SREC account – this takes a few weeks
  3. Once set up, SRECTrade will collect your readings at the beginning of each month using an online form or internet-enabled inverter
  4. SRECs are generated quarterly by NE-GIS
  5. SRECTrade hosts monthly auctions on the first Friday of each month. You will be notified of the result after each auction. Possible results include:
    1. Successful: X SRECs sold at Y Price
    2. Unsuccessful: Y Price was below minimum, X SRECs not sold
    3. No SRECs: None were available in this auction
  6. If successful, payments will be delivered by the end of the month via direct deposit or mailed check. If unsuccessful SRECs are carried forward to next auction

EasyREC customers own their SRECs until sold in auction or contracted in the Forwards Exchange.

For More Information: