Archive for August, 2011

Solar Capacity in the SREC States – August 2011

Posted August 26th, 2011 by SRECTrade.

SRECTrade SREC Markets Report: August 2011

The following post outlines the megawatts of solar capacity certified and/or registered to create SRECs in the SREC markets SRECTrade currently serves.

For a PDF copy of this table click here.

Renewable Generators in GATS 8_25_11_v4

PJM Eligible Systems

As of the end of August, there were 18,112 solar PV (17,791) and solar thermal (321) systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS) registry. Of these eligible systems, 77 (0.43%) have a nameplate capacity of 1 megawatt or greater, of which only 6 systems are greater than 5 MW. The largest system, currently located in New Jersey, is 18.3 MW, and the second largest, located in Ohio is 12 MW. The third largest system, at 11.2 MW, is located in Delaware.

Beginning of energy year for DE, NJ, and PA

June 1, 2011 marked the beginning of the new energy year for DE, NJ, and PA. All requirements for these markets increase given their RPS solar carve out schedules. SRECs for the month of July, the second creation period for the new reporting year, will be minted at the end of August.

Delaware: The reporting year 2011-2012 requirement for DE equates to approximately 21 MW being online for the entire year or approximately 25,600 SRECs created. As of August 25, 2011, 20.5 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS. 11.2 MW of the 20.5 MW currently eligible is from the Dover Sun Park project developed by LS Power. In the 2011-12 compliance year, Delmarva Power has contracted to purchase 9,846 SRECs from the project, of which 7,000 are being held by the Sustainable Energy Utility (SEU) until 2015-16*.

New Jersey: The reporting year 2012 requirement for NJ equates to approximately 368 MW being online for the entire year with a fixed SREC requirement of 442,000 MWhs. As of August 25, 2011, 379 MW of solar capacity was registered and eligible to create NJ SRECs in PJM GATS. While this figure represents all projects registered in GATS, there are recently installed projects awaiting issuance of a New Jersey state certification number. This delay results in a portion of installed projects not yet represented in the 379 MW figure. On July 26, 2011 the NJ Office of Clean Energy (NJ OCE) reported that as of June 30, 2011 more than 380 MW (10,086 projects) of solar had been installed in NJ. The news release noted that 40 MW were installed in the month of June. The installation data for July 2011 has not yet been released by the NJ OCE. For more details on the the current NJ market conditions see this post.

Pennsylvania: The reporting year 2012 requirement for PA equates to approximately 44 MW being online for the entire year or approximately 53,000 SRECs created. As of August 25, 2011, 124.5 MW of solar capacity was registered and eligible to create PA SRECs in PJM GATS.

Massachusetts DOER Qualified Projects

As of August 15, 2011, there were 861 MA DOER qualified solar projects; 829 operational and 32 not operational. Of these qualified systems, 11 (1.3%) have a nameplate capacity of 1 megawatt or greater, of which only 3 are between 1.5 and 2 MW. Three of the projects greater than 1 MW are currently operational.

Capacity Summary By State

The tables above demonstrate the capacity breakout by state. Note, that for all PJM GATS registered projects, each state includes all projects certified to sell into that state. State RPS programs that allow for systems sited in other states to participate have been broken up by systems sited in state and out of state. Additional detail has been provided to demonstrate the total capacity of systems only certified for one specific state market versus being certified for multiple state markets. For example, PA includes projects only certified to sell into the PA SREC market, broken out by in state and out of state systems, as well as projects that are also certified to sell into PA and Other State markets broken out by in state and out of state systems (i.e. OH, DC, MD, DE, NJ). PA Out of State includes systems sited in states with their own state SREC market (i.e. DE) as well as systems sited in states that have no SREC market (i.e. VA). Also, it is important to note that the Current Capacity represents the total megawatts eligible to produce and sell SRECs as of the noted date, while the Estimated Required Capacity – Current and Next Reporting Year represents the estimated number of MW that need to be online on average throughout the reporting period to meet the RPS requirement within each state. For example, New Jersey needs approximately 368 MW online for the entire 2012 reporting year to meet the RPS requirement. Additionally, the data presented above does not include projects that are in the pipeline or currently going through the registration process in each state program. This data represents specifically the projects that have been approved for the corresponding state SREC markets as of the dates noted.

*Source: State of Delaware Pilot Program For the Procurement of Solar Renewable Energy Credits: Recommendations of the Renewable Energy Taskforce

Why Doesn’t Illinois have an SREC Market?

Posted August 25th, 2011 by SRECTrade.

The Illinois Renewable Portfolio Standard (RPS) has aggressive renewable energy goals. The RPS requires Investor-Owned Electric Utilities (EUs) and alternative retail electric suppliers (ARES) to have 25% of their electricity come from renewable resources by 2025, so why don’t we see a viable SREC market? Part of the story can be tied to anemic SREC incentives.

Within the 25% renewable requirement, 6% of the renewable energy procured from EUs and ARES must come from solar sources, with percentages starting lower, reaching 6% by 2016, and holding until 2025. This latest addition came into effect under HB 6202, the details of which can be seen here. The legislation goes into effect in June 2013, with incremental requirements leading up to 6% in June 2016. In order to meet this requirement, EUs and ARES are able to purchase Solar Renewable Energy Credits (SRECs) from private individuals and businesses throughout the mid-West and mid-Atlantic regions- not just from within Illinois.

A unique aspect of the Illinois RPS revolves around a forced alternative compliance payment (ACP), which states that ARES must meet 50% of their renewable quota by paying an ACP. This effectively divides the potential REC market in half as tradable RECs will only be utilized for 50% of the renewable quota. EUs and ARES can buy RECs from the PJM-GATS or M-RETS (Midwest Renewable Energy Tracking System) tracking registries, or just pay the ACP fine.

It’s unlikely that the Illinois market will be attractive for the following two reasons:

1) The ACP currently covers all renewable fuel types. Current ACP rates for June 1, 2011 through May 31, 2012 are estimated to be approximately $0.058 per MWh, with a maximum value of $2.158/MWh. ACP rates vary by utility territory and more information can be found here. There isn’t a separate “carve-out” for solar with a higher ACP rate. This means that REC values are much lower than necessary to incentivize the solar market with RECs alone. For comparison New Jersey’s RY2012 Solar ACP (SACP) is $658 per SREC.

2) Utility companies may opt to meet their full solar requirement by paying the relatively low ACP fine for not complying, rather than meeting the other “optional” 50 % requirement by paying for SRECs.

Other options for Illinois sited solar systems:

Illinois systems are eligible to sell SRECs in Pennsylvania if their facility is located in an area served by Commonwealth Edison (ComEd) utility. Currently, selling their SRECs into the PA market provides the highest value for SRECs coming from IL (ComEd) facilities, with pricing in August 2011 at $25 per SREC. Solar systems that are located in all of Illinois were previously able to sell SRECs into the D.C. market, but recent legislation has made that option no longer possible.

Other incentives have been put in place to help catalyze the Illinois solar market, though several lack the necessary funding to allow for widespread solar adoption. The Illinois Solar Energy Association runs an annual Renewable Energy Credit Aggregation Program (RECAP) that allows qualified systems to sell SRECs to the ISEA at a fixed rate of $200/SREC. Unfortunately, this program has exhausted its funding and is only accepting wait list applications.  The state of Illinois also offers a special property tax assessment for properties with solar systems. Finally, the state Solar and Wind Rebate program offered a 30% rebate to residential and commercial systems and a 50% rebate for non-profit or commercial systems before closing its latest round of funding in December 2010.


Posted August 16th, 2011 by SRECTrade.

The Massachusetts DOER has revised their application schedule by moving up the deadlines for generation eligibility. The new schedule states that in order for systems generating electricity prior to June 30th (Q2) to get SREC credit for that generation, their applications must have been submitted by August 15th, though there is expected to be some leniency around this first deadline. We strongly urge all unregistered MA customers to submit their EasyREC applications AS SOON AS POSSIBLE (i.e. the next few days) if their systems were generating prior to June 30th. Future deadlines are listed below.

Q2 generation (systems online before June 30th): must apply by 8/15/11

Q3 generation (system online before September 30th): must apply by 11/15/11

Q4 generation (system online before December 31st): must apply by 2/15/12

Please email your completed MA EasyREC application to or fax to (732) 453-0065.

PUCO Grants FirstEnergy Waiver From Solar Requirement

Posted August 10th, 2011 by SRECTrade.

On August 3, 2011, FirstEnergy was granted its “force majeure” application to reduce its 2010 in-state solar requirement from 3,206 Solar Renewable Energy Credits (SRECs) to 1,629 SRECs by the Public Utilities Commission of Ohio (PUCO). The shortfall of 1,577 SRECs will be added onto FirstEnergy’s 2011 solar energy resource (SER) requirements.

On April 15, 2011, FirstEnergy filed an application for force majeure to reduce its SER benchmark from 3,206 SRECs to 1,629 SRECs, the amount it actually acquired in 2010. In its motion, FirstEnergy claimed that it attempted to procure SRECs through requests for proposals (RFPs), SREC brokers, and SREC auctions. Despite its good faith efforts, it only managed to obtain 1,629 SRECs, or 51% of its SER requirements. FirstEnergy cited a lack of supply of in-state SRECs being reasonably available in the market, as well as the impracticability of constructing solar facilities as reasons for its inability to reach its SER target. Further, FirstEnergy was recently approved to conduct an RFP to purchase SRECs through 10 year contracts. The RFP will be used to meet future compliance requirements including any shortfall in 2010 that will be incorporated into its 2011 benchmark.

The full order from the PUCO website can be found here: PUCO FirstEnergy Order.

First 2012 New Jersey Auction and Market Conditions

Posted August 10th, 2011 by SRECTrade.

Our August auction was the first auction of the NJ2012 reporting year (RY2012).  In New Jersey, the reporting year runs from June 1 to May 31, and dictates the vintage year of a given SREC.  June SRECs, the first generation month of RY2012, were first available for trading in the August auction and showed a significant price drop compared to RY2011 SRECs.  The price drop reflects the anticipated oversupply of SRECs for RY2012. Previously, in RY2011 and prior, buyers had faced an under-supplied market and were willing to pay high prices.  RY2012, however, will be the first year in the NJ market with an oversupply of SRECs.

RY2012 SRECs traded on July 29th at $276.16, approximately 50% less than the RY2011 prices.  Prices for RY2011 SRECs (June 2010 – May 2011) remained high at $564.99.  Given that compliance buyers have until the end of September to purchase their required RY2011 SRECs, RY2011 SRECs should remain in demand until that time.

For RY2011, SREC compliance buyers are required to purchase 306,000 SRECs, but SREC production fell short of this goal as the energy year came to a close. As of this posting, PJM-GATS reported that approximately 276,000 NJ2011 SRECs have been issued, representing a shortage of 30,000 SRECs. In RY2012, 442,000 SRECs will need to be procured, an increase of 136,000 SRECs, or approximately 113 MW.  Given this increase the market is intended to only average 10 MW of solar development each month, though as the graph below shows, growth has averaged 20.1 MW per month since the beginning of 2011.

NJ blog post 8_10_11

New Jersey started the 2012 reporting year in June at 339.6 MW of installed capacity, approximately 28.7 MW less than the targeted average of 368.3 MW. As of the end of July, the NJ Board of Public Utilities announced the state surpassed 380 MW of installed capacity, adding more than 40 MW in June. Considering recent capacity added and additional growth through RY2012, the market will have enough supply online to create 442,000 SRECs in the 2012 reporting year.

On the legislative front, the New Jersey State Senate recently passed S2371, a bill intended to help stabilize the NJ SREC market. The bill has yet to move to the State Assembly and the Governor’s desk, but if passed, it would move the SREC compliance requirements forward one year, with RY2014 SREC requirements replacing those in place for RY2013.

MA DOER Seeks to Set Fixed SACP Schedule

Posted August 3rd, 2011 by SRECTrade.

On August 2, 2011, the Massachusetts Department of Energy Resources (DOER) proposed an amendment to the Solar Alternative Compliance Payment (SACP) schedule for the MA SREC program. Feedback from market participants including project developers, financing parties, and retail electricity suppliers indicated the current SACP structure creates uncertainty around future SREC valuation. Under the existing structure, the DOER has the ability to reduce the SACP on a yearly basis by up to 10% of the current value. The amended schedule seeks to provide more certainty for expected future prices while assisting project financing and negotiations for long-term SREC contracts.

The proposal establishes a 10-year schedule for the SACP that would maintain the current rate of $550/SREC through compliance year 2013, then decrease 5% each following year. The proposal also requires the schedule to be updated on a yearly basis to include a price for the 10th year of the schedule. For example, the 2022 price will be added to the schedule no later than January 31, 2012. The table below demonstrates the proposed schedule.

MA SACP Schedule 8_2_11

Prior to implementation, the proposed schedule is to go through a comment process. The comment period is currently open through August 15, 2011. Once all comments are collected, the DOER will review and begin the necessary process to amend the existing Solar Carve-Out provisions.