Archive for April, 2013

Massachusetts Market Update Webinar

Posted April 24th, 2013 by SRECTrade.

MA SREC Webinar May 15 2013SRECTrade will host a webinar covering the Massachusetts SREC market on Wednesday, May 15, 2013 at 2 pm ET. The webinar will cover the rules and timeline for the DOER Solar Clearinghouse Auction.  Additionally, information provided by the DOER concerning applications eligible for the current 10 year opt-in term will also be reviewed. Lastly, as the program’s 400 MW cap is approached, the DOER will be implementing queuing and registration requirements. These intricacies will also be discussed. To register for the webinar please follow this link. The webinar recording will also be posted to SRECTrade’s blog.

New Jersey is a solar leader, but that’s not necessarily good for SREC pricing

Posted April 22nd, 2013 by SRECTrade.

Last month the New Jersey Office of Clean Energy (NJ OCE) and the Christie Administration released data showing that over 1 gigawatt of solar had been installed in New Jersey. As of this writing, those numbers have increased to approximately 1.03 gigawatts. In 2012 alone, New Jersey was only surpassed by California and Arizona for installed solar capacity. See GTM’s public 2012 report for details and for access to the most recent NJ OCE data visit here. Additionally, our monthly capacity report of solar generators registered in PJM GATS shows that 973.8 MW of NJ solar is registered, following the expected lag between installed capacity announced by New Jersey and GATS registrations.

At face value, more solar is a good thing, right? Yes, if all you care about is the amount of solar installed and you disregard much of the complexity of state’s various different electricity policies and the wide spectrum of impact across stakeholder groups. Luckily, SREC markets are straightforward when it comes to the relationship of installed capacity to SREC price. In simple terms, when New Jersey’s installed capacity outstrips the state’s goal for installed capacity we see an over-supplied SREC market and depressed SREC pricing. In even simpler terms this means that photovoltaic facility owners make less money overall per SREC than they would have if New Jersey wasn’t consistently exceeding its solar goals.

So how does this happen? Why is solar getting installed even though SREC prices are trading in the low $100s? One blaring factor is that the cost of installing solar has dramatically decreased. Installers are getting more efficient at building projects and pure equipment costs have plummeted. Referencing the GTM report again we see that pricing blended across all solar sectors (utility, commercial and residential) has decreased from over $5/W on average to around $3/W. That’s a 40% drop in overall cost over two years and this doesn’t even take in to account financing innovations like solar leases and easier access to renewable energy loans.

Some industry participants point to New Jersey SREC legislation (SB 1925) passed in 2012 as a saving grace for the New Jersey SREC market. The legislation increased New Jersey’s solar goals beginning in June 2013 (the start of energy year 2014) and was hailed as a bill to save the New Jersey solar market. The legislation forces a dramatic increase in SREC requirements from approximately 596,000 SRECs for EY2013 to approximately 1,633,394 SRECs for EY2014. Unfortunately this is still not enough to push the NJ market in to under-supply. Going off of numbers from our Q4 2012 SREC Market Monitor report, New Jersey would need to install approximately less than 10 MW/month to push the market into under supply by the 2015 energy year. In the first quarter of 2013, NJ installed over 70 MW of solar capacity, surpassing the less than 10 MW/month by an average of 2.5 times each month. Given this activity, it’s not irrational to calculate an over-supplied market moving into EY2015 and beyond. The build rate of solar capacity in NJ must slow down for NJ solar asset owners to experience an under supplied market.

For detailed data on the SREC markets, purchase the SREC Market Monitor report.

Massachusetts Post-400 MW Solar Program Proposal

Posted April 22nd, 2013 by SRECTrade.

Some projections show installed PV capacity eligible for the MA Solar Carve-Out Program, otherwise known as the MA SREC program, reaching 400 MW as early as 2014. Once the current SREC market reaches 400 MW no other projects will be eligible for participation in the current program. In preparation for the approach of the 400 MW cap, the DOER held a “Post-400 MW Solar Policy Stakeholder Meeting” in Boston on March 22, 2013, attended by SRECTrade’s own Alex Sheets.

The purpose of the meeting was to discuss the DOER’s post-400 MW program proposals, including the need for additional clarifications on an “Assurance of Qualification” queuing process for projects wishing to participate in the current iteration of the SREC program. After the meeting’s conclusion, the DOER requested additional formal comments and suggestions. The DOER has since issued guidance on Assurance of Qualification process as well as public comments on the size and shape of a solar incentive program after the 400 MW cap is reached for the current program.

Assurance of Qualification Guideline

In its April 12, 2013 email the DOER summarized the main points of its draft Assurance of Qualification (queuing process) proposal. The draft guideline can be viewed here and we reprint the DOER’s own draft bullet points here:

  • Establishes a list of criteria for determining what constitutes a “complete” application.
  • Creates an exception for small generation units (<30kW DC) that exempts them from meeting the same criteria that larger projects must meet in order to qualify.
  • Establishes a set-aside of the 400 MW DC program cap specifically for small generation units that is equal to 60 MW DC. This 60 MW set-aside includes just over 30 MW of small generation units that are already qualified and operational and helps ensure that the residential and small commercial sector will be protected from any market disruptions in the event the 400 MW program cap is reached before a new program is in place.
  • Establishes a reservation period of 9 months for projects that have obtained an Assurance or Statement of Qualification. Units must be interconnected within this reservation period or will lose their Assurance or Statement of Qualification. It also provides for extensions of this reservation period in certain situations.
  • Creates a list of permissible and prohibited changes that can be made to a project after it receives its Assurance or Statement of Qualification.

Post-400 MW Solar Policy Proposals

The DOER posted all written proposals for a post-400 MW program here. A wide spectrum of proposals were submitted. However, suggestions predictably ranged from the implementation of a feed-in-tariff program to the development of a parallel SREC program, similar to the current one. In general it appears that the majority of stakeholders support the continued implementation of an SREC-based policy.

SRECTrade will continue to closely monitor the development of both post-400 MW policy as well as the Assurance of Qualification process and will periodically update this blog with updates.



Massachusetts DOER Clearinghouse Auction Update

Posted April 19th, 2013 by SRECTrade.

The Massachusetts SREC market is unique among SREC markets in that it is underlain by a price support mechanism called the DOER Solar Credit Clearinghouse Auction. The DOER Solar Credit Clearinghouse Auction is held no later than July 31st in years in which SRECs are deposited into the DOER auction account. The rules of the MA SREC market require that unsold SRECs be placed in the DOER auction account by June 15, 2013. SRECs placed in the DOER’s auction are sold at a set price of $285/SREC, after DOER administrative fees.

The DOER Solar Credit Clearinghouse Auction does not require buyers to participate and purchase SRECs for any volume, but a variety of compliance incentives encourage participation. For this reason, market participants view the price support attributes of the DOER auction with caution. There is no guarantee that SRECs placed in the DOER auction will be sold.  After multiple rounds of the auction, if any unsold SRECs remain they are transferred back to the original owner. These unsold SRECs, now no longer eligible for future DOER auctions, are reissued with a new useful life in the following three compliance periods. For example, a 2012 SREC not sold in the July 2013 DOER auction will be reissued to the original owner with eligibility in 2013, 2014, and 2015. This reissued SREC must be transacted in one of these three compliance periods.

The MA SREC market is over-supplied for the first time in the short history of the MA solar program (the MA SREC market started in 2010). There are approximately 45,000 more MA2012 SRECs available than are required, all of which will likely be deposited in the DOER Solar Credit Clearinghouse Auction. All client’s utilizing SRECTrade’s EasyREC services will have any unsold MA2012 SRECs automatically transferred into the DOER auction account. Any sellers managing their own NEPOOL GIS account should know that their SRECs need to be manually transferred to the DOER auction account on or before June 15, 2013. For instructions on how to do so click here.

Massachussetts DOER Auction 40 Quarter Opt-In Deadline Now July 15th

Posted April 18th, 2013 by SRECTrade.

The Massachusetts Department of Energy Resources (DOER) sent out a general letter on April 12, 2013 clarifying the deadline for submitting an application to guarantee the 10 year/40 Quarter DOER Auction Opt-In Term. The new deadline is July 15, 2013. SRECTrade had originally communicated that the deadline was June 20, 2013 based on previously provided DOER information. SRECTrade will be be able to process EasyREC applications for the 10-year Opt-In Term if submitted by July 1, 2013. The earlier an application is submitted, the easier it will be to ensure that applications are processed in a timely fashion. We encourage early submission of applications.

Successful acceptance into the 10 year/40 Quarter DOER Auction Opt-In term begins upon the statement of qualification date. For example, if a project is accepted in Q3 2013, but not interconnected until Q1 2014, the project will forego 2 quarters (i.e. Q3 and Q4 2013) of DOER auction eligibility.

What is required to submit an application that qualifies for the 10 year Opt-In Term?

  • Completed EasyREC application (without letter of interconnection)
  • Must be submitted to SRECTrade before July 1, 2013
  • Proof of applicable state and local permits is required for projects greater than or equal to 1 MW

SRECTrade SREC Markets Report: March 2013

Posted April 10th, 2013 by SRECTrade.

SRECTrade SREC Markets Report: March 2013

The following post is a monthly update outlining the megawatts of solar capacity certified to create SRECs in the Solar REC markets that SRECTrade currently serves. All PJM data is based on the information available in PJM GATS as of the date noted. All MA data is based on the information provided by the DOER as of the date noted. This analysis does not include projects that are not yet registered and certified with the entities noted herein.

A more detailed analysis of supply, demand and price trends in the SREC markets can be found in the SREC Market Monitor, a joint-venture between SRECTrade and Greentech Media’s GTM Research.

A PDF copy of this table can be found here.


***NJ Capacity Update as of 3/31/13*** Through March 2013 NJ installed capacity reached approximately 1,026 MW of installed solar capacity; a 18 MW increase over the prior month. The number in the table above represents all capacity registered in GATS as of the date noted. The remaining capacity will be registered and receive SREC credit from the date of project interconnection.

Overview of PJM Eligible Systems

As of April 9, 2013 there were 33,116 solar PV and 679 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these, 225 (0.67%) have a nameplate capacity of 1 megawatt or greater. Twenty-four of these projects have a nameplate capacity of 5 MW or greater. New Jersey continues to host most of the larger scale facilities, claiming home to 62.5% of the projects, 15 of 24 facilities, that are equal to or greater than 5 MW. The three largest projects are a 29.1 MW FirstSolar project in MD, the 25.1 MW PSE&G utility pole mount project located in NJ, and the 16.1 MW Mount St. Mary’s project in MD.

Massachusetts DOER Qualified Projects

As of April 17, 2013, there were 5,532 MA DOER qualified solar projects; 5,485 operational and 47 not operational. Total qualified capacity is 239.1 MW, 207.2 MW of which is operational and 31.9 MW not operational. Electricity suppliers providing power to the state need to acquire approximately 73,400 SRECs in 2012. According to NEPOOL GIS, 119,247 MA2012 SRECs have been issued for the current compliance year.

How to Interpret This Table

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 with only that particular compliance period vintage. For example, New Jersey needed approximately 496.7 MW online for the entire 2013 reporting year to meet the RPS requirement with 2013 vintage SRECs only. SRECs still available from prior eligible periods can also impact the Solar RPS requirements. 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.

Note: SREC requirements for markets without fixed SREC targets have been forecast based on EIA Report “Retail Sales of Electricity by State by Provider” updated 10/1/12. Projected SRECs required utilizes the most recent EIA electricity data applying an average 1.5% growth rate per forecast year. The state’s RPS Solar requirement is then multiplied by forecast total electricity sales to arrive at projected SRECs required. Projected capacity required is based on a factor of 1,200 MWh in PJM states and 1,130 MWh in MA, generated per MW of installed capacity per year.