Create account Log in

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: http://www.srectrade.com/massachusetts_srec.php

Share||Subscribe


Tags: , , ,
Posted in Massachusetts, SREC Markets |

Connecticut SREC Program On Hold After Governor Rell Veto

Posted June 7th, 2010 by SRECTrade.

Connecticut Governor M. Jodi Rell vetoed Senate Bill 493, which would pave the way for an SREC Program in the state.  Rell argued that the Bill, titled An Act Reducing Electricity Costs and Promoting Renewable Energy, will fail to accomplish both aspects of its stated intent. The Bill declared that “The Division of Research, Energy and Technology shall, in accordance with the comprehensive plan approved pursuant to section 16a-3a of the general statutes, as amended by this act, (1) increase the state’s energy independence and security by promoting conservation and efficiency and the use of diverse indigenous and regional electric resources; [and] (2) encourage the use of renewable energy resources and new electric technologies, particularly technologies that support economic development in the state and promote environmental sustainability.” While the Bill never directly mentioned SRECs among a wide variety of energy related topics, Rell’s veto will slow the process of the creation of an SREC market in Connecticut.

The Bill’s proponents claim that the legislation would reduce energy costs, spark growth in the state’s renewable energy industry, create jobs, and stabilize the state’s electricity market. Senator Rell argues that these claims are “eerily reminiscent” to those made on a bill in Connecticut a decade ago, which has since failed to reduce utility prices or help spawn renewable energy in the State. Rell claims that the bill “is not in the best interests of the ratepayers or taxpayers of our state.” Rell never directly mentioned any effect on an SREC market, instead attacking the fiscal irresponsibility of the Bill.

The effect of the veto is being felt heavily in the state’s solar power industry. When asked about the prospects of solar power in the state, Mike Silvestrini, president of Middletown-based Green Skies Renewable Energy replied, “There is absolutely zero opportunity in Connecticut without the energy bill. Eventually we will have to make a decision on whether we can remain in this state.” The legislation would have provided the solar industry with incentives to build large projects on commercial facilities, much bigger business than small residential jobs. The idea was to bring in enough business that Economies of scale could kick in and the business could become self-sustaining.

Although Rell has vetoed the Bill, it could still pass if Democrats are able to drum up enough of a majority to override the veto. If they are unsuccessful, any hopes for an SREC market in Connecticut will have to be put on hold until the next round of legislative sessions.

Meanwhile, SRECTrade is exploring ways to help solar owners in Connecticut generate and sell SRECs outside of the state until the government puts a local market together.

Share||Subscribe


Tags: , , ,
Posted in Connecticut |

New York bill to create NY SREC program

Posted June 4th, 2010 by SRECTrade.

The New York state legislature has proposed a renewable portfolio standard with a solar carve out. Bill No. A11004 in State Assembly and Bill No. S7093 in the State Senate (jointly know as New York Solar Industry Development and Jobs Act of 2010) would require electric suppliers to purchase SRECs for 0.05% of their electric sales 2012, increasing gradually to 2.50% in 2025.

New York has traditionally used solar rebates and utility level solar incentives and is now considering in light of their success in states like New Jersey and Pennsylvania.

The SREC requirement proposed for NY are similar to those enacted in NJ and MD although NY is a significantly bigger population and power consumer. This RPS would dramatically increase the demand for solar renewable energy credits and take some of the pressure of the markets like DC that are currently the only home for the SRECs produce by solar PV installations in New York State.

Share||Subscribe


Posted in New York, State RPS, Washington, DC |

PA considers strengthening solar requirements in RPS

Posted June 4th, 2010 by SRECTrade.

The Pennsylvania House of Representatives is set to consider strengthening the renewable portfolio standard next Tuesday. House bill 2405, known as the Clean Energy and Job bill would set the alternative compliance payment to $450, raise the ultimate solar carve out from 0.5% to 3.0% and exclude solar facilities outside of Pennsylvania from qualifying to sell into PA. These change are remarkable for a number reasons:

1. This follows states like NJ and MD who updated their renewable portfolio standards by increasing the SRECs required.

2. PA has a very unique alternative compliance payment which currently resets to twice the average trading price of SRECs in the previous year. This potentially unlimited ACP could potentially be the most forceful incentives to ensure PA utilities actually meet their RPS requirements rather than pay the fine (despite impressive solar development in NJ, NJ utilities dramatically under performed the RPS requirements and paid million in ACP fines last year).

3. It’s unclear whether or not out of state systems currently registered in PA will be grandfathered in and would certainly hinder solar development in states like VA and NC who would likely sell SRECs into PA.

Pennsylvania solar installers, solar trade groups (e.g. msiea.net) and environmental groups (e.g. PennFuture) have all come out in support of the legislation while developer and solar owners within the PJM region (PJM map) might be amongst the naysayers.

Share||Subscribe


Posted in North Carolina, Pennsylvania, State RPS, Virginia |

Deal reached in TransCanada lawsuit against Mass SREC Program

Posted June 1st, 2010 by SRECTrade.

Stakeholders in the Massachusetts solar industry can be relieved to know that a preliminary deal has been reached in TransCanada’s lawsuit against the Massachusetts SREC program.  The lawsuit asserted that the program was unconstitutional on the grounds that it violated interstate commerce laws.  It argued that the exclusion of out-of-state solar facilities from SREC eligibility discriminated against out-of-state electricity providers. In the deal reached with the Department of Energy, electricity supply contracts signed prior to the January 1, 2010 start of the SREC program will be grandfathered in and protected from the requirements.  In return, TransCanada has agreed to drop claims against the state’s solar program.

See full article at Boston.com

Share||Subscribe


Posted in Massachusetts |

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

Share||Subscribe


Tags: , ,
Posted in Maryland |

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: http://kerry.senate.gov/americanpoweract/pdf/APAbill.pdf

Share||Subscribe


Tags: , , , , , ,
Posted in Federal SRECs, State RPS |

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.

Subscribe to the SREC Blog by Email

Share|


Tags: , , , ,
Posted in Grants and Rebates, New Jersey |

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?

Residential:
 System must be SRCC-300 rated.  Here’s the link to the approved systems if you don’t already have it: http://securedb.fsec.ucf.edu/srcc/annual_search.  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

Commercial:
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.

Subscribe to the SREC Blog by Email

Share|


Tags: , ,
Posted in Solar Thermal, Washington, DC |

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 (http://www.dcpsc.org/pdf_files/commorders/dcmr15/Chapter29.pdf) 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.

Subscribe to the SREC Blog by Email

Share|


Tags: , , , , , , ,
Posted in Delaware, Illinois, Indiana, Kentucky, Michigan, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, Washington, DC, West Virginia, Wisconsin |

« Older Entries
Newer Entries »
Clients
Markets
About
Legal

© 2025 SRECTrade, Inc. All rights reserved.