Massachusetts DOER 400 MW Cap Stakeholder Meeting

Posted June 7th, 2013 by SRECTrade.

Today, the DOER hosted a meeting to address how the current SREC program will be finalized and the implementation of a the state’s next SREC program. The MA SREC market was thrown a curve ball last week when the DOER announced on May 29th that the current SREC program had reached its 400 MW capacity. Many industry participates expected the program to be closed to applicants sometime in 2014. In fact, the DOER planned to announce on June 7th, a process for applicants to ensure project eligibility under the current 400 MW SREC program.

The meeting today outlined the criteria for managing projects that are installed but not listed as eligible under the original application guidelines for the current program and those projects that have applied but are not yet installed.

In addition to today’s meeting, the DOER promulgated rule changes proposed in February of this year (see blog post here). The details of the implemented rules can be found on the DOER’s website here.

Clarifications on project eligibility for the current SREC program

The DOER plans to enact emergency rules for the current 400 MW Solar Carve-out program. The initial outline of those rules are listed below and additional details can be found here on the DOER’s website. A link to the presentation slides from today’s meeting can be found here. We will update updates on these rules as the DOER provides further official clarification.

The DOER is expanding the current program capacity limit to include project applications that meet certain criteria. To do this this they are splitting applications up into two categories based on facility size: 1) projects equal to or less than 100 kW and 2) projects greater than 100 kW.

Projects equal to or less than 100 kW

  • Applications for facilities equal to or less than 100 kW which have an authorization to interconnect approval and have submitted an SQA prior to the effective date of MA’s next solar carve-out program will be provided an SQA. We believe the effective date will be 1/1/2014 at the earliest, but look to the DOER to provide further clarification.

Projects greater than 100 kW

  • Projects that are listed after the 400 MW capacity cap demarcation on the pending SQA list will qualify if they they meet the following criteria: 
    • Fully executed Interconnection Service Agreement (ISA) application dated June 7, 2013 or earlier.
    • Receive an authorization to interconnect by 12/31/2013, or an extension to 6/30/2014 can be applied for if at least 50% of the project budget is spent by 12/31/2013.
    • Projects that can demonstrate interconnection applications have been delayed by the distribution utility can request further extensions. 

Clarifications on the next SREC program

The DOER indicated that the next phase of the Massachusetts SREC market will be a modification of the current program. The Commonwealth has an overall goal of 1,600 MW of installed solar capacity under the current SREC program and the future SREC program. The final size of the next SREC program will be determined by how many facilities meet the criteria for eligibility outlined above for the current program. For example if 500 MW of capacity is approved in the current program, then the next SREC program will allow for 1,100 MW of eligible capacity. The DOER emphasized that the next program’s design will take in to account a goal to minimize the impact of the program on rate rate payers and eventually bring the SREC market in line with the Massachusetts Class I REC market.

To do this the DOER plans to implement a series of key design features based on project location, size, and a new tool that the DOER calls the Adjusted SREC factor. Smaller projects will be granted SRECs that carry an inherently higher value than larger projects. Additionally, it was proposed that a greater SREC factor will be given to projects installed on brownfields and other specially designed zones. The DOER intends to adjust the SREC factor over time for projects as more capacity comes to market and the cost to install decreases.

The DOER also intends to moderate growth by capping the capacity for eligible project applications on a year to year basis using managed growth provisions to throttle supply.

The DOER mentioned that a separate, but similar Solar Credit Clearinghouse Auction will provide a price support mechanism. All projects will have a 10 year opt-in term. The price set under this mechanism was not mentioned. The DOER did indicate that it is waiting for the legislature to determine the outcome of H2915, a bill that if passed, would require the distribution utilities to support a minimum SREC price in years where there is an over-supply of SRECs.

Preliminary SACP prices were presented as well. The SACP is the penalty price that electricity suppliers in the MA market must pay if they do not meet their renewable energy compliance requirement with SRECs. The proposed schedule is listed below:

2014: $375
2015: $350
2016 (and beyond): $325

We look to the DOER to continue to clarify the application rules for the current SREC program as well as the general market design and implementation period for the next SREC program. We express some concern over the administrative complexities presented by the proposed SREC II program. It is important that the DOER and stakeholders understand that however the new program is structured, participants should focus on pursuing administrative efficiency in transacting SRECs and managing solar assets. SRECTrade will stay in close touch with the DOER and continue to provide updates on this blog.


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