The SREC market in Washington D.C. has seen a change in trends due to changing market conditions associated with COVID-19. Our enclosed analysis provides an update on these market conditions and evaluates future market dynamics.
Compared to our last market update – posted on May 22, 2020, we project a greater oversupply in 2020 & 2021 and our new analysis shows 2022 now slightly oversupplied in high build rate scenarios. Despite this, we expect the market to flip to undersupplied in 2023, or sooner in low build rate scenarios.
This change in dynamic can be attributed to several factors including:
- COVID related decline in electricity sales resulting in lower SREC demand
- Higher build rates resulting in higher forecasted SREC production
- 1.65 Last Twelve Month Avg. (MW/mo) (May Analysis) vs.
- 2.49 Last Twelve Month Avg. (MW/mo) (Current Analysis)
In this time of uncertainty, there are several fundamental considerations that could impact the final supply and demand figures over the next coming months. Final 2020 DC SREC production, Q4 build rates, and actual grandfathered load will need to be analyzed to determine the degree of oversupply and more accurately project future market conditions.
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