Solar Alternative Compliance Payment (SACP)

Posted July 22nd, 2009 by SRECTrade.

The Solar Alternative Compliance Payment (SACP) is the amount that Load Serving Entities (LSEs), i.e. electricity suppliers, must pay per MWh of solar electricity that they are unable to generate themselves or buy rights to through SREC purchases in order to meet the state Renewable Portfolio Standard (RPS) solar requirement. Find out more about future RPS and SACP values from your state page on our SREC Program Information page.

An LSE is better off buying SRECs as long as the price is less than the SACP.  However, LSEs incur costs in purchasing SRECs, so the maximum price they are willing to pay may actually be well below the SACP. For instance, if a utility calculates that the cost to purchase an SREC is $40, they may not be willing to pay more than $40 less than the SACP. At that price, they can save money by simply paying the SACP.

Of course, while the SACP is fixed in any given year, the price of SRECs varies based on the market forces of supply and demand.  Find out more about this on our SREC Program Information page.

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