Archive for the ‘Pennsylvania’ Category

Pennsylvania Alternative Energy Portfolio Standard (AEPS) Expansion Legislation Introduced

Posted April 5th, 2021 by SRECTrade.

On Friday, March 26th, Pennsylvania State Senators Art Haywood (D-Montgomery/Philadelphia) and Dan Laughlin (R-Erie) introduced legislation that would amend PA’s Alternative Energy Portfolio Standards (AEPS) Act of 2004 and increase the state’s Tier I requirement from 8% to 18% by 2026. In addition, the legislation would increase the state’s solar carve-out from 0.5% at present to 5.5%, with 3.75% of the carve-out being sourced from in-state utility-scale solar (projects larger than 5 MW) and 1.75% from in-state distributed solar (smaller, interconnected residential and commercial projects). Notably, the legislation would also establish a limit on the cost of alternative energy credits (AECs, PA’s renewable energy credits) and facilitate long-term contracting in an effort to help minimize ratepayer impacts. Lastly, the legislation would also initiate a study on renewable energy storage in the state. The proposed legislation is expected to help address the state’s current economic crisis due to COVID-19 by inspiring renewable energy investment and creating jobs.

This legislation was introduced just days after PA Governor Tom Wolf’s announcement on March 22nd that 50% of the Pennsylvania government’s electricity will come from solar energy by 2023. The governor’s initiative, named PULSE (Project to Utilize Light and Solar Energy), represents the largest state government solar energy commitment in the nation. PULSE includes seven new solar arrays totaling 191 MW that will be built around the state.

While a number of steps in the legislative process must still be completed before the AEPS expansion would be passed into law, its introduction represents a continued step forward in PA’s renewable energy transition. SRECTrade will continue to monitor the legislation’s development and provide updates.

Pennsylvania SREC Market Update: What Will the Market Look Like If SB600 Passes?

Posted February 5th, 2020 by SRECTrade.

In November of 2018, the Pennsylvania Department of Environmental Protection (“DEP”) released the Pennsylvania Solar Future Plan. The 152-page document outlines strategies to help the state meet a goal of 10 percent in-state solar electricity generation by 2030. As part of this plan, the DEP recommends that the state consider revising their Alternative Energy Portfolio Standard Program (“AEPS”) and increase the target to help bolster SREC prices and solar build rates. In response, on April 10, 2019, Senate Bill 600 was introduced in the Pennsylvania General Assembly. Most notably, the Bill:

  1. Expands AEPS Tier I requirement from 8% by 2021 to 30% by 2030
  2. Expands AEPS solar carve-out from 0.5% by 2021 to 10% by 2030, including 7.5% for grid-supply solar and 2.5% for distributed generation (DG) solar
  3. Introduces fixed alternative compliance payment (ACP) schedules and a 15-year SREC eligibility term for solar facilities (beginning on June 1, 2021)

While the future of this Bill is still uncertain, SRECTrade has prepared an analysis that illustrates the projected market dynamic if SB600 were to pass as well as baseline scenario cases assuming the current AEPS policy stays in place.

In reaction to these bullish signals from policymakers and the closure of PA borders to out-of-state systems, SREC prices have seen an appreciation in value over the past 12 to 18 months to values around $35-45. SRECTrade will continue to monitor progressions with this Bill and update our clients, partners, and stakeholders accordingly.


Pennsylvania Governor Tom Wolf Announces Support For AEPS Expansion

Posted May 3rd, 2019 by SRECTrade.

On Monday, April 29th, Pennsylvania Governor Tom Wolf declared his support for Senate Bill 600 (SB 600). In conjunction, Gov. Wolf released the fourth iteration of the state’s Climate Action Plan, providing recommendations for how the state can mitigate climate change, and also announced that Pennsylvania joined the U.S. Climate Alliance, a bipartisan coalition of 24 states committed to reducing greenhouse gas emissions.

Initially introduced in the Pennsylvania General Assembly on April 10th, SB 600 was referred to the Consumer Protection and Professional Licensure Committee on April 29th. The bill updates the state’s Alternative Energy Portfolio Standards (AEPS) for the first time since the AEPS was established in 2004, calling for four primary changes:

  1. Expand the AEPS Tier I requirement from 8% by 2021 to 30% by 2030
  2. Expand the AEPS solar carve-out from 0.5% by 2021 to 10% by 2030, including 7.5% for grid-supply solar and 2.5% for distributed generation (DG) solar
  3. Minimize rate increases for electricity customers by introducing fixed alternative compliance payment (ACP) schedules and a 15-year SREC eligibility term for solar facilities (beginning on June 1, 2021)
  4. Direct the PA Public Utilities Commission (PUC) to explore a program for renewable energy storage
Table 1.
Table 2.
Table 3.

SB 600’s introduction of solar carve-out compliance categories between “customer-generators” and “non-customer-generators” marks a first for the state. Tables 2 and 3 above display the proposed solar carve-out requirements and solar alternative compliance payment (SACP) schedules between the two respective categories. The bill defines customer-generators as solar facilities that were certified on or before May 31, 2021 and also appears to define them as “behind-the-meter” facilities. Conversely, it appears that non-customer-generators are defined as grid-supply facilities, although the exact definitions of both categories may be subject to change.

Pennsylvania DEP Releases Final “Solar Future Plan”

Posted November 16th, 2018 by SRECTrade.

On November 15th, the Pennsylvania Department of Environmental Protection (DEP) released its final “Pennsylvania’s Solar Future Plan” which outlines strategies to increase solar powered generation in the state from 1% to 10% of total electric generation by 2030. In order to achieve this goal, the state would have to procure over 10 GW of solar capacity bringing statewide installed capacity from 350 MW to 11 GW.

The plan weighs the costs and benefits of two pathways to achieve their goal: having grid-supply solar represent either 65% or 90% of the total solar capacity. With the focus on job growth, land development, and cost of installment, the plan recognizes the higher costs associated with small distributed generation resources, but also projects more job growth and less land utilization. In either scenario, the DEP projects that 60,000 to 100,000 jobs would be created as a result of the Plan, with the 65% pathway creating jobs at the high end of that range.

Notably, with respect to distributed generation resources, the plan proposes an increase in the Alternative Energy Portfolio Standard (AEPS) to between 4 and 8 percent by 2030, as well as a carbon pricing program, which would be used to fund renewable energy and energy efficiency initiatives.

SRECTrade will continue to monitor legislative activity in Pennsylvania as it relates to solar development and provide updates accordingly.

Pennsylvania SREC Market Update

Posted May 29th, 2018 by SRECTrade.

The Pennsylvania Solar Renewable Energy Credit (SREC) market has been through some changes since the fall of 2017. In October 2017, Governor Wolf signed Act 40 into law. On May 3, 2018, the PA Public Utilities Commission entered its final implementation order. The order clarified two main items:

  1. PA certified SRECs issued for October 2017 generation and prior would maintain their PA SREC certification regardless if the generator was sited in the state or out of the state
    • Out of state generators with RECs generated from November 2017 onward were reclassified as PA Tier I eligible. The PA program administrator and PJM GATS made these updates in the tracking registry in early May 2018.
  2. Some out of state generators would be eligible to temporarily maintain SREC eligibility if their SRECs were sold under a preexisting contract, executed before Act 40 became law. For the generator to maintain eligibility the contract would have to be signed directly with an Electric Distribution Company (EDC) or Electric Generation Supplier (EGS). The contracting EDC or EGS would need to file a petition for approval with PUC within 60 days of the May 3, 2018 final implementation order. If approved, the out of state generator would only be able to maintain PA SREC eligibility for the term and quantity of the contract.
    • On May 17, 2018, the PA PUC issued a follow on order that they will be taking into consideration comments filed by Community Energy to reconsider the requirements of who generators are contracted with in order to maintain PA SREC eligibility for out of state solar projects. Additionally, the PA PUC noted that it would stay the 60 day period for EDCs and EGSs to petition to qualify their contracts with out of state generators, pending further review and consideration of the comments filed by Community Energy. All PA PUC documents and comments can be found by searching Docket #2017-2631527 on the PA PUC site.

One of the most meaningful components of these changes in the PA SREC market has been the change in the price of PA SRECs. The spot market has increased more than 2.5x since this time last year (i.e. from ~$5/SREC in May 2017 to ~$13/SREC in May 2018). Pricing on a forward basis has also been positively impacted with more participants starting to show interest in transacting out the curve.

Fundamentally, the PA SREC market remains oversupplied. A very large bank of eligible SRECs from RY2016, 2017, and 2018 from sited and out of state projects (generation from October 2017 and prior) is the main driver of oversupply. Additionally, Pennsylvania’s solar carve-out is relatively small (0.50% by reporting year 2021) as compared to Maryland’s current 1.5% requirement in calendar year 2018 and New Jersey’s 3.2% requirement in reporting year 2018. For more specific details on potential supply scenarios click here for our latest PA SREC Market Update presentation.

Expected oversupply for reporting year 2018 is by nearly 2 million SRECs. While the analysis shows the oversupply becoming less meaningful moving forward, assuming relatively modest in-state build rates, the market could still expect varying degrees of oversupply (i.e. ~40-70% even in reporting year 2023). One potential factor that could change this oversupply dynamic dramatically would be market participants willingness to purchase PA certified out of state SRECs from the existing SREC bank (i.e. generation from October 2017 and prior). Since the PA PUC final implementation order has been clarified and PJM GATS and the PA AEPS administrator adjusted the SRECs in the tracking registry, demand for in-state SRECs has been much more prevalent than for out of state certified SRECs. The presentation enclosed herein includes a scenario demonstrating what supply would look like relative to demand if none of the out of state certified bank from October 2017 generation and prior were used in meeting current and future RPS obligations. It does not appear likely that this preference for in-state only demand would remain prevalent for a long period of time. It has been presented simply to show a scenario that would lead to one scenario of under-supply that would likely be recognized by the market and quickly corrected.

Lastly, due to the PA PUC staying the petition to qualify of out of state PA forward contracts for continued eligibility during the contract term, it is still unknown how these contracts will impact future supply. The enclosed analysis notes that this has not been taken into consideration in the scenarios presented herein, but please keep this in mind as you are reviewing this information.

As more updates become available we’ll provide more information. Should you have any questions about the enclosed analysis or need REC transaction and management services, please contact us.

PA PUC Enters Final Implementation Order of Act 40

Posted May 10th, 2018 by SRECTrade.

On Thursday, May 3rd, the Pennsylvania Public Utilities Commission (PUC) entered its Final Implementation Order of Act 40 of 2017, clarifying some questions that remained from its adoption of the Final Implementation Order. Notably, the entry confirmed that PA-certified but out-of-state facilities would not be grandfathered with solar renewable energy credit (SREC) eligibility (i.e. Tier I solar), since the PUC found that grandfathering these facilities would result in minimal improvement for state SREC prices and fail to effectuate the intentions of the PA General Assembly.

The entry also clarified that PA SRECs associated with energy generated after October 30, 2017 would be re-certified to non-solar RECs (i.e. Tier I non-solar). The PA REC Program Administrator and PJM GATS have already worked together to modify the Tier I certification numbers attributed to all out-of-state facilities and SRECs that no longer qualify for Tier I solar eligibility. This means that SRECs with a Month of Generation of November 2017 and later have now been re-certified as Tier I non-solar RECs.

Some facilities that were re-certified with Tier I non-solar eligibility will be permitted to temporarily maintain SREC certification if under an SREC contract with an electric distribution company (EDC) or electric generation supplier (EGS) serving PA customers. EDCs and EGSs seeking to qualify contracted RECs as Tier I solar-eligible under the Final Implementation Order’s ruling must file a petition within 60 days of the entry date of the Order (May 3rd). Please note that such facilities will only be permitted to maintain certification until the expiration of the SREC contract.

Moving forward, it appears that the PA REC Program Administrator will be responsible for working with PJM GATS to re-certify SREC-contracted facilities for Tier I non-solar REC generation once their contract term expires.

Additionally, the entry clarified that:

  • Solar facilities interconnected in PJM service territory are permitted to continue generating RECs eligible to be used toward Tier I non-solar requirements in the AEPS.
  • Out-of-state grid-supply solar facilities must be serving end-use electricity load in PA to continue to generate energy and SRECs eligible for compliance under the Tier I solar requirement. Specifically, solar facilities must meet one of the following criteria:
    • Physical connection to a PA EDC customer’s internal electrical system
    • Physical interconnection to an EDC’s distribution system
    • Physical connection to a PA electric cooperative’s or municipal electric system’s distribution network
    • Physical connection to any PA-located transmission system, including utility-scale solar facilities that are within a PA EDC’s service territory and operating under PJM wholesale generator rules
  • SRECs generated by out-of-state facilities prior to October 30, 2017 will maintain their Tier I solar certification

PA PUC Adopts Final Implementation Order of Act 40 – Impacts Out-of-State PA-Certified Solar Projects

Posted April 19th, 2018 by SRECTrade.

On Thursday, April 19th, the Pennsylvania Public Utilities Commission (PUC) adopted its Final Implementation Order of Act 40 of 2017. The Order amends the qualifications to certify Tier I solar photovoltaic facilities under Pennsylvania’s Alternative Energy Portfolio Standards (AEPS) Act. As summarized in our previous blog post, ambiguous language in Section 2804(2)(i) and Section 2804(2)(ii) of Act 40 made it unclear whether certified but out-of-state facilities would retain their certifications under the AEPS. The Order clarified the PUC’s interpretations of Section 2804(2)(i) and Section 2804(2)(ii) which are as follows:

  • Section 2804(2)(i) – “[a] certification originating within the geographical boundaries of this Commonwealth…” shall mean a facility located within PA having received an AEPS Tier I solar photovoltaic certification.
  • Section 2804(2)(ii) – shall only permit out-of-state facilities that are 1) already certified as AEPS Tier I Solar Photovoltaic and 2) entered into an SREC contract with a PA electric distribution company (EDC) or electric generation supplier (EGS) serving PA customers to maintain certification until the expiration of the contract.

Solar facilities that meet the two Section 2804(2)(ii) criteria listed above are limited to maintaining certification only for the applicable amount of Solar Renewable Energy Credits (SRECs) contractually committed to an EDC or EGS. EDCs and EGSs seeking to qualify SRECs under this interpretation must file a Petition with 60 days of the entry date of the Order.

In addition, the Order clarified that SRECs generated by certified but out-of-state facilities prior to October 30, 2017 will retain their Tier I solar qualification for their standard banking lifetime (current reporting year and following two). The Order did not clarify whether SRECs generated by such facilities after October 30, 2017 will also be able to retain their Tier I solar qualification.

At this time, it is unclear how implementation of these interpretations will be administered. SRECTrade will continue to monitor the proceedings and provide updates as they become available.

PA Passes Act Restricting Geographical Eligibility for PA SRECs

Posted October 30th, 2017 by SRECTrade.

On October 30th, Pennsylvania Governor Wolf signed into law Act No. 40 (see HB 118), a Comprehensive Opioid Package containing, among other items, language amending the state’s Alternative Energy Portfolio Standards (AEPS). Originating in February 2017, HB118 was revised several times before passage in the House and the Senate in late October.

Amendments to the AEPS require solar photovoltaic systems to satisfy one of the following in order to be eligible for participation in the AEPS solar carve-out (PA SREC) program:




HB118 includes the following grandfathering language to protect certain systems already certified under the AEPS, but it is unclear how the Pennsylvania Public Utilities Commission (PUC) will interpret the language for certified but out-of-state generators.




The revisions are effective as of the date of the Act (October 30, 2017). Accordingly, any new solar photovoltaic system seeking certification in the PA AEPS solar carve-out (SREC) program as of this date must meet the eligibility requirements above. The full text of the Act is available here.

SRECTrade will provide updates on the Act and on the PUC’s interpretation as soon as more information is made available.

SRECTrade at Solar Focus 2016: Maryland SREC Update and Pennsylvania RPS Overview

Posted November 21st, 2016 by SRECTrade.

Last week, members of the SRECTrade team attended MDV-SEIA’s Solar Focus Conference in Washington, D.C.  The conference’s focus was on “cracking the code for East Coast solar”, and the subject matter covered a wide variety of issues relevant to the solar industry across the Mid-Atlantic region.  In particular, the conference provided a forum for in-depth conversations around the future of critical, although challenged, state markets such as Pennsylvania and Maryland.

SRECTrade’s Director of Environmental Markets, Brett Waikart and our Director of Regulatory Affairs and General Counsel, Allyson Browne were invited to speak about the Maryland and Pennsylvania markets, respectively.  Brett’s presentation covered the fundamentals of the Maryland SREC market and laid out hypothetical future scenarios assuming various RPS carve-out schedules and build rates.  Allyson’s presentation focused on the composition of Pennsylvania’s electricity market and emphasized different aspects of the state’s Alternative Energy Portfolio Standard (AEPS) structure that could be adjusted in order to improve market conditions.  Their presentations are included below, along with a brief synopsis of the analysis provided.

Maryland SREC Update – November 2016

Little has changed in the overall degree of oversupply in the Maryland spot market since our last post in September. There have been no changes to official RPS policy, and supply continues to far outstrip the demand levels set by the RPS compliance schedule.  As can be seen in the snapshot below, as of November 15th there were approximately 156k CY14 and CY15 SRECs still available for sale and another 477k CY16 SRECs that had been generated in the current year.  Assuming that recent build rates continue through the end of 2016, we anticipate another 89k SRECs to be generated before the year is over.  When compared to the MD16 RPS obligation of  approximately 431k SRECs, these numbers indicate that we are oversupplied by a little more than 291k SRECs, or 68% of the current RPS demand requirement. MD16 snapshot

While this degree of oversupply is substantial, the monthly build rate numbers confirm that weaker project economics, caused by depressed SREC prices, have indeed slowed the installation of new capacity significantly.  The average amount of new capacity added over the last three months has slowed to just less than 10MW/month, as compared to just less than 30MW/month in the first quarter of 2016.  Also notable is that we have not seen the installation of a single asset greater than 1MW in capacity reports since June.  You can clearly see the trend lower in the graph below, which illustrates the quarterly sum of new capacity brought online over the last year.

Q4_15 to Q3_16

With the MD SREC market now fully reflecting the current degree of oversupply, and the effects now being felt by the asset development industry, stakeholders can agree that the time has come to find a solution.  The Maryland market has now fully outgrown the trajectory previously laid out for it through the current RPS schedule.  With that in mind, we now present a third scenario in our MD Capacity Presentation.  In addition to our typical supply and demand projections under the current RPS and the RPS proposed through HB1106, we now include an analysis illustrating the potential market conditions that would result from a more aggressive RPS schedule.  You will find our results in the slide deck provided below.

Our full capacity presentation can be found here.

Pennsylvania Policy Update

The concept of oversupply is even more familiar to Pennsylvania’s SREC market. Although the state’s AEPS targets exceed those of other PJM state RPS targets on an absolute basis, the state has been fundamentally oversupplied for years due to the design of its program.

In her presentation, Allyson takes a holistic look at Pennsylvania’s electricity market and generation mix and applies this foundation to the state’s AEPS design. The result is a structural oversupply that will require several supply- and demand-side adjustments before the market will be able to rebound and achieve supply-demand balance.

After providing this framework for the panel’s discussion, Allyson addresses Pennsylvania’s work towards compliance with the EPA’s Clean Power Plan (despite its now uncertain future) and identifies possible routes for reinvigorating Pennsylvania’s solar market.

Allyson’s full presentation can be viewed here.


As always, please feel free to reach out to your coverage on the SRECTrade brokerage desk to discuss any observations or comments you may have regarding our analysis or your view of the SREC markets.  We will continue to update our analysis and provide you with any new information we receive as it becomes relevant.


Disclaimer. This document, data, and/or any of its components (collectively, the “Materials”) are for informational purposes only. The Materials are not intended as investment, tax, legal, or financial advice, or as an offer or solicitation for the purpose or sale of any financial instrument. SRECTrade, Inc. does not warranty or guarantee the market data or other information included herein, as to its completeness, accuracy, or fitness for a particular purpose, express or implied, and such market data and information are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Any comments or statements made herein do not necessarily reflect those of SRECTrade, Inc. SRECTrade, Inc. may have issued, and may in the future issue, other communications, data, or reports that are inconsistent with, and reach different conclusions from, the information presented herein.

Copyright. This document is protected by copyright laws and contains material proprietary to SRECTrade, Inc. This document, data, and/or any of its components (collectively, the “Materials”) may not be reproduced, republished, distributed, transmitted, displayed, broadcasted or otherwise disseminated or exploited in any manner without the express prior written permission of SRECTrade, Inc. The receipt or possession of the Materials does not convey any rights to reproduce, disclose, or distribute its contents, or to manufacture, use, or sell anything that it may describe, in whole or in part. If consent to use the Materials is granted, reference and sourcing must be attributed to the Materials and to SRECTrade, Inc. If you have questions about the use or reproduction of the Materials, please contact SRECTrade, Inc.

Environmental Markets Association – PA, NJ, and MD SREC Presentation

Posted May 28th, 2015 by SRECTrade.

Last week, SRECTrade was invited to present at the Northeast Renewable Energy Credit Round Table hosted by the Environmental Markets Association (EMA).  The presentation provides a fundamental look into the PA, NJ and MD SREC markets.

The presentation covers the following topics on each state SREC program.

  • Current Installed Solar Capacity
  • Supply and Demand
  • Recent Pricing

Feel free to contact us with any questions.