Archive for the ‘Pennsylvania’ Category

Solar Capacity in the SREC States in 2010

Posted July 28th, 2010 by SRECTrade.

SRECTrade’s State of the SREC Markets in 2010
The New Jersey, Pennsylvania and Delaware Energy Years came to a close on May 31, 2010.  The following is a report of the solar capacity in megawatts (MW) certified and registered to create SRECs in all states at that time.

Solar generators by state located: This table is based solely on the location of the facility and does not include multiple state listings. All facilities must have been registered by May 31st, 2010.

As you can see New Jersey has by far the largest amount of solar installed and eligible for SRECs with 146 MW. Pennsylvania is a distant second at 17 MW.  Meanwhile, Ohio and Illinois are third and fourth respectively, however of the 16 MW in Ohio, 12 come from one facility and of the 10.1 MW in Illinois, 10 come from one facility. Delaware and Maryland both have sizable markets at around 6 MW each. Volumes in other state are much smaller since there is no local SREC market.

Solar generators by size: Projects certified for SREC markets range in size from as small as 0.5 kW to as large as 12 MW, however, only 20 out of the 7,700 projects are over 1 MW.  Of those 20 projects all are well below 5 MW, with the exception of a 10 MW facility in Illinois and 12 MW facility in Ohio. The lack of multi-MW facilities in the SREC markets is a function of both the complexity involved and constraints on demand. The only state SREC market today with any legitimate appetite for multi-MW facilities is New Jersey.

Solar generators by state eligibility: Because some states accept out-of-state SRECs, the in-state supply listed above differs from the total supply available to buyers in that state.  For instance, Ohio’s market also includes facilities located in PA, WV, KY, IN, and MI.  The table below lists the total solar capacity in megawatts eligible for each SREC market, along with the percent of the market that is sourced in-state.  Note: many facilities will be counted multiple times in this table since they are eligible in several states. For example, the 10 MW facility in Illinois is eligible in both DC and PA.

In Ohio 89.6% of the market is in-state SRECs. Some of our customers have asked why in-state Ohio SRECs do not sell at a premium because of the 50% in-state requirement. The reason is that, as you can see, buyers are not having difficulty meeting the 50% requirement with the large supply of in-state SRECs. In the future as the requirements increase, in-state SRECs could be harder to come by and may indeed sell for more than out-of-state SRECs.

Interpreting the data: One important thing to notice is that the 2010 Capacity Requirement column details the capacity required to be sustained throughout the entire energy year. The Volume column shows the capacity registered through May 2010. For example, New Jersey needed approximately 160 MW of capacity running on average from June 2009 through May 2010 in order to meet the 2010 SREC requirement. The state is actually farther away from the 160 MW capacity mark than the 145.69 MW volume would suggest.  Capacity in New Jersey grew approximately 65 MW over the course of the year and so there were probably only enough SRECs created to meet approximately 110-115 MW of the 160 MW requirement. That requirement increases in the 2011 Energy Year to approximately 260 MW. For more information on the growth of the New Jersey market and any other state market, please visit our page devoted to State SREC Markets.

Assumptions used in calculations: Solar capacity required is based on 2007 Department of Energy electricity sales figures, assuming a 1.5% growth rate. The resulting solar megawatt-hours required (i.e. SRECs) are converted to megawatt capacity requirement at a rate of 1200 MWhs per MW.

PA Bill Could Alter Regional SREC Market

Posted July 9th, 2010 by SRECTrade.

House Bill number 2405, currently waiting for review in the PA house of representatives, contains many changes that would significantly alter the PA SREC market. The Bill has yet to be subjected to a vote, largely because its supporters understand that the bill is a solid 10-15 votes shy of the 102 votes it would need to pass the 203 person house of representatives in Pennsylvania. The House is currently not in session, so the Bill remains stagnant for now, and is most likely not to be voted on before the legislative period ends in November.

Notable changes in the Bill include a six-fold increase in the solar requirement for utilities. The requirement is currently slated to reach .5% by the 2024-2025 energy year, but would be 3% in this same year if Bill 2405 were passed. The Bill would also set an SACP of $450 per credit starting in 2011, decreasing by 3% each year. The SACP as currently stated in PA is double the average price of SRECs in the state for each year ($550 for 2010). The bill would also close the Pennsylvania SREC market, limiting buyers to SRECs exclusively from in-state solar facilities. Each of these changes is geared toward promoting the growth of the solar industry in Pennsylvania, keeping the job creation and other economic benefits local.

Changes from this bill, if it is passed, would be scheduled to be put in place on December 31, 2010. Regarding systems from out of state that have already been approved for the Pennsylvania AEPS program, unfortunately, if this legislation passes, buyers will be unable to purchase SRECs from out-of-state, even if they have previously been accepted into the Pennsylvania AEPS program.  The pending legislation states the change shall apply to “all contracts and short-term purchases made after December 31, 2010.”

This Bill is still a long way from being passed. In order to become law, the Bill would need to gain the extra 10-15 votes it needs in the PA House of Representatives, presumably through key revisions, and then pass the state Senate as well. Because the representatives are currently on summer recess, these changes do not appear to be imminent, but could be on the horizon.

Here is a table detailing the changes made by PA HB 2405, and comparing them to the market under current legislation:

For more information, click here to see the entire Pennsylvania House Bill No. 2405


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.


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.

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PJM Region

Posted March 28th, 2010 by SRECTrade.

The PJM Interconnection is a regional transmission organization.  It serves to connect the electricity produced by the various utilities across a region.  In several states, the Renewable Portfolio Standard legislation lets utilities count renewable electricity produced within the PJM region towards meeting the state’s renewable goals.

In Pennsylvania, for example, a resident within the PJM region can apply for certification in the Pennsylvania SREC program.  If your system is convered in this map, you can sell SRECs to PA!

Washington, DC is similar to Pennsylvania in that both allow SRECs from anywhere within the PJM region, however DC will also qualify facilities that are eligible to deliver their electricity into the region. This may include facilities in states that are adjacent to the PJM region such as New York or Wisconsin.

Ohio is another state that allows SRECs from out of state. In that specific case, the utilities are limited to buying 50% from out of state and only from states within the region that are contiguous: Pennsylvania, West Virginia, Kentucky, Michigan and Indiana.

Washington, DC is similar to Pennsylvania in that both allow SRECs from anywhere within the PJM region, however DC will also qualify facilities that are eligible to deliver their electricity into the region.

For these reasons, it is important to know what constitutes the PJM region to determine whether or not you qualify.  Here is a map of the region, along with the retail electricity companies who are served by PJM.

pjm-region


Pennsylvania SREC Market in 2010

Posted February 19th, 2010 by SRECTrade.

Despite a robust RPS and the threat of non-compliance fines above $550, the Pennsylvania SREC market has been slow to develop. We take a quick look at some of the factors that influence this market and hopefully provide some insight as to why the Pennsylvania SREC demand has been low.

Demand Issues: For starters, the PA RPS is expected to ramp up as described on our Pennsylvania Page. Based on current electricity sales into Pennsylvania, we project the demand for SRECs to be as follows:

According to this projection, approximately 20,000 SRECs need to be purchased in Pennsylvania for generation through May 31, 2010. However, the reality is a bit more complex. Electricity markets are composed of three types of companies: electricity generators who supply the power, electricity transmitters responsible for transmission and electricity distributors responsible for the delivery of the retail electricity. It is important to know that although the distribution companies (EDCs) or retail utilities are most commonly associated with state RPS goals, it is actually the numerous electricity suppliers who are responsible for purchasing the SRECs to meet the RPS. The Pennsylvania electricity market is comprised of 11 Electricity Distribution Companies (EDCs).  Behind each EDC are the many suppliers providing power to them.  When the PA RPS was passed, the suppliers for several EDCs were exempted for the first few years. According to the DSIRE website, these EDCs were exempted because they were under rate freezes or still recovering from costs associated with restructuring. In all, 5 of the 11 EDCs are exempt. The exemption ended this January of 2010 for one of the EDCs and the exemption for the other 4 will expire in January of 2011.  More significantly, these EDCs represent over 85% of the total electricity market exempt through January of 2010 and 70% exempt through January of 2011!  With that said, this changes the outlook for SREC demand in Pennsylvania substantially in 2010 and 2011:

As a result, the actual demand for PA SRECs in the 2009-10 Energy Year drops from nearly 20,000 SRECs to under 5,000 SRECs – 25% of what was initially projected. In 2010-11, the demand drops from an initial projection of 33,000 SRECs down to 21,000 SRECs – about 60% of initial projections!

Procurement Issues: In addition to a decreased demand in the early years of the PA market, the state also has some constraints in place that have created challenges for buyers and sellers to connect in this market. For the first time in history, home and business owners are entering electricity markets as generators. These markets are geared towards large corporations that produce significant amounts of power, and as a result, the approach many companies have taken to procuring SRECs is geared towards large companies (as an aside, this is why GATS is such a cumbersome platform for solar owners). In addition, since most of these companies are heavily regulated, protections are put in place to ensure a competitive process. Unfortunately, these protections are also geared towards large companies.  The end result is that the Pennsylvania Public Utilities Commission (PUC) requires buyers to use a competitive RFP process.

Well, the problem is that most solar owners don’t even know what an RFP is, let alone have the requirements in place to be eligible. This explains why most RFPs for SRECs are severely under-prescribed and why in late 2009, PPL successfully petitioned the PUC to lessen the credit requirements necessary to bid in their RFP. Instead of being required to have a credit rating and listing with an accredited credit agency, you now only needed to put up a letter of credit to bid on the opportunity to sell SRECs in minimum bundles of 500!

Fortunately, it seems that the PUC continues to re-evaluate this process and the constraints they have placed on the suppliers.  Most recently, they have proposed a change to their policy to allow suppliers to enter into a restricted volume of bi-lateral contracts that are also restricted in value by the average value of SRECs procured in the adjacent RFPs. You can read the proposal and we encourage you to submit your comments. While this is a step forward, we still believe that this will likely incentivize the same companies bidding on RFPs to just enter into the bi-lateral contracts, squeezing out the rest of the market.  We setup our auction to ensure a competitive process that is accessible to all market participants and hope that future iterations of PUC policy changes will better address the entire SREC market and allow more compliance buyers to enter into auctions like SRECTrade without having to jump through legal hoops in order to do so.

Conclusion: The Pennsylvania SREC market has an extremely promising future and all signs are pointing in the right direction. We believe that this is an iterative process. Looking back at the lead taken by New Jersey, their SREC program has been amended several times and it is now inspiring a prolific SREC market. Pennsylvania will continue to tweak its program until the market truly is more efficient and effective in promoting solar. Until then, we at SRECTrade are doing everything we can to bring buyers to the market, as well as set up other means for selling SRECs for our clients. The great news is that most facilities eligible in Pennsylvania are also likely to be eligible in DC and Ohio where in the short-term, SREC prices will be better. If you have any questions, as always, feel free to contact us.

New to Solar?

Posted February 15th, 2010 by SRECTrade.

We realize that many visitors of our site are learning about solar for the first time, so we thought we would put up this post by way of an introduction and some guidance on how to navigate our site. A growing number of states are implementing SREC programs. If you are new to solar, here is what you need to know:

1. Understand SRECs: For a deeper understanding of what SRECs are and how the programs work, visit our SREC Program page.

2. Find out where you are eligible to sell your SRECs: Your state may or may not have a program, however your ability to sell your SRECs into other states could have a significant impact on the value of your SRECs. You may be eligible to get your system certified in many state programs, regardless of if your state has one or not. Everyone should check our Cross-Listing post to see the states in which they may be eligible for certification.

3. Get your system installed: SRECTrade works with several installation companies. In addition, you should be able to sign up for the EasyREC service through your installer. If they do not offer the service, then feel free to contact us directly.

4. Enroll with SRECTrade: SRECTrade provides two options. If you sign up for the EasyREC service, we handle everything else including submitting your state certification applications, creating your SREC tracking account and automating the sale of your SRECs in our auction.

If you do not sign up for EasyREC, here are the additional steps:

4a. Get your system certified by your state: Once the system is installed, it is now ready to be certified by your state and any other states in which you are eligible. You can find out more on where you are eligible and how to apply on the Cross-Listing page. Every state handles this process differently, but we recommend beginning the application as soon as possible, before your installation is complete.

4b. Set up your SREC tracking account: Every state or region will use a different system for creating and tracking the SRECs. The Mid-Atlantic states use GATS, North Carolina uses NC-RETS, Massachusetts uses NE-GIS. If you opt to manage your own SRECs, you will need to have a tracking account with one of these registries. Once you have SRECs in that account, you can then post them in our auction.

4c. Create an account online with SRECTrade: This is the simplest step of all. Complete the online form to create your account and when your SRECs are available in your tracking account, log into your SRECTrade account, select the “Orders” link and place an offer to sell your SRECs.

5. Understand the timing: After you initially sign up, it will take a few months before you begin receiving payments. For example, if your system goes online on January 1st, your January generation will be recorded on February 1st. Your first SREC(s) will be actually credited to your account on March 1st. They would then be sold in the March auction, so your first payment would come in late March. After that, payments will come as SRECs are generated. Also note: some systems operate on a quarterly basis, rather than monthly.

As these processes are refined, we will continue to update this post. Please feel free to contact us any time at 877-466-4606 if you have any questions.

2009 PA SREC pricing data

Posted January 14th, 2010 by SRECTrade.

As we have mentioned previously, the Pennsylvania market is slightly different than other SREC markets because the SACP is not published until December after the energy year trading has concluded.  The PA PUC recently published the prices paid by SRECs purchased for compliance in PA. Note: this only reflects prices paid by the electricity suppliers, i.e. the end buyers.  As you can see the SACP for 2009 was $550.15 in PA.  Up slightly from $528.34 the previous year.

2008/2009 Alternative Energy Credit Pricing

AEC Type Weighted Average Price Price Range ACP
Solar PV $260.19 $225 – $690 $550.15

Our comments:  Although the price range was $225 – $690, the majority of PA SRECs must have traded in the mid-$200 range due to the fact that the weighted average price was only $260.  With the way this market is structured, buyers will try to purchase at the average price level throughout the year so as not to drive the average price up.  This is reflective of the market price.  However, at year end, if a buyer is in danger of not procuring enough SRECs to comply, the buyer will be willing to pay anything below their best calculation of the SACP for that year.  Based on the results above, it appears that most buyers paid around $260 for SRECs in PA in 2009, however, there was at least one buyer, who in an effort to avoid the SACP, paid a price of $690! We wonder if that was based on the buyer’s own calculation that the SACP would be at or above $700, or if it was the case that an SREC bought in the NJ market was used for PA compliance.

The good news for PA solar generators is that the average trading price is increasing.  We expect this trend to continue as the solar requirement increases each your for Pennsylvania electricity suppliers.

Cross Listing Your SRECs

Posted January 3rd, 2010 by SRECTrade.

2011 Update: State certification information can be found here

One of the benefits of the SRECTrade multi-state auction platform is the ability to cross-list in multiple states in which you have registered your SRECs. If an SREC is cross-listed, it will be included in any state in which it has been registered to be sold.  SRECs will be sold in the state auction that offers the most value. In order to qualify to sell your SRECs in a state that accepts out-of-state SRECs, you need to get your system certified in that state. The following section has information on what states accept out-of-state SRECs and how to get your systems registered and obtain a state certification number. For EasyREC customers, SRECTrade can help you register in the states available to you.

SREC Markets by State

SREC State Registration Information:

Delaware

To get a Delaware state certification number, your installation must be located in DE. You must apply to become an Eligible Energy Resource. The link for the application is here.  For more information, go to the Delaware Public Service Commission.

Contact:
Delaware Public Service Commission
861 Silver Lake Boulevard
Cannon Building, Suite 100
Dover, DE 19904
Main: (302) 736-7500
Toll-Free: (800) 282-8574
Fax: (302) 739-4849

District of Columbia

Eligible to states within and adjacent to the PJM Region. For information on the DC registration process, see DC State Certification Instructions.

Contact:
Dorothy Wideman
Commission Secretary
Public Service Commission of the District of Columbia
1333 H Street, N.W
2nd Floor West Tower
Washington, D.C. 20005

Maryland

To register in Maryland, your solar installation must be in MD and you must complete and file an application for certification as a Solar Renewable Energy Facility (REF) with the Public Service Commission. The link to the application is here.  For more complete details on the process, see Maryland SREC Registration Details.

New Jersey

New Jersey is a closed market, therefore only SRECs produced in New Jersey are eligible. New Jersey residents can apply for state certification at the New Jersey Office of Clean Energy’s website.

Contact:
New Jersey’s Clean Energy Program
c/o Conservation Services Group
75 Lincoln Highway, Suite 100
Iselin, New Jersey 08830
Phone: 866-NJSMART (866-657-6278)

North Carolina

North Carolina is still in the early stages of implementing an SREC program. The state is still accepting applications for a REC tracking system through December 15, 2009.  More information can be found on the North Carolina Utilities Commission website. A sample application can be found here.

Contact:
Chief Clerk
North Carolina Utilities Commission
4325 Mail Services Center
Raleigh, NC 27699-4325

Ohio

Utilities in Ohio are allowed to procure 50% of the SRECs from out of state facilities. However, these states must be contiguous with Ohio (PA, MI, IN, KY, WV). Instructions and forms required for Ohio certification can be found here: Application for Certification as an Ohio Renewable Energy Resource Generating Facility

Contact:
Public Utilities Commission of Ohio
Email: AEPS@puc.state.oh.us
Toll-Free: (800) 686-PUCO (7826)
Phone: (614) 466-3292 (in Columbus area)
Fax: (614) 752-8351
180 East Broad Street
Columbus, Ohio 43215
Directions to the PUCO

Pennsylvania

Utilities in Pennsylvania are allowed to buy out of state SRECs from solar generators in the PJM region to meet the Renewable Portfolio Standard. If you are interested in selling in PA, you need to get your solar system registered.  For a detailed explanation of the process with screenshots see our most recent post on Pennsylvania State Certification Registration Process.

Contact Info:
Dina M. Deana
Pennsylvania AEPS Program Manager
Clean Power Markets, Inc.
Phone: 1-877-AEPS-773 (1-877-237-7773)
Fax: (610) 444-9213
Email: paaeps@cleanpowermarkets.com



Qualifying for the Ohio SREC market

Posted December 16th, 2009 by SRECTrade.

This is the first year that the Ohio RPS has come into effect and we expect Ohio to be one of the best market for SRECs over the next few years.  With an established SACP starting at $450 this year, a large electricity market, and a growing solar requirement, we expect Ohio to surpass Pennsylvania and many of the other SREC states in volume.  For that reason, we recommend registering in Ohio if you are from Ohio and any of its neighboring states: Pennsylvania, West Virginia, Kentucky, Indiana and Michigan.  For Pennsylvania residents, the early months of the Pennsylvania auctions brought a price of $290-$300, but your PA SRECs could be worth up to 30% more in the Ohio market.  To find out more about the Ohio SREC program follow this link.

Registering in Ohio

Utilities in Ohio are allowed to procure 50% of the SRECs from out of state facilities. However, these states must be contiguous with Ohio (PA, MI, IN, KY, WV). Instructions and forms required for Ohio certification can be found here: Application for Certification as an Ohio Renewable Energy Resource Generating Facility

Contact:
Public Utilities Commission of Ohio
Email: AEPS@puc.state.oh.us
Toll-Free: (800) 686-PUCO (7826)
Phone: (614) 466-3292 (in Columbus area)
Fax: (614) 752-8351
180 East Broad Street
Columbus, Ohio 43215
Directions to the PUCO