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Massachusetts DOER Raises Solar Requirement for 2011

Posted June 17th, 2010 by SRECTrade.

The Massachusetts DOER made its final changes pertaining to the implementation of the solar carve-out program in the state’s RPS class I revised regulation. Most noteworthy of the changes, the DOER increased the solar requirement for the 2011 energy year to 69MW, or a total of 78,577 MWh. The increase in the solar requirement is a welcome development for SREC markets in Massachusetts, coming on the heels of the TransCanada legislation, which reduced the solar requirement for Massachusetts (more information on the TransCanada legislation here). This is a good indication that the state has levers it can pull to ensure the state supports a thriving SREC market, providing the market with some stability.

This should serve to counterbalance the change prompted by the TransCanada settlement that exempts certain buyers from the solar carve-out.

To see the all the changes made to the legislation see the RPS Class I Revised Regulation with Tracked Changes.

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Impact of TransCanada Settlement on Mass SREC Market

Posted June 9th, 2010 by SRECTrade.

Statement from the Massachusetts DOER

While DOER realizes as a practical matter that providing a reduced ACP Rate for pre-existing contracts will result in a reduction in the demand for SRECs in the early years of the program, that exact percentage is unknown at this time.  The demand will be a direct reflection on that percentage of load that was contracted for prior to January 1, 2010 which is data that DOER does not generally collect.  DOER did discuss this issue with a handful of competitive retail suppliers, and under a confidentiality agreement, obtained contract information from 8 suppliers serving about 1500 GWh in 2009.  DOER provides the following information with no warranty of its accuracy beyond the above stated parameters.

Approximately 50% of the retail load in Massachusetts is served by competitive suppliers, and of that portion, DOER estimates that about 70-90% of that load will be served in 2010 under a pre-2010 contract.  This percentage decreases dramatically in the following years as contracts expire or are renewed, such that in 2011 only 40% of the competitive supply load will be served by pre-2010 contracts.  This trend continues with 20% in 2012, 10% in 2013, and under 5% in 2014.

It is important to remember that combined with the growth in the Minimum Standard each year, the overall percent of applicable load relative to the Standard diminishes even more substantially.

While DOER hopes this very limited analysis provides some information to the solar development community but will not assure its accuracy beyond the given parameters or be responsible for any further conclusions drawn by any market participant.  DOER will receive additional information on load under contracts by retail suppliers as part of the 2009 Annual Compliance Filing and will report that information, in the aggregate, as soon as it is available.

SRECTrade Comment

Essentially what this is saying is that the settlement exempts suppliers under previous supply contracts from the SREC requirement.  This will impact 35-45% of the demand in the Massachusetts SREC market.  This means that if the requirement in 2010 was 30 MW of solar to meet the RPS, with these exemptions, the actual requirement will be 17-20 MW of solar.  In the following 3 years the impact is reduced to 20% of the total demand, 10% and 5%, respectively.  Fortunately, DOER has several levers it can pull to ensure that pricing of SRECs stays within the $300-$600 range. For example, if there is a surplus in 2010, the requirement for 2011 will likely be increased to adjust for the surplus. This should mitigate the impact of this settlement. Finally, even with the reduced demand, the state needs to get to an average solar capacity of 17-20MW in 2010.  This is no small task.

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Massachusetts SRECs 101

Posted June 8th, 2010 by SRECTrade.

What is an SREC? Solar Renewable Energy Certificates (SRECs) are created for every megawatt hour of electricity produced by solar generators. A 10 kW system produces about 12 SRECs a year. SRECS are sold separately from electricity, and the solar power generated does not need to be used for the SREC to be created.

Who buys SRECs? Electricity suppliers must buy SRECs to meet the Massachusetts RPS requirement. Threatened by a Solar Alternative Compliance Payment (SACP) of $600 per megawatt hour if they do not comply, these companies will pay up to this price for SRECs.

How do I sell SRECs? Since individual solar owners do not produce enough SRECs to sell direct to buyers, an intermediary mechanism must exist. SRECTrade created the SREC auctions to connect sellers directly to the buyers in the market in a simple, efficient and effective way. The closing price of each auction represents the fair market price based on supply and demand.

Massachusetts SREC Pricing: State has set up a controlled market for SRECs that creates a price range of $300-$600 per SREC. There are several levers available to the state to ensure that pricing stays within this range.  First, the electricity suppliers who fall short of their SREC requirements must pay a fine of $600 per SREC. This sets a ceiling price of $600. In years where there is an SREC shortage, pricing will be close to $600. If there is an oversupply of SRECs, then market prices will be at or near $300. The state ensures this floor price by having a last chance fixed-price auction at the end of the year. Buyers can bid to purchase the SRECs that are available at $300 per SREC. If there are still unsold SRECs remaining after this auction, the state will adjust the capacity requirements for the following year to compensate for this surplus and allow increase the life of the unsold SRECs from 2-years to 3-years. This will ensure a stable SREC price and give solar owners an assurance that prices will be above $300.

Massachusetts Solar Requirement: The state has set the requirement for the SREC program at 30 megawatts of solar in 2010. That is the equivalent of approximately 36,000 SRECs that need to be produced and purchased by suppliers in 2010.

Massachusetts SREC Program Logistics

  1. SRECTrade will submit PV project application to the DOER. Once this application is approved, their solar facility will be added to the NEPOOL GIS tracking platform, where SRECs will be created and transacted.
  2. Solar electricity generation is reported to the Production Tracking System (PTS).
  3. SRECs are generated quarterly in NE-GIS and are then posted in the SREC auctions.
  4. The state has committed to the program for 10 years. Each SREC is valid for 2 years, so an SREC created in 2010 can also be sold in 2011.

SRECTrade Aggregation Logistics

  1. Fill out the forms to enroll in EasyREC
  2. SRECTrade will submit your application to the DOER for approval and set up your SREC account – this takes a few weeks
  3. Once set up, SRECTrade will collect your readings at the beginning of each month using an online form or internet-enabled inverter
  4. SRECs are generated quarterly by NE-GIS
  5. SRECTrade hosts monthly auctions on the first Friday of each month. You will be notified of the result after each auction. Possible results include:
    1. Successful: X SRECs sold at Y Price
    2. Unsuccessful: Y Price was below minimum, X SRECs not sold
    3. No SRECs: None were available in this auction
  6. If successful, payments will be delivered by the end of the month via direct deposit or mailed check. If unsuccessful SRECs are carried forward to next auction

EasyREC customers own their SRECs until sold in auction or contracted in the Forwards Exchange.

For More Information: http://www.srectrade.com/massachusetts_srec.php

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Deal reached in TransCanada lawsuit against Mass SREC Program

Posted June 1st, 2010 by SRECTrade.

Stakeholders in the Massachusetts solar industry can be relieved to know that a preliminary deal has been reached in TransCanada’s lawsuit against the Massachusetts SREC program.  The lawsuit asserted that the program was unconstitutional on the grounds that it violated interstate commerce laws.  It argued that the exclusion of out-of-state solar facilities from SREC eligibility discriminated against out-of-state electricity providers. In the deal reached with the Department of Energy, electricity supply contracts signed prior to the January 1, 2010 start of the SREC program will be grandfathered in and protected from the requirements.  In return, TransCanada has agreed to drop claims against the state’s solar program.

See full article at Boston.com

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Massachusetts SREC Registration Details

Posted February 18th, 2010 by SRECTrade.

Massachusetts DOER is recommending that solar owners utilize aggregators for managing their SRECs.  This is a smart move because it allows them to work with a small number of firms that specialize in managing SRECs rather than build the customer service capability necessary to handle all the questions that would arise if every individual solar owner in Massachusetts were to register themselves.  SRECTrade will be on of a few aggregators, however we do hope to be the best!  Here we will provide some more information on how the SREC registration process will work in Massachusetts:

1. Upon signing up for SRECTrade’s services, we will submit a PV Project Application to the DOER. You can find the most up-to-date registration forms on our EasyREC page.

2. The DOER will plan to process the applications within 30 days and issue a Statement of Qualification upon approval.

3. Once you have been issued a Statement of Qualification, SRECTrade will add your facility to the NEPOOL GIS tracking platform. This is where the SRECs will be created and transacted.

4. As soon as the DOER receives confirmation that your project has been authorized to interconnect by your utility provider, you will be able to begin reporting production data to the Massachusetts Clean Energy Center’s (CEC) Production Tracking System (PTS).  Reporting will be done on a monthly basis and the CEC will upload data to NEPOOL GIS on a quarterly basis after verifying the accuracy of the data by checking for any out of bounds data reported.  The SRECs will then be minted on the following schedule.

Quarter Generated – Date SRECs Minted
January 1st – March 31st: July 15th
April 1st – June 31st: October 15th
July 1st – September 30th: January 15th
October 1st – December 31st: April 15th

5. Since SRECs are all created once a quarter, SRECTrade will host quarterly auctions for Massachusetts SRECs.  The auctions are currently set to close on the following dates:

Tentative Massachusetts SREC Auction Dates
Q1 SRECs – August 6th, 2010
Q2 SRECs – November 5th, 2010
Q3 SRECs – February 4th, 2011
Q4 SRECs – May 6th, 2011

If you or your installer has questions about this process and how SRECTrade can help you, please feel free to give us a call at (877) 466-4606.  Click here for more information on the SREC program in Massachusetts.

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Massachusetts SREC Market

Posted December 16th, 2009 by SRECTrade.

The Massachusetts Department of Energy Resources (DOER) recently announced the implementation of a solar carve out as part of the state’s renewable portfolio standard.  The carve-out establishes a requirement of 25 MW of solar electricity for 2010 and a solar alternative compliance payment (SACP) of $600.  SRECTrade will begin hosting SREC auctions in Massachusetts in 2010.  Solar generators may begin registering their facilities with SRECTrade as long as they meet the criteria for eligibility in Massachusetts:

– Solar photovoltaic project located in Massachusetts
– Under 2MW in capacity
– Installed on or after January 1, 2008
– Has not received funding from Commonwealth Solar I
– Has not received substantial support from ARRA-related federal stimulus funds

Go to the Massachusetts Solar Renewable Energy Certificate (SREC) Program page for more details.

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