Posts Tagged ‘long-term srecs’

Delaware SREC Program Results Announced

Posted April 18th, 2012 by SRECTrade.

On Wednesday, April 18th, SRECTrade announced Tier 1 and 2a results for the Delaware Pilot Procurement Program. The results can be found here on the Program site. Results for Tier 2b and 3 (systems between 250 and 2,000 kW) are not yet finalized.

For Tier 1 and 2a, during the random selection process, applications that represented PV systems with both Delaware parts and labor were automatically sorted above applications with just Delaware parts or just labor. Applications that did not qualify for either Delaware parts or labor were sorted last.

A fixed amount of SRECs were required to be purchased within each Tier.  For example, Tier 1 required 2,972 SRECs per year. After sorting the systems, their cumulative SREC production was calculated. Applications were accepted down the sorted list until the 2,972nd SREC requirement was met. All other systems were not accepted into the Program. Overall the Pilot solicitation attracted the equivalent of 6,610 SRECs from Tier 1 qualified systems. As such, there were enough systems with Delaware parts and labor alone to meet the 2,972 SREC requirement for the Tier 1 solicitation.

The Delaware Pilot SREC Procurement Program is a partnership between Delmarva, the largest retail utility in Delaware and the Delaware Sustainable Energy Utility. The Program is designed to source all of Delmarva’s SRECs while guaranteeing eligible PV system owners a 20-year fixed price contracts for their SRECs.

Delaware SREC Pilot Program Closes for Tiers 1 and 2a, Still Open for Tiers 2b and 3

Posted April 6th, 2012 by SRECTrade.

The Delaware SREC Pilot Procurement Program reached a milestone today. The solicitation period (window for submitting applications) closed today at 5 pm Eastern Standard Time for Tier 1 and 2 photovoltaic systems (PV systems <250 kW DC). SRECTrade is contracted by the Delaware SEU to run the Pilot Procurement solicitation. Successful applicants will be guaranteed 20-year contracts for their SRECs, but not all applicants will be successful because of capacity limitations set in place by the state. The application rules and contract values vary depending on system size. The application form and guidelines are provided on the SRECDelaware website.

Tiers 2B and 3 are still open until 5:00 EST on Friday, April 13th.  Any facilities that did not bid in Tier 1 or 2A may still bid in Tier 2B regardless of size, however they have to meet the requirements of a Tier 2B system and must submit a bid price.  Any system that bid in Tier 1 or 2A may not bid in Tier 2B and any systems that do so will have both bids disqualified.

All applications for Tier 1 and 2A must have been received by 5:00 pm Eastern Standard Time on Friday and all bid deposits must have been initiated prior to that time.  SRECTrade will continue to update the status of individual applications status as bid deposits are received on Monday. We will contact any facilities requiring minor corrections during the week of April 9-13.

Diamond Castle’s equity-only approach to Solar

Posted July 20th, 2010 by SRECTrade.

A recent Wall Street Journal blog post highlighted a new approach to solar financing.  Diamond Castle Holdings LLC has committed up to $225 million of equity to KDC Solar LLC to develop solar projects in New Jersey. The company will finance the project completely with equity, which will give them increased freedom with their SRECs over the more traditional method of financing solar projects by taking out debt.

The genius behind this strategy from an SREC perspective is simple: most solar projects today are financed with debt. The off-taker of that debt requires an SREC contract with a suitable counter-party. Bilateral long-term contracts have been hard to come by and have traded at a significant discount to ACP levels. This is one reason we’ve seen such growth in our long-term SREC contract markets and Diamond Castle is solving the problem yet another way. Rather than giving up this value, it seems the private equity firm is forgoing the leverage and financing the projects with equity suggesting they believe the discount in a long-term SREC contracts wipes out the benefit of taking on leverage.

This groundbreaking strategy could prove influential in SREC markets moving forward, illustrating an alternative model for the financing of solar projects. It highlights the issues that many developers face in financing projects in the SREC market world. More importantly, it demonstrates that despite the challenges created by a market-based structure for subsidizing solar, private industry will always find a solution. This is at the core of why the U.S. favors SREC markets over the state-controlled Feed-In-Tariffs that are popular abroad. A fixed subsidy for solar energy may be a whole lot easier to implement on day one, but in the long-run, a successful market-based mechanism is an optimum solution (not to mention, far more American).

When New Jersey passed the 2010 version of its SREC program, the most important takeaway wasn’t the increasing of the requirements, the creation of a safety net or the extension of the program through 2026: it was the overall statement coming from the legislature that this program is here to stay and it is only getting stronger. Now it is time for the industry to come up with its own solutions for playing within the parameters of the SREC market. The companies that solve those solutions creatively will be successful while the rest wait around for something to change. Hopefully the banks will find a way to participate, but until they do, firms like Diamond Castle will lead the way.

For more information on this story in the Wall Street Journal blog, see here.

SRECTrade announces SREC Forwards Exchange

Posted May 5th, 2010 by SRECTrade.

In 2008, SRECTrade launched the SREC auction as an innovative way to connect sellers directly to buyers in the nascent SREC markets that lacked liquidity and transparency. Since then the auctions have grown substantially, providing publicly available market pricing and fulfilling a missing piece in the SREC program. With the expansion of new SREC markets in adjacent states, SRECTrade is now the leading online platform for anything related to SRECs.

With the launch of the SREC Forwards Exchange, SRECTrade has become a one-stop shop for all participants in the  SREC markets.  The service now includes long-term SREC price discovery and contracts, in addition to the spot transactions available in the auction. The Forwards Exchange will provide a mechanism to match sellers in need of long-term contracts or upfront payments for financing solar projects to parties interested in the return opportunities available in buying and trading forward contracts.

In the Forwards Exchange, sellers and buyers will have two options.  Prepaid Forwards are available to smaller facilities using estimated generation.  These users will be able to sell any strip or individual SREC scheduled to be produced by their facility for an upfront payment from a buyer.  For larger facilities, traditional Forward Contracts are available in the exchange with payment terms on delivery.  Both sellers and buyers entering into the payment-on-delivery forwards will be required to post some form of collateral, whether it be maintaining a margin requirement for buyers or withholding a portion of the SRECs generated for sellers.  Buyers in both markets will own the rights to the SRECs and can choose to hold onto them until maturity or close their positions in the market at any time.

For more information, visit our main website for each market:

Prepaid Forwards – Upfront payments for SRECs

Forward Contracts – Long-term SREC contracts with payment-on-delivery

For questions or comments on the SREC Forwards Exchange, please email