Posts Tagged ‘SACP’

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.

Pennsylvania SREC Pricing

Posted July 13th, 2009 by SRECTrade.

The Pennsylvania Solar Alternative Compliance Payment (SACP) is structured a bit differently than the rest of the states in our auction.  Most states have a set SACP that is known at the beginning of each year.  Pennsylvania releases their SACP six months after the Energy Year ends. The 2008 Pennsylvania SACP of $528.34 was released in December of 2008 for the Energy Year ending May 31, 2008. It is calculated as 200% of the PJM area average SREC price. This means that from June 1, 2007 – May 31, 2008, the average PJM area SREC price was $264.17.  The interpretation used by the program is that this is an average of the price paid for SRECs used to comply with the Pennsylvania state RPS.  So in reality, it is an average of PA SRECs.

PA SRECs are valued based on speculation of what the SACP will be in  December. PA utilities should be willing to pay more for SRECs if they are struggling to meet the solar requirement in Pennsylvania. In the early years of this program, that requirement may be attainable, but it ratches up pretty quickly, so it may not be long before the SREC values in Pennsylvania increase above all the other states in the region.

For reference, our July 10th auction saw PA close at $300.  DE closed at $245, and MD closed at $375.

This is good news for solar owners in Delaware, Maryland, Ohio, West Virginia and the other surrounding states who may be eligible to sell into Pennsylvania.  Of course the influx of supply of SRECs into PA might at some point depress the price of SRECs.  It will be interesting to see how the market plays out.  One thing is certain—as a seller, it doesn’t hurt to be registered in as many states as you can.  See our post on cross-listing to learn how.

SRECTrade Now in Delaware

Posted June 18th, 2009 by SRECTrade.

For our July 10th auction, SRECTrade plans on having a fully functional multi-state platform in place with seven new states and the ability to cross-list your SREC in multiple states. Delaware is a fairly new and liberal market for the exchange of SRECs. There are no restrictions on exporting SRECs and the state Renewable Portfolio Standard (RPS) has a specific carve-out for Solar through 2019. The standard is 20% renewables by 2019, with solar representing 2.005%.

If an electricity supplier (utility) doesn’t reach the solar-carve out threshold with their own solar supply or by purchasing SRECs, they must pay a Solar Alternative Compliance Payment (SACP) as an offsetting penalty into a state renewable energy fund. In Delaware, the SACP begins at $250 per MWh and increases $50 every year if a utility didn’t reach the threshold in the previous year. So there is a big incentive to buy SRECs to reach the threshold. This is why SREC prices follow SACP prices.

This year in Delaware, SRECs have fetched prices between $200-$250. However, as time progresses, if utilities don’t meet the solar threshold, you will see the SACP average price climb because of the $50 per year increase, and the SREC price will follow.

Additionally, since other states have different structures for their SACP price, they will have different prices for their SRECs. If you register your Delaware system in other states (e.g., Pennsylvania), you will be able to sell your SRECs in the states you are registered in by checking the cross-list box on the order. We’ll make sure you get the best price possible in your eligible states.

How to get started in Delaware:

1. Certify your PV system: your installer will provide you with the information to get your system certified by the state.

2. Option A: Sign up for our EasyBid service, and we’ll handle your SRECs. We’ll take care of registering your system with GATS, and cross-listing your SRECs on our multi-state auction platform every month to make sure you get the best price for your SRECs.

Option B: Sign up for GATS yourself in Delaware, as well as other states that accept Delaware SRECs (Pennsylvania and Maryland to start). Then post your SRECs every month on or find a third-party to sell your SRECs.