Posts Tagged ‘SCCA’

MA 2018 Solar Credit Clearinghouse Auction Result Announcement

Posted July 26th, 2019 by SRECTrade.

On Thursday, July 25th, the Massachusetts Department of Energy Resources (DOER) announced that all of the MA2018 SREC Is and SREC IIs submitted to the auction account were transacted in the first round of the Solar Credit Clearinghouse Auction (SCCA).

A total volume of 9,780 SREC Is were bid on across 21 unique bidders, creating more than sufficient demand to clear the available auction volume of 632 SREC Is.

A total volume of 63,388 SREC IIs were bid on across 21 unique bidders, creating more than sufficient demand to clear the available auction volume of 4,626 SREC IIs.

DOER and EnelX are in the process of certifying and finalizing the auction results. More information will be made available on the SCCA webpage in the coming weeks.

If SRECTrade submitted SRECs to the SCCA on your behalf, we will provide further notice on the status of your transaction once the DOER and EnelX provide us with finalized auction results.

Massachusetts Solar Credit Clearinghouse Auction Announcement – Summer 2017

Posted June 21st, 2017 by SRECTrade.

On June 16th, the DOER formally announced that they would conduct Solar Credit Clearinghouse Auctions (SCCA) for both the SREC-I and SREC-II programs.

EnerNOC Inc. posted the Auction Notice and Qualification Application for this year’s SCCA to the Auction Announcement Website. The SCCA is a market mechanism that allows for any leftover SREC supply from the previous compliance year to be sold to buyers. In years of oversupply, the DOER will consider the total volume of SRECs submitted to the SCCA, as well as the success of the auction in clearing those volumes, in their decision to increase the RPS demand for future compliance years.  Since there will be a SCCA for compliance year 2016, we know that the 2018 obligation will be adjusted higher.


This year’s fixed price for buyers is set at $300 for both SREC-I and SREC-II. After the DOER administration fee, sellers will receive a net amount of $285 per SREC. Beginning next year, the SREC II SCCA price will begin to decrease while the SREC I price will remain at $300.


The volumes of certificates available for purchase through each auction are as follows:
MA16 SREC I: 14,405 certificates
MA16 SREC II: 234,057 certificates


The auction will consist of two tiers:

The first tier (Tier I) includes all natural compliance buyers. Up to 50% of the total auction volume will be reserved for Tier I bidders. If demand exceeds the 50% benchmark, awards will be made on a pro-rata basis. If there is insufficient demand from Tier I bidders, the remaining SRECs will be made available to Tier II bidders.

The second tier (Tier II) of bidders include all other entities, including Tier I entities with unfulfilled bids from Tier I. After Tier I awards have been given, the remaining SRECs will be allocated to Tier II bidders on a pro-rata basis.

Key Dates & Bidder Webinar Registration

  • Wednesday, June 21, 2017 – Bidder webinar to review auction process and the Qualification Application
    • To register for the webinar please follow this link
  • Wednesday June 28, 2017 – Bidder Qualification Application due
  • Monday, July 24, 2017 – First auction takes place

We will keep you posted with any new updates ahead of the auction, and the results of the auction as soon as they are made publicly available.  Feel free to reach out to your coverage on the SRECTrade brokerage desk to discuss any questions you may have about the upcoming auction.


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Massachusetts Solar Credit Clearinghouse Auction – Summer 2016

Posted July 7th, 2016 by SRECTrade.

On July 6th, the Commonwealth of Massachusetts Department of Energy Resources (DOER) announced that EnerNOC Inc. has posted the Auction Notice and Qualification Application for this year’s Solar Credit Clearinghouse Auction (SCCA) to the Solar Renewable Energy Credits (SREC-I and SREC-II) Auction Announcement Website. The SCCA serves as a price support mechanism for the Massachusetts SREC programs. In over-supplied years (when more SRECs are available than required), buyers are incentivized to purchase SRECs through the SCCA, if they believe that the SCCA price is at or below the potential future price of the SRECs. You can read more about the SCCA here. The 2016 SCCA is scheduled to begin on Friday, July 29th.

SREC Volume

This year, the DOER will conduct Solar Credit Clearinghouse Auctions for both SREC-I and SREC-II certificates. The volumes of certificates available for purchase through each auction are as follows:

MA15 SREC-I: 1,898 certificates
MA15 SREC-II: 66,440 certificates

Multi-tiered Auction

The auction will be divided into two tiers of bidders. The Tier I bidders will consist solely of Retail Electric Suppliers with Renewable Portfolio Standard (RPS) compliance obligations. Up to fifty percent (50%) of the total auction volume will be reserved for Tier I bidders. If bid demand exceeds fifty percent (50%) of the total auction quantity, awards will be made on a pro-rata basis. If there is insufficient demand, each bid received will be awarded and the remaining quantity of SREC-I and SREC-IIs will be made available to Tier II bidders. Tier II bidders consist of all entities, including any Tier I bidders with unfulfilled bids from Tier I. The remaining auction quantity after the Tier I awards have been made will be allocated on a pro rata basis to all Tier II Bidders, as has been done in all prior auctions.

Minimum and Maximum Financial Security Requirements

The separation of Retail Electric Suppliers from Non-Retail Suppliers also stands in the auction’s Minimum and Maximum Financial Security Requirements. For only the SREC-II Auction, all Non-Retail Electric Suppliers without RPS compliance obligations must post at least $10,000 in financial security to participate in the SREC-II Auction. For both the SREC-I and SREC-II Auctions, Retail Electric Suppliers with RPS compliance obligations will be credited an amount of security commensurate with the volume of electric load that they served in 2015. Both Retail Electric Suppliers posting above their credited security and Non-Retail Electric Suppliers without RPS compliance obligations can post an amount no greater than the amount required to purchase ten percent (10%) of the total auction volume. Non-Retail Electric Suppliers in the Commonwealth of Massachusetts without RPS compliance obligations cannot bid on and will not be awarded SREC-I or SREC-IIs in excess of ten percent (10%) of the total auction volume.

Key Dates & Bidder Webinar Registration

Friday, July 8, 2016 – Bidder webinar to review auction process and the Qualification Application
To register for the webinar, click here.
Wednesday July 13, 2016 – Bidder Qualification Application due
Friday, July 29, 2016 – First auction takes place

Questions regarding the SCCA can be directed to the Auction Manager email account at:

MA Department of Energy Resources Update 9/27/13

Posted October 7th, 2013 by SRECTrade.

The Massachusetts Department of Energy Resources (DOER) sent out an email update on Friday, 9/27/13, covering the management of the SREC I program and the status of the DOER proprosal for an SREC II program. The email can be found here.

SREC I Project Deadline Extension Guidelines Drafted

Less than or Equal to 100 KW

Facilities 100 kW or smaller that have submitted a Statement of Qualification application must receive authorization to interconnect by the “effective date of a new solar carve-out program established by the Department, or by June 30, 2014,  whichever is earlier.”*

*We had previously stated that systems 100 kW and smaller must be fully interconnected by December 31, 2013 in order to participate in the SREC I program.

Greater than 100 kW

Facilities greater than 100 kW may be installed no later than June 30, 2014 as long as they are demonstrably 50% complete by December 31, 2013.

The DOER is accepting comments on the draft guidelines through Monday, 10/7/2013.  Comments may be sent to with the “Solar Construction Guideline Comments” in the Subject field. The DOER’s draft guidelines can be found here.

SREC II Technical Session

The DOER will hold a technical session on Monday, 10/7/2013 to discuss the SREC II proposal with a team of consultants that the DOER has employed to “conduct studies in support of the SREC II program design.” This team of consultants is charged with creating five reports in support of an SREC II program. Two of the five reports are published and available here.

Technical Session Details:

Monday, 10/7/2013 from 1-3 pm
Gardner Auditorium, Massachusetts State House
Boston, MA

2012 Solar Credit Clearinghouse “Last Chance Auction” SREC Purchase Results

Only three SRECs of the 38,863 SRECs deposited in the 2012 Solar Credit Clearinghouse Auction (SCCA) were purchased during the auction. Following the auction the DOER offered to purchase all available 2012 vintage SRECs for $285/SREC. The DOER announced that they purchased 36,437 SRECs, leaving 2,426 MA2012 SRECs in the market.

MA DOER Clarifies Purchasing Plan for Massachusetts 2012 SRECs

Posted August 6th, 2013 by SRECTrade.

Last Friday the Massachusetts Department of Energy Resources (DOER) announced that it would purchase any unsold SRECs deposited in the Solar Credit Clearinghouse Auction (SCCA) for $285 per SREC. Unlike the SCCA, this is a voluntary option. Depositors with SRECs in the SCCA will need to notify the DOER that they would like to take advantage of the offer by Wednesday, August 14th (an MA DOER set deadline). Any SRECs not purchased will be returned by the DOER to depositors’ accounts following the August 14 due date. Returned SRECs will be eligible to be transacted for 3 more years (2013, 2014, and 2015), but will not be eligible for any future Solar Credit Clearinghouse Auctions.

SRECTrade has made it easy for clients to sell their eligible SRECs to the DOER by including the DOER’s bid as a feature in their online account. SRECTrade clients with EasyREC accounts will need to log in to their accounts and indicate they would like to sell the applicable SRECs. All SRECs eligible for the DOER’s offer will sell for $285 per SREC, less SRECTrade’s EasyREC fees.

SRECTrade clients will have until Wednesday, August 14th at 9:00 am ET to log in to their SRECTrade account and opt to sell their eligible SRECs. Not all SRECTrade clients with facilities in Massachusetts are eligible for this transaction option. Only clients that had SRECs produced during 2012 and deposited in the SCCA are eligible.

SRECTrade account log in.

For additional information on the SCCA and the DOER’s bid for MA2012 SRECs please read our previous blog posts on the subject.

Massachusetts DOER Offers to Buy All Unsold 2012 SRECs after 3 SRECs sell in the Solar Credit Clearinghouse Auction

Posted August 2nd, 2013 by SRECTrade.

Participants in the Massachusetts  SREC market waited with bated breath today for the third and final round results of the first MA Solar Credit Clearinghouse Auction (SCCA). The SCCA is the hallmark price support mechanism of the Massachusetts SREC market. In over-supplied compliance years, the SCCA is meant to act as a potential last chance for excess SRECs to transact. For more information on the SCCA please see the official DOER page here and previous SRECTrade posts here.

Today, we learned that only 3 out of 38,866 available SRECs were sold. However, the DOER immediately sent an email following the news that they are offering to purchase all remaining 38,863 SRECs for a fixed price of $285 per SREC. The DOER explained its ability to purchase these SRECs on a compliance exemption it provided power suppliers on electricity load already under contract. The adjustment, implemented on June 7, 2013, revised the 2013 compliance requirement upward from 135,495 SRECs to 189,297. The DOER estimates that the incremental compliance obligation exempt from the 2013 adjustment to be approximately 40,000 SRECs.

Effectively the DOER increased the 2013 SREC requirement, but allowed power suppliers the equivalent of a 40,000 SREC exemption from the increase. This exemption is due to the fact that the compliance requirement increase was made retroactively after some power suppliers had already entered into 2013 electricity contracts. Instead of buying the 40,000 exempt SRECs in the open market, the DOER is purchasing SRECs available from the SCCA auction pool. From its email the DOER states that, “World Energy, on behalf of DOER, will directly contact early next week all depositors or their aggregators of this “after-auction” purchase option by DOER, and provide complete instructions on how to opt-in to this opportunity and execute the financial transaction.” Also of note, the DOER is using alternative compliance funds from previous years to cover the cost of purchasing these SRECs. The notice sent to stakeholders did state that that market should not expect the DOER to take this action in any future auction.


Round Two of the MA DOER Auction Does Not Clear

Posted July 31st, 2013 by SRECTrade.

The Massachusetts Department of Energy Resources (DOER) announced today, 7/31/2013, that Round Two of its Solar Credit Clearinghouse Auction (SCCA) did not clear. With Round Two not clearing, the compliance requirement for 2014 SRECs is automatically increased by 38,866 SRECs; the amount of SRECs originally deposited in the SCCA. This officially puts the 2014 Massachusetts compliance requirement at 464,520 SRECs. For more information on the SCCA please visit the official website and read our analysis here.

Rounds One and Two were designed to clear only if the bid volume is equal to or greater than the volume deposited into the auction account. Things get interesting with Round Three as the SCCA rules allow for partial fills (i.e. if buyer demand is less than the volume available for sale). Round Three will be held this Friday, 8/2/13. Stay tuned.

Massachusetts DOER Revises 2014 Compliance Numbers and Announces 2nd Round of SCCA

Posted July 27th, 2013 by SRECTrade.

Following Thursday’s MA DOER email announcing the preliminary 2014 compliance obligation, the DOER sent a follow up email yesterday, 7/26/13, that revised down the 2014 compliance requirement. Additionally, the email announced that the first round of the Solar Credit Clearinghouse Auction (SCCA) did not clear. The SCCA will now go to Round Two on Wednesday, July 31st. Any SRECs deposited in the SCCA are now eligible for three compliance years (2013, 2014 and 2015). The updated web page covering the new compliance obligation can be found here and the updated SCCA page here.

The 2014 minimum standard was revised down because of a calculation error

The DOER revised down the base line 2014 compliance obligation from 498,951 SRECs to 425,654 SRECs. The DOER attributed this downward revision of  73,297 (pre-SCCA results) to an error made in calculating the figures, “whereby the production from Generation Units operating in Q1 2013 was counted twice in DOER’s projection of SRECs that will be generated in 2013.” The revision sets the 2014 requirement to 425,654 SRECs, but if the SCCA reaches Round 3 then the 2014 compliance obligation will be increased to 464,520 SRECs.

The revision means less capacity is needed to meet the 2014 standard

With any compliance obligation announcement in Massachusetts we must adjust our calculations to account for a legal settlement between TransCanada and the DOER. Taking in to account the DOER’s revisions and the TransCanada reduction of 4,369 SRECs from the 2014 compliance obligation, the adjustments equate to 421,285 SRECs prior to any impact from the SCCA. We can convert the compliance obligation to calculate that an average of 363.2 MW or 396.7 MW operational all year long to to produce 421,285 SRECs or 460,151 SRECs depending on whether or not the SCCA reaches the third round. Note, these MW capacity figures only consider retiring 2014 vintage SRECs to meet the compliance obligation. It is possible older vintage SRECs can be used to meet the 2014 requirements, thus further reducing the capacity needed online throughout 2014.

We understand that 245.9 MW is operational (installed through July 25) and qualified for the current SREC program. Depending on whether or not the SCCA reaches the third round, a difference of 117.3 MW or 150.8 MW is needed to be added by the end of 2013 to issue the 2014 SREC requirement. Remember, this assumes the 2014 standard is only met with 2014 vintage SRECs and no additional capacity is added throughout 2014 (likely not the case given oversupply from prior periods and the possibility more MW capacity will be added before the end of 2013 or by June 2014; if eligible). Referencing the recent qualified and pending SQA lists, there are approximately 435 MW eligible but not yet operational. This means that (without taking in to consideration oversupply from previous periods) approximately 25-35% of the eligible, not operational capacity would need to be installed by 12/31/2013  to have enough solar capacity online by the beginning of 2014. See yesterday’s blog post to reference our analysis prior to the DOER’s revision.

The market did not expect round one of the DOER auction to clear

In order for the first round of the SCCA to have cleared today, all 38,866 SRECs needed to be transacted. Since the auction did not clear the SCCA moves to Round Two. The SRECs are now deposited back in to the SCCA with an extended useful life; 2 years increased to 3. Should a third round be needed then the 2014 compliance standard will increase by the number of SRECs originally entered in to the SCCA; 38,866 SRECs. At this point, the new 2014 SREC obligation will be increased to 460,151 net of all compliance exemptions.

Massachusetts Announces the 2014 Compliance Obligation and SREC II Program Meeting Date

Posted July 25th, 2013 by SRECTrade.

Less than 24 hours before the start of the DOER Solar Credit Clearinghouse Auction (SCCA), referenced here and officially here, the Massachusetts DOER announced the preliminary SREC compliance obligation for 2014. The DOER’s original email can be found here.

A quick look at the numbers

The official 2014 SREC requirement is 498,951 SRECs, however 4,369 SRECs are deducted from the overall requirement because of a settlement between TransCanada, a power supplier, and the DOER. This gives us a final number of 494,582 SRECs required. If the SCCA goes to the 3rd round, the 2014 compliance obligation will automatically increase by the volume deposited, 38,866 SRECs, resulting in a new 2014 net compliance obligation of 533,448 SRECs.

Approximately how much more solar is needed in 2014 

According to the DOER’s calculation worksheet, 245.9 MW of capacity is currently qualified (installed through July 25). In simple terms, the 2014 compliance requirement equates to an average of 426.4 MW or 459.9 MW operational all year long to mint the 494,582 or 533,448 MWh requirements (note the 2 scenarios depend on whether or not the the upcoming SCCC reaches the 3rd round). Also, its important to note that the MW equivalent figures only take into consideration SRECs issued during the 2014 compliance year. We already know there is excess supply from 2012, the volume banked and deposited into the SCCA, and oversupply from 2013 that will effectively reduce the capacity needed online throughout 2014 to meet the Solar RPS requirements.

The difference between the 245.9 MW qualified and the capacity needed under each 2014 scenario is a difference of 180.5 MW or 214.0 MW. Given the recent qualified and pending SQA lists, there are approximately 435 MW eligible but not yet operational. This means that approximately 40-50% of the eligible, not operational capacity would need to be installed by 12/31/2013 (without including oversupply from previous periods) to have enough solar capacity, by the beginning of the year, issue the 2014 MA SRECs required.

Timeline for large project installations

Projects that are greater than 100 kW in capacity and eligible for the current program must be operational by 12/31/13 or demonstrate that they have expended at least 50% of the project costs before the end of the year to receive an extension until the end of June 2014. Projects that can demonstrate substantial delays originating from the interconnecting utility can possibly receive longer extensions. This means that it will be at least until the end of the year, if not June 2014, before we understand the final shake out of installed capacity eligible under the current SREC program.

SREC II Program Meeting

The DOER will hold a stakeholder meeting to discuss the next SREC program on August 12th from 1 to 3 pm ET. The meeting will be held in the Gardner Auditorium of the Massachusetts State House in Boston. Further information on the SREC II program can be tracked here. The email announcing the meeting is linked here.

Borrego’s Dan Berwick Posts “Understanding Massachusetts’ SREC Auction Program”

Posted July 23rd, 2013 by SRECTrade.

Dan Berwick, Borrego Solar’s Vice President of Business Development,  recently posted the best article we’ve seen to date on the upcoming Massachusetts Solar Credit Clearinghouse Auction (SCCA). Dan Berwick’s article was originally posted on and is re-posted here.

“This week, the Massachusetts Department of Energy Resources will run its first Solar Renewable Energy Credit (SREC) auction under the solar carve-out.

It might not clear, and everything will be okay.

The Solar Credit Clearinghouse Auction (SCCA) is happening for the first time this year because even though 2012 was the third year of the solar carve-out, it was the first year in which SREC supply exceeded SREC demand. Under-supply and high SREC prices in 2010 and 2011 attracted investment that tipped the 2012 SREC vintage into oversupply, and guaranteed oversupply in 2013 as well.

By rule, any 2012 SRECs not used for 2012 compliance will expire and lose all value unless they are deposited in the SCCA account in the month after compliance is closed, and before the auction is run. The 2012 minimum standard was 81,559 SRECs, and 119,247 SRECs were actually minted — 37,688 more than were needed. That’s close to the 38,866 SRECs that ended up in the SCCA account by the time it closed last month.

Next, the Department of Energy Resources (DOER) announces the minimum standard — that is, the demand level — for 2014.  It’s important to note that the DOER has no discretion over the 2014 minimum standard; it is calculated according to a formula set forth in the regulation, 225 CMR 14.00. The reason that the DOER has to wait until July 2013 to announce the 2014 minimum standard is that the formula for calculating it includes, as its final term, the number of 2012 SRECs deposited in the SCCA account.

Specifically, whatever the formula says 2014 demand would be, the actual 2014 minimum standard gets increased by 38,866. This is actually pretty intuitive, if you remember that every design element that makes this program unique among SREC programs is there to foster supply-demand balance. The SRECs deposited in the SCCA account represent over-supply — they are extra SRECs in need of a home.  By including the SCCA term in the formula for calculating new demand, the formula is simply saying, “Okay, there is an oversupply of 38,866 SRECs; if we want to get back to supply/demand balance, let’s increase demand by those 38,866 SRECs, and presto change-o, we’re back to balance.”

Now that the formula has sent an unambiguous signal to the market — “Hey, market: you’re gonna need these SRECs” — it’s time to run the auction.

The SCCA is in fact a nested series of three rounds of a fixed-price auction, that price being $300, or, from the seller’s perspective, $285, because there is a $15 administrative fee. In each round, if there are fewer bids than there are SRECs in the auction, the round is scrubbed and the process begins again. But by rule, the pot gets sweetened between each round. In the first round of the SCCA, the SRECs get two years of extended life — they can be used for compliance in 2013 or 2014. If buyers don’t like what they are seeing enough to pay $285 for every available SREC, then we try again with round two, but this time those same SRECs get another year of extended life; they can also be used in 2015.

If the second round doesn’t clear, the DOER plays hardball. The pot-sweetener before the third and final round of the SCCA is that the 2014 minimum standard gets increased a second time by the number of SRECs deposited in the SCCA account. So for 2014, that’s another increase of 38,866 SRECs to the 2014 minimum standard.

In our analysis, this, along with the 400 megawatt cap on supply, is the linchpin of the program’s design. Taken along with the various other program rules as defined in 225 CMR 14.00, the conclusion is robust and powerful: an uncleared 2012 auction inevitably leads to undersupply by 2015 at the latest. In other words, this occurs within the three-year extended life of an uncleared 2012 SCCA SREC.

Of course, that doesn’t guarantee a cleared auction, for a couple of reasons.

One, $300 is by many measures a pretty steep price to pay in the summer of 2013 for an SREC that could very well not find a willing buyer at a good price until the spring of 2016. Today’s market price for a 2012 SREC is just a bit above $200.

Two, it’s not obvious what a “good price” will be for that SREC. On the one hand, we have consistently observed in all SREC markets that the clearing price in an under-supplied market has been just a bit below the alternative compliance payment, which in this case would mean a price in the high $400s selling into an under-supplied 2015 SREC market. But on the other hand, the data set is not terribly large, and our shared history with SREC markets is not long, so it’s fair for investors to be cautious and conservative.

And three, this is a policy-created market, which means that it is exposed to political and regulatory risk, which is nobody’s favorite type of risk. Two to three years may be a long time to be exposed to it.

So this auction may well not clear.  And in fact, the third reason in the paragraph above is the reason we decided to write this note.

If the SCCA doesn’t clear, we may hear a number of calls for policy intervention, claiming that because the auction didn’t clear, the program is not working as it was designed to work. But that’s not accurate. In fact, the most innovative and effective element of the DOER’s brainchild is exactly its resilience in the wake of an uncleared auction. The program is designed to provide stability whether the SCCA clears or not.

We would not have seen the investment and building boom that we saw in 2012 if this weren’t the case. So far, the solar carve-out program has stimulated over half a billion dollars of new investment in the Commonwealth — an incredible success story for the Patrick administration and the Green Communities Act.

Does anyone think that investors injected half a billion dollars into our state’s economy with one hand while keeping their fingers crossed on the other that the SCCA would clear? Quite the contrary; I’m sure that no less than 90 percent of the time spent by credit committees evaluating these investments was dedicated to this simple question: “What happens if the auction doesn’t clear?” (By the way, if you have half a billion dollars and aren’t in the habit of asking that kind of question, I have a bridge I’d like to sell you.)

Now, that said, I would argue that there are two kinds of SREC sellers in Massachusetts. The first — the group that owns the vast majority of all MA SRECs — are investors like the ones I just described. Some are energy companies, some are purely financial investors, and others are independent local investors who saw a good opportunity to earn a return by putting their money into something positive. But as a group, these are sophisticated professionals who are totally capable of evaluating the opportunities and risks to a potential investment.

Massachusetts has both a right and an obligation with respect to these investors. The right is that the ratepayers and taxpayers of Massachusetts don’t have to bear the financial risk of this investment; if it turns out that investing in SREC-generating solar in MA in 2012 was a bad bet, a money-loser, that’s not their problem. Public officials tried to design the program so that it offered an attractive but not-too-attractive return, with minimal risk. If you then invested, Massachusetts hopes you will make a little money, not a lot of money. But whether you lose your shirt or do quite well, that’s the idea of a market-based incentive program.

The flip side of that is the obligation: in order to encourage a strong, low-risk, attractive investment climate in this kind of market-based program, policymakers have to refrain from changing the program rules unless it is so clearly necessary that all or almost all stakeholders agree. An un-cleared auction this summer would be a crossroads for the solar carve-out; good public policy in this case calls for forbearance. If those un-cleared SRECs end up back in investors’ hands — with a new lease on life — no doubt some will call for some policy intervention to prop up prices, and others will be content to bide their time in the expectation of a seller’s market within a few years. Either way, the rules are the rules.

But that’s just one group of SREC sellers. The problem with this argument is that group two is in a different situation altogether. Group two are homeowners. Though Borrego only works at the commercial and utility scale, I have some direct experience with group two because it includes some friends who, knowing I work in solar, have come to me for advice about going solar at the residential scale in Massachusetts. Actually, “advice” is the wrong word; “translation” is more accurate. These are savvy, sophisticated people, but it’s easy to see that group two is totally different from group one; they have no way to evaluate the future value of a Massachusetts SREC other than to listen to what other people tell them.

When the solar carve-out was being implemented in 2009 and 2010, many stakeholders took to referring to the SCCA as a “floor,” which understandably conjures a strong impression of something through which one cannot fall. To a first approximation, the SCCA was designed to clear, and I know that it is possible to pinpoint this or that statement from someone at the DOER or the Massachusetts CEC that could have been interpreted by a homeowner that they would always be able to sell their SRECs for $285, especially when relayed by a solar installer making a sale.

We may have a problem here. If the SCCA doesn’t clear, it may be a good idea to explore potential policy interventions that provide $285 per SREC, or something close to it, in relatively short order, to small system owners who hold the SREC position on their systems themselves.

Beyond that, though, let’s allow this well-designed program to run its course.

For the moment, though the market is tough, there is no macro-problem: SREC prices are low, solar is getting built, and business is good for local solar companies and national investors alike, which is a great recipe for job creation. If the auction doesn’t clear, we will likely see a quick drop in prices and fresh calls for a change in the regulation. But overreaction would be a mistake, especially given the trauma that the Massachusetts solar community just went through in June, with the quick filling of the 400 MW qualification queue.

The program design is sound and resilient, and in its present form will almost surely deliver 400 MW of solar more efficiently — for fewer subsidy dollars — than any of the other Northeast SREC markets.

A market-based incentive delivery mechanism is just that: a market. Like all markets, this one will go through good times and not-so-good times, and will achieve its objectives by leveraging the value of competitive pressure, which of course can be painful for market participants. But overall, if we take the long view and exercise restraint, this one is going to continue to work out well.


Dan Berwick is Borrego Solar’s Vice President of Business Development, based out of the New England regional headquarters. Dan’s primary focus is on shaping Borrego Solar’s unique business strategies and product offerings around the country, with a particular emphasis on the opportunities created by policy and regulation.”