Posts Tagged ‘ZREC’

$4.5M solar grant bridges Connecticut’s transition to SRECs (a.k.a. ZRECs)

Posted October 3rd, 2011 by SRECTrade.

After successfully passing Bill 1243, Connecticut will be moving to an SREC-based solar financing program in 2012 (technically referred to as ZREC or LREC for “low-” or “zero-” emission). Per the guidelines set forth in the legislation, the state’s electricity suppliers must propose plans for the SREC solicitation program by the end of this year. Given that the law doesn’t require the first contracts to be signed until the end of 2012, we expect the details for the Connecticut SREC program to be finalized in mid- to late-2012.

In an effort to bridge the time until SRECs launch in Connecticut, the Clean Energy Finance and Investment Authority (formerly CT Clean Energy Fund) has developed a solicitation for solar projects by experienced developers. $4.5M in solar funding is available through the competitive RFP. The solicitation period will be open until December 30, 2011 and results will be announced in March 2012. However, any projects that take the grant will not be eligible for the SREC program commencing in late 2012. The CEFIA will hold an information session at the Department of Energy and Environmental Protection, 79 Elm Street, Hartford, CT on October 12, 2011. See below for more information and check out this website for complete details.

The Clean Energy Finance and Investment Authority (CEFIA), formerly the Connecticut Clean Energy Fund (CCEF), has combined the former Best of Class and Public Buidlings solicitations.  The new solicitation, the On-Site Renewable Distributed Generation (OSDG) Program Best of Class, Public Buildings and Affordable Housing Request for Proposals (RFP) solicits applications from eligible entities working with experienced renewable energy developers. There will be a strong emphasis on evaluating the financial feasibility of proposed projects as well as the ability of applicants to complete project construction in a timely manner. The intent of the funding is to enable owners of eligible renewable energy systems to “break even” over the life of the equipment, with a fair and reasonable return on investment compared to purchasing the equivalent amount of power from an electric utility company.

CEFIA is currently offering OSDG grants through an RFP format. The OSDG Best of Class, Public Buildings and Affordable Housing RFP will be offered to bridge the time until the launch of the Zero-Emission and Low-Emission Renewable Energy Certificate (REC) programs become available to the market and to prepare the market for the transition from a grant-based program model to a REC-based program model. The competitive, solar photovoltaic (PV) only RFP will close at 5:00 p.m. EST on December 30, 2011. The closing date for the rolling submission, other technologies RFP will be announced in early October 2011.

Funding available under this RFP is as follows:

Best of Class, Public Buildings and Affordable Housing

Type of RFP




Fuel Cell

To Be Announced

Rolling Submission

Other Technologies

To Be Announced

Rolling Submission
Competitve, PV-only RFP Timeline Activities
Activity Date
Issue RFP document
September 12, 2011
Issue press release
September 12, 2011
Questions accepted in writing – E-mail only –
September 12, 2011 to
October 12, 2011

Information session – Phoenix Room, Department of Energy and Environmental Protection, 79 Elm Street, Hartford
4:00 p.m. – 6:00 p.m.

October 12, 2011
Final question responses posted on CEFIA Website
October 31, 2011
RFP response due date – Competitive solicitation only
December 30, 2011
5:00 p.m. EST
Eligibility rejection/acceptance letters issued – Competitive solicitation only
January 2012
CEFIA staff recommendations to the Board – Competitive solicitation only
February 2012
Funding authorization letters issued – Competitive solicitation only
March 2012

The timeline for the rolling submission, other technologies RFP will be announced in early October 2011.

Links to Important Information

Competitive Solicitation RFP document – PV only
Competitive Solicitation RFP application – PV only

Connecticut solar bill adds new twist to the SREC concept

Posted June 23rd, 2011 by SRECTrade.

On June 17th, Connecticut passed legislation that consolidates the development and implementation of Connecticut’s environmental and energy policy within a new, expanded Department of Energy and Environmental Protection (DEEP). Although it is still waiting to be signed by the governor, signs point towards approval as he has spoken out in support of the bill.  The bill will affect the solar market on two different levels: residential solar production and commercial facilities less than one megawatt.  The original bill known as “Bill 1243” can be found here ( ) (see section 106-108) and a summary of the Bill can be found here ( (see page 4 of the summary of the effects of the residential portion of this bill).


The new Residential Solar Program mentioned in the bill requires the Clean Energy Finance Authority (CEFIA) to create a solar investment program that will produce a minimum of 30 megawatts by the end of 2022, a relatively modest goal, but it is specific to residential solar.

In order to achieve this goal of 30 megawatts by 2022, the CEFIA will offer panel owners the choice between a performance-based incentive or a one-time upfront incentive based on estimated future system performance, known as expected performance-based buydowns.  The actual amount received by panel owners from these incentives will be determined on an individual basis and, if panel owners elect to receive these one-time upfront incentives, panel owners will forfeit the credits they earn from excess energy production.

This expected performance-based buy down program will encourage the buying and installation of new solar panels, but does not set the groundwork for a traditional SREC market. Connecticut’s Renewable Portfolio Standard (RPS), enacted in 1998, mandates that a percentage of retail electricity be renewable, of which a portion is required to be Class 1 (i.e. solar, wind etc.).  These new incentives in combination with low Alternative Compliance Payments (ACP) will result in prices remaining below $55 per REC in the Connecticut market in the future.

In summary, there are three main takeaways from the portion of the new legislation that effects residential solar:

1. There was a “pro-solar” bill passed
2. It’s goals are modest relative to other states
3. The bill doesn’t create a viable SREC “market”

Commercial/Distributed REC Program

The bill also lays out a program that will require energy distribution companies (EDCs) to spend a given amount of money to buy RECs from renewable energy facilities under 1 MW. This is essentially geared towards distributed solar since wind and hydro projects below 1 MW are not as common as for solar. Therefore, we’ll refer to them as “SRECs” for now. According to the bill, electric distribution companies must solicit 15-year SREC contracts from qualified facilities, spending $8M in the first year. Each year thereafter, for the first 4 years of the program, the EDCs must add $8M in annual expenditures through additional solicitations for 15-year SREC contracts. This essentially means that the program will double in size for each of the first 4 years.

At the end of these initial 4 years there are two possibilities: either a) the costs of the relevant technologies have been reduced, or b) the costs have not been reduced.

a)     If the cost of technologies have been reduced (determined by PURA), electric distribution companies will be required to continue the eight million dollar increase in spending per year in years five and six. In years seven through fifteen, the required spending will remain at 48 million per year and will decrease by eight million dollars in years sixteen through twenty-one (as the contracts signed in years 1-4 roll off).

b)    If the cost of technologies haven’t been reduced, electric distribution companies will be required to continue to spend thirty-two million dollars per year in years five through thirteen. In years fourteen through nineteen the required expenditure will decline by eight million dollars per year.

Essentially what this means is that the program will either peak in year 4 and remain at a high of $32M in annual REC purchases or it will be expanded after year 4 to a peak of $48M.

The obligation for electric distributors to buy these RECs will be determined based on the size of their respective distribution system loads and the price of each of these RECs will be capped by the Public Utilities Regulatory Authority (PURA) at $350 per REC.  In addition, PURA retains the ability to reduce this price ceiling by 3-7% per year based on a comparison with actual bid prices from the annual solicitation of contracts and foreseeable reductions in the cost of technologies.

These solicitation plans required of the EDCs will be broken down into three separate categories by facility size: under 100kW, 100-250kW, and 250-1000kW. Systems less than 100kW do not need to participate in the solicitations, but will be eligible to receive a price per REC equal to 10% more than the weighted average in the competitive solicitations for projects in the 100-250 kW range. All systems larger than 100 kW will use a competitive solicitation run by the EDCs and focused on getting the most out of the $8M required to be spent.

For example, if the EDC is required to spend $500,000 a year on the program:
$500,000 / $300 per REC / 1200 = 1.39 MW can be installed

If the price is “bid down” to $200:
$500,000 / $200 per REC / 1200 = 2.08 MW can be installed

As the price gets bid down by producers who are willing to sell their SRECs for less than other producers, the percentage of the EDC’s energy production that is Class I renewable will increase (assuming their overall distribution remains roughly the same).

Finally, if EDCs fall short of spending the required amount of money, they will be forced to make a non-compliance payment of 125% of the difference between what was required and what was spent.