The Massachusetts Department of Energy Resources (DOER) launched the first Massachusetts SREC program in January 2010. The program, now referred to as SREC-I, was created as a Massachusetts-specific solar carve-out of the New England REC market. SREC-I was originally established with a capacity limit of 400 MW, but this was reached in the spring of 2013. Pursuant to Emergency Regulations and revisions to the RPS Class I Regulation, the DOER continued to qualify projects under SREC-I through the first half of 2014, after the initial 400 MW limit was reached. On April 25, 2014, the DOER launched its SREC-II program to carry Massachusetts to its goal of installing 1,600 MW of solar capacity by 2020. Facilities qualified under either SREC-I or SREC-II are granted up to 10 years of SREC production under their respective program rules.
Massachusetts is currently in the process of designing and implementing its Next Solar Incentive Program. Additional information is provided below, and you can visit our blog for updates on this process.
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Massachusetts SRECs are defined by eligibility for the DOER Solar Credit Clearinghouse Auction (SCCA). Solar facilities may produce SCCA-eligible SRECs for no more than 40 calendar quarters (10 years) of generation. Applications submitted after specific program deadlines may either truncate the eligibility period or delay the start of eligibility until after the date of interconnection. After a facility’s SREC eligibility period ends, the facility produces RECs eligible for the Massachusetts Class I market.
Facilities must report generation from revenue grade meters to the Massachusetts Clean Energy Center (MassCEC) Production Tracking System (PTS). Facilities with a nameplate capacity greater than 10 kW must report automatically using a MassCEC-approved revenue grade meter online monitoring system, also known as a Data Acquisition System (DAS).
Instead of a predetermined increase in the number of SRECs required year over year (as is used in other SREC markets), the DOER utilizes a formula that takes into consideration how much capacity was installed in previous years and the results of the annual DOER-administered Solar Credit Clearinghouse Auction (SCCA) to determine the next year’s SREC compliance obligations.
The formula for determining the SREC requirement under both the SREC-I and SREC-II programs is as follows:
"Auction Volume" refers to the number of SRECs deposited in each program's Solar Credit Clearinghouse Auction Account. Also, when the program reaches its MW capacity limit (i.e., the “Sunset Period”), the components of the formula are adjusted as outlined in the regulation.
The Massachusetts SREC programs are built around a price support mechanism called the Solar Credit Clearinghouse Auction (SCCA). In oversupplied 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.
The SREC-I and SREC-II programs each have their own SCCA. The results of the SCCA for each of the programs are unrelated, but the rules governing each SCCA are similar. SRECs from the SREC-I program may only be deposited in an SREC-I SCCA, and SRECs from the SREC-II program may only be deposited in an SREC-II SCCA. The SCCA program rules do not require buyers to purchase SRECs through the SCCA, so there is no guarantee that SRECs deposited in the SCCA will be purchased. Buyers purchasing SRECs in the SCCA must pay predetermined purchase prices. Since the DOER takes a 5% administration fee for each sale, the value to a seller with SRECs in the SCCA is the predetermined SCCA price, less 5%.
MA SRECs are issued once per quarter with a three and a half month delay, based on the following schedule:
|Power Production Period||Date SRECs Issued|
|Q1 (Jan to Mar)||July 15th|
|Q2 (Apr to Jun)||October 15th|
|Q3 (Jul to Sep)||January 15th|
|Q4 (Oct to Dec)||April 15th|
A system’s eligibility start dates will be its date of interconnection, so long as the certification application is submitted prior to that quarter’s application deadline. Otherwise, eligibility will be based on the application date and its corresponding quarter. System owners should apply for certification around the date of interconnection to ensure they receive SREC eligibility for all generation produced following interconnection.
The Solar Alternative Compliance Payment (SACP) is the penalty price that electricity suppliers must pay per SREC if they fail to file the required number of SRECs by the end of each compliance period. The SACP price decreases over time in both the SREC-I and SREC-II programs.
SRECs unsold by the end of each trading year (June 15th) must be deposited in the DOER Solar Credit Clearinghouse Auction (SCCA). If an SREC deposited in the SCCA is not purchased, then it is re-issued and must be sold within three years; however, re-issued SRECs may not be deposited into future Solar Credit Clearinghouse Auctions, effectively stripping these SRECs of SCCA eligibility. The risk of an unsuccessful SCCA sale and the time value of money are two reasons why sellers will sell SRECs below the SCCA price in oversupplied years.
The SREC-II program divides project eligibility into market sectors. With the exception of the Managed Growth category, there are no limits on how much capacity can qualify within each market sector. A project’s market sector eligibility determines how many SRECs it receives for each megawatt hour it produces. This is meant to allow for a diverse portfolio of projects to be developed in the Commonwealth. For example, a residential project or large carport will receive 10 SRECs for every 10 megawatt hours it produces, whereas a project in the Managed Growth category will only receive 7 SRECs for every 10 megawatt hours it produces.
The table below summarizes the original SREC-II factors. For the reduced SREC-II factors, see below.
|Sector||Generation Unit Type||Factor|
|Managed Growth (MG)||Unit that does not meet the criteria of Market Sector A, B, or C.||0.7|
For important information on market sectors and SREC-II, please visit the following MA DOER web pages:
A summary of SREC-I and SREC-II program details:
|Adjustable Compliance Obligation||Yes||Yes|
|Decreasing SACP Rate Schedule||Yes||Yes|
|SCCA Opt-in Schedule||Yes||Yes, all projects get 40 quarters from qualification date|
|Decreasing SCCA Sale Price Schedule||No (fixed at $285/SREC)||Starts at $285/SREC and decreases over time|
|Program Cap||Capped at 660.5 MW on 6/30/2014||1,600.0 MW less final SREC-I qualified capacity|
|Project Size Maximum||Yes, 6 MW DC||Yes, 6 MW DC|
MA SREC market requirements as currently set by state legislation:
|Energy Year||Estimated SRECs Required (MWh)||SACP||Net SCCA Price|
|2017||To be determined||$448||$285|
|2018||To be determined||$426||$285|
|2019||To be determined||$404||$285|
|2020||To be determined||$384||$285|
|2021||To be determined||$365||$285|
|2022||To be determined||$347||$285|
|2023||To be determined||$330||$285|
|2024||To be determined||$330||$285|
|2025||To be determined||$330||$285|
|Energy Year||Estimated SRECs Required (MWh)||SACP||Net SCCA Price|
|2010||Program not available|
|2011||Program not available|
|2012||Program not available|
|2013||Program not available|
|2017||To be determined||$350||$271|
|2018||To be determined||$350||$257|
|2019||To be determined||$333||$244|
|2020||To be determined||$316||$232|
|2021||To be determined||$300||$221|
|2022||To be determined||$285||$210|
|2023||To be determined||$271||$199|
|2024||To be determined||$257||$189|
|2025||To be determined||$244||$180|
The DOER is in the process of designing a new solar incentive program pursuant to Chapter 75 of the Acts of 2016 signed into law by Governor Baker on April 11. On September 23, 2016, DOER presented its vision for the next generation of solar incentives to the public with its Straw Proposal. As the development of the program continues, we will provide updates on our blog. You can also subscribe to the DOER listserv for their updates here.
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