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Archive for November, 2011

Will the California RPS and TREC program promote solar and SRECs?

Posted November 30th, 2011 by SRECTrade.

Many solar advocates are hoping that the California TREC program will boost solar development the way SREC markets have in the country’s fastest growing solar markets on the East Coast. After much delay, the program is finally set to launch on December 10th. Unfortunately, the odds are stacked against the distributed solar industry and here is why:

The first hurdle was whether or not the California Public Utilities Commission (CPUC) would allow distributed generation (DG) projects to be eligible for the state Renewable Portfolio Standard (RPS). For the sake of clarification, DG is often referred to as smaller, commercial size projects, but in California, the technical definition extends to all projects that are considered onsite generation, meaning the electricity produced by the system is used locally, rather than transmitted through the broader electricity grid (think residential, small commercial and community solar projects. Based on recent proposed revisions (pdf), the CPUC will likely approve DG projects for RPS eligibility and has already started to layout the process for approving projects (a service that will be provided by SRECTrade).

The next hurdle centers around how DG TRECs are classified within the RPS. There are three categories used for RPS compliance:

  1. In-State: At least 50% of the renewable energy must be sited in California.
  2. Out-of-state: Up to 50% of the renewable energy can come from projects outside California that supply electricity to the California grid.
  3. TRECs: Up to 25% of the RPS can be met through the purchase of Tradable Renewable Energy Certificates, a cap that will be reduced to 10% by 2020.

This is a key battle for the relevance of TRECs in supporting DG projects in California. Proponents for DG have argued that TRECs from in-state distributed projects should be included in the 1st bucket. A few reasons supporting this position include the added benefits from reduced transmission costs inherent in DG projects and the fact that the state should favor supporting distributed renewable energy projects sited in California over utility-scale projects outside of California. In a rare occurrence, advocates for the solar industry and the major utilities in California share this opinion. The only opponents we can think of are regulators and lawyers choosing a strict interpretation of a poorly written portion of a legislative mandate and unfortunately, it appears the only way to fix this would be to go back to the legislature. It is likely that the legislature envisioned tradable RECs as those coming from systems sited outside of regional territories and/or outside the state of California, without proper consideration for what that meant for legitimate, local, distributed renewable projects. The CPUC is scheduled to vote on this issue tomorrow, December 1st ahead of the December 10 launch.

The impact of this decision will effectively curtail the ability for distributed solar projects to count towards the RPS, while also making TRECs a non-factor in the financing of distributed solar projects. The RPS incentive scheme will first favor utility-scale hydro, wind and solar from within the state borders, followed by counterparts outside California and then, TRECs produced by renewable facilities anywhere in the Western U.S. and a portion of Canada (WREGIS). This means TREC prices will be next to nothing and the market will be dominated by regional utility-scale hydro and wind projects able to produce at a much larger scale than local DG solar. To put that into perspective, the fastest growing solar markets in the U.S. today (SREC states driven by RPS laws such as New Jersey, Pennsylvania and Massachusetts) are made up primarily of DG solar projects! As a result, California will need to find ways outside the RPS to encourage the growth of distributed solar energy. This most likely means a continuation of short-term, taxpayer funded, grant/rebate based programs like the California Solar Initiative (CSI).

Even if the CPUC decides to include DG in the in-state bucket, questions still exist around whether or not the potential TREC values will be enough to impact solar DG development. Compared to other states, California is backward in its approach to DG projects. Here we have an industry fighting to be on a level playing field with utility-scale renewables, where other states (16 at the most recent count) have DG or solar set-asides that recognize the value of distributed generation and favor it in their RPS incentive structure over utility-scale renewables. We have often written about the need for a solar carve-out specifically because of different cost structures and the need to support solar separately. The reality is that wind and other distributed renewables have traditionally been more cost-effective, and therefore more competitive within DG carveouts. In addition, the small-scale inherent with solar relative to wind or hydro add transaction costs that also favor the larger producers. Even in an ideal world, where California distributed solar is in bucket #1, the fear is that it will be crowded out by large scale producers with cheaper alternatives to solar and lower transaction costs. The hope has always been that the RPS and the TREC program could be a stepping stone towards a solar-only SREC program in California with long-term, sustainable growth targets similar to those seen on the East Coast.

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Solar Capacity in the SREC States – November 2011

Posted November 29th, 2011 by SRECTrade.

SRECTrade SREC Markets Report: November 2011

The following post outlines the megawatts of solar capacity certified and/or registered to create SRECs in the Solar REC markets SRECTrade currently serves.

A PDF copy of this table can be found here.

GATS_generators_11_28_11

PJM Eligible Systems

As of the end of November, there were 20,223 solar PV and 252 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS) registry. Of these eligible systems, 87 (0.42%) have a nameplate capacity of 1 megawatt or greater, of which only 6 systems are greater than 5 MW. The largest system, currently located in New Jersey, is 18.3 MW, and the second largest, located in Ohio is 12 MW. The third largest system, at 11.2 MW, is located in Delaware.

Delaware: The reporting year 2011-2012 requirement for DE equates to approximately 23,340 SRECs being retired. If all retired SRECs were of DE2011-2012 vintage, approximately 19.5 MW would need to be operational all year long. As of November 28, 2011, 22.8 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS. 11.2 MW of the 22.7 MW currently eligible is from the Dover Sun Park project developed by LS Power. In the 2011-12 compliance year, Delmarva Power has contracted to purchase 9,846 SRECs from the project, of which 7,000 are being held by the Sustainable Energy Utility (SEU) until 2015-16*. As of this writing, PJM GATS reported the issuance of 8,758 DE2011-2012 SRECs. Additional SRECs from the DE2010-2011 period may also impact the market should there be a demand for these older vintage SRECs.

Maryland: Maryland’s 2011 Solar RPS target requires approximately 32,240 SRECs to be retired. To meet this using only 2011 vintage SRECs, approximately 26.9 MW would need to be operational all year long. As of November 28, 2011, 54.8 MW of solar capacity was registered to create MD eligible SRECs. 33.5 MW of this capacity was sited in the state of MD. The RPS currently requires electricity suppliers to acquire SRECs from in-state sited solar systems before looking to outside systems. As of this writing, PJM GATS reported the issuance of 23,439 MD2011 SRECs from MD sited systems. There are also MD sited SRECs available from 2010, which could be utilized for compliance needs in 2011.

New Jersey: The New Jersey 2012 reporting year requires 442,000 SRECs to be retired. This equates to approximately 368 MW of capacity being operational all year long. Given the shortage of NJ2011 Solar RECs, older vintage SRECs will not impact the 2012 market. As of November 28, 2011, 433.2 MW of solar capacity was registered and eligible to create NJ SRECs in PJM GATS. While this figure represents all projects registered in GATS, there are recently installed projects awaiting issuance of a New Jersey state certification number. This delay results in a portion of installed projects not yet represented in the 433.2 MW figure. As of September 30, 2011 the NJ Office of Clean Energy (NJ OCE) reported that 447.7 MW of solar had been installed in NJ. For more details on the increase in NJ capacity see this post. As of this writing, PJM GATS reported the issuance of 163,507 NJ2012 SRECs.

Ohio: Ohio’s 2011 RPS solar target requires approximately 45,210 SRECs to be retired by the end of the compliance period. At least 50% of the SREC requirement must come from systems sited in the state. As of November 28, 2011, 27.7 MW of in-state capacity and 61.3 MW of out-of-state capacity were eligible to generate OH SRECs. Additionally, for the year to date, GATS has issued 23,834 in-state and 47,137 out-of-state OH2011 eligible SRECs. Additional SRECs from prior years are also eligible for the current compliance period, which may impact the current year’s requirements.

OH Capacity Chart

Pennsylvania: The reporting year 2012 requirement for PA equates to retiring approximately 48,430 eligible SRECs. If all compliance obligations were met using 2012 vintage SRECs, approximately 41.9 MW would need to be operational all year long. As of November 28, 2011, 152 MW of solar capacity was registered and eligible to create PA compliant SRECs. As of this writing, PJM GATS reported the issuance of 66,243 PA2012 SRECs. Given the oversupply during previous reporting years, there are also PA2012 eligible SRECs from the 2010 and 2011 reporting years.

Washington, DC: DC’s 2011 RPS amended solar target requires approximately 50,270 SRECs to be retired by the end of the compliance period. The figures displayed above demonstrate the capacity of systems eligible to create DC SRECs moving forward. These figures do not take into consideration the amount of electricity delivered into the district that may be exempt from complying with the Distributed Generation Amendment Act increases, considering some electricity contracts may have been signed prior to the amendment’s implementation. As of November 28, 2011, 21.5 MW of capacity was eligible to generate DC SRECs. Additionally, for the year to date, GATS has issued 18,382 DC2011 eligible SRECs. Additional SRECs from prior years are also eligible for the current compliance period, which may impact the current year’s requirements.

Massachusetts DOER Qualified Projects

As of November 21, 2011, there were 1,149 MA DOER qualified solar projects; 1,128 operational and 21 not operational. Of these qualified systems, 11 (1.0%) have a nameplate capacity of 1 megawatt or greater, of which only 3 are between 1.5 and 2 MW. Three of the projects greater than 1 MW are currently operational. Electricity suppliers providing power to the state need to acquire approximately 62,900 SRECs in 2011. Through the Q2 2011 issuance period (10/15/11), 9,499 SRECs have been minted. The Department of Energy Resources (DOER) projects approximately 29,000 SRECs to be generated this year, leaving the market short approximately 33,900 SRECs.

MA Capacity Chart

Capacity Summary By State

The tables above demonstrate the capacity breakout by state. Note, that for all PJM GATS registered projects, each state includes all projects certified to sell into that state. State RPS programs that allow for systems sited in other states to participate have been broken up by systems sited in-state and out-of-state. Additional detail has been provided to demonstrate the total capacity of systems only certified for one specific state market versus being certified for multiple state markets. For example, PA includes projects only certified to sell into the PA SREC market, broken out by in state and out of state systems, as well as projects that are also certified to sell into PA and Other State markets broken out by in state and out of state systems (i.e. OH, DC, MD, DE, NJ). PA Out of State includes systems sited in states with their own state SREC market (i.e. DE) as well as systems sited in states that have no SREC market (i.e. VA). Also, it is important to note that the Current Capacity represents the total megawatts eligible to produce and sell SRECs as of the noted date, while the Estimated Required Capacity – Current and Next Reporting Year represents the estimated number of MW that need to be online on average throughout the reporting period to meet the RPS requirement within each state. For example, New Jersey needs approximately 368 MW online for the entire 2012 reporting year to meet the RPS requirement. Additionally, the data presented above does not include projects that are in the pipeline or currently going through the registration process in each state program. This data represents specifically the projects that have been approved for the corresponding state SREC markets as of the dates noted.

*Source: State of Delaware Pilot Program For the Procurement of Solar Renewable Energy Credits: Recommendations of the Renewable Energy Taskforce

Note: SREC requirements for markets without fixed SREC targets have been forecast based based on EIA Report “By End-Use Sector, by State, by Provider”. Projected SRECs required utilizes the most recent EIA electricity data applying an average 1.5% growth rate per forecast year. The state’s RPS Solar requirement is then multiplied by forecast total electricity sales to arrive at projected SRECs required. Projected capacity required is based on a factor of 1,200 MWh in PJM states and 1,130 MWh in MA, generated per MW of installed capacity per year.

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New Jersey Capacity Update – Solar Continues to Push Forward

Posted November 28th, 2011 by SRECTrade.

NJ2012 Capacity Update

The New Jersey Office of Clean Energy (NJ OCE) published an updated installed solar projects list as of September 30, 2011. According to the NJ OCE, as of 9/30/11 the Garden State installed 447.7 MW of solar capacity. This equates to more than 20 MW added in the month of September, putting the state at an average of 27.1 MW per month and a total of 108.2 MW installed for the 2012 compliance year to date. NJ OCE estimates for October 2012 expect 44 MW of additional capacity to be installed, bringing total installed capacity to over 491 MW.

Although the NJ OCE reports 447.7 MW installed as of September 30, 2011, PJM GATS currently shows 431.2 MW registered to produce SRECs as of 11/26/11. It is common to see a difference in registered projects between the NJ OCE and PJM GATS reported figures as there is typically a delay from when systems are interconnected and installed to when they receive their NJ state certification number and become registered in GATS.

New Jersey’s 2012 reporting year solar requirement is currently set at 442,000 MWhs. Assuming a production factor 1.2 MWh per installed kW per year, the state needs approximately 370 MW operational all year long. As of 11/26/11, GATS has reported 163,507 SRECs issued through September 2011 generation. October 2011 generation will be issued on November 30, 2011. Given the volume issued through September 2011, approximately 37% of the required volume has been generated. This leaves a need of approximately 278,500 SRECs to meet the 442,000 MWh RY2012 target.

Monthly Capacity Analysis_v2-1

Assuming all NJ solar facilities produce at a 1.2 MWh production factor per kW per year, and all systems noted as installed on the NJ OCE installed project list received generation credit from their first full month of operation, the existing installed capacity of 447.7 MW will produce approximately 338,400* SRECs between October 2011 and May 2012. This additional generation will bring the NJ2012 SREC issuance total to approximately 501,900 SRECs, an excess of 60,000 MWhs. Assuming the October 2012 estimates are accurate, the additional of 44 MW in October creates additional oversupply, equating to a forecast of almost 530,600* NJ2012 SRECs minted and an excess of 88,600 MWh. Both of these scenarios only account for the existing installed capacity through September 2011 and estimates through October 2011. Additional supply will continue to come online through the remaining months of NJ2012, with more capacity anticipated to be pushed through at the end of the 2011 calendar year due to the expected expiration of the federal grant incentive. The additional supply coming online throughout the remaining months of NJ2012 will further impact the long SREC market NJ is facing and have an effect on the 2013 market.

NJ2013 SREC Market

As it currently stands, the NJ2013 (June 2012 – May 2013) Renewable Portfolio Standard (RPS) requires 596,000 MWhs of solar generation. This Solar REC requirement equals approximately 496.7 MW to be operational all year long, assuming the NJ2013 requirements are met only using 2013 vintage SRECs. Given the current market, and expected oversupply, the NJ2013 market will start off the year with between 60,000 – 88,600 MWhs already issued and eligible to meet the 2013 requirements. Note, this assumes the September figures and October estimates provided by the NJ OCE are accurate and do not take into consideration any additional capacity to be installed in the remaining months of the 2012 compliance period.

Assembly Bill 4226

Introduced on November 10, 2011, Assembly Bill 4226, sponsored by Assemblyman Upendra Chivakula (District 17), and Assemblyman Daniel Benson (District 14), would implement changes to the current solar RPS requirements. Under the current RPS, the SREC requirements are subject to a 20% increase per year through 2027 should the state meet or exceed its solar requirements three years in a row, while also experiencing a decline in SREC pricing in those same three consecutive periods. The final paragraph of the current format of 4226, states that the 3 year time period would be reduced to 1 year and be applied beginning in the 2013 compliance period.

Should this bill be signed into law, the 20% increase would take effect in 2013. Currently, RY2013 has a requirement of 596,000 MWhs. A 20% increase would adjust the 2013 requirement to 715,200 MWh; equal to an additional 119,200 SRECs required or approximately 99.3 MW operational all year long.

Other solar trade and advocacy groups have actively suggested alternative proposals to the legislation, some of which include a revised SREC requirement schedule as well as a fixed SACP schedule through 2027. We will continue to keep a close eye on the legislative process and provide updates as more information is known and how it will impact RY2013 and future NJ compliance periods.

*This figure uses a PVWatts calculation assuming 1.2 MWh/kW/Year and takes into consideration seasonality for the remaining months left in the compliance period.

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PSEIA: HB1580 creates thousands of jobs for less than half a penny a day

Posted November 23rd, 2011 by SRECTrade.

On November 16th, 2011, the Pennsylvania Solar Energy Industries Association (PASEIA) released its Ratepayer Cost Analysis regarding PA House Bill #1580. HB1580 was introduced on October 3rd, 2011 by Rep. Chris Ross, and includes 109 co-sponsors as of November 10th, 2011.

The Bill was introduced to address the recent collapse of the PA SREC market by accelerating the solar share requirement from 2012 through 2015. While the solar share requirements from 2012 through 2015 have been accelerated, the solar share requirements in 2016 through 2018 remains the same as SREC prices are expected to have stabilized by then regardless of the present situation. HB1580 will also close the solar market in Pennsylvania to out-of-state systems, thus limiting the supply of SRECs available which will drive up their value. While undoubtedly a blessing for the solar industry within Pennsylvania, some concerns have been raised regarding the impact this program will have on ratepayers. The Ratepayer Cost Analysis aims to address these issues.

Here is the breakdown of HB1580, using figures derived from the Cost Impact Report. The introduction of HB1580 imposes an additional $113,315,417 distributed amongst all residential and commercial power users in Pennsylvania.

Current Scenario
Reporting Year Solar Share SRECs SREC Price* Cost
2012 – 2013 0.0510% 75,189 $50 $3,759,453
2013 – 2014 0.0840% 123,012 $50 $6,250,621
2014 – 2015 0.1440% 216,338 $50 $10,816,879
2015 – 2016 0.2500% 379,150 $70 $26,540,513
2016 – 2017 0.2933% 449,047 $80 $35,923,723
2017 – 2018 0.3400% 525,500 $85 $44,667,471
Total – 1,770,235 – $127,958,661

Proposed Scenario (HB1850)
Reporting Year Solar Share SRECs SREC Price* Cost Increment
2012 – 2013 0.1500% 221,144 $190 $42,017,420 $38,257,967
2013 – 2014 0.1700% 253,001 $150 $37,950,200 $31,699,579
2014 – 2015 0.2040% 306,478 $125 $38,309,780 $27,492,901
2015 – 2016 0.2500% 379,150 $100 $37,915,019 $11,374,506
2016 – 2017 0.2933% 449,047 $90 $40,414,188 $4,490,465
2017 – 2018 0.3400% 525,500 $85 $44,667,471 $0
Total – 2,134,320 – $241,274,078 $113,315,417

* SREC price is based on aggregator feedback, as well as average weighted PA SREC prices in GATS

The cost imposed on each ratepayer is than calculated based on an estimated use of 10,716kWh/yr for residential and 150,000kWh/yr for commercial usage.

Reporting Year Estimated Elect Sales Estimated Increased Cost

Cost Increase per kWh

 Estimated Increased Residential Cost Estimated Increased Commercial Cost
Annual Monthly Annual Monthly
2013 147,429,544 $38,257,967 $0.0002595 $2.78 $0.23 $38.93 $3.24
2014 148,824,315 $31,699,579 $0.0002130 $2.28 $0.19 $31.95 $2.66
2015 150,234,430 $27,492,901 $0.0001830 $1.96 $0.16 $27.45 $2.29
2016 151,660,076 $11,374,506 $0.0000750 $0.80 $0.07 $11.25 $0.94
2017 153,101,443 $4,490,465 $0.0000293 $0.31 $0.03 $4.40 $0.37
2018 154,558,725 $0 $0 – – – –
Total $113,315,417 – $8.14 $0.68 $113.97 $9.50
Average – $0.0001520 $1.63 $0.14 $22.79 $1.90

As the table shows, the residential bill on average increases by less than 14 cents over five years and under $2 for commercial customers with an assumed annual electric usage of 150,000kWh/yr. This amounts to less than half a penny a day for residential owners. In addition, these are pre-tax costs, so for-profit commercial and industrial customers will pay less than these estimates based on their effective tax rates..

For more information, please contact:
Ron Celentano
PASEIA – President
CelentanoR@aol.com

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Massachusetts SREC Timeline

Posted November 21st, 2011 by SRECTrade.

To help with cash flow planning, it is important to understand the timeline inherent with the Massachusetts SREC program. Customers are often surprised to learn that SRECs are created by the state several months after they are produced. Here is a chart outlining when SRECs are created in Massachusetts.

Production Quarter

In Massachusetts SRECs are created once a quarter on a quarter delay. This means that a system that was installed in say, July 2010, will sell its first SRECs in January. Why the long delay? This is a function of the way the program has been implemented in Massachusetts. The solar system owners must first report solar production to the Production Tracking System (PTS). The PTS is part of the Massachusetts Clean Energy Center and is in charge of collecting all renewable energy production data. At the end of each quarter all of the solar production information is submitted to the NEPOOL-GIS, a third-party organization that is in charge of the software used to register and track SRECs. The NEPOOL-GIS creates SRECs at the end of the new quarter based on the previous quarter’s production data.

SRECTrade holds a Massachusetts specific auction on the day that the SRECs get created or the first business day that they are available. For example, January 15th 2012 falls on a Sunday, so the auction will be held on Monday, January 16th 2012.

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Delaware PSC Approves SREC Procurement Pilot Program

Posted November 15th, 2011 by SRECTrade.

The Delaware Public Service Commission approved the SREC Procurement Pilot Program on November 8th, 2011. This program will allow qualified solar energy system owners to sell their SRECs at a fixed price for the next 20 years.

The program will only be open to certain DE solar owners, for example, eligible facility owners must have received approval of their “Accepted Completed Solar System Interconnection Application” on or after December 1st 2010. Another requirement stipulates that the facility must not have received supplemental funding from a public source other than grants associated with the Delaware Green Energy Program “GEP”.

The number of SRECs to be procured is tiered according to the system size from which they are obtained. They will also be priced accordingly. Based on the requirements for June 2011 through May 2012, the numbers and price are

Tier Size (kW) Number of SRECs Percentage of Total SRECs Price, 1st 10 years Price, next 10 years
1 <50 2972 13.4% $260 base, $235 alt+ $50
2a 50 – 250 2,000 9.1% $240 base, $175 alt+ $50
2b 250 – 500 2,000 9.1% Lowest Bid Price* $50
3 500 – 2,000 4,500 20.4% Lowest Bid Price* $50
4 >2,000 10,600 48% Lowest Bid Price* $50
+Alternative pricing for projects that received a GEP grant before December 10 2010.
* Prices for tiers 2b, 3 and 4 will be decided by competitive bidding amongst the applicants.

In the event of oversubscription for facilities in Tier 1 and 2A, systems will be eliminated via lottery, starting with systems enrolled in the equipment or workforce bonus program.

Payments will be made quarterly for Tier 1 and monthly for Tiers 2 and 3. The energy production must be measured by at least a standard, utility grade meter and online monitoring for Tier 1 systems, and a revenue grade meter with online monitoring for Tiers 2 and 3.

Facilities are obliged to deliver the number of SRECs as estimated for their system size when they apply. The Sustainable Energy Utility is obliged to purchase up to 110% of the estimated SRECs, but may choose not to purchase any additional surplus SRECs.

This program will likely commence this winter or spring, and SRECTrade will be supporting this program for all of our installers and their customers. Look out for a future email regarding the SREC Pilot Program.

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Posted in Delaware, SREC Markets, SREC Pricing | 2 Comments »

FirstEnergy Closes SREC and REC RFP

Posted November 15th, 2011 by SRECTrade.

FirstEnergy’s Ohio utilities announced the close of its Request for Proposal (RFP) for 10 year SREC and REC contracts. The utility issued the RFP seeking 5,000 Solar Renewable Energy Credits and 20,000 Renewable Energy Credits per year for the compliance periods covering 2011-2020.

The utility noted they were able to successfully fill the requested volumes. The contracted supply will allow FirstEnergy to meet its 2011 RPS requirements including the SRECs not retired under their 2010 compliance obligations. The RFP received submissions from 28 qualified participants offering more than two times the requested SREC volumes and four times the requested REC volumes. Contract pricing was not disclosed.

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Pennsylvania SREC Bill’s Hearing Offers PA Citizens An Opportunity To Show Support

Posted November 14th, 2011 by SRECTrade.

The much discussed PA Solar Jobs Bill (HB 1580) goes up for review in the PA House Consumer Affairs Committee on Thursday, 11/17/2011 (the hearing date was rescheduled after this post was originally published to Wednesday, December 8th at 10 am)*. This is a critical juncture for the bill. In order for HB 1580 to make it out to the PA State House of Representatives for general vote, it must first pass out of the House Consumer Affairs Committee. The Committee is chaired by Rep. Bob Godshall of the 53rd District. PennFuture, a grassroots Pennsylvania advocacy group, has put together an e-petition for contacting members of the House Consumer Affairs Committee and voicing support for HB 1580.

For more information on the state of the PA SREC market click here. For historic PA SREC pricing click here.

If you are a Pennsylvania resident and you’d like to show your support for HB 1580 click here.

*This announcement was made on 11/16/2011 by Rep. Godshall’s office.

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Rhode Island Passes Renewable Energy Law

Posted November 14th, 2011 by SRECTrade.

The Ocean State took a step forward in promoting solar energy recently as Rhode Island Governor Lincoln D. Chafee signed §723 Sub A into law on June 29, 2011 to encourage the generation and use of renewable energy in the state.

The legislation requires at least 40 MWs worth of distributed generation projects in the small New England state by the end of 2014. The contracting shall be spread over 4 years based on annual targets set by the Board. Though the specific rules are still being sorted out, the program should proceed quickly as the first 5 MW are due to be contracted by the end of this year.

(1) By Dec 30, 2011, minimum 5 MW;
(2) By Dec 30, 2012, minimum aggregate of 20 MW;
(3) By Dec 30, 2013, minimum aggregate of 30 MW;
(4) By Dec 30, 2014, minimum aggregate of 40 MW.

The Board will recommend to the Commission the standard contract ceiling price by October 15 each year and it will be announced by December 15. The ceiling price for each technology should allow a private owner to receive a reasonable rate of return, based on recent reported and forecast information on the cost of capital and the cost of generation equipment. The reasonable rate of return shall include applicable state or federal incentives including but not limited to tax incentives.

This program represents the first statewide Feed-In Tariff law passed in the U.S. The implementation will be a key factor in how this program will ultimately impact the state. A target of 40 MW over 4 years is not very large, especially considering that a single wind turbine can be larger than 5 MW. All it would take is eight 5MW wind turbines (not wind farms; individual turbines!). Therefore, if Rhode Island has any ambition of developing a lasting industry, it is important that the program is designed in a way that provides access to a diverse group of participants rather than a few “winners” selected by the state and the utility companies.

To that effect, the legislation mandates that by Dec 31, 2012, there shall be at least 4 technology classes and of which, 2 shall be for solar generation technologies. A standard contract term is for 15 years. Besides distributed generation facilities having to be located within the Utility Company’s load zone, small projects shall have a nameplate capacity no larger than 500 kw for solar, 1.5 MW for wind and no more than 1 MW for other renewable energy. Large distributed generation projects may not exceed 5 MW and a project developer will not be allowed to segment a project into smaller sized projects in order to fall under the “small” definition. As long as electric distribution companies fulfill the required technology classes, they are free to mix and match small and large projects to achieve their goals.

Each electric distribution company shall conduct at least 3 standard contract enrollments during each program year except for 2011 where only 1 is required. During the two week enrollment period, the electric distribution company is required to receive standard short-form applications requesting standard contracts for distributed generation energy projects. Contracts for small distributed generation projects are awarded on a first-come first-serve basis. Contracts for large distributed generation projects will be awarded based on the lowest proposed prices received. Eligible systems that are net-metered may apply to sell excess output.

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November 2011 SREC Auction Results

Posted November 1st, 2011 by SRECTrade.

SRECTrade’s November 2011 SREC Auction has completed. Below are the clearing prices at which SRECs traded this month.

November SREC Prices Energy Year Ending
State 2010 2011 2012*
Delaware – – $88.99
Maryland In-State $174.98 $200.00
Maryland Out-of-State – –
Massachusetts – $535.00**
New Jersey – $670.00 $225.00
Ohio In-State – $380.00
Ohio Out-of-State – $55.00
Pennsylvania – $10.00 –
Washington, DC $119.00 $150.00

Notes:
*Delaware, New Jersey and Pennsylvania operate on a June-May energy year.
**Massachusetts Q2 auction occurred on October 17th
Green text represents a price improvement over October, red text represents a decrease.
“-” reflects no sale, which would result if there were no matching bids and offers that cleared for a sale in the auction.

State Market Observations:

Delaware (Supply: 22.7 MW | Demand: 19.5 MW): Legislation increasing the SREC requirement went into effect this past June but the market has yet to pick up in response. Stakeholders in DE continue to work to wards a long-term SREC contract solicitation program for new facilities. This program should be approved within the next month. Meanwhile, the SREC market will likely pick up at the end of the energy year when electricity suppliers are more active.

Maryland (Supply: 30.8 MW | Demand: 26.9 MW): SRECs continue to hover around $200. The state seems on a good pace to maintain a balanced supply relative to demand. As 2011 comes to an end, a shortage of SRECs in the state, if any, will be reflected by an increase in prices at the end of the trading period in the first quarter of 2012. Out-of-state SRECs continue to be a non-factor in Maryland.

Massachusetts (Supply: 27.1 MW | Demand: 55.7 MW): Mass SREC values rose to $535 in the Q2 2011 sale on October 18th. This trend should continue as the SREC shortage becomes more apparent. The next big quarterly MA SREC auction will close on Monday January 16th. In the meantime, solar owners can offer unsold SRECs in our regular monthly auctions.

New Jersey (Supply: 448 MW | Demand: 368 MW): The 2012 market continues to rebound up to $225 from $205 last month. As more buyers become active in the 2012 market, prices should continue to correct, though the oversupply continues to grow as 18 more megawatts were added in September.

Ohio (Supply: 82.0 MW | Demand: 37.7 MW) : In-State SRECs demand dropped slightly. Activity in the out-of-state SREC market increased this month.

Pennsylvania (Supply: 146.4 MW | Demand 40.4 MW): HB 1508 was recently introduced to address the state’s SREC market. This marks the beginning of a long process to rescue the PA SREC market. Until then, SRECs will continue to bottom out.

Washington, DC (Supply: 21.4 MW | Demand: 41.9 MW): Prices continue to increase as new legislation closing the DC market borders and increasing requirements take effect on the market.

For historical pricing please see this link. The order period for the December auction will close on Wednesday, November 30, 2011 at 5:00 p.m Eastern. For more information, please visit www.srectrade.com.

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Posted in SREC Markets, SREC Pricing | Comments Off on November 2011 SREC Auction Results

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