Archive for the ‘Massachusetts’ Category

MA Capacity Update

Posted October 6th, 2011 by SRECTrade.

The MA Department of Energy Resources (DOER) recently published an updated qualified solar projects list as of September 23, 2011. The state currently has a total of 982 solar projects, 957 operational and 25 not operational, eligible for the SREC program. 11 of the 982 projects are greater than 1 MW, 3 of which are currently operational. The largest project, located in Sheffield, MA and approximately 2.0 MW, is not yet operational. The second largest project is 1.8 MW, located in Dartmouth, MA, and has been operational since March 2011. The table below demonstrates the change in capacity and # of projects from the last update on August 15, 2011.

	8/15/11	9/23/11	Change	% Change
Capacity (MW)
Operational	23.0	26.6	3.7	15.9%
Not Operational¹	14.9	14.0	(1.0)	-6.6%
Total	37.9	40.6	2.7	7.0%

Projects (#)
Operational	829	957	128	15.4%
Not Operational¹	32	25	(7)	-21.9%
Total	861	982	121	14.1%

1. A decline in capacity and # of projcts can be explained by not operational projects converting to operational.

Overall, the total qualified capacity currently stands at 40.6 MW, of which 26.6 MW is operational. The next SREC issuance period is scheduled for October 15, 2011. This will cover all SRECs generated during Q2 2011. Based on the information provided by the DOER as of 9/12/2011, 2,358 SRECs were issued in Q1 2011 (issuance date was 7/15/11). Additionally, based on the data provided, 5,652* MWh have been reported to the MassCEC Production Tracking System (PTS) for the period covering April – June 2011. An another 3,929* MWh have been reported during July and August 2011.

Taking into consideration the estimated load exemptions for the TransCanada settlement, MA electricity suppliers need to acquire approximately 63,000 SRECs during the 2011 compliance year. According to the DOER 2012 minimum standard announcement, the forecast generation for the 2011 compliance year is 29,056 SRECs.

The chart below demonstrates the qualified capacity as of 9/23/11 compared to the estimated MW requirements needed to be online and operational during the entire 2011 and 2012 compliance years to meet the state’s solar obligations.

MA Capacity 9_23_11

Note: The 2011 and 2012 estimated megawatts required in the chart above have been adjusted for the impact of the TransCanada settlement.

* These figures represent the MWhs reported to PTS on a monthly basis. The DOER notes that the data from PTS is not finalized and the actual number of SRECs minted by NEPOOL GIS may differ.

Tags: Capacity, MA DOER, Massachusetts, NEPOOL GIS, Solar, SRECs
Posted in Massachusetts, SREC Markets | 1 Comment »

MA DOER Releases 2012 SREC Requirement

Posted September 5th, 2011 by SRECTrade.

The Massachusetts Department of Energy Resources (DOER) recently announced the SREC requirement for the 2012 compliance year. The 2012 compliance requirement is based on a formula that takes into consideration the 2011 compliance obligation, the forecast 2011 total SREC generation, and the actual 2010 SREC generation. A growth rate is then applied to these figures based on a set formula for the MA SREC program. Additional considerations are made for the 2010 Alternative Compliance Payment (ACP) volume, the 2010 banked SREC volume, and the number of 2010 SRECs purchased through Solar Credit Clearinghouse Auction. For a detailed analysis of this formula and the considerations made for setting the 2012 requirement please see this link.

Upon running the figures, the DOER arrived at a 2012 compliance obligation of 81,559 MWhs or SRECs. This represents an increase over the 2011 standard by 2,982 SRECs, or approximately 3.8%. After factoring in the estimated load exemptions from the TransCanada settlement, the 2012 compliance year target is approximately 73,400 SRECs. This equals an increase of approximately 10,400 SRECs from the 2011 adjusted target of about 63,000 SRECs. Converting these figures to MW capacity, using a 1.13 MWh production factor per installed kW per year, 2012 will need the equivalent of approximately 65 MW online vs. the 2011 required capacity of approximately 55.7 MW. This step up in capacity represents an increase of 16.6%.

MA 2012 Capacity Req Graph

*Note: The 2011 and 2012 estimated megawatts required in the chart above have been adjusted for the impact of the TransCanada settlement.

Tags: MA DOER, MA SRECs, Massachusetts Solar Carve-out, Massachusetts Solar RPS, Massachusetts SREC, Massachusetts SRECs
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IMPORTANT ANNOUNCEMENT FOR MASSACHUSETTS SOLAR GENERATORS

Posted August 16th, 2011 by SRECTrade.

The Massachusetts DOER has revised their application schedule by moving up the deadlines for generation eligibility. The new schedule states that in order for systems generating electricity prior to June 30th (Q2) to get SREC credit for that generation, their applications must have been submitted by August 15th, though there is expected to be some leniency around this first deadline. We strongly urge all unregistered MA customers to submit their EasyREC applications AS SOON AS POSSIBLE (i.e. the next few days) if their systems were generating prior to June 30th. Future deadlines are listed below.

Q2 generation (systems online before June 30th): must apply by 8/15/11

Q3 generation (system online before September 30th): must apply by 11/15/11

Q4 generation (system online before December 31st): must apply by 2/15/12

Please email your completed MA EasyREC application to easyrec@srectrade.com or fax to (732) 453-0065.

Tags: MA, MA SREC, MA SREC aggregation, MA SRECs, Massachusetts, Massachusetts Solar Carve-out, Massachusetts Solar Renewable Energy Certificates, Massachusetts SREC, Massachusetts SREC Program
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MA DOER Seeks to Set Fixed SACP Schedule

Posted August 3rd, 2011 by SRECTrade.

On August 2, 2011, the Massachusetts Department of Energy Resources (DOER) proposed an amendment to the Solar Alternative Compliance Payment (SACP) schedule for the MA SREC program. Feedback from market participants including project developers, financing parties, and retail electricity suppliers indicated the current SACP structure creates uncertainty around future SREC valuation. Under the existing structure, the DOER has the ability to reduce the SACP on a yearly basis by up to 10% of the current value. The amended schedule seeks to provide more certainty for expected future prices while assisting project financing and negotiations for long-term SREC contracts.

The proposal establishes a 10-year schedule for the SACP that would maintain the current rate of $550/SREC through compliance year 2013, then decrease 5% each following year. The proposal also requires the schedule to be updated on a yearly basis to include a price for the 10th year of the schedule. For example, the 2022 price will be added to the schedule no later than January 31, 2012. The table below demonstrates the proposed schedule.

MA SACP Schedule 8_2_11

Prior to implementation, the proposed schedule is to go through a comment process. The comment period is currently open through August 15, 2011. Once all comments are collected, the DOER will review and begin the necessary process to amend the existing Solar Carve-Out provisions.

Tags: DOER, MA, MA DOER, MA SREC aggregation, MA SRECs, Mass SREC Aggregations, Mass SRECs, Massachusetts, Massachusetts DOER, Massachusetts Solar Carve-out, Massachusetts Solar Renewable Energy Certificates, Massachusetts Solar RPS, Massachusetts SREC, Massachusetts SREC aggregation, Massachusetts SREC Aggregators, Massachusetts SRECs, SREC, SREC Aggregator, SREC Aggregators, SRECs
Posted in Massachusetts, SREC Markets | 1 Comment »

Mass DOER releases July statistics, SRECTrade continues to lead in Mass SREC market

Posted July 20th, 2011 by SRECTrade.

With the August SREC auction coming next Friday, July 29th, SRECTrade will post the first sale for 2011 SRECs in Massachusetts. Last week, the DOER released the most recently updated list of qualified and installed solar projects (excel download) in the state that are eligible for the solar carve-out. This gives us a unique opportunity to look behind the curtains and see what is going on in the SREC market.

Of the 649 projects that are operational, SRECTrade’s aggregation is by far the largest in the state, representing 36% of all facilities that are operational in Massachusetts. In terms of installed capacity, with nearly 3 MW of 19 MW installed as of July 11, the 16% share of capacity is second only to the state’s largest utility, National Grid who has installed 4 projects totaling 3.4 MW which represents 18% of the solar capacity in the market. That said, 16% understates SRECTrade’s presence in the Massachusetts since signing up for SRECTrade’s aggregation service is not a pre-requisite for selling through the platform.

Largest SREC Aggregations in Massachusetts
	% of Capacity	Capacity Rank	% of Facilities	Facility Rank
National Grid	17.7%	#1	0.6%	#16
SRECTrade	15.8%	#2	36.1%	#1
Totals: 649 Facilities / 19.0 MW

Although key features like transparent, competitive market pricing, low fees, no contracts to sign and online access to the SRECs that are not lumped together with other facilities have made SRECTrade an attractive option to solar owners, the success of the platform can ultimately be attributed to the network of installers that recommend it to their customers. According to the DOER’s report, 42 of the 111 installers with facilities in the ground have customers with SRECTrade, including 8 of the top 10 installers by volume.

Top Installers In SRECTrade’s Network as of July 11, 2011 (as published by DOER)
– My Generation Energy, Inc., Brewster, MA
– SunBug Solar, Somerville, MA
– Sunlight Solar Energy, Waltham, MA
– E2 Solar Inc., Hyannis, MA
– Alteris Renewables Inc., Natick, MA
– NorthEast Solar Design Associates, West Hatfield, MA
– South Mountain Company, Inc., West Tisbury, MA
– SolarFlair Energy, Inc., Framingham, MA

The SRECTrade aggregation is not a prerequisite to participate in the SRECTrade market. The platform is open to anyone in the market looking to sell SRECs. The improved fee structure makes SRECTrade a simple and inexpensive option for aggregations with SRECs to sell. The combination of an open platform and guaranteed volume coming from the state’s largest aggregation makes SRECTrade the top destination in Massachusetts for entities with compliance obligations.

Tags: Largest SREC Aggregation, Largest SREC Aggregation in Massachusetts, MA SREC aggregation, MA SRECs, Mass SREC Aggregations, Mass SRECs, Massachusetts Solar Carve-out, Massachusetts Solar RPS, Massachusetts SREC, Massachusetts SREC aggregation, Massachusetts SREC Aggregators, Massachusetts SRECs, SREC, SREC Aggregator, SREC Aggregators, SRECs
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MA DOER Updates Retroactive SREC Rules

Posted June 1st, 2011 by SRECTrade.

The DOER announced today that they will no longer be awarding retroactive credit for SRECs from generation prior to the current SREC generation period.

In simplified form, this change means that installers and system owners should get their EasyREC paperwork in as soon as their system is interconnected to the electric grid. By submitting immediately, the the DOER and MassCEC will have ample time to approve the system. Even for systems that go online at the end of Q1 (i.e. March 20th), the state will then have a full 3 months to get the system certified for Q1 SRECs on July 15th.

If a system was interconnected in Q1 but is not certified in DOER by July, then it’s first chance to create SRECs will be October 15th. On that date, DOER will only create Q2 SRECs, and will ignore any Q1 SRECs that would have been generated for the system on July 15th.

All recent applications to SRECTrade’s EasyREC service have already been submitted to DOER on the customer’s behalf, and thus are not going to be affected by this change. Feel free to follow up with us, though, if you would like to double-check your status.

If your system went online before March 31, 2011 and you have not yet submitted your application, go to our EasyREC page and fill out the forms as soon as possible!

Tags: DOER, MA, MA DOER, Massac, Massachusetts, Massachusetts DOER, Massachusetts Solar Carve-out, Massachusetts Solar Renewable Energy Certificates, Massachusetts SRECs
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Final SRECTrade Auction for MA 2010 SRECs is Friday, June 3rd

Posted May 27th, 2011 by SRECTrade.

The trading year for 2010 Massachusetts SRECs is coming to a close. The deadline to opt-in to the Massachusetts Department of Energy Resources (DOER) administered auction is June 15th, however there is still time to sell through the SRECTrade MA auction! SRECTrade’s final 2010 MA SREC auction closes on Friday, June 3rd at 5 pm EST and is open to any market participant. The May 2011 SRECTrade auction posted a $570/SREC clearing price (95% of the MA SACP) and is indicative of the high demand for unsold MA SRECs.

Participants in the June 3rd Massachusetts SRECTrade auction will be notified of the auction results by Wednesday, June 8th- well before the opt-in period for the DOER auction. SRECs sold in the DOER auction will receive a maximum price of $285/SREC after DOER administrative fees. After the SRECTrade June 3rd auction any unsold 2010 MA SRECs that are not placed in the DOER auction by June 15th will be retired and will no longer be eligible for sale.

Massachusetts SRECs are created on a quarterly basis following a January 1st to December 31st energy year. According to the rules outlined by the DOER, SRECs created from generation in Q4 of each year (October, November, December) are first available for sale on the open market at the beginning of Q2 (April 15th) the following year. Following the same cycle, SRECs created from solar generation in Q1 of 2011 are not available until the beginning of Q3 (July 15th). For this reason SRECs created at the end of 2010 are still being traded in SRECTrade’s monthly auctions through the June auction. Due to high demand for unsold SRECs there should be little activity, if any, in the DOER auction.

Please visit www.srectrade.com for more information on SRECTrade and Massachusetts SREC pricing.

Tags: ma solar, MA SREC, MA SRECs, Massachusetts Solar, Solar, solar ma, SREC, SREC Aggregator, SRECs
Posted in Massachusetts, SREC Markets | Comments Off on Final SRECTrade Auction for MA 2010 SRECs is Friday, June 3rd

SRECTrade’s unique Massachusetts aggregation fosters individual control and market diversity

Posted March 30th, 2011 by SRECTrade.

A key (and unique) benefit of the SRECTrade aggregation in Massachusetts is that all facilities produce their own SRECs and can track and control them online. SRECs are created each quarter at a rate of 1 SREC per 1,000 kWh and tagged to each individual facility in the SRECTrade aggregation. Any remainder is then carried forward and added to the generation for the next quarter.

One of the fundamental components of any successful market is diversity of sellers and buyers. The market-based platform that SRECTrade has designed relies on this diversity. In Massachusetts, SRECTrade manages the largest aggregation in the state’s SREC program. One of the key selling points of the SRECTrade aggregation over others is the individual facility’s ownership of SRECs. Unlike other aggregations where the generation of multiple facilities are combined to create “shared” SRECs in NEPOOL GIS, SRECTrade takes additional steps to ensure that each facility has its own separate SREC account in NEPOOL GIS.

By way of background, there are 3 types of entities that make up the SREC ecosystem in Massachusetts. The Mass CEC Production Tracking System (PTS) is responsible for verifying readings and transferring them to the SREC tracking registry. NEPOOL GIS is the SREC tracking registry that every aggregation will use to track and trade SRECs in the market. In addition to providing a market functionality, SRECTrade offers an aggregation service, known as EasyREC, that gives individual solar facilities access to their SRECs and the market in one online account on SRECTrade.com. Verification (PTS), tracking (NEPOOL) and trading (SRECTrade) make these markets work.

Prior to the SREC program in Massachusetts, a similar structure was used for the Class I REC market dominated by wind and other non-solar renewables. A major difference between the Class I REC market and the SREC market is the value per certificate. Class I RECs trade around $10/REC, while SRECs could be anywhere from $300 to $600/SREC. Since the value (and variability) of the Class I REC market is so insignificant, the existing aggregation model was simplified to combine the generation of all the facilities in an aggregation into one REC account. When this happens, the RECs are only tagged to the aggregation and not to any individual facility. This doesn’t work for SRECs since the value is so much greater and individual ownership is therefore much more important.

The problem with the existing model at the implementation of the Massachusetts SREC program was that it limited the diversity of sellers. All the SRECs created by an aggregation would be tagged to the aggregation and not-differentiated. It also created complexity around accountability in the SREC market, where a buyer who purchases from an aggregation will have no way of verifying what facility the SREC comes from and where that facility is located (though PTS does account for this at the generation level). From the standpoint of SRECTrade, it would not be possible to operate a fair and competitive market if the SRECTrade aggregation lumped all of its customers’ generation together to create one large batch of SRECs. The resulting market on SRECTrade.com would include a couple smaller aggregations and one large seller representing all of SRECTrade’s aggregation. Facility owners would lose control over when, where and how much the SRECs were sold for in the market.

Fortunately, SRECTrade was able to work with the DOER, NEPOOL and PTS to implement a solution that allowed individual facilities to have their own listings in NEPOOL GIS. Their flexibility in allowing aggregations to report for individual facilities meant that any generation reported by a facility to PTS is sent directly to that facility’s record in NEPOOL GIS each quarter, where the SRECs are created for the facility. Since SRECs are created for every 1,000 kWh, any remainder is then carried forward and added to the next quarter. The screenshot of an online account on SRECTrade.com is a good example of how SRECs are created and the remaining generation is carried forward.

In establishing individual facility ownership of SRECs, SRECTrade has successfully created a diverse platform that gives sellers the control over, and accountability for, their own SRECs in the market. Without this diversity, the open, public and fair market platform would not exist and facility owners would be limited to the options provided by a small group of non-transparent aggregators – a throwback to the early years of the New Jersey SREC programs when the early aggregators could make as much as 40% on trades behind closed doors. Fortunately, the advent of the public SREC markets have transferred much of the SREC value back to the facility owners where it belongs.

Tags: MA SREC aggregation, Mass SREC aggregation, Massachusetts SREC aggregation, SREC aggregation
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How long will projects be eligible for the Massachusetts Solar Carve-Out?

Posted March 16th, 2011 by SRECTrade.

Understanding the length of time that Massachusetts solar facilities can generate and sell SRECs as part of the Solar Carve-Out is key to financing solar in the state. In an earlier post, we explained the Massachusetts Last-Chance Auction in great detail. The purpose was to help stakeholders understand the conditions, if any, that would result in the SREC market dropping below $285. From there, it is also important to understand how long a facility can bank on the floor price set by the auction.

The Opt-In Term is the length of time a facility is eligible for the Last-Chance Auction
There are a few misconceptions regarding the “10-year” Opt-In Term and the 400 MW Minimum Standard Cap. For example, it might seem that the program is slated to last 10 years or until it reaches 400 MW, after which the SRECs go away. This is most definitely NOT true. The Opt-In Term actually represents the length of time that a facility that is approved for the SREC program can opt into the Last-Chance Auction, i.e. the amount of time a facility is guaranteed a floor price in the market. Once a facility is approved, this term cannot be changed – though the Opt-In Term for future projects may be adjusted by the DOER (see below).

The 400 MW Cap is a limit to the amount that will be approved for the Solar Carve-Out
Meanwhile, the 400 MW cap is actually just a limit to the capacity of projects that can be eligible for the Solar Carve-Out. The 400th MW approved for the SREC program will be eligible for the full-length of the published Opt-In Term. This means that if Massachusetts reaches 400 MW in 2015 and the Opt-In Term is still 10 years, then the Solar Carve-Out will fade out in 2025. In simple terms: the state will accept 400 MWs into the program and every accepted facility will be guaranteed a floor of $285 for “X years” from the time it is installed. “X years” will vary based on the Opt-In Term established in the year of installation.

The Opt-In Term may change for future projects
Today, the Opt-In Term is 10 years and that will not change for any existing projects. However, every year, the DOER may make a change to the Opt-In Term for NEW facilities based on the results of the last-chance auction. If there is an oversupply, then the Opt-In Term may be decreased by as much as 2 years to a minimum of 5 until 2017, and a minimum of zero thereafter. If there is a shortage, the Opt-In Term may be increased to a maximum of 10 years.

The Solar Carve-Out expires when the Opt-In Term ends for the final project approved under the 400 MW Cap
Finally, facilities can continue to sell SRECs after the Opt-In Term as long as the Solar Carve-Out program is still in place. The only difference is that those facilities will no longer be eligible for the Last-Chance Auction and therefore are not supported by the $285 floor price. The Solar Carve-Out will expire after the Opt-In Term for the final project registered under the 400 MW Cap has concluded AND all remaining SRECs created during that time have either been sold or expired. After this time, all facilities will be transferred to the RPS Class I REC market (which by that time could be worth very little).

Here are the key paragraphs taken from the DOER Solar Carve Out website worth reading carefully:

Minimum Standard Cap and Termination of the Program
The Minimum Standard is capped at 455,520 MWh (sufficient to enable the installation of approximately 400 MW of solar PV). When DOER qualifies 400 MW of solar for the program, qualification of all additional solar installations is transferred to the RPS Class I Program. Once the cap has been met, the Minimum Standard for the RPS Solar Carve-Out will be set annually per regulation to maintain market balance. The RPS Solar Carve-Out program remains in effect until all the Auction Opt-In Terms of the qualified projects and the full shelf-life years of any Re-Minted Auction SRECs have both expired, thereby maintaining the price certainty promised to all solar generators. For the year after the final Compliance Year, when the Solar Carve-Out Minimum Standard is set to zero SRECs shall cease to exist, and all generation from qualified Solar Carve-Out Renewable Generation Units shall produce RPS Class I Renewable Energy Attributes.

Opt-In Term
The Auction Opt-In Term is defined as the number of years (expressed in calendar quarters) that a project is eligible to deposit SRECs into the Solar Credit Clearinghouse Auction Account. For all projects qualified in 2010, this is set at 10 years, or 40 quarters. Any SRECs generated in this span of 40 quarters will be eligible to participate in an auction that will potentially be held each July, where they will be assured a price of $300/MWh for their SRECs (minus a $15 auction fee assessed by DOER). This mechanism sets a floor price for SRECs and gives projects long-term price assurance should they be unable to sell them directly to LSEs or there be an oversupply of SRECs. Once a project’s Opt-In Term has expired, its owner may continue to sell their SRECs until the program officially ends, but will not have the price assurance guaranteed by the ability to Opt-In to the auction.

Adjustments to Auction Opt-In Term
Long Market (SREC Oversupply) Adjustment: The Auction Opt-In Term is reduced by 4 quarters for each full 10% of the year’s Compliance Obligation that is deposited into the Auction Account. The maximum reduction per annual adjustment is two years. The minimum Auction Opt-In Term is 20 quarters or 5 years for the first 7 years of the program (through Compliance Year 2016). After that time, the minimum term is reduced to zero years, unless otherwise set by the Department of Energy Resources (DOER). Short Market (SREC Shortage) Adjustment: The Auction Opt-In Term is increased by 4 quarters for each full 10% of the year’s Compliance Obligation that is met through Alternative Compliance Payments. The maximum reduction per annual adjustment is two years. The maximum Opt-In Term is 40 quarters.

In conclusion, we will monitor the Opt-In Term as it is published each year by the DOER. The term will not change for existing projects once established, but it will impact new projects. Solar developers should consider this as they do project finance for facilities that may not be completed this year. Given the shortage in the SREC market in 2010, we do not foresee any changes to the Opt-In Term in 2011.

SRECTrade continues to offer long-term Fixed-Price and Upfront SREC payments for solar projects in Massachusetts.

Tags: Length of SREC Program in Massachusetts, MA SREC, MA SRECs, Mass Solar Carve-Out Term, Massachusetts Solar Carve-out, Massachusetts Solar RPS, Massachusetts SREC, Massachusetts SRECs, Minimum Standard Cap, Opt-In Term, SREC Opt-In Term
Posted in Massachusetts | Comments Off on How long will projects be eligible for the Massachusetts Solar Carve-Out?

DOER lowers Massachusetts SREC SACP from $600 to $550

Posted February 1st, 2011 by SRECTrade.

As we have written previously, the DOER’s Massachusetts Solar Carve-out has established an SREC market that could become the model that many states move towards in order to promote solar in the U.S. For an industry accustomed to the promotion of the feed-in tariff model, the Massachusetts market represents a hybrid between the market-based approach of SREC programs popular on the East Coast and the fixed-subsidy approach of the feed-in tariff model popular in Europe, though nearly non-existent in the U.S.

Through the use of a ceiling price set by a $600 SACP and a floor price set by a $300 last chance auction mechanism, the DOER is able to keep SREC prices within a manageable range. One of the significant caveats of the rules by which the DOER implements the solar carve-out is that it can, at its discretion (and with proof of justification) reduce the SACP by up to 10% in any given year. That announcement needs to be made by January 31st of that year and the DOER did just that yesterday on January 31st, 2011

According to the DOER, the ACP will drop by $50 from $600 to $550 for the 2011 SREC year. This means that any SRECs generated beginning in January and subsequently created beginning in July will have a ceiling of $550 instead of $600. The announcement and justification are found here:

COMMONWEALTH OF MASSACHUSETTS
EXECUTIVE OFFICE OF ENERGY & ECONOMIC AFFAIRS
DEPARTMENT OF ENERGY RESOURCES

RENEWABLE ENERGY PORTFOLIO STANDARD (RPS) – CLASS I
SOLAR CARVE-OUT

Reduction of the Alternative Compliance Payment (ACP) Rate

January 31, 2011
DOER is authorized under 225 CMR 14.08(3)(b)2 to reduce the Alternative Compliance Payment (ACP) rate pertaining to the Solar Carve-Out portion of the RPS Class I obligation. Any such rate reduction may be no more than 10% in any one Compliance Year, must be announced by January 31st of that year, and must be accompanied by an explanation.

DOER hereby reduces the Solar Carve-Out ACP Rate to $550 per MWh, down by 8.3% from the program’s 2010 initial rate of $600/MWh. The new $550/MWh rate is effective for Compliance Year 2011 and thereafter, unless and until DOER makes a further reduction by January 31st of any subsequent year.

DOER has reached this decision after careful consideration and deliberation on the market conditions facing solar development in Massachusetts since 2009, when the original $600 ACP level was set. During this time, solar developers have enjoyed declining PV module costs and have used conservative financial assumptions.

Globally, over the past two years, PV module prices have experienced significant price drops, and some European solar feed-in tariff rates have been reduced. Locally, installed costs for projects qualified for the Solar Carve-Out have trended downward between 5% and 10% since the beginning of the program. Elsewhere, Lawrence Berkeley Laboratory reports installed solar PV prices dropping in 2010 about $1/W in the major PV markets in California and New Jersey (http://eetd.lbl.gov/ea/ems/reports/lbnl-4121e.pdf). DOER remains committed to the growth of our solar market and to achieving this growth at lowest cost to Massachusetts electric customers.

The discretion of the DOER in making this change has been clear from the rules set at the outset of the program. It is surprising that this adjustment would happen so early in the adoption of the program, particularly given the shortfall of SRECs in Massachusetts in the first year of the program. However, the 2010 shortage is not necessarily a reflection of the feasibility of financing solar in Massachusetts with the solar carve-out in place. It likely has more to do with the amount of time it takes to implement the program logistically, the time it takes to educate stakeholders, and the time it takes to go to the retail and institutional markets with the new, SREC-driven economics. In the states that have come before, the full adoption of SREC-based economics has taken 3-4 years. Ohio is a full two-years into the program and the industry is still catching up (though Ohio’s problem has more to do with a flawed design). Massachusetts may see adoption quicker given a growing industry consciousness around SRECs and a program that can *almost* be simply described as you install solar, you get back $300-$600 per megawatt-hour that your system produces in addition to your electricity savings/sales for 10-years.

That *almost* is where we are today as the implications of a reduced SACP brings some of the caveats of the program to the forefront. That range of pricing has now been squeezed to $300-$550, and it also means that anyone following the SREC market should start to wonder if $550 will be $500 in 2012 and $450 in 2013 and at some point this just turns into a fixed feed-in tariff at $300. One thing is clear: the DOER has created a program that gives it the levers necessary to make it flexible enough to keep pace with solar industry trends and that the DOER will not hesitate to pull those levers.

As we mentioned, the ability of the DOER to adjust the ceiling price was apparent in the rules, but there is no mention that anything can be done to change the $300 fixed-price in the last chance auction. We believe that this was a cornerstone to the program. And the only apparent variable with the floor price is the Opt-In term which sets the number of years a facility may be eligible for the last-chance auction – initially set at 10 years.

Finally, as the largest aggregation and market in Massachusetts, SRECTrade has been partnering with buyers to extend various options to our network of installers. These options now include upfront payments and 5-year+ fixed-price contracts for facilities of all sizes. Our goal is to ensure that our customers have every possible option available when making a decision on how best to go solar with the Massachusetts solar carve-out. Installers can learn about joining our network here: SRECTrade Installer Network.

Tags: MA SACP, Mass SACP, Mass Solar Carve-Out SACP, Massachusetts SACP, Massachusetts SREC, Massachusetts SRECs, Solar Carve-Out SACP
Posted in Massachusetts | 2 Comments »