Archive for the ‘SREC Markets’ Category

SRECTrade Webinar for Massachusetts Installers

Posted November 16th, 2012 by SRECTrade.

SRECTrade will host an hour long webinar for Massachusetts solar installers on Wednesday, 12/5 at 2 pm EST.  To register for the webinar please click here.

The webinar will be co-moderated by SRECTrade’s CEO Brad Bowery,  Lisa Wadsworth and Sam Rust. The presentation is slated to last 30-40 minutes, with the the rest of the webinar open for questions. Topics covered in the presentation will be:

  • Overview of customer options
  • Account set up best practices
  • SREC market mechanics
  • Pricing trends and market outlook
We look forward to seeing you online Wednesday, 12/5 at 2 pm EST!

About the presenters:

Brad Bowery is the CEO of SRECTrade, a company that he has managed since 2008. Under Brad’s stewardship SRECTrade provides SREC services for over 5,000 facilities and 70+ MW of aggregated solar capacity. Brad holds an MBA from the Stanford Graduate School of Business.

Lisa Wadsworth is the Applications Manager for SRECTrade and is responsible for managing SRECTrade’s team of employees dedicated to navigating the complex SREC registration process across all of the SREC markets.

Sam Rust is the Director of Channel Operations for SRECTrade and works closely with the company’s installer partners to improve SRECTrade’s services.

Pennsylvania Legislative Update

Posted November 14th, 2012 by SRECTrade.

In July 2012 Pennsylvania State Senator Dave Argall (R-29th District) introduced PA Senate Bill (SB) 1350 with 18 co-sponsors. The bill was then submitted to the Pennsylvania Consumer Protection and Licensure Committee in August. The earliest the Bill could be reviewed is in the 2013 legislative session, so there is little to report right now.

Senator Argall’s website describes SB 1350 as an updated adoption of Representative Chris Ross’ (R-Chester) failed House Bill 1580 which we described in these previous blog posts.

Key points proposed in SB 1350 are:

  • Accelerates the existing Pennsylvania Renewable Portfolio Standard (RPS) over 3 years, starting with RY 2013.
  • Establishes a cap on the SREC prices through a set Alternative Compliance Payment (ACP) of $285 per SREC out to 2019 (currently PA does not have an ACP), followed by a decline of 2% per year.
  • Allows for solar thermal facilities to qualify for SRECs along with solar photovoltaic systems.
  • Adds consumer protection language for educating stakeholders about SREC prices.
  • Does not include a clause to prevent qualified out of state photovoltaic facilities from selling SRECs in the Pennsylvania market.

New Jersey Revenue Grade Meter Deadline is November 30th

Posted November 13th, 2012 by SRECTrade.

Starting December 1, 2012 all New Jersey sited photovoltaic facilities must report power generation for SRECs from revenue grade meters.  The New Jersey Board of Public Utilities (BPU) ruling requires revenue grade meters  that are accurate to +/- 2% and that are compliant with the American National Standards Institute (ANSI) rule C12.1-2008 standard. See our previous post on the topic here.

Prior to this rule change facilities smaller in size than 10 kW DC capacity had the option to report from “estimated” production. With this change no facilities will be able to create SRECs automatically from estimated generation and must report meter readings from an actual meter. Starting December 1, no SRECs from estimated production will be produced.

Switching from Estimates

If you are creating SRECs from estimated generation and are able to begin reporting your readings from your revenue grade meter please email customerservice@srectrade.com with your reading. We will then explain how to report your readings directly to your www.srectrade.com account moving forward.

Installing a Revenue Grade Meter

  • If you have questions about revenue-grade meters, please contact a solar contractor or electrician. We won’t be able to answer questions regarding your solar equipment.
  • Residential revenue grade meters installed by solar contractors tend to range in price from $300 to over $1,000 depending on the type of meter installed.
  • Some SRECTrade clients have opted to manage the revenue grade meter installations themselves by ordering meter parts direct from suppliers such as the Hialeah meter company (http://www.hialeahmeter.com). Equipment costs for an ANSI C12 compliant meter and a meter box are reported at around $50 retail. There would likely be additional costs for hiring an electrician to install the meter and any unforeseen equipment needs. SRECTrade does not have expertise in the technical and permitting requirements for meter installations, so we would advise first contacting a technical professional.

If you have questions about how to report your readings, please feel free to call us at (877) 466-4606 or email us at customerservice@srectrade.com

Solar Capacity in the SREC States – October 2012

Posted November 12th, 2012 by SRECTrade.

SRECTrade SREC Markets Report: October 2012

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

A more detailed analysis of supply, demand and price trends in the SREC markets can be found in the SREC Market Monitor, a joint-venture between SRECTrade and Greentech Media’s GTM Research.

A PDF copy of this table can be found here.

Overview of PJM Eligible Systems

As of November 12, 2012 there were 29,303 solar PV and 519 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these, 189 (0.63%) have a nameplate capacity of 1 megawatt or greater. Nineteen of these projects have a nameplate capacity of 5 MW or greater, up from 18 projects in the last analysis. New Jersey continues to host most of the larger scale facilities, claiming home to 68% of the projects, 13 of 19 facilities, that are equal to or greater than 5 MW. The three largest projects continue to be a 25.1 MW PSE&G utility pole mount project located in NJ, a 16.1 MW Mount St. Mary’s project in MD, and a 12.5 MW project located in NJ.

Massachusetts DOER Qualified Projects

As of November 13, 2012, there were 3,794 MA DOER qualified solar projects; 3,777 operational and 17 not operational. Total qualified capacity is 154.9 MW, 137.7 of which is operational and 17.3 MW not operational. Electricity suppliers providing power to the state need to acquire approximately 73,400 SRECs in 2012. According to NEPOOL GIS, 44,956 Q1 and Q2 2012 SRECs have been issued for the year to date. Additionally, 47,361 MWhs were reported to the MassCEC production tracking system for the 4 months covering July-October 2012.

How to Interpret This Table

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 with only that particular compliance period vintage. For example, New Jersey needed approximately 496.7 MW online for the entire 2013 reporting year to meet the RPS requirement with 2013 vintage SRECs only. SRECs still available from prior eligible periods can also impact the Solar RPS requirements. 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.

Note: SREC requirements for markets without fixed SREC targets have been forecast based on EIA Report updated 11/15/11 “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.

 

November 2012 SREC Auction Results

Posted November 9th, 2012 by SRECTrade.

SRECTrade’s November 2012 SREC Auction closed last week. Below are the clearing prices by vintage across the markets covered in the auction.

November SREC Prices Energy Year Ending
State 2011 2012 2013*
Delaware
Maryland $130.00
Massachusetts $199.00
New Jersey $70.01 $70.00
Ohio In-State
Ohio Out-of-State
Pennsylvania $15.00 $8.99
Washington, DC $251.00 $300.00

Notes:
*Delaware, New Jersey and Pennsylvania operate on a June-May energy year.
Green text represents a price increase over the last auction clearing price for that vintage, red text represents a decrease.
“-” reflects no sale, which would result if there were no SRECs available for sale in that vintage or there were no matching bids and offers to determine a clearing price.

For detailed analysis of SREC market prices and trends please subscribe to the SREC Market Monitor, a joint publication of Greentech Media’s GTM Research and SRECTrade.

State Market Observations:

Delaware: No DE SRECs transacted in the November auction.  The last auction price for DE2012 SRECs was $40.00 in the September 2012 auction. Most demand for DE SRECs will be through the DE SEU SREC Procurement Program solicitations. More information about these solicitations can be found at srecdelaware.com.

Maryland: MD2012 SRECs continue to decline in price, trading at $130/SREC. The 2012 market is expected to be oversupplied. More than 60,000 MD2012 SRECs, ~90% of this year’s requirement, have been issued through September generation. A portion of the 2012 oversupply is driven by a 20 MW project in Hagerstown, MD and a 16.1 MW project at Mount St. Mary’s University. There have been rumors that some of the SRECs from the Mount St. Mary’s project will be withheld from the market, but no official statement has been made public. The market is expecting this volume to impact supply.

Massachusetts: MA2012 SRECs continue to trade around $200/SREC. SREC issuance volumes through Q2 2012 and Q3 2012 MWhs reported to the MA CEC demonstrate that 2012’s requirements have been met. The market will likely be oversupplied by approximately 50% of this year’s compliance obligation. Many sellers remain confident they will be able to utilize the DOER’s solar credit clearinghouse auction if they are unable to sell their SRECs prior to the close of the trading year.

New Jersey: NJ2012 SRECs traded up $5/SREC, while the NJ2013 vintage remained flat at $70/SREC. December 1 is the final deadline for Load Serving Entities to complete their 2012 compliance requirements. SREC volumes issued through September, plus the oversupply from 2012, have surpassed the 2013 compliance obligation.

Ohio: OH Sited and OH Adjacent markets did not trade in the November 2012 auction. Both markets are oversupplied. It appears that most demand for OH Sited SRECs has been fulfilled through long term agreements with large utility scale projects or through long term RFPs with the state’s regulated utilities. Given the current market, it is likely there will be minimal demand for the remaining part of the 2012 compliance year.

Pennsylvania: Both PA2012 and PA2013 SRECs traded down from $17 to $15 and $20 to $8.99, respectively. The lack of demand for the 2013 vintage caused the significant decline. SREC oversupply continues to impact PA’s market. 

Washington, DC: The 2012 vintage increased from $290 to $300/SREC. New installations continue to come online slowly as the geography of the District is challenging for developers. The 2012 market is likely under supplied given the estimated requirements for the 2012 compliance year.

For historical auction pricing please see this link. The next SRECTrade auction closes on Monday, December 3rd at 5 p.m. ET and will cover MA and PJM Solar RECs. Click here to sign in and place an order.

Solar Capacity in the SREC States – September 2012

Posted October 16th, 2012 by SRECTrade.

SRECTrade SREC Markets Report: September 2012

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.

PJM Eligible Systems

As of this writing, there were 28,657 solar PV and 468 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these eligible systems, 185 (0.64%) have a nameplate capacity of 1 megawatt or greater, of which 18 systems are greater than 5 MW. The largest system, the PSE&G utility pole mount project located in New Jersey, is 25.1 MW, and the second largest, located in Maryland is 16.1 MW. The third largest system, at 12.5 MW, is located in New Jersey.

Massachusetts DOER Qualified Projects

As of October 10, 2012, there were 3,218 MA DOER qualified solar projects; 3,206 operational and 12 not operational. Total qualified capacity is 132.0 MW, 123.9 of which is operational and 8.0 MW not operational. Electricity suppliers providing power to the state need to acquire approximately 73,400 SRECs in 2012. According to NEPOOL GIS, 44,956 Q1 and Q2 2012 SRECs have been issued for the year to date. Additionally, 36,576 MWhs were reported to the MassCEC production tracking system for the 3 months covering July-September 2012.

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 with only that particular compliance period vintage. For example, New Jersey needed approximately 496.7 MW online for the entire 2013 reporting year to meet the RPS requirement with 2013 vintage SRECs only. SRECs still available from prior eligible periods can also impact the Solar RPS requirements. 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.

Note: SREC requirements for markets without fixed SREC targets have been forecast based based on EIA Report updated 11/15/11 “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.

The Argument for SRECs

Posted October 16th, 2012 by SRECTrade.

Occasionally SRECTrade is asked to defend the efficacy of the SREC system. The harsh drop in SREC prices over the last several months in New Jersey and the long-term outlook for Pennsylvania are sobering examples of SREC market volatility. A recent guest post on Greentechmedia itemized the viewpoint that the structure of SREC markets (in their current form) are detrimental to the distributed solar industry. While we agree that the SREC subsidy mechanism is complicated and can be improved upon we also think SRECs are the best option proposed to date. Like the Winston Churchill quote on democracy we say “SRECs are the worst form of incentive except all of the others that have been tried.”

So far we’ve been presented with two production-based options for subsidizing the solar industry: 1) feed-in-tariffs (FITs) and 2) solar renewable energy credits (SRECs). It is our opinion that non-production based incentives (read grants and tax credits) are a poor method for incentivizing solar as they focus on capacity without regard for long-term optimization and maintenance of the systems to maximize lifetime electricity production.

At their most basic level, FITs are fixed electricity rate guarantees to project owners above the cost of non-solar electricity. FITs typically operate independent of a market. SRECs are a market-based incentive that fluctuate in value depending on supply and demand factors and are traded separately from the actual electricity produced. The idea is that SREC pricing should reflect a market’s need for the subsidy. Below we use some of the concerns we’ve heard voiced about SRECs to underline why they are the best option we have for now.

SRECs Enhance Risk – By definition SREC markets are risky because un-contracted SRECs do not have a fixed price. These risks should be factored into any solar investment in the SREC market states. The problem is that the solar industry ignores huge risks posed by other subsidy schemes and focuses on SREC risk instead. For example, FITs were seen by project finance players as a risk-free long-term contract subsidy until places like Spain, in an effort to control unforeseen costs, retroactively applied production caps for payments far below actual power production and wiped out the economics from under the feet of existing solar systems.

With SRECs you have an independently tradable asset that allows you to sign contracts with counterparties that can be evaluated using standard commercial risk techniques.  With a FIT you’re subject to the whim of a government that may be elected several years from today concerned with cutting “excess” costs. Additionally, solar subsidies tied to payment for actual electricity production (SRECs are traded independent of the sale of solar electricity) are subject to the risk that utilities will impose creative methods to recapture their costs. For example utilities have tried to impose punitive standby charges (recently been attempted in NJ, AZ, CA, and VA), and the tiered residential tariff structure that has driven the CA market is always subject to change. Even the 1603 cash grant in lieu of the investment tax credit (ITC) is subject to claw back, so not even the grant incentive is risk-free. The bottom line is that SREC risk is known at the outset and therefore can be managed, and in fact may be the least “risky” part of the investment.

SREC markets don’t balance themselves- Again, SREC markets aren’t perfect. The long latency between market signals and impacts on build rates are a weakness that market systems like the Massachusetts SREC market are attempting to improve. SREC markets could also be improved in this regard policy adjustments like requiring traditional electricity suppliers (the “natural” buyers of SRECs) to meet compliance requirements throughout the year, among other things. A FIT, on the other hand, is a government determined rate that is almost by definition going to be either set too high, which will give windfall profits to developers, or too low which won’t provide enough incentive to produce the desired result. A grant is an even blunter policy instrument. The compounding impact of the 1603 cash grant and state and local grant programs are large contributors to “failed” SREC markets like PA.

SRECs are too complicated- We spend a good amount of time trying to simplify and explain SREC markets, so we understand this criticism but also understand that there is almost an inverse correlation between complexity and maximum effectiveness with minimal cost. We can make it dead simple but ineffective and costly, or a little more complicated and more cost effective. An SREC program allows those who want simplicity to trade off a slightly lower return in exchange for SRECTrade or other SREC service providers to manage all the complexity of SRECs for them. Those who want to maximize returns can manage that complexity themselves. FITS and grants don’t offer this degree of flexibility and cost effectiveness.

Some Parties Bear Disproportionate Amounts of Risk- In a fully functioning market, aggregated groups of smaller players can sign up for the same contracts as larger projects, and this has been the case for some time in most of the SREC markets. This means market price is almost solely determined by aggregate supply and demand, making it hard for a single competitive supplier to have outsize influence against the aggregated supply of a company like SRECTrade.

We acknowledge that there are market inefficiencies at play that allow larger solar developers advantages, but these advantages can be mitigated through tiered mechanisms like those seen in the Delaware SREC Procurement Program where residential and solar commercial facility owners do not compete against large, sophisticated facility owners and developers.

SRECs Guarantee a Certain Amount of Added Cost- Any incentive program has administrative costs. If you use a FIT or rebate program then it will likely be administered by a regulated utility or government agency, neither of which have any competition to compel them to drive down costs. While SREC markets require aggregators and brokers, these are themselves competitive markets where service providers are incentivized to minimize their cost in order to be able to compete for customers on price.

SREC programs aren’t perfect by any means, but in our opinion they’re the best we’ve got and the proof is in the results. California is often cited as a counter-model the SREC system, but New Jersey (the largest SREC market) overtook California as the state with the most MW of solar installed the first quarter of this year, all the more amazing when you consider that CA has four times the population and a green reputation.

New Jersey Revenue Grade Meter Requirement

Posted September 28th, 2012 by SRECTrade.

In late spring 2012, the New Jersey Board of Public Utilities (BPU) mandated that all photovoltaic facilities participating the in the New Jersey SREC market have revenue-grade meters installed to monitor system production. Previous to the ruling it was possible for systems with a nameplate capacity of less than 10 kW create SRECs from production estimates derived from the National Renewable Energy Laboratory’s  PV Watts production calculator. This ruling impacts thousands system of homeowners in New Jersey who have gone solar over the past several years. You can read more about the decision at the New Jersey office of Clean Energy website. The two key aspects of this ruling are:

1. In order to be eligible for SRECs, all NJ customers must have a revenue-grade meter by November 30, 2012.

2. Customers who have had SRECs created by estimates will have to begin reporting readings by November 30, 2012.

Revenue-grade Meters

Revenue-grade meters are power production meters that measure to +/- 2% accuracy per the American National Standards Institute (ANSI) rule C12.1-2008. Inverters often have power production meters but they are often only accurate to  +/- 10%. The revenue-grade meter is the device that measures the output of your solar system, not the utility meter that measures how much power you take from the power grid. Many residential installs in New Jersey have used cheaper, non-revenue-grade meters because the state originally did not require them. If your meter is not a revenue-grade meter or you are unsure about whether or not you have a revenue-grade meter, you will need to contact your installer. If you are unable to reach your installer, you can use our directory to find a local installer. We have seen price quotes in the $300 to $1,000 range depending on equipment requirements and facility location.

Switching from Estimates

Many of our customers already report their readings to SRECTrade each month. If you have not been reporting to us because you are on “Estimated Generation”, your SRECs will no longer be created automatically after November 30th.  On that date, we will switch all customers who are currently on “estimates” to “reported readings”. If you are on estimates and are able to begin reporting your readings from your revenue-grade meter sooner than that, please email customerservice@srectrade.com with the date that the meter was installed and your current meter reading. We will then update your account and explain how to report your readings directly to your www.srectrade.com account moving forward.

***If you have questions about revenue-grade meters, please contact an installer. We won’t be able to answer questions regarding your solar equipment.

Finally, it is very important that you comply with this change, otherwise you will lose thousands of dollars in potential SREC revenues in the long run. We understand that the BPU ruling is unfortunately retroactive for systems that did not have a meter already installed, however, we hope that this information will make it easier for you to comply with the change.

 

New York Solar Legislation Update

Posted September 21st, 2012 by SRECTrade.

A series of bipartisan bills were signed by Governor Andrew Cuomo on August 20th aimed at supporting business and homeowner investments in solar energy.  We outline the bills below.

Bill 34-B, expands the 25% tax credit for non- 3rd party owners, lessees, and PPA off takers. The credit does not exceed $3,750 for “qualified solar energy system equipment expenditures” before September 1st, 2006 or $5,000 on “qualified solar energy system equipment expenditures” after September 1st 2006. Qualified solar expenditures include:

A) Solar equipment installed on a property in the state and is the principal residence of the taxpayer at the time of install.

B) A solar equipment lease of at least 10 years in New York and is the principal residence of the taxpayer at the time of install.

C) Power purchase agreement spanning at least 10 years in New York and is the principal residence of the taxpayer at the time of install.

D) The expenditures connected with installation and labor.

E) This does not include the interest or other finance charges of solar equipment purchase.

Bill A10620 allows a property tax abatement over a “compliance period” of four years available to solar-generating systems installed in cities of one million people or more. The bill covers:

A)  Installations before January 1st 2011 can receive a tax credit that is the lesser of:

    1. 8.75% of facility cost
    2. 8.75% total amount of taxes payable
    3. $62,500

B) Installations on or after January 1st 2011 and before January 1st 2013 can receive a tax credit that is the lesser of:

    1. 5% of facility cost
    2. 5% total amount of taxes payable
    3. $62,500

C) Installations on or after January 1st 2013 but before or on January 1st 2015 can receive a tax credit that is the lesser of:

    1. 2.5% of facility cost
    2. 2.5% total amount of taxes payable
    3. $62,500

Senate Bill S03203 exempts commercial solar energy system installation costs from state sales tax obligations. Additionally Senate Bill S03203 gives municipalities the power to grant certain systems a tax exemption.

On another note, the much anticipated, “NY Solar Jobs Act” legislation, formally bill A05713 has been watered down under a renamed Assembly Bill  A09149.  This new bill, proposed by Assemblyman Steven Englebright eliminates language creating a state-wide SREC market due to push back from the New York Senate and Governor’s office. Representatives from Steven Englebright’s office, maintain “cautious optimism” that the bill will gain support when the 2013 Legislative Session begins in January. As of September 7th,  the “Solar Jobs Act” is searching for a Senate sponsor.

Analysis of the bill can be found on VoteSolar.org here. The bill sets a solar target of 670 MW in 2015 and ramps up to 3,000 MW in 2021 but segments goals in to three separate requirements, based on type of utility. The bill allows the utilities the ability to define how they plan to achieve the solar mandate and does not specify interim solar requirements between 2015 and 2021.

 Utility Type  2015  2021
 Investor Owned Utilities (IOUs)  270 MW  900 MW
 New York Power Authority  120 MW  400 MW
 Long Island Power Authority  150 MW  500 MW

Solar Capacity in the SREC States – August 2012

Posted September 12th, 2012 by SRECTrade.

SRECTrade SREC Markets Report: August 2012

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.

PJM Eligible Systems

As of this writing, there were 28,155 solar PV and 437 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these eligible systems, 185 (0.65%) have a nameplate capacity of 1 megawatt or greater, of which 18 systems are greater than 5 MW. The largest system, the PSE&G utility pole mount project located in New Jersey, is 25.1 MW, and the second largest, located in Maryland is 16.1 MW. The third largest system, at 12.5 MW, is located in New Jersey.

Delaware: The reporting year 2012 (6/1/12 – 5/31/13) requirement for DE equates to approximately 48,100 SRECs being retired. If all retired SRECs were of DE2012 vintage, approximately 40.1 MW would need to be operational all year long. As of September 11, 2012, 28.8 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS. As of September 11, 2012, PJM GATS reported the issuance of approximately 5,900 DE2012.  Additional SRECs from prior eligible periods may also impact the market should there be a demand for these older vintage SRECs.

Maryland: As of September 11, 2012, 72.5 MW of MD sited solar capacity was registered to create MD eligible SRECs. A large increase came from a 16.1 MW project Constellation Energy commissioned at Mount St. Mary’s University. The 2012 reporting year requirement for MD equates to approximately 67,310 SRECs being retired. If all retired SRECs were of MD2012 vintage, approximately 56.1 MW would need to be operational all year long. As of September 11, 2012, PJM GATS reported the issuance of approximately 41,800 MD2012 SRECs. Lastly, there are MD sited SRECs available from prior eligible periods, which could be utilized for compliance needs in 2012.

New Jersey: The New Jersey 2012 and 2013 reporting years require 442,000 and 596,000 eligible SRECs, respectively. For 2012, this equates to approximately 368 MW of capacity being operational all year long and 496.7 MW for 2013, assuming all requirements were met with current vintage year SRECs. As of September 11, 2012, 843.3 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 843.3 MW figure. As of July 31, 2012 the NJ Office of Clean Energy (NJ OCE) reported that 852.7 MW of solar had been installed in NJ. Estimates for August 2012 show a total of 876.0 MW. On July 23, NJ Governor, Chris Christie, signed into law legislation to increase the Solar RPS requirements. For details see the following: NJ Governor Christie Signs Bill to Increase Solar Requirements. As of September 11, 2012, PJM GATS reported the issuance of approximately 699,200 NJ2012 SRECs. This figure surpasses the current 2012 compliance year requirement of 442,000 SRECs by approximately 257,200 SRECs. Additionally, the second month of RY2013 generation was issued at the end of August. GATS reported a total of 196,700 total NJ2013 SRECs for the compliance year to date were issued; approximately 33% of the current year’s obligation (not considering the eligible oversupply from NJ2012).

Ohio: Ohio’s 2012 RPS solar target requires approximately 95,300 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 September 11, 2012, 50.2 MW of in-state capacity and 96.7 MW of out-of-state capacity were eligible to generate OH SRECs. As of September 11, 2012, GATS issued approximately 40,400 in-state and 71,900 out-of-state OH2012 eligible SRECs. Additional SRECs from prior years are also eligible for the current compliance period, which may impact the current year’s requirements.

Pennsylvania: The reporting year 2012 and 2013 requirements for PA equates to retiring approximately 49,450 and 78,750 eligible SRECs, respectively. If all compliance obligations were met using 2012 and 2013 vintage SRECs, approximately 41.2 and 65.6 MW would need to be operational all year long within each compliance period. As of September 11, 2012, 222.4 MW of solar capacity was registered and eligible to create PA compliant SRECs. As of September 11, 2012, PJM GATS reported the issuance of approximately 220,000 PA2012 SRECs. Given the oversupply during previous reporting years, there are also SRECs from the 2010 and 2011 reporting years eligible for the PA2012 compliance period. Additionally, as of September 11, 2012 GATS reported approximately 52,000 PA2013 SRECs were issued.

Washington, DC: DC’s 2012 RPS amended solar target requires approximately 61,180 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 SREC and capacity 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 September 11, 2012, 24.4 MW of capacity was eligible to generate DC SRECs. Additionally, as of September 11, 2012, GATS reported the issuance of approximately 18,000 DC2012 eligible SRECs. 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 September 11, 2012, there were 3,134 MA DOER qualified solar projects; 3,118 operational and 16 not operational. Total qualified capacity is 121.3 MW, 110.4 of which is operational and 10.9 MW not operational. Electricity suppliers providing power to the state need to acquire approximately 73,400 SRECs in 2012. According to NEPOOL GIS, 14,479 Q1 2012 SRECs were issued on July 15, 2012. Additionally, 53,359 MWhs were reported to the MassCEC production tracking system for the 5 months covering April-August 2012.

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 with only that particular compliance period vintage. For example, New Jersey needs approximately 368 MW online for the entire 2012 reporting year to meet the RPS requirement with 2012 vintage SRECs only. SRECs still available from prior eligible periods can also impact the Solar RPS requirements. 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.

Note: SREC requirements for markets without fixed SREC targets have been forecast based based on EIA Report updated 11/15/11 “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.