Archive for the ‘SREC Markets’ Category

PA Market Update

Posted July 28th, 2011 by SRECTrade.

The Pennsylvania 2011 SREC compliance year has seen a substantial amount of solar development. Solar capacity registered within the state has lead to a significant oversupply resulting in an 85% decline in spot market trading throughout the course of the 2011 reporting year.

Since September of 2010, PA SRECs have dropped from $300/SREC to $50/SREC. As of July 25, 2011, the 115.7 MW of registered generation has far outpaced the 2011 RPS requirements of 18 MW. This has been the result of additional PA solar incentives, on top of the SREC program, and a large influx of out-of-state systems; of the 115.7 MW registered in PA, 24.7 MW are located out-of-state.

Fortunately, Representative Chris Ross has proposed an amendment to the PA Alternative Energy Portfolio Standard. The amendment would modify the eligibility criteria so that only in-state systems could register in Pennsylvania after January 1, 2012. Furthermore, the solar carve-out requirements for energy years 2013, 2014, and 2015 would increase from approximately 71 MW, 118 MW and 205 MW to 207 MW, 238 MW, and 290 MW, respectively. These proposed changes should strengthen the market by increasing solar requirements and closing off out of state supply. However, the oversupply of SRECs in 2011 and 2012 will carry over into the 2013 solar year and may keep prices low. Given the legislature is out of session until October, further development will not occur until late 2011.

If new legislation does get passed, the market may shift from an oversupplied market to an undersupplied market. This shift could result in an increase in future SREC pricing. One of the determining factors for price is the Alternative Compliance Payment (ACP). In some states, NJ for example, the ACP is set by law and is known for future years. Buyers know exactly what the alternative payment will be, and thus have a basis for the maximum value of an SREC. In PA however, the future ACP is not known. The ACP is calculated based on the average price paid for an SREC during the current year with weighting to include solar rebates. For Chris Ross’s amendment to be truly successful, it will not only have to address the oversupply, but the ACP price as well.

To get involved with advocating for solar legislation, the Pennsylvania Division of the Mid-Atlantic Energy Industries Association (PASEIA) is a group of solar professionals who advocate for the interests of solar energy and a strong local PA industry. Their blog has some good information on the status of the bill.

PA SREC Market – Proposed Legislation and Current Capacity

Note: Capacity (MW) forecast based on PA RPS requirements and SRECTrade estimates. Capacity (MW) figures presented for May 2010, May 2011, and July 2011 based on registered systems in GATS as of date listed. The current requirements (i.e. green line) as of July 2011 demonstrates the capacity (MW) required for the 2012 reporting year; approximately 44 MW. Figures for 2013-2015 represent the estimated amount of installed capacity (MW) needed on average throughout the compliance year.

Tags: House Bill 1580, PA SREC, PA SRECs, SACP, selling SRECs, Solar Renewable Energy Certificates, SREC, SREC Programs, SREC States, SRECs
Posted in Pennsylvania, SREC Markets, SREC Pricing, State RPS | 3 Comments »

Tennessee Market Update

Posted July 27th, 2011 by SRECTrade.

After the Council of the District of Columbia recently voted to close the DC SREC market to out-of-state systems, Tennessee sellers find themselves without SREC options (solar system owners in American Electric Power territory may sell in to PA).

Tennessee does not have an in-state SREC market and we don’t see any activity in the state’s General Assembly to implement an RPS. The lack of an RPS and the rules of Tennessee’s regulated utility companies limits the state’s ability to create a traditional SREC market.

The state has, however, recently doubled their total solar capacity, up from 4.3 MW in 2010 to 8.8 MW through March 2011. In addition to two 1 MW solar farms installed by Efficient Energy of Tennessee, around 250 kW have been installed in Chattanooga through a program headed by Green Spaces, a local community organization promoting sustainable building practices. The program utilized an urban development grant along with other government incentives to install 10 systems totaling 248 kW. The program partnered with Sustainable Future, a Knoxville-based installation company.

Posted in SREC Markets | Comments Off on Tennessee Market Update

Solar Capacity in the SREC States – July 2011

Posted July 26th, 2011 by SRECTrade.

SRECTrade SREC Markets Report: July 2011

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

For a PDF copy of this table click here.

Capacity_July11

PJM Eligible Systems

As of the end of July, there were 17,106 solar PV (16,792) and solar thermal (314) systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS) registry. Of these eligible systems, 70 (0.40%) have a nameplate capacity of 1 megawatt or greater, of which only 4 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 10 MW, is located in IL and eligible for the MD, PA, and DC SREC markets. The fourth largest, at 6.2 MW, is located in New Jersey.

New Energy Year To Begin for DE, NJ, and PA

June 1, 2011 marks the beginning of the new energy year for DE, NJ, and PA. All requirements for these markets increase given their RPS solar carve out schedules. SRECs for the month of June, the first creation period for the new reporting year, will be minted at the end of July.

Delaware: The reporting year 2011-2012 requirement for DE equates to approximately 21 MW being online for the entire year or approximately 25,600 SRECs created. As of July 25, 2011, 9.1 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS.

New Jersey: The reporting year 2012 requirement for NJ equates to approximately 368 MW being online for the entire year with a fixed SREC requirement of 442,000 MWhs. As of July 25, 2011, 347.5 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 347.5 MW figure. On July 26, 2011 the NJ Office of Clean Energy (NJ OCE) reported that as of June 30, 2011 more than 380 MW (10,086 projects) of solar had been installed in NJ. The news release noted that 40 MW were installed in the month of June.

Pennsylvania: The reporting year 2012 requirement for PA equates to approximately 44 MW being online for the entire year or approximately 53,000 SRECs created. As of July 25, 2011, 115.7 MW of solar capacity was registered and eligible to create PA SRECs in PJM GATS.

Massachusetts DOER Qualified Projects

As of July 11, 2011, there were 682 MA DOER qualified solar projects; 649 operational and 33 not operational. Of these qualified systems, 11 (1.6%) 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.

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.

Tags: DC SRECs, DE SRECs, East Coast Solar Capacity, GATS, MA DOER, MA SRECs, MD SRECs, NEPOOL GIS, NJ SRECs, OH SRECs, PA SRECs, RECs, Renewable Energy Certificates, renewable portfolio standard, Solar Capacity, Solar Carve-Out, Solar Renewable Energy Certificates, Solar Renewable Energy Credits, SREC Aggregator, SREC States, SRECs
Posted in Capacity Summary, 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
Posted in Massachusetts | Comments Off on Mass DOER releases July statistics, SRECTrade continues to lead in Mass SREC market

New Jersey SREC market experiences volatility for first time in 3 years

Posted July 14th, 2011 by SRECTrade.

The July New Jersey SREC auction on SRECTrade.com cleared at $555 earlier this week, an $85 drop from $640 where NJ SRECs have traded since the beginning of the year. Today, the results of the NERA SREC auction on behalf of the four regulated Electric Distribution Companies (EDCs) closed at $475 per SREC. This is the auction used by PSE&G, ACE, JCP&L and RECO to sell the SRECs they purchase from the solar facilities that contracted in the various long-term SREC RFPs, such as the Solar Loan Program.

Meanwhile, the most recent data on SRECs created in New Jersey was reported by the Office of Clean Energy through May (generation through April). After 11 months, the state has created 220,000 2011 SRECs. The requirement is 306,000 SRECs. In April, there were about 40,000 SRECs created by the installed capacity and with one month to go, and over 80,000 SRECs short, it is highly unlikely that the state will meet its target. New Jersey will probably end up with somewhere between 85% and 90% of the requirement – which is pretty successful given how low relative capacity was at the beginning of the year.

That said, SREC prices have fallen despite the under-supply. The market could either keep falling to levels similar to the $475 price in the NERA auction or it could turn out to be a lull in the market before 2011 trading comes to a close in September. Here are few possible explanations as to why prices might fall at this time of year despite a shortage:

1. The 4th of July holiday coupled with a large influx of supply from May SRECs created July 1 means buyers may not been as active, while the volume of sellers increased.
2. At this point in the year, the aggressive buyers have purchased the SRECs they need, leaving the market to less-competitive buyers, who will pay less or opt for the fine.
3. Since New Jersey has a fixed SREC requirement, the BPU must notify each buyer what their total SREC requirement is based on their pro rata share of electricity sales. Without that information, buyers have a harder time estimating their requirement than in past years when it was based on their own electricity sales. Until the BPU publishes the final requirements, buyers will likely hold off on their final purchases.

Either way, 2011 trading will end in September and 2012 trading will pick up next month as the first 2012 SRECs are created. Next year will be a big year for the SREC concept in general. For the first time since 2008, SREC prices in New Jersey will be set by the market, not by the SACP. The SREC market concept will be tested on a large scale with a pure SREC-only policy – something that was missing in Pennsylvania when supply shot through the roof last year. If dropping SREC prices have the intended effect, the rate of installation in New Jersey will slow down to 10-12 MW per month for the next few years. If it doesn’t slow down, prices could be in trouble.

For now, the immediate concern has to do with whether or not buyers will return to the 2011 market before the trading period ends. Given what 2012 has in store, at the very least, it would be prudent to make sure to sell 2011 SRECs before September 30.

Tags: New Jersey SREC forecast, New Jersey SREC Prices, New Jersey SREC volatility, NJ SREC forecasts, NJ SREC Prices
Posted in New Jersey | Comments Off on New Jersey SREC market experiences volatility for first time in 3 years

DC Closes Borders to Out-of-State Solar Systems

Posted July 12th, 2011 by SRECTrade.

The Council of the District of Columbia unanimously voted, today July 12th, to close the DC SREC market to out-of-state systems. The Distributed Generation Amendment Act of 2011 (Bill 19-10) increases the SREC requirement in 2011 as well as establishes an SACP schedule through 2023. Once in effect, the bill will allow out-of-state systems registered prior to 1/31/2011 to continue to sell SRECs in the DC market. The DC Public Services Commission has not provided clarification on how the bill will affect out of state systems that have already granted DC registrations after the January 31st 2011 grandfather date. For more information on the bill please refer to our previous blog postings here and here.

The bill is not yet law. It first must go through a 30-day Congressional Review process before it can go in to effect. Given these mechanistic delays we don’t expect the bill to go in to effect for at least another month.

The following chart illustrates which out-of-state systems will be effected by the legislation.

State	Eligible Markets (after B19-10 is effective)
DE	DE, PA
IN	OH; PA (if in American Electric Power territory)
IL	PA (if in Com Ed territory)
KY	OH; PA (if in American Electric Power territory)
MD	MD; PA
MI	OH; PA (if in American Electric Power territory)
NC	NC; PA (if in Dominion Electric Territory)
NJ	NJ, PA
NY	–
OH	OH; PA
PA	PA; OH
TN	PA (if in American Electric Power territory)
VA	PA
WV	OH; PA
WI	–

Posted in Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, SREC Markets, State RPS, Tennessee, Virginia, Washington, DC, West Virginia, Wisconsin | 2 Comments »

New Jersey Senate votes to advance solar RPS

Posted July 5th, 2011 by SRECTrade.

While the New Jersey Governor has recently raised some uncertainty over the state’s commitment to solar energy in the Energy Master Plan, there certainly is no doubt where the state Senate stands on the subject. Last week the Senate voted 30-7 to pass S2371 to accelerate the solar renewable portfolio standard. This Bill was originally intended to create a requirement for long-term SREC contracts in the New Jersey market, but that measure was shot down fairly quickly given the strong opposition from the deregulated energy industry in New Jersey. A later version of the Bill included a mechanism for a floor price, similar to the one introduced in Massachusetts in 2010. The version of the Bill that was passed only increases the SREC requirement in 2013, moving forward all the SREC requirements by one year in each year after 2012.

Though the initial intent of this Bill was to provide stability and lower long-term SREC prices to a fluctuating SREC market, the revised Bill will essentially double the additional capacity required in 2013. With a pending oversupply in New Jersey (the state installed 145 MW last year and needs only 115 MW before it hits an oversupply), the increase in 2013 will help support the current rate of solar adoption. The change will allow for 275 MW of additional capacity in 2013, allowing the state to maintain its current build rate. That said, it is only a temporary fix to what will continue to be a problem past 2013 as the requirements in 2014-2016 only allow for approximately 150 – 175 MW of solar per year. The bottom line is that the rate of solar development in New Jersey needs to slow down. Whether this bill passes or not only effects how fast the industry must apply those brakes.

If development doesn’t slow down, SREC prices will not only fall, but many sellers will not be able to find buyers in an oversupplied market. Hopefully the current drop in SREC prices are providing the intended signal to would-be solar projects that the market can’t handle continued development. This past month, an additional 23 MW became active in the NJ SREC market. Moving forward, the market cannot handle any more than 10-12 MW per month for the next 5 years if it is to reach an equilibrium.

Tags: New Jersey S2371, New Jersey Solar RPS Advancement, NJ S2371, NJ SREC market, NJ SREC Prices, NJ SRECs
Posted in New Jersey | 2 Comments »

Solar Capacity in the SREC States – June 2011

Posted July 5th, 2011 by SRECTrade.

SRECTrade SREC Markets Report: June 2011

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

For a PDF copy of this table click here.

Capacity_June2011_1

PJM Eligible Systems

As of the end of June, there were 16,381 solar PV (16,069) and solar thermal (312) systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS) registry. Of these eligible systems, 65 (0.40%) have a nameplate capacity of 1 megawatt or greater, of which only 4 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 10 MW, is located in IL and eligible for the MD, PA, and DC SREC markets. The fourth largest, at 6.2 MW, is located in New Jersey.

New Energy Year To Begin for DE, NJ, and PA

Delaware: The reporting year 2011-2012 requirement for DE equates to approximately 21 MW being online for the entire year or approximately 25,600 SRECs created. As of June 30, 2011, 9.1 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS.

New Jersey: The reporting year 2012 requirement for NJ equates to approximately 368 MW being online for the entire year with a fixed SREC requirement of 442,000 MWhs. As of June 30, 2011, 332 MW of solar capacity was registered and eligible to create NJ SRECs in PJM GATS. As of April 30, 2011, the NJ Office of Clean Energy (NJOCE) reported that 330.5 MW (9,181 projects) of solar had been installed in the state. The NJOCE data shows that from November 2010 – April 2011, the average installed capacity per month was 18 MW. Forecasts prepared by the NJOCE, show the monthly rate of installation through September 2011 ranging between 17 – 30 MW per month depending on different scenarios.

Pennsylvania: The reporting year 2012 requirement for PA equates to approximately 44 MW being online for the entire year or approximately 53,000 SRECs created. As of June 30, 2011, 104.8 MW of solar capacity was registered and eligible to create PA SRECs in PJM GATS.

Massachusetts DOER Qualified Projects

As of May 6, 2011, there were 524 MA DOER qualified solar projects; 467 operational and 57 not operational. Of these qualified systems, 11 (2.1%) 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.

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 255 MW online for the entire 2011 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.

NY SREC market put on hold

Posted June 28th, 2011 by SRECTrade.

The New York State Assembly’s session ended on Friday, June 24^th without the passing of the New York Solar Industry and Jobs Act, which would have established an SREC market in New York beginning in 2013. The bill is the assembly’s latest iteration of State Senate Bill S.4178A, which we covered in a blog post in May. Since then, the bill has received several edits:

*The compliance schedule for the implementation of solar has changed, with the first year’s targets reduced from a .33% solar requirement to a .15% requirement. The 2020 target of 1.5% solar has remained unchanged.

*The original $300 price floor for state-sponsored SREC sales has been removed, and SRECs will simply expire after 2 years.

*A multiplier making SRECs generated within a utility’s distribution region worth 1.5 the value of SRECs generated outside the distribution region was added.

Unfortunately, this important legislation will not be able to be addressed until the start of the 2012 session. Until then, the prospect of a NY SREC market has been put on hold.

Tags: New York, New York Renewable Energy Credits, New York Solar, New York Solar Legislation, New York Solar Renewable Energy Credits, New York SREC, New York SREC Legislation, New York SREC Market, New York SRECs, NY SREC, solar renewable energy credit, SREC
Posted in New York, SREC Markets | Comments Off on NY SREC market put on hold

Connecticut solar bill adds new twist to the SREC concept

Posted June 23rd, 2011 by SRECTrade.

On June 17^th, Connecticut passed legislation that consolidates the development and implementation of Connecticut’s environmental and energy policy within a new, expanded Department of Energy and Environmental Protection (DEEP). Although it is still waiting to be signed by the governor, signs point towards approval as he has spoken out in support of the bill. The bill will affect the solar market on two different levels: residential solar production and commercial facilities less than one megawatt. The original bill known as “Bill 1243” can be found here (http://www.cga.ct.gov/2011/ACT/Pa/pdf/2011PA-00080-R00SB-01243-PA.pdf ) (see section 106-108) and a summary of the Bill can be found here (http://www.murthalaw.com/files/summary_of_public_act_1180_bill_1243_copy1.pdf) (see page 4 of the summary of the effects of the residential portion of this bill).

Residential

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

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

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

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

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

Commercial/Distributed REC Program

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

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

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

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

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

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

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

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

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

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

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

Tags: Bill 1243, Connecticut Solar, Connecticut SREC, Connecticut SRECs, CT Solar, CT SREC, CT SRECs, SB1, SB1243, ZREC, ZRECs
Posted in Connecticut | Comments Off on Connecticut solar bill adds new twist to the SREC concept