Archive for the ‘SREC Markets’ Category

Delaware SEU to protect SREC market from 10MW Dover project

Posted March 12th, 2010 by SRECTrade.

The planned 10MW project in Dover, Delaware would have flooded the state’s SREC market and made it impossible for Delaware residents to sell their SRECs to Delmarva Power. Thanks to the Delaware Sustainable Energy Utility (SEU), the Delaware market will be protected from the potential harm that such an influx of SREC supply would cause to the market. The SEU decided today that it would purchase the SRECs from the 10MW facility in Dover to avoid flooding the market for residential and small commercial solar project SRECs. The current plan is to hold the SRECs until 2015 when the market is large enough to support such a supply.

This is great news for market participants in Delaware. Although most sellers will register their facilities out of state in Pennsylvania and DC where higher Alternative Compliance Payments (ACP) lend to higher SREC prices, it is important that Delaware establish its own SREC market to support the growth of the industry in-state without relying on legislation of neighboring states to do so.

On a related note, Delaware’s Governor Jack Markell has proposed the extension of the state RPS by 10 years through 2029, increasing the total requirement from 20% to 30% of electricity for renewables. In addition to the proposed expansion of the program to include all of Delaware’s electricity suppliers (not just Delmarva Power), this could also be an opportunity to increase the ACP in Delaware. We will see!

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Posted in Delaware | 8 Comments »

California SRECs (TRECs) coming soon!

Posted March 12th, 2010 by SRECTrade.

The California TREC market is here!

Yesterday California passed legislation to allow for a Tradable Renewable Energy Credit (TREC) market. This essentially means that utilities in California can now buy SRECs unbundled from the electricity. Prior to this ruling, any SRECs used to comply with the state’s Renewable Portfolio Standard had to be purchased with the electricity itself, i.e. the SRECs had to be bundled with the electricity and sold to the utility together. The reason behind this ruling is that the utilities are not able to meet the growing requirement from projects sited within their territories and this new rule allows them to get credit for renewable energy produced elsewhere by purchasing the SRECs (or TRECs as the state calls them) from generators outside their territories. The Alternative Compliance Payment (ACP) will start at $50, creating a cap, but that cap and other restrictions around the use of RECs is planned to be lifted after 2011 after the state has had time to get more comfortable with the program. In the early stages, this means that TREC values will be significantly lower than values in other states where the Solar ACP (SACP) is anywhere from $250-$700. Currently TRECs include all forms of Renewable Energy, however, it is unclear if there will be a market in the future that places a distinction on Solar RECs, SRECs in the California market place. With this legislation, SRECs carry the same value as any other RECs.

We see this being an important opportunity for generators outside California who are now able to help the state meet its renewable energy goals by purchasing RECs. The RECs must be registered in WREGIS in order to be eligible. SRECTrade will have more information regarding the online market place for California TRECs soon.

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Tags: CA SREC, CA TREC, California SREC, California SRECs, SREC, SRECs, TREC, TRECs
Posted in California | Comments Off on California SRECs (TRECs) coming soon!

New York Facility Rejected by the DC SREC Program

Posted February 24th, 2010 by SRECTrade.

We recently received additional clarification on the rules governing acceptance into the District of Columbia SREC Program. Previously we noted that DC will approve facilities in states adjacent to the PJM region. However, the actual requirements are more specific than that. A facility sited in a state adjacent to the PJM Region must also demonstrate that the electricity produced by the facility can be served into the PJM Region. This will likely be an important distinction for residents of New York, Michigan, Wisconsin, Illinois, Indiana, Kentucky and Tennessee who are hoping to register and sell SRECs in DC.

We are working with the DC Public Service Commission to get clarity on how to determine whether facilities sited in states adjacent to the PJM Region are indeed eligible for the DC SREC program and will provide an update as soon as possible.

Posted in Illinois, Indiana, Kentucky, Michigan, New York, Tennessee, Washington, DC, Wisconsin | Comments Off on New York Facility Rejected by the DC SREC Program

Pennsylvania SREC Market in 2010

Posted February 19th, 2010 by SRECTrade.

Despite a robust RPS and the threat of non-compliance fines above $550, the Pennsylvania SREC market has been slow to develop. We take a quick look at some of the factors that influence this market and hopefully provide some insight as to why the Pennsylvania SREC demand has been low.

Demand Issues: For starters, the PA RPS is expected to ramp up as described on our Pennsylvania Page. Based on current electricity sales into Pennsylvania, we project the demand for SRECs to be as follows:

According to this projection, approximately 20,000 SRECs need to be purchased in Pennsylvania for generation through May 31, 2010. However, the reality is a bit more complex. Electricity markets are composed of three types of companies: electricity generators who supply the power, electricity transmitters responsible for transmission and electricity distributors responsible for the delivery of the retail electricity. It is important to know that although the distribution companies (EDCs) or retail utilities are most commonly associated with state RPS goals, it is actually the numerous electricity suppliers who are responsible for purchasing the SRECs to meet the RPS. The Pennsylvania electricity market is comprised of 11 Electricity Distribution Companies (EDCs). Behind each EDC are the many suppliers providing power to them. When the PA RPS was passed, the suppliers for several EDCs were exempted for the first few years. According to the DSIRE website, these EDCs were exempted because they were under rate freezes or still recovering from costs associated with restructuring. In all, 5 of the 11 EDCs are exempt. The exemption ended this January of 2010 for one of the EDCs and the exemption for the other 4 will expire in January of 2011. More significantly, these EDCs represent over 85% of the total electricity market exempt through January of 2010 and 70% exempt through January of 2011! With that said, this changes the outlook for SREC demand in Pennsylvania substantially in 2010 and 2011:

As a result, the actual demand for PA SRECs in the 2009-10 Energy Year drops from nearly 20,000 SRECs to under 5,000 SRECs – 25% of what was initially projected. In 2010-11, the demand drops from an initial projection of 33,000 SRECs down to 21,000 SRECs – about 60% of initial projections!

Procurement Issues: In addition to a decreased demand in the early years of the PA market, the state also has some constraints in place that have created challenges for buyers and sellers to connect in this market. For the first time in history, home and business owners are entering electricity markets as generators. These markets are geared towards large corporations that produce significant amounts of power, and as a result, the approach many companies have taken to procuring SRECs is geared towards large companies (as an aside, this is why GATS is such a cumbersome platform for solar owners). In addition, since most of these companies are heavily regulated, protections are put in place to ensure a competitive process. Unfortunately, these protections are also geared towards large companies. The end result is that the Pennsylvania Public Utilities Commission (PUC) requires buyers to use a competitive RFP process.

Well, the problem is that most solar owners don’t even know what an RFP is, let alone have the requirements in place to be eligible. This explains why most RFPs for SRECs are severely under-prescribed and why in late 2009, PPL successfully petitioned the PUC to lessen the credit requirements necessary to bid in their RFP. Instead of being required to have a credit rating and listing with an accredited credit agency, you now only needed to put up a letter of credit to bid on the opportunity to sell SRECs in minimum bundles of 500!

Fortunately, it seems that the PUC continues to re-evaluate this process and the constraints they have placed on the suppliers. Most recently, they have proposed a change to their policy to allow suppliers to enter into a restricted volume of bi-lateral contracts that are also restricted in value by the average value of SRECs procured in the adjacent RFPs. You can read the proposal and we encourage you to submit your comments. While this is a step forward, we still believe that this will likely incentivize the same companies bidding on RFPs to just enter into the bi-lateral contracts, squeezing out the rest of the market. We setup our auction to ensure a competitive process that is accessible to all market participants and hope that future iterations of PUC policy changes will better address the entire SREC market and allow more compliance buyers to enter into auctions like SRECTrade without having to jump through legal hoops in order to do so.

Conclusion: The Pennsylvania SREC market has an extremely promising future and all signs are pointing in the right direction. We believe that this is an iterative process. Looking back at the lead taken by New Jersey, their SREC program has been amended several times and it is now inspiring a prolific SREC market. Pennsylvania will continue to tweak its program until the market truly is more efficient and effective in promoting solar. Until then, we at SRECTrade are doing everything we can to bring buyers to the market, as well as set up other means for selling SRECs for our clients. The great news is that most facilities eligible in Pennsylvania are also likely to be eligible in DC and Ohio where in the short-term, SREC prices will be better. If you have any questions, as always, feel free to contact us.

Tags: AEC, AEC Demand, AEC RFP, PA SREC Demand, Pennsylvania, Public Utilities Commission, PUC, RFP, RFP AEC, SREC, SREC RFP
Posted in Pennsylvania, SREC Pricing | Comments Off on Pennsylvania SREC Market in 2010

Massachusetts SREC Registration Details

Posted February 18th, 2010 by SRECTrade.

Massachusetts DOER is recommending that solar owners utilize aggregators for managing their SRECs. This is a smart move because it allows them to work with a small number of firms that specialize in managing SRECs rather than build the customer service capability necessary to handle all the questions that would arise if every individual solar owner in Massachusetts were to register themselves. SRECTrade will be on of a few aggregators, however we do hope to be the best! Here we will provide some more information on how the SREC registration process will work in Massachusetts:

1. Upon signing up for SRECTrade’s services, we will submit a PV Project Application to the DOER. You can find the most up-to-date registration forms on our EasyREC page.

2. The DOER will plan to process the applications within 30 days and issue a Statement of Qualification upon approval.

3. Once you have been issued a Statement of Qualification, SRECTrade will add your facility to the NEPOOL GIS tracking platform. This is where the SRECs will be created and transacted.

4. As soon as the DOER receives confirmation that your project has been authorized to interconnect by your utility provider, you will be able to begin reporting production data to the Massachusetts Clean Energy Center’s (CEC) Production Tracking System (PTS). Reporting will be done on a monthly basis and the CEC will upload data to NEPOOL GIS on a quarterly basis after verifying the accuracy of the data by checking for any out of bounds data reported. The SRECs will then be minted on the following schedule.

Quarter Generated – Date SRECs Minted
January 1^st – March 31^st: July 15^th
April 1^st – June 31^st: October 15^th
July 1^st – September 30^th: January 15^th
October 1^st – December 31^st: April 15^th

5. Since SRECs are all created once a quarter, SRECTrade will host quarterly auctions for Massachusetts SRECs. The auctions are currently set to close on the following dates:

Tentative Massachusetts SREC Auction Dates
Q1 SRECs – August 6th, 2010
Q2 SRECs – November 5th, 2010
Q3 SRECs – February 4th, 2011
Q4 SRECs – May 6th, 2011

If you or your installer has questions about this process and how SRECTrade can help you, please feel free to give us a call at (877) 466-4606. Click here for more information on the SREC program in Massachusetts.

Posted in Massachusetts | Comments Off on Massachusetts SREC Registration Details

New to Solar?

Posted February 15th, 2010 by SRECTrade.

We realize that many visitors of our site are learning about solar for the first time, so we thought we would put up this post by way of an introduction and some guidance on how to navigate our site. A growing number of states are implementing SREC programs. If you are new to solar, here is what you need to know:

1. Understand SRECs: For a deeper understanding of what SRECs are and how the programs work, visit our SREC Program page.

2. Find out where you are eligible to sell your SRECs: Your state may or may not have a program, however your ability to sell your SRECs into other states could have a significant impact on the value of your SRECs. You may be eligible to get your system certified in many state programs, regardless of if your state has one or not. Everyone should check our Cross-Listing post to see the states in which they may be eligible for certification.

3. Get your system installed: SRECTrade works with several installation companies. In addition, you should be able to sign up for the EasyREC service through your installer. If they do not offer the service, then feel free to contact us directly.

4. Enroll with SRECTrade: SRECTrade provides two options. If you sign up for the EasyREC service, we handle everything else including submitting your state certification applications, creating your SREC tracking account and automating the sale of your SRECs in our auction.

If you do not sign up for EasyREC, here are the additional steps:

4a. Get your system certified by your state: Once the system is installed, it is now ready to be certified by your state and any other states in which you are eligible. You can find out more on where you are eligible and how to apply on the Cross-Listing page. Every state handles this process differently, but we recommend beginning the application as soon as possible, before your installation is complete.

4b. Set up your SREC tracking account: Every state or region will use a different system for creating and tracking the SRECs. The Mid-Atlantic states use GATS, North Carolina uses NC-RETS, Massachusetts uses NE-GIS. If you opt to manage your own SRECs, you will need to have a tracking account with one of these registries. Once you have SRECs in that account, you can then post them in our auction.

4c. Create an account online with SRECTrade: This is the simplest step of all. Complete the online form to create your account and when your SRECs are available in your tracking account, log into your SRECTrade account, select the “Orders” link and place an offer to sell your SRECs.

5. Understand the timing: After you initially sign up, it will take a few months before you begin receiving payments. For example, if your system goes online on January 1st, your January generation will be recorded on February 1st. Your first SREC(s) will be actually credited to your account on March 1st. They would then be sold in the March auction, so your first payment would come in late March. After that, payments will come as SRECs are generated. Also note: some systems operate on a quarterly basis, rather than monthly.

As these processes are refined, we will continue to update this post. Please feel free to contact us any time at 877-466-4606 if you have any questions.

Tags: Getting started with solar, New to solar, Solar Credits, Solar Renewable Energy Certificates, SREC Programs, SRECs
Posted in Delaware, Getting Started, Maryland, New Jersey, North Carolina, Ohio, Pennsylvania, SREC Markets, Virginia, Washington, DC, West Virginia | Comments Off on New to Solar?

NJ Solar Energy Advancement and Fair Competition Act

Posted February 5th, 2010 by SRECTrade.

Senate Bill A3520: The Solar Energy Advancement and Fair Competition Act was passed on January 17, 2010 and represents another big step forward for the New Jersey solar market. The state that is leading the way with its SREC program is upping the requirement in the Solar Renewable Portfolio Standard. Here are the key additions included in this legislation:

The RPS for solar increases through 2026 and will remain at or above the 2026 level indefinitely after.
Starting in June, 2010, the SREC requirement will be changed from a percentage to an absolute number of required SRECs each year.
The annual SREC requirement will increase by approximately 20% on average over current requirements.
The RPS shall increase by 20% in any given year if the SREC requirement is met in the each of the previous 3 years AND the average LSE purchase price decreases in 3 consecutive years.
The BPU will be required to establish a new SACP level that shall not reduce previously published SACP levels.
As previously reported, the requirement that a facility be below 2MW to be eligible for SRECs has been lifted.
In the final version of the bill, the legislation disqualifying public utility solar projects from SRECs was removed in favor of the following: “For projects which are owned, or directly invested in, by a public utility, the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.”

Here are the new requirements listed by year will be posted here:
http://www.srectrade.com/new_jersey_srec.php

This is a huge step forward for all participants in the SREC market as it not only indicates an increase in the potential of the solar market and the number of SRECs that will be traded in the year, but more importantly that the state is committed to developing a viable competitive market for SRECs. This legislation sets out to ensure that all segments of the market can have access to the value created by the market and limits the influence that any single public entity can have over the market.

The Bill can be read in its entirety here: http://www.njleg.state.nj.us/2008/Bills/A4000/3520_R3.HTM

For an explanation of the bill: DSIRE New Jersey RPS

Posted in New Jersey, State RPS | 6 Comments »

SREC-Based Financing Program for ACE, JCP&L and RECO

Posted January 28th, 2010 by SRECTrade.

ACE, JCP&L and RECO have an SREC-Based Financing Program that is available to solar project developers. The utilities are expected to issue three RFPs (requests for proposals) per year available to solar developers in these territories for projects under 500kW with 10-15 year contracts. In theory, the program is intended to promote solar by providing reasonable assurances regarding the prices of SRECs, however, the RFPs, run by NERA Economic Consulting have not reached the targets set by the program. In the first solicitation, only 8 bids were received, the most recent one reached 44. The firms intend to increase the targets for future RFPs in order to meet the original goal of the program. As seen below, the average prices tend to be around $400/SREC, while the lowest price bid by a developer was well under $300/SREC! Although these RFPs aren’t viable for the majority of the prospective developers out there, it should serve as an indication of the long term contracts that are out there.

The New Jersey Board of Public Utilities (“Board” or “BPU”) has approved the results of the second solicitation of the SREC-Based Financing Program for ACE, JCP&L, and RECO, which was held in December 2009. The results are as follows:

Forty-four (44) bids were received, totaling 7,009.628 kW.

Thirty-nine (39) awards were made, totaling 6,521.798 kW.

Five bids (5) were rejected because pricing was found not to be competitive, totaling 487.830 kW.

The simple average NPV of all accepted projects was $2,864.93 (corresponding to an average price of $405.15/SREC for a ten-year project).

The low NPV of all accepted projects is $1,926.53 (corresponding to an average price of $272.44/SREC for a ten-year project).

Posted in New Jersey, SREC Pricing | Comments Off on SREC-Based Financing Program for ACE, JCP&L and RECO

DC State Eligibility Criteria

Posted January 25th, 2010 by SRECTrade.

The District of Columbia is one of the states that will allow its electricity suppliers to procure SRECs from out-of-state solar generating facilities. There are no defined boundaries for what states may qualify for certification in the DC SREC market. According to information received by SRECTrade, the DC PSC will approve SRECs for states in the PJM region and states adjacent per the following guidelines:

The DC Public Service Commission is responsible for approving applications to the DC SREC market. Their rule of thumb is that if your state has an RPS similar to DC you are guaranteed certification in DC. Currently those states include Maryland, Pennsylvania, Delaware, New Jersey and Ohio.

Solar facilities built in all other PJM area states AND adjacent states are reviewed closely and the DC PSC will determine if they can be granted certification. Currently, they have not declined a registration from any of those states because of location. Based on the map of the PJM region, these states include: Indiana, Illinois, Kentucky, Michigan, Tennessee, Virginia, West Virginia and Wisconsin.

Here is a link to get you started:

DC Certification Instructions

Tags: DC SREC, Michigan, New York, SREC, SRECs, Tennessee, Wisconsin
Posted in Illinois, Indiana, Kentucky, Michigan, New York, North Carolina, Ohio, Tennessee, Virginia, Washington, DC, West Virginia, Wisconsin | 2 Comments »

Maryland Governor to accelerate the solar RPS

Posted January 22nd, 2010 by SRECTrade.

In a press release issued by the Governor’s office, Governor Martin O’Malley has prioritized solar electricity in his 2010 agenda. He plans to increase the solar RPS requirement in the earlier years. Currently, compared to other states, Maryland’s RPS solar requirement increases exponentially in the later years. It appears the Governor is planning to straighten out the growth path so that more solar is required earlier. This is great news for the industry in Maryland in the next five years because it allows the state to remain competitive with other states in the region while the solar industry is in its formative years. Hopefully this will help establish the state at the foreground of industry along with New Jersey and Delaware. Here are the specific agenda items relating to the solar RPS:

This legislation will accelerate Maryland’s solar RPS requirements in the early years (2011 – 2017), resulting in more residential and commercial solar installation and greater job creation.
It will make the phase-in of the Solar RPS more evenly distributed over the next decade and provide more long-term support for Maryland‘s growing solar industry. This change will put the State’s solar goals more in line with New Jersey and Delaware.
Additional solar energy in Maryland will decrease peak load electricity prices in the summertime, reduce greenhouse gas emissions by displacing fossil-fueled powered generation, create new green jobs, and help Maryland meet its renewable energy goals.

Tags: Maryland, maryland solar rps, Solar, solar requirement
Posted in Maryland | Comments Off on Maryland Governor to accelerate the solar RPS