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Pennsylvania SREC Pricing

Posted July 13th, 2009 by SRECTrade.

The Pennsylvania Solar Alternative Compliance Payment (SACP) is structured a bit differently than the rest of the states in our auction.  Most states have a set SACP that is known at the beginning of each year.  Pennsylvania releases their SACP six months after the Energy Year ends. The 2008 Pennsylvania SACP of $528.34 was released in December of 2008 for the Energy Year ending May 31, 2008. It is calculated as 200% of the PJM area average SREC price. This means that from June 1, 2007 – May 31, 2008, the average PJM area SREC price was $264.17.  The interpretation used by the program is that this is an average of the price paid for SRECs used to comply with the Pennsylvania state RPS.  So in reality, it is an average of PA SRECs.

PA SRECs are valued based on speculation of what the SACP will be in  December. PA utilities should be willing to pay more for SRECs if they are struggling to meet the solar requirement in Pennsylvania. In the early years of this program, that requirement may be attainable, but it ratches up pretty quickly, so it may not be long before the SREC values in Pennsylvania increase above all the other states in the region.

For reference, our July 10th auction saw PA close at $300.  DE closed at $245, and MD closed at $375.

This is good news for solar owners in Delaware, Maryland, Ohio, West Virginia and the other surrounding states who may be eligible to sell into Pennsylvania.  Of course the influx of supply of SRECs into PA might at some point depress the price of SRECs.  It will be interesting to see how the market plays out.  One thing is certain—as a seller, it doesn’t hurt to be registered in as many states as you can.  See our post on cross-listing to learn how.

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Maryland Update

Posted July 13th, 2009 by SRECTrade.

The July 10th auction closes with a clearing price of $375 for 2009 credits! We are looking forward to the next auction on August 7th. The August auction will be primarily for 2010 credits, but parties interested in selling or buying any remaining 2009 credits may also participate.

Maryland system owners can also sell their credits to Pennsylvania, Washington DC, and North Carolina. Maryland prices look to be the highest as of now, but in future years we expect the highest prices to come from Pennsylvania as a result of the state’s future expected increase in SACP. For more information about cross-listing your SRECs, click here

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Delaware solar owners can register out of state

Posted July 9th, 2009 by SRECTrade.

One of our customers recently confirmed that any solar generator in Delaware is eligible to certify their system out of state.  Therefore, if you are a solar generator in the state of Delaware, you should see our blog on Cross-Listing to find out where you may be eligible and how to get started in each state.

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SRECTrade launches its service in Pennsylvania

Posted June 18th, 2009 by SRECTrade.

We are really excited to announce that we will be launching our auction in Pennsylvania next month! We are adding seven new states in our July 10th auction and giving Solar Alternative Energy Certificate sellers (AEC sellers or SREC sellers as they are referred to in other states) the ability to cross-list their SRECs.

The Pennsylvania SREC market is going to be significant and increase rapidly every year. Our estimates show that there will be a demand for 14,000 SRECs in Pennsylvania this year. These numbers represent the 0.0063% solar requirement for utilities and this number will grow to 0.5% by 2021.

Utilities that fail to comply will have to pay a Solar Alternative Compliance Payment (SACP) for each SREC (i.e. 1 Mega Watt Hour of electricity) they are short. Pennsylvania has a unique SACP structure where the penalty is not pre-fixed but is actually set 6 months after the end of the energy year. The energy year of Pennsylvania runs from June 1 to May 31 of the next year (for example, the 2009 energy year was from June 1, 2008 to May 31, 2009). The SACP for the 2009 energy year will be declared on December 20, 2009 and will be 200% of the average SREC trading price in Pennsylvania in that year. This means that the SRECs will be sold without really knowing their true value. We plan on providing information on the average SREC trading price in the state to give our Pennsylvania customers a rough idea of what they should sell their SRECs for.

PA, MD, DC, NC and OH are the states accept out of state SRECs for now. For those of you who wish to be able to sell your certificates in these states, your system needs to be registered in that state and have a separate State Certification Number. This will be done with GATS, and we will soon put up information on the procedure.

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SRECTrade in Washington D.C.

Posted June 18th, 2009 by SRECTrade.

The District of Colombia’s Renewable Energy Portfolio Standard (RPS) requires that 11 percent of the energy sold in the District must come from renewable sources by 2022. This standard includes a solar set-aside, requiring .4 percent of electricity to come from solar by 2020. Much like other states, electricity suppliers must make an alternative compliance payment (ACP) should they not meet each yearly requirement. In D.C., the ACP goes to the District’s Renewable Energy Development Fund.

Due to the area’s small size, the government has imposed fairly modest requirements for renewable energy provided by electricity suppliers, compared to those of neighboring states. However on a per capita basis, owners of photovoltaic solar systems in the D.C. area are equally well positioned to benefit from RPS requirements through federal incentives and the ability to sell self-generated SRECs. The government offers grants for installation of solar systems based on the size and capacity of the system, with a maximum receivable amount of $33,000. Once the system is installed and registered, owners can sell their SRECs to electricity suppliers in D.C., namely PEPCO, relative to the price dictated through supply and demand in the area.  SRECTrade hopes to be an integral part of matching that supply with demand through facilitating the sale of credits generated in D.C. with electricity suppliers in both D.C. as well as neighboring states.

Getting Started in D.C.

If you wish to generate and sell SRECs in D.C., you must first apply for certification as a Solar Renewable Energy Facility through the Washington D.C. Public Service Commission. Once your system is certified, you must register with the PJM-EIS Generation Attribute Tracking System (PJM-GATS), which serves as the renewable energy generation tracking system for Washington D.C. and several surrounding states. Generators interested in having SRECTrade manage their SRECs can simply sign up for our EasyBid service and send the forms to us. We’ll handle the rest. Find out more on our EasyBid page.

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SRECTrade Now in North Carolina

Posted June 18th, 2009 by SRECTrade.

North Carolina is a brand new market for the exchange of SRECs. There are no restrictions on selling North Carolina SRECs to eligible states in the PJM network. North Carolina has a Renewable Portfolio Standard mandated by the state, with a specific carve-out for solar energy. 12.5% of all energy sold by suppliers must be from renewables by 2021, with 0.20% of that coming from solar energy.

Utilities are required to provide the above portions of electricity from solar sources. Your SRECs help the utilities to reach this minimum threshold. Normally, if they do not reach the threshold, they are forced to pay a Solar Alternative Compliance Payment (SACP). The state of North Carolina has not yet determined what the price of their SACP will be. When this is decided, the price of SRECs will respond. For now, the price will be around the regional average, $200-$250.

Getting Started in North Carolina

Talk to your installer to get your PV installation certified in North Carolina and other states where it is eligible. Once you have these state certification numbers, we’ll be able to help you establish an account and manage your SRECs. We’ll cross-list your SRECs on our multi-state auction platform every month to make sure you get the best price for your SRECs. Alternatively, if you choose to manage your own SRECs, you would need to register with the appropriate state SREC agency. After that you can choose to sell your SRECs month-to-month on SRECTrade.com.

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SRECTrade Expands to Virginia & West Virginia

Posted June 18th, 2009 by SRECTrade.

In Virginia and West Virginia, SREC markets do not currently exist. However SREC generators in these markets are able to sell out-of-state in other markets.

Virginia enacted a voluntary Renewable Portfolio Goal in 2007. Investor-owned utilities are encouraged to obtain a percentage of power sold in Virginia from renewable sources. There are various incentives for the utilities that participate, however, since solar is still more costly than other types of energy, it is unlikely in the short term that utilities in Virginia will be looking to buy SRECs. Meanwhile, in West Virginia there is no RPS program. States with stringent RPS standards still need SRECs, and your SRECs from Virginia or West Virginia can be sold into some of the other PJM states. In this year, SRECs have been fetching prices from $200-$250 in other markets, and this is forecasted to increase.

Getting Started in Virginia and West Virginia:

Talk to your installer to get your PV installation certified in states where it is eligible. Once you have these state certification numbers, we’ll be able to help you establish an account and manage your SRECs. We’ll cross-list your SRECs on our multi-state auction platform every month to make sure you get the best price for your SRECs. Alternatively, if you choose to manage your own SRECs, you would need to register with the appropriate state SREC agency. After that you can choose to sell your SRECs month-to-month on SRECTrade.com.

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SRECTrade launches in Ohio

Posted June 18th, 2009 by SRECTrade.

We are really excited to announce that we will be launching our auction in Ohio next month! We are adding seven new states in our July 10th auction and giving SREC sellers the ability to cross-list their SRECs. Unlike previous years, the Ohio SREC market is going to be significant and increase rapidly every year. Our estimates show that there will be a demand for 6,200 SRECs in Ohio this year, half of which must come from Ohio generators. These numbers represent the 0.004% solar requirement for utilities in Ohio and this number will grow to 0.5% by 2024.

Utilities that fail to comply will have to pay a Solar Alternative Compliance Payment (SACP) for each SREC (i.e. 1 Mega Watt Hour of electricity) they are short. For 2009, this has been set at $450. For 2010 and 2011 it will be $400, $350 for 2012 and 2013, and will continue to drop $50 every two years until it reaches $50 in 2024.

The SACP somewhat represents the ceiling price for SRECs. This is the first year that the SREC requirement is significant in Ohio where the demand is expected to be higher than supply. This means utilities will be willing to pay prices closer to the SACP. Therefore, our suggestion would be to not enter into long-term contracts, at least for now, as the future of the SREC market is still not fully certain.

PA, MD, DC, and OH accept out of state SRECs for now. For those of you who wish to be able to sell your certificates in these states, your system needs to be registered in that state and have a separate State Certification Number. We will soon put up information on the procedure.

How to get started in Ohio:

1. Certify your PV system: your installer will provide you with the information to get your system certified by the state.

2. Start selling your SRECs:

Option A: Sign up for our EasyBid service, and we’ll handle your SRECs. We’ll take care of registering your system to generate SRECs, and cross-listing your SRECs on our multi-state auction platform every month to make sure you get the best price for your SRECs.

Option B: Users who choose to manage their own SREC accounts can register with GATS or MISO in Ohio. Then post your SRECs every month on SRECTrade.com or find a third-party to sell your SRECs.

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SRECTrade Now in Delaware

Posted June 18th, 2009 by SRECTrade.

For our July 10th auction, SRECTrade plans on having a fully functional multi-state platform in place with seven new states and the ability to cross-list your SREC in multiple states. Delaware is a fairly new and liberal market for the exchange of SRECs. There are no restrictions on exporting SRECs and the state Renewable Portfolio Standard (RPS) has a specific carve-out for Solar through 2019. The standard is 20% renewables by 2019, with solar representing 2.005%.

If an electricity supplier (utility) doesn’t reach the solar-carve out threshold with their own solar supply or by purchasing SRECs, they must pay a Solar Alternative Compliance Payment (SACP) as an offsetting penalty into a state renewable energy fund. In Delaware, the SACP begins at $250 per MWh and increases $50 every year if a utility didn’t reach the threshold in the previous year. So there is a big incentive to buy SRECs to reach the threshold. This is why SREC prices follow SACP prices.

This year in Delaware, SRECs have fetched prices between $200-$250. However, as time progresses, if utilities don’t meet the solar threshold, you will see the SACP average price climb because of the $50 per year increase, and the SREC price will follow.

Additionally, since other states have different structures for their SACP price, they will have different prices for their SRECs. If you register your Delaware system in other states (e.g., Pennsylvania), you will be able to sell your SRECs in the states you are registered in by checking the cross-list box on the SRECTrade.com order. We’ll make sure you get the best price possible in your eligible states.

How to get started in Delaware:

1. Certify your PV system: your installer will provide you with the information to get your system certified by the state.

2. Option A: Sign up for our EasyBid service, and we’ll handle your SRECs. We’ll take care of registering your system with GATS, and cross-listing your SRECs on our multi-state auction platform every month to make sure you get the best price for your SRECs.

Option B: Sign up for GATS yourself in Delaware, as well as other states that accept Delaware SRECs (Pennsylvania and Maryland to start). Then post your SRECs every month on SRECTrade.com or find a third-party to sell your SRECs.

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SRECTrade Expands to Maryland

Posted June 18th, 2009 by SRECTrade.

SRECTrade is expanding into several other PJM Region states in July of 2009. As part of this expansion, we are utilizing this blog to help introduce our customers to the individual state SREC programs. Maryland’s Renewable Energy Portfolio Standard (RPS) requires electric service providers to provide 20 percent of their sales in the state from renewable energy sources by 2022. There is a specific carve-out for solar-generated electricity, currently at .01% for 2009 and set to reach 2% by 2022. Much like other states, electricity suppliers must make an alternative compliance payment (ACP) into the Maryland Strategic Energy Investment Fund should they not meet each yearly requirement.

Maryland is unique because the RPS mandates that electricity suppliers buying from individual solar owners must enter a 15-year contract for the sale of all the owner’s SRECs produced during that time. Due to uncertainty of the future, electricity suppliers have been disinclined to buy SRECs in this manner, and thus both sides have mutually used third parties (as allowed by law) as a means of transferring the credits between individuals and electricity suppliers. The SRECTrade auctions will serve as means to sell SRECs for sellers who are unable to lock into the 15-year contracts.

Meanwhile, Fred Ugast, an advocate for Maryland solar owners at U.S. Photovoltaics, has been working to secure 15-year contracts for their SRECs. He has familiarized us with the Maryland market and we are following his progress in this endeavor. According to Fred, there were 94 solar photovoltaic (PV) systems eligible to create SRECs in 2008, and 252 SRECs were created. This left estimated solar ACP payments at nearly one million dollars. The demand for SRECs in Maryland is approximately 5,000 in 2009, but supply is expected to increase at a faster rate over the next few years. SRECTrade hopes to be an integral part of matching that supply with demand in Maryland. Please check back as we learn more!

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