Create account Log in

Posts Tagged ‘RPS’

« Older Entries
Newer Entries »

Proposed New Jersey Solar Bill May Not Solve SREC Woes

Posted May 16th, 2012 by SRECTrade.

For a PDF copy of this post click here.

Introduction

Senators Bob Smith and Stephen Sweeny recently introduced New Jersey Senate Bill 1925. The bill proposes to amend New Jersey’s current Solar Renewable Portfolio Standard (RPS) requirements in attempt to help stabilize the oversupplied SREC market. The bill is currently in draft form and is scheduled to be heard by the New Jersey Environment and Energy Committee on Thursday, May 17, 2012.

Based on the information presented below, the proposed version of S1925, while increasing the near term Solar RPS requirements, will likely still leave the market oversupplied. This note summarizes the key points in the draft legislation and quantifies the near term and long term impacts it would have on the SREC market if passed into law.

Summary of S1925

Senate Bill 1925 proposes a few substantial changes that would influence New Jersey’s RPS requirements beginning in the 2014 compliance year (June 1, 2013 – May 31, 2014). The chart below demonstrates the change from a fixed SREC requirement under the current RPS to a % based Solar requirement under S1925. The Solar RPS requirements would change beginning in the 2014 compliance year, with a requirement of 1.832% increasing to 3.730% by the 2028 energy year.

Additionally, the table below shows the SREC quantities required under the current RPS versus the estimates required under S1925. While S1925 increases the RPS requirements in the near term, the % requirements estimate a decrease vs. the current requirements beginning in 2023.

Beyond the proposed changes in SREC requirements, S1925 would implement a new fixed Solar Alternative Compliance Payment (SACP) schedule. The schedule reduces the SACP beginning in 2014 to $350/SREC declining to $252/SREC in 2028. The implementation of this schedule will cap SRECs at a price of $350 in 2014 and decrease in future periods. The table below demonstrates the proposed schedule as compared to the current RPS requirements.

In addition to S1925’s proposed SREC and SACP changes, the bill also addresses a few other areas:

1) An SREC’s useful life would extend from 3 to 5 years; giving it eligibility in the year in which it is issued and the following four energy years.

2) During 2014, 2015, and 2016, approved non-net metered grid supply projects cannot exceed more than 100 MW in total aggregated capacity each year. Grid supply projects located on brownfields are not limited under this stipulation. After 2016, the approval of grid supply projects would be subject to review by the Board of Public Utilities (BPU).

3) Solar RPS requirements would automatically increase by 20% for the remainder of the schedule in the event that the following two conditions are met: 1) the number of SRECs generated meets or exceeds the requirement for three consecutive reporting years, beginning with energy year 2014 and 2) the price for SRECs purchased by entities with renewable energy portfolio standards obligations in each of the same three consecutive reporting years is less than the current SREC price in the year prior to the three consecutive reporting years (i.e. if the price in 2014, 2015, and 2016 is less than the 2013 price and the number of SRECs exceeds the requirement in each of these years, the 20% increase in the RPS will be triggered).

What Does This Mean for the NJ SREC Market?

While S1925 takes the steps needed to prop up the NJ SREC market, a closer look at the numbers suggest that even if this bill comes to fruition the market could continue to be oversupplied. The table below shows the current and proposed S1925 RPS requirements through 2017. Both scenarios demonstrate what the markets look like given estimates of installed capacity through April 30, 2012, and assume that excess, eligible SRECs from prior periods are used to meet the compliance obligations in the current period. Under the current RPS requirements, assuming no new build, the market is oversupplied through energy year 2016. Applying these same figures to the estimated SRECs required if S1925 is implemented, the market is short approximately 118,500 SRECs in 2014 (the equivalent of approximately 98.8 MW operational all year long).

Although the requirements under the current installed capacity and proposed changes under S1925 put the market at under supply with no new build, the likelihood of that is minimal. Over the last twelve months (LTM), the average MW installed per month has been 36.0 MW. That figure over the last 6 months has reached 44.9 MW/month. Given the recent historic build rates, we have analyzed 3 different scenarios in which the following cases are assumed:

1) Case 1 – shows half of the LTM average MW added per month throughout the course of the annual forecast periods;

2) Case 2 – shows the LTM average MW added per month remains the same throughout the annual forecast periods;

3) Case 3 – shows 1.5x the LTM average MW added per month throughout the annual forecast periods.

Note, for the purpose of obtaining an ending balance of MW capacity as of May 31, 2012, the table below assumes another 36.0 MW is added in the month of May 2012.

In each of the 3 cases presented above, the market ends up in oversupply through at least 2016. It is important to note that each case assumes all excess, eligible SRECs from the prior period are utilized to meet the current year RPS requirements.

As demonstrated in the scenario analysis, the market would need to substantially slow down current monthly build rates to allow supply to come in line with demand in the future RPS compliance periods. It‘s unlikely that build rates will decline fast enough to protect from future oversupply. This bill does not allow for an increase in build rates (it requires a decrease) and cannot be used as a justification for an increase in PV installation growth.

Reaching the install rates shown in Case 1 (approx. 18 MW/month) should be within reach despite the restrictions put on grid supply projects. Additionally, the potential introduction of new EDC SREC programs, as well as historic build rates in the residential and commercial sectors, will also contribute to meeting the levels outlined in Case 1. Clearly, SREC pricing and availability of forward contracts to support new project development will impact future build rates, but even in markets with an oversupply of solar (i.e. PA), projects continue to be built without much regard for the current SREC environment.

How Does this Impact the 2012 and 2013 energy years?

Under the current draft of S1925, the RPS requirements would be unaffected in 2012 and 2013. The 2012 generation period will come to a close at the end of May 2012. Compliance buyers will have until approximately the end of September to wrap up their purchases before finalizing RPS reports with the BPU. As it currently stands, we estimate the NJ2012 market to see an excess of approximately 180,000 SRECs. Recent over the counter trading has increased to levels between $125 and $135/SREC, up from the last SRECTrade auction clearing price at just above $115/SREC.

The Electric Distribution Companies (EDCs), or regulated utilities, in NJ will be holding an auction on Thursday, May 17, 2012. Recent announcements show that as many as 33,000 NJ2012 SRECs will be available for sale during this auction. Given these volumes, 2012 demand may be reduced after this auction.

In addition to the 2012 energy year, the 2013 compliance period is fundamentally oversupplied. Current estimates show the 2013 period will see an excess of approximately 496,000 SRECs. This estimate takes into consideration the excess SRECs from 2012 and installed capacity estimates through April 2012. The 2013 forward market has recently traded above the 2012 vintage, but given the fundamental oversupply it is likely pricing will trend downward throughout the 2013 compliance period beginning June 1, 2012 (note the first 2013 vintage SRECs will not be issued in GATS and available for delivery until the end of July 2012).

SRECTrade will continue to keep a close eye on the S1925 legislative process as it makes its way through the Senate Environment and Energy Committee and the remaining requirements needed before it can be signed into law.

Note: Percentage based SREC requirements 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 per MW in New Jersey.

Tags: , , , , , ,
Posted in New Jersey, SREC Markets | Comments Off on Proposed New Jersey Solar Bill May Not Solve SREC Woes

Solar Capacity in the SREC States – April 2012

Posted May 13th, 2012 by SRECTrade.

SRECTrade SREC Markets Report: April 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 24,784 solar PV and 316 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these eligible systems, 147 (0.59%) have a nameplate capacity of 1 megawatt or greater, of which 14 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 New Jersey is 12.5 MW. The third largest system, at 12 MW, is located in Ohio.

Delaware: The reporting year 2011-12 (6/1/11 – 5/31/12) requirement for DE equates to approximately 23,700 SRECs being retired. If all retired SRECs were of DE2011-12 vintage, approximately 19.8 MW would need to be operational all year long. As of May 7, 2012, 28.0 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS. 11.2 MW of the 28.0 MW currently eligible is from the Dover Sun Park project developed by LS Power. In the 2011-12 compliance year, Delmarva Power has contracted to purchase 9,846 SRECs from the project, of which 7,000 are being held by the Sustainable Energy Utility (SEU) until 2015-16*. Additionally, the DE SREC Pilot Program solicitation recently closed its first solicitation. As of May 11, 2012, PJM GATS reported the issuance of approximately 23,400 DE2011-12 vintage SRECs. Additional SRECs from prior eligible periods may also impact the market should there be a demand for these older vintage SRECs.

Maryland: The end of February marked the first issuance period of MD2012 SRECs in PJM GATS. As of May 7, 2012, 45.6 MW of MD sited solar capacity was registered to create MD eligible SRECs. 2012 Solar RPS requirements are estimated at 56.1 MW or approximately 67,310 SRECs. The MD Senate recently passed legislation to pull forward the RPS requirements. As of May 11, 2012, PJM GATS reported the issuance of approximately 10,200 MD2012 SRECs. Additionally, all out of state MD systems are no longer eligible to produce MD certified SRECs and their MD certification numbers have been removed from their systems in PJM GATS. 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 reporting year requires 442,000 SRECs to be retired. This equates to approximately 368 MW of capacity being operational all year long, assuming all requirements were met with current vintage year SRECs. As of May 7, 2012, 700.2 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 700.2 MW figure. As of March 31, 2012 the NJ Office of Clean Energy (NJ OCE) reported that 730.3 MW of solar had been installed in NJ. Additionally, estimates through April 2012 show almost 760 MW of total installed capacity. For additional information on the status of the NJ market and information on the expected legislation to adjust the Solar RPS see the following: New Jersey SREC Market Update May 2012. As of May 11, 2012, PJM GATS reported the issuance of approximately 455,500 NJ2012 SRECs. This figure surpasses the current 2012 compliance year requirement of 442,000 SRECs.

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 May 7, 2012, 46.8 MW of in-state capacity and 87.3 MW of out-of-state capacity were eligible to generate OH SRECs. A large increase of in state capacity recently came from a 9.8 MW project sited at the Campbell Soup facility in Napoleon, OH. As of May 11, 2012, GATS issued approximately 9,940 in-state and 20,170 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 requirement for PA equates to retiring approximately 49,450 eligible SRECs. If all compliance obligations were met using 2012 vintage SRECs, approximately 41.2 MW would need to be operational all year long. As of May 7, 2012, 203.1 MW of solar capacity was registered and eligible to create PA compliant SRECs. As of May 11, 2012, PJM GATS reported the issuance of approximately 144,900 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.

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 May 7, 2012, 23.9 MW of capacity was eligible to generate DC SRECs. Additionally, as of May 11, 2012, GATS reported the issuance of approximately 5,800 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 May 7, 2012, there were 1,807 MA DOER qualified solar projects; 1,775 operational and 32 not operational. Total qualified capacity is 72.2 MW, 59.5 of which is operational and 12.7 MW not operational. Electricity suppliers providing power to the state need to acquire approximately 62,900 and 73,400 SRECs in 2011 and 2012, respectively. Through the Q4 2011 issuance period (4/15/12), 26,598 SRECs have been minted. Additionally, 20,421 MWh have been reported to the PTS during January – April 2012. Given the SRECs issued through Q4 2011, the 2011 compliance period is short by approximately 36,302. The next issuance period for Q1 2012 SRECs will be on July 15, 2012.

For additional analysis on the current state of the MA SREC market and an outlook on 2012 see the following post published on March 16, 2012: Massachusetts SREC Market Update – March 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.

*Source: State of Delaware Pilot Program For the Procurement of Solar Renewable Energy Credits: Recommendations of the Renewable Energy Taskforce

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.

Tags: , , , , , ,
Posted in Capacity Summary, SREC Markets | Comments Off on Solar Capacity in the SREC States – April 2012

New Jersey SREC Update May 2012

Posted May 7th, 2012 by SRECTrade.

New Jersey SRECs recently traded at $115.16 per SREC in SRECTrade’s May 2012 auction. This follows the dramatic decline in prices that the New Jersey SREC market has experienced since the beginning of the 2012 energy year. Click here for historic data on SRECTrade’s New Jersey SREC market auction pricing.

What’s going on?

The New Jersey SREC market is oversupplied. The state’s  Solar Renewable Portfolio Standard (RPS) targets a fixed number of megawatt hours (MW-hrs) needed to be purchased by electricity suppliers each compliance period. A MW-hr is the equivalent of one SREC, so in NJ we discuss the SREC market both in terms of total capacity installed in MW and total number of SRECs available each year. Under the current RPS, significantly more solar has been installed than is necessary to meet the state’s RPS goals for the next several years.

The 2012 reporting year (June 1, 2011 – May 31, 2012) requires 442,000 SRECs. Our March 2012 capacity analysis (scroll down to see the NJ numbers) shows that as of the beginning of April, total registered installed capacity was 670.9 MW with 386,500 SRECs issued. More recent data from the New Jersey Office of Clean Energy shows the installed capacity, as of March 31, 2012, at 730.3 MW. Additionally, approximately 455,000 SRECs have been issued in GATS from solar PV generation through March 2012. This figure, demonstrates that as of the last issuance period, there are more than enough SRECs available in the market to meet the 2012 reporting year requirement of 442,000 SRECs. The Generation Attribute Tracking System (GATS) is the organization that all New Jersey PV systems must register with in order to create and transact SRECs.

Another factor is that SREC issuance tends to follow a natural lag due to missing meter reading submissions and delays registering systems with GATS.  Given our experience with this data, it’s reasonable to expect a further bump in SREC numbers through March 2012. Also, April and May 2012 SRECs will be issued at the end of May and June, respectively, and will also add to this year’s total SREC issuance figures.

The additional volume to be issued allows us to project that the market is likely 40% to 50% oversupplied for the 2012 energy year. Lastly, when analyzing the 2013 through 2015 energy year current RPS requirements, the figures show that the market will be oversupplied when taking into consideration eligible excess SRECs rolled forward from prior years and the existing amount of installed capacity as of 3/31/12 currently eligible to produce SRECs. The table below demonstrates this in more detail:

Proposals to stabilize the SREC market

Industry stakeholders are working with the New Jersey legislature to come up with a way to stabilize the NJ SREC market. A NJBiz.com article dated May 3rd, mentions a possible bill proposal by Sen. Bob Smith (D-Piscataway), Chairman of the Senate Environment Committee, that would accelerate New Jersey’s solar goals while reducing how much buyers would need to pay for their SRECs if they don’t have enough SRECs in their portfolios at the end of each energy year.

To date, no bill has been made publicly available. Based on the information provided on the NJ State Legislature website, it appears the bill will be slated under the number S1925. The current description listed includes the following, “Revises certain solar renewable energy programs and requirements; provides for aggregating net metering of Class I renewable energy production on certain contiguous and non-contiguous properties owned by local government units and school districts.”

Until then, we must speculate on what the final contents of the bill will be.  An additional consideration is that even if a bill is passed by the NJ legislature, the bill will likely not go into effect until the 2014 energy year which starts in June 2013.

Tags: , , , , , , , , , ,
Posted in New Jersey, SREC Markets | Comments Off on New Jersey SREC Update May 2012

Solar Capacity in the SREC States – March 2012

Posted April 9th, 2012 by SRECTrade.

SRECTrade SREC Markets Report: March 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 23,871 solar PV and 287 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these eligible systems, 139 (0.58%) have a nameplate capacity of 1 megawatt or greater, of which 14 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 New Jersey is 12.5 MW. The third largest system, at 12 MW, is located in Ohio.

Delaware: The reporting year 2011-12 (6/1/11 – 5/31/12) requirement for DE equates to approximately 23,700 SRECs being retired. If all retired SRECs were of DE2011-12 vintage, approximately 19.8 MW would need to be operational all year long. As of April 4, 2012, 27.8 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS. 11.2 MW of the 27.8 MW currently eligible is from the Dover Sun Park project developed by LS Power. In the 2011-12 compliance year, Delmarva Power has contracted to purchase 9,846 SRECs from the project, of which 7,000 are being held by the Sustainable Energy Utility (SEU) until 2015-16*. Additionally, the DE SREC Pilot Program solicitation is under way, with a portion of the capacity tiers already closed. As of April 8, 2012, PJM GATS reported the issuance of approximately 19,600 DE2011-12 vintage SRECs. Additional SRECs from prior eligible periods may also impact the market should there be a demand for these older vintage SRECs.

DE Chart

Maryland: The end of February marked the first issuance period of MD2012 SRECs in PJM GATS. As of April 4, 2012, 44.0 MW of MD sited solar capacity was registered to create MD eligible SRECs. 2012 Solar RPS requirements are estimated at 56.1 MW or approximately 67,310 SRECs. Legislation is making its way through the MD legislature to pull forward the RPS requirements. As of April 8, 2012, PJM GATS reported the issuance of approximately 5,500 MD2012 SRECs. Additionally, all out of state MD systems are no longer eligible to produce MD certified SRECs and their MD certification numbers have been removed from their systems in PJM GATS. Lastly, there are MD sited SRECs available from prior eligible periods, which could be utilized for compliance needs in 2012.

MD Chart

New Jersey: The New Jersey 2012 reporting year requires 442,000 SRECs to be retired. This equates to approximately 368 MW of capacity being operational all year long, assuming all requirements were met with current vintage year SRECs. As of April 4, 2012, 670.9 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 670.9 MW figure. As of February 29, 2012 the NJ Office of Clean Energy (NJ OCE) reported that 689.1 MW of solar had been installed in NJ. As of April 8, 2012, PJM GATS reported the issuance of approximately 386,500 NJ2012 SRECs.

NJ Chart

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 April 4, 2012, 44.9 MW of in-state capacity and 84.0 MW of out-of-state capacity were eligible to generate OH SRECs. A large increase of in state capacity recently came from a 9.8 MW project sited at the Campbell Soup facility in Napoleon, OH. As of April 8, 2012, GATS issued approximately 5,200 in-state and 11,200 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.

OH Chart

Pennsylvania: The reporting year 2012 requirement for PA equates to retiring approximately 49,450 eligible SRECs. If all compliance obligations were met using 2012 vintage SRECs, approximately 41.2 MW would need to be operational all year long. As of April 4, 2012, 187.9 MW of solar capacity was registered and eligible to create PA compliant SRECs. As of April 8, 2012, PJM GATS reported the issuance of approximately 124,500 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.

PA Chart

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 April 4, 2012, 23.1 MW of capacity was eligible to generate DC SRECs. Additionally, as of April 8, 2012, GATS reported the issuance of approximately 3,100 DC2012 eligible SRECs. SRECs from prior years are also eligible for the current compliance period, which may impact the current year’s requirements.

DC Chart

Massachusetts DOER Qualified Projects

As of April 5, 2012, there were 1,728 MA DOER qualified solar projects; 1,698 operational and 30 not operational. Total qualified capacity is 64.1 MW, 53.7 of which is operational and 10.4 not operational. Electricity suppliers providing power to the state need to acquire approximately 62,900 and 73,400 SRECs in 2011 and 2012, respectively. Through the Q3 2011 issuance period (1/15/12), 19,257 SRECs have been minted. Additionally, more than 7,000 MWh have been reported to the PTS during Q4 2011. The Department of Energy Resources (DOER) projects approximately 29,000 SRECs to be generated in 2011, leaving the market short approximately 33,900 SRECs. The next issuance period for Q4 2011 SRECs will be on April 15, 2012.

MA Chart

For additional analysis on the current state of the MA SREC market and an outlook on 2012 see the following post published on March 16, 2012: Massachusetts SREC Market Update – March 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. 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.

*Source: State of Delaware Pilot Program For the Procurement of Solar Renewable Energy Credits: Recommendations of the Renewable Energy Taskforce

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.

Tags: , , , , , ,
Posted in Capacity Summary, SREC Markets | 1 Comment »

Maryland Update – Senate Passes SB791

Posted April 4th, 2012 by SRECTrade.

Today, the Maryland Senate voted 37-9 in favor of Senate Bill 791. We have been following this piece of legislation closely and have provided estimates and analysis around its impact on the Maryland Solar REC market.

Overall, the legislation pulls forward the Solar RPS requirements, reaching the existing 2022 Solar % requirements in 2020. The chart below demonstrates the existing requirements vs. the proposed requirements under the new legislation.

MD Solar RPS Current vs. HB1187

The next step for the bill is to move on to the Governor’s office to be signed into law.  Maryland stakeholders expect the legislation to be well received by the Governor who will likely sign the bill in May.

We’ll continue to provide updates as the bill is finalized and signed into law. Before then we should point out this bill was successfully promoted in part due to the efforts of the Maryland-DC-Virginia Solar Energy Industries Association (MDV-SEIA) and strong grassroots support from Maryland stakeholders at large.

Tags: , , , ,
Posted in Maryland | 1 Comment »

Update – Maryland Proposes New Solar Legislation

Posted April 2nd, 2012 by SRECTrade.

Since our last update on legislation to adjust the Solar RPS requirements in Maryland, there has been some movement in both the House and the Senate.

After HB1187 passed out of the House Economic Matters Committee, the bill was heard on the floor of the House and passed unanimously 131-0. Earlier last week, the Senate version of the bill, SB791, was voted down in the Senate Finance Committee, 4-7. The bill was then reconsidered by the committee the other day with the original vote being overturned, 8-2 (with one abstention).

The next stage for SB791 is to bring it up for vote on the floor of the Senate. Stakeholders expect this will take place Monday or Wednesday of this week. Some have expressed that the bill may be met with some resistance from the Senate, but it is expected that should it pass out of the Senate it will be well received by the Governor.

If you have an interest in voicing your thoughts on this piece of legislation, feel free to visit this link to find your appropriate representative. We’ll continue to provide updates through our blog as the bill makes its way through the process.

Tags: , , , ,
Posted in Maryland | 1 Comment »

Delaware Pilot SREC Procurement Program

Posted March 30th, 2012 by SRECTrade.

SRECTrade was recently awarded the contract to administer the Delaware Pilot SREC Procurement Program on behalf of the Delaware Sustainable Energy Utility (SEU) and Delmarva Power. Since receiving the contract we’ve put up a website to answer questions about the program and to accept applications for the solicitation. An overview powerpoint and webinar recording can be viewed by clicking here.

This is the first essentially state-wide SREC program to take such a long-term approach to SREC contracts. Regulators and industry observers are eager to see how this “pilot” solicitation is reviewed. Should the “pilot” be deemed successful it is likely that the SEU will hold yearly solicitations for SREC contracts.

With the Pilot SREC Procurement Program, the  SEU and Delmarva have formed a partnership to provide stable, long-term pricing (20-year contracts) for a finite amount of SRECs from systems that are accepted into the program. Among the eligible systems for the program, preferential selection and pricing  is given to systems installed with Delaware parts and/or labor. Systems under 250 kW (DC) nameplate capacity apply into a lottery solicitation, whereas systems that are greater than 250 kW (DC) must apply through a competitive bid process.  The solicitation will likely be over-subscribed with applications from among the many eligible, in-state systems. Solar systems that are not successful in the solicitation will still be able to transact SRECs outside of the Delmarva program, and could remain eligible for future solicitations or this program.

Key items

  • DE-sited solar systems interconnected on or after 12/1/2010 are eligible.
  • Systems must have online monitoring.
  • Systems that received funding from a public source other than the Federal Investment Tax Credit and DE Green Energy Program are ineligible.
  • 4/2/2012 – Solicitation opens.
  • 4/6/2012 – Solicitation will stay open at least until this date for systems <250 kW (DC) capacity, but could stay open if not all capacity is filled.
  • 4/13/2012- Solicitation closes for systems >250 kW (DC).
  • 4/23/2012 – Results announced.

    • Tags: , , , , , , ,
    Posted in Delaware, SREC Markets, State RPS | Comments Off on Delaware Pilot SREC Procurement Program

    Maryland Proposes New Solar Legislation

    Posted March 22nd, 2012 by SRECTrade.

    For a PDF copy of this analysis please click here: Maryland Proposes New Solar Legislation

    In February 2012, the Maryland legislature introduced legislation that directly impacts the MD solar industry. Two sets of legislation are proposed. The first set, House Bill 1187 (HB1187) and Senate Bill (SB791) seek to adjust the solar goals outlined in the MD Renewable Portfolio Standard (RPS). The second set House Bill 864 (HB864) and Senate Bill 595 (SB595) propose adjustments to the state law to allow for “Community Solar.”

    In order for either sets of legislation to be signed into law, both the House and Senate versions must be passed and a final bill signed by the Governor. We detail both sets of legislation below.

    Maryland RPS Adjustment

    Companion bills HB1187 and SB791, pull forward the percentage requirement of the solar portion of the MD RPS, reaching its 2.0% solar target in 2020 instead of 2022. In addition to pulling the RPS % forward, the percentage requirements in the interim, beginning in 2013, would also increase.

    The chart below demonstrates the existing RPS % versus the proposed percentage requirements under HB1187/SB791.

    MD Solar RPS Current vs. HB1187

    While the overall MD RPS solar goal does not change under HB1187/SB791, the amount of SRECs required increases in each of the interim years beginning in 2013 (SREC requirements are directly tied to the RPS % requirements). These increases could have a positive impact on SREC pricing if the market is unable to develop the needed supply during these future periods. Although the increases are meaningful (especially in the later years, see charts below), large projects such as First Solar’s20 MW Hagerstown, MDproject and Constellation Energy’s16.1 and 1.3 MW Emmitsburg, MDprojects can still substantially impact the SREC market.

    Current vs. Proposed and Additional

    As of March 7, 2012,PJM GATS reported 41.8 MWof operational MD eligible capacity. Under the existing MD2012 RPS requirements, Maryland needs an average of 56.1 MW operational all year long, or 67,310 SRECs. Additionally, any left-over supply from 2010 and 2011 also can be used to meet MD2012 compliance requirements. Given continued development in the state, which has averaged approximately 2.3 MW/month over the last 12 months (LTM), and the larger projects noted above, the increase in capacity as proposed by HB1187 and SB791 would help absorb continued solar build out.

    Maryland could expect to see approximately 102.2 MW of operational capacity at the beginning of 2013. This figure takes into consideration the online capacity as of 3/7/12, the impact of the Constellation and Maryland Solar projects (assumed to be fully operational by the end of 2012), and continued development at the same pace as the LTM period. The table below demonstrates how our estimated 2013 beginning balance capacity compares to the number of SRECs required under the current 2013 RPS requirements versus the proposed requirements under HB1187/SB791.

    estimated 2013 beginning balance

    Where Does HB1187/SB791 Currently Stand?

    Earlier this week, HB1187, the House version of the bill, was heard in the House Economic Matters committee. A couple panels with industry analysts and regional installation professionals presented their thoughts on the impact of pulling forward the Solar RPS requirements. After the reading and the presentations, the bill was unanimously passed out of committee.

    It is expected that the House bill will reach the floor for final vote later this week or early next week. Additionally, the Senate bill needs to be heard in the Senate Finance Committee before it can make it to the floor of the Senate. Should both sides of the legislature vote in favor of the bills, the final step would be to have it sent to Governor O’Malley to be signed into law.

    Community Energy Bills HB864/SB595

    In addition to HB1187/SB791, there are 2 bills in the MD House and Senate,HB864andSB595, which provide guidelines and regulations for investing, operating, and participating in the usage of electricity generated from shared community energy generation facilities. While Annapolis insiders suggest that these “community solar” bills have a way to go before they are implemented, important initial legwork is being completed to make community solar projects feasible. The highlights of the current versions of the bills include:

    – Defining that community energy-generating facilities and their subscribers or subscriber organizations are not considered Electric Companies or Electricity Suppliers

    – Provides a frame work for crediting generated electricity to the subscribers of the facility

    – Outlines who can be a qualified project owner

    – Explains how energy not fully allocated to users of the project’s electricity will be credited/purchased as wholesale electricity

    – Implements nameplate megawatt capacity caps, currently 2 MW, on projects that participate in a community energy project structure

    SRECTrade will continue to keep a close eye on the legislative process across these bills and provide updates as they become available.

    Tags: , , , , ,
    Posted in Maryland, SREC Markets | 2 Comments »

    Massachusetts SREC Market Update – March 2012

    Posted March 16th, 2012 by SRECTrade.

    For a PDF copy of this analysis click here: Massachusetts SREC Market Update – March 2012

    The MA2012 SREC compliance year began in January 2012. There has been a lot of attention on the Bay State’s solar carve-out program and installation activity continues to pick up. A substantial under supply in 2010 and 2011 vintages resulted in SRECs pricing just shy of the alternative compliance payment (ACP). Moving forward many stakeholders are closely watching how supply will impact 2012 and future period valuations. The analysis below takes a look at current capacity levels and provides some insight into how the market may shape up in 2012.

    As of March 6, 2012, the MA Department of Energy Resources (DOER) posted updated total qualified solar capacity figures. The DOER noted that due to a delay from MassCEC, the entity that approves all renewable projects in the Commonwealth, the project-level details of the total qualified capacity is not yet available. As of this writing, the DOER was still awaiting the information from MassCEC and noted an updated report would be published when available.

    MA Chart

    The total qualified capacity noted as of the update is as follows:

    – Total Qualified Capacity (3/6/12): 63.6 MW (1,704 projects)
    – Total Operational Capacity (3/6/12): 52.6 MW (1,671 projects)
    – Total Operational Capacity (1/1/12): 48.3 MW (1,595 projects)

    Based on the historic capacity that has come online since December 2010, below is some analysis demonstrating capacity that could be expected to come online throughout the 2012 compliance period.

    Historic Capacity 3_15_12

    The table above demonstrates the amount of operational capacity as reported by the DOER based on the dates indicated. Note, these figures are (and were) readily available on the DOER’s public website.  Looking at the last 12 DOER reported periods (which we’ll refer to as Last Twelve Months, or LTM for our purposes), the average MW added per month was just above 4.0 MW.

    Using the January 1, 2012 starting capacity of 48.3 MW and the March 6 operational capacity of 52.6 MW, we have inferred that on average 2.2 MW became operational in January and February 2012. The analysis below demonstrates 3 cases. In each case, a different capacity scenario is presented based on the average amount of added capacity over the LTM. Case 1 assumes only half of the LTM average capacity is added per month; Case 2 assumes the same amount of LTM average capacity is added per month; and Case 3 assumes two times the amount of LTM average capacity is added per month. Note, these forecast figures were derived simply based on historic rates. The figures do not take into consideration the amount of capacity currently in the interconnection pipeline. Many factors can impact these figures, including the timing associated with interconnection, changes in federal incentive policies, and pricing and liquidity in the MA SREC forward market, to name a few.

    Forecast MA Capacity 3_15_12

    *Note the Estimated Production Factor per Period is based on a 1.13 MWh per installed kW per year adjusted for seasonal impacts.

    The 3 cases presented herein demonstrate a market that is slightly undersupplied (Case 1), a market that is slightly oversupplied, or almost flat (Case 2), and a market that is oversupplied by approximately 30% (Case 3). Also, it is important to note that expected volume in each case presented could change if the roll out of additional capacity is not evenly disbursed. Depending on each scenario, SREC prices will adjust accordingly.

    Through the Q3 2011 issuance period (1/15/12), 19,257 MA2011 SRECs have been minted. Additionally, more than 7,000 MWh have been reported to the PTS during Q4 2011. The Department of Energy Resources (DOER) projects approximately 29,000 SRECs to be generated in 2011, leaving the market short approximately 33,900 SRECs. As a result of this substantial undersupply, MA2011 SRECs have traded close to the 2011 ACP value of $550/SREC. In recent trading, the MA2012 market has priced at approximately 65% of MA2011 spot prices. Additionally, bidding for multi-year forward contracts beginning with 2012 delivery is currently below the Solar Credit Clearinghouse Auction price.

    Projects Installed by Size Category

    Given the relatively smaller MW capacity requirements in the early stages of the MA SREC program, the installation of larger scale (>1 MW) projects can easily have a substantial impact on the SREC requirements. Looking at the various cases presented above, they demonstrate that the installation of enough >1 MW projects could easily tip the market into oversupply. Additionally, it is possible that commercial size projects ranging from 100kW to 500kW could have an impact as well. While >1 MW projects quickly meet the 2012 requirements, many of these projects take much longer to come to fruition. The design, interconnection, construction, and financing processes for these projects can take several months. Installers and developers in MA have recently noted that smaller, multi-100kW commercial projects are much faster from inception to power generation. It is common that these projects are financed using all equity capital or debt sourced from an existing banking relationship established and backed by a corporate entity’s balance sheet. Considering these factors, it is very possible the multi-100kW size category will have a meaningful impact on the MA2012 SREC market.

    The table below analyses various size categories of systems and the number of projects installed and how these categories grew from DOER reported data as of July 11, 2011 vs. January 25, 2012.

    Project Categories 3_15_12

    As demonstrated above, both the residential (<50kW) and commercial (>50 kw to 500kW) categories grew at substantial rates during the periods presented. Given these historic growth rates and the amount of current solar development interest in MA, it is expected that we will continue to see more growth in these size categories throughout 2012.

    The final MA2011 issuance period for Q4 2011 SRECs is April 15, 2011. The first MA2012 spot trades will commence after the Q1 MA2012 issuance period on July 15, 2012.

    Tags: , , , ,
    Posted in Massachusetts, SREC Markets | 3 Comments »

    Solar Capacity in the SREC States – February 2012

    Posted March 8th, 2012 by SRECTrade.

    SRECTrade SREC Markets Report: February 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.

    Renewable Generators in GATS 3_7_12

    PJM Eligible Systems

    As of this writing, there were 23,036 solar PV and 272 solar thermal systems registered and eligible to create SRECs in the PJM Generation Attribute Tracking System (GATS). Of these eligible systems, 133 (0.57%) have a nameplate capacity of 1 megawatt or greater, of which 14 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 Ohio is 12 MW. The third largest system, at 11.2 MW, is located in Delaware.

    Delaware: The reporting year 2011-12 (6/1/11 – 5/31/12) requirement for DE equates to approximately 23,700 SRECs being retired. If all retired SRECs were of DE2011-12 vintage, approximately 19.8 MW would need to be operational all year long. As of March 7, 2012, 27.1 MW of solar capacity was registered and eligible to create DE SRECs in PJM GATS. 11.2 MW of the 27.1 MW currently eligible is from the Dover Sun Park project developed by LS Power. In the 2011-12 compliance year, Delmarva Power has contracted to purchase 9,846 SRECs from the project, of which 7,000 are being held by the Sustainable Energy Utility (SEU) until 2015-16*. As of March 8, 2012, PJM GATS reported the issuance of approximately 17,300 DE2011-12 vintage SRECs. Additional SRECs from prior eligible periods may also impact the market should there be a demand for these older vintage SRECs.

    DE Chart

    Maryland: Maryland’s 2011 solar compliance requirements are currently being finalized. The 2011 Solar RPS target requires approximately 33,160 SRECs to be retired. To meet this using only 2011 vintage SRECs, approximately 27.6 MW would need to be operational all year long. The MD Public Services Commission recently announced that enough solar facilities were connected to the Maryland electric grid to satisfy the 2011 Solar RPS requirements with MD sited SRECs. The end of February marked the first issuance period of MD2012 SRECs in PJM GATS. As of March 7, 2012, 41.8 MW of MD sited solar capacity was registered to create MD eligible SRECs. 2012 Solar RPS requirements are estimated at 56.1 MW or approximately 67,310 SRECs. As of  March 8, 2012, PJM GATS reported the issuance of approximately 2,340 MD2012 SRECs. Additionally, all out of state MD systems are no longer eligible to produce MD certified SRECs and their MD certification numbers have been removed from their systems in PJM GATS. Lastly, there are MD sited SRECs available from prior eligible periods, which could be utilized for compliance needs in 2012.

    MD Chart

    New Jersey: The New Jersey 2012 reporting year requires 442,000 SRECs to be retired. This equates to approximately 368 MW of capacity being operational all year long, assuming all requirements were met with current vintage year SRECs. As of March 7, 2012, 637.1 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 637.1 MW figure. As of January 31, 2012 the NJ Office of Clean Energy (NJ OCE) reported that 649.2 MW of solar had been installed in NJ. Additionally, preliminary figures from the NJ OCE estimate another 39 MW installed in February 2012, totaling 689 MW of capacity. As of March 8, 2012, PJM GATS reported the issuance of approximately 327,000 NJ2012 SRECs.

    NJ Chart

    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 March 7, 2012, 44.0 MW of in-state capacity and 81.3 MW of out-of-state capacity were eligible to generate OH SRECs. A large increase of in state capacity recently came from a 9.8 MW project sited at the Campbell Soup facility in Napoleon, OH. As of March 8, 2012, GATS issued approximately 1,904 in-state and 4,485 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.

    OH Chart

    Pennsylvania: The reporting year 2012 requirement for PA equates to retiring approximately 49,450 eligible SRECs. If all compliance obligations were met using 2012 vintage SRECs, approximately 41.2 MW would need to be operational all year long. As of March 7, 2012, 182.0 MW of solar capacity was registered and eligible to create PA compliant SRECs. As of March 8, 2012, PJM GATS reported the issuance of approximately 115,700 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.

    PA Chart

    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 March 8, 2012, 23.1 MW of capacity was eligible to generate DC SRECs. Additionally, as of March 8, 2012, GATS reported the issuance of approximately 1,320 DC2012 eligible SRECs. SRECs from prior years are also eligible for the current compliance period, which may impact the current year’s requirements.

    DC Chart

    Massachusetts DOER Qualified Projects

    For a additional analysis on the current state of the MA SREC market see the following post published on March 16, 2012: Massachusetts SREC Market Update – March 2012

    As of March 6, 2012, there were 1,704 MA DOER qualified solar projects; 1,671 operational and 33 not operational. Total qualified capacity is 63.6 MW, 52.6 of which is operational and 11.0 not operational. Electricity suppliers providing power to the state need to acquire approximately 62,900 and 73,400 SRECs in 2011 and 2012, respectively. Through the Q3 2011 issuance period (1/15/12), 19,257 SRECs have been minted. Additionally, more than 7,000 MWh have been reported to the PTS during Q4 2011. The Department of Energy Resources (DOER) projects approximately 29,000 SRECs to be generated in 2011, leaving the market short approximately 33,900 SRECs. The next issuance period for Q4 2011 SRECs will be on April 15, 2012.

    MA Chart

    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.

    *Source: State of Delaware Pilot Program For the Procurement of Solar Renewable Energy Credits: Recommendations of the Renewable Energy Taskforce

    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.

    Tags: , , , , , ,
    Posted in Capacity Summary, SREC Markets | 2 Comments »

    « Older Entries
    Newer Entries »
    Clients
    Markets
    About
    Legal

    © 2024 SRECTrade, Inc. All rights reserved.