NEPOOL Class I RECs: Q3 2015 Data Release Update & the “Maine” Event

Ali Shajrawi Market Research Briefs

While NEPOOL Class I REC pricing saw a retreat in 2015 compared to 2014, prices for the spot vintages in all markets (except Maine) remained robust near their newly established low-$50sresistance level. NEPOOL Class I REC pricing tracked within 95% of their respective ACPs in 2013 and most of 2014, bringing into focus assumptions of persistent undersupply. Nevertheless, as REC generation increased in 2015, the NEPOOL Class I REC market became adequately supplied and REC prices pulled back.

MA SREC II Market Update – No Bill, Full Caps, Can’t Build

Ali Shajrawi Market Research Briefs

After the recent failure of the Massachusetts legislature to pass a compromise bill to raise the net metering cap before winter recess, many projects are at risk of heading off a cliff. Coupled with the Investment Tax Credit (ITC) step-down from 30% to 10% for commercial projects, the delay in raising the net metering cap may jeopardize the installations of over 115 MW in 2016. In this Report, the Karbone Research Desk addresses the impact of these recent developments on the SREC-II market and discusses forward build rates scenarios, historical pricing trends, and the impact of legislative uncertainty on market fundamentals.

NEPOOL Class I RECs Q2 2015 Data Release Update

Ali Shajrawi Market Research Briefs

NEPOOL Class I data showed continued generation growth across all states for almost all technologies. Generation in the most liquid markets of Massachusetts and Connecticut grew 12% and 19% in Q2 2015 over Q2 2014, respectively. New Hampshire saw the most quarter-on-quarter growth at 35%, while the less liquid Rhode Island grew 14% in Q2 ’15 against Q2’14.

Massachusetts SREC I Update: Diminishing Demand meets Stranded Supply

Ali Shajrawi Market Research Briefs

The third Massachusetts SREC I Auction cleared in the first round for the first time amid overwhelming demand. Preliminary results of the Auction indicated mixed implications for forward supply and demand scenarios. Can the SRECs sold in the Auction help satisfy the projected shortage in 2015 Compliance Obligation? Will enough of the reserve of re-minted SRECs be held out for future usage to relieve the perceived tightness in 2016 supply? The Karbone Research Desk addresses forward supply & demand dynamics, pricing, and market balance concerns in this report.

NEPOOL Class I RECs: Racing in Reverse – Supply Decelerates More Than Demand

Ali Shajrawi Market Research Briefs

NEPOOL Class I data showed continued generation growth across all states and for almost all technologies. In the most liquid markets of Massachusetts and Connecticut, Class I REC generation in Q1 2015 grew 4.6% and 12.9% against Q1 2014, respectively. In addition, even the less liquid New Hampshire market supply grew considerably by 27% in Q1’15 over Q1’14. Class I REC generation increased slightly at 3.1% in Maine and 9.6% in Rhode Island. Nevertheless, Q1 year-on-year rates of growth have decreased significantly for most states across the board (excluding NH). While the absolute levels of RECs produced in Q1 has increased, harsh winter conditions seemed to affect per-MW productivity for most renewable technologies as generation fell below expectations given installed nameplate capacity.

NEPOOL Class I RECs Q1 2015 Data Release Update

Ali Shajrawi Market Research Briefs

NEPOOL Class I data showed continued generation growth across all states and for almost all technologies. In the most liquid markets of Massachusetts and Connecticut, Class I REC generation in Q1 2015 grew 4.6% and 12.9% against Q1 2014, respectively. In addition, even the less liquid New Hampshire market supply grew considerably by 27% in Q1’15 over Q1’14. Class I REC generation increased slightly at 3.1% in Maine and 9.6% in Rhode Island. Nevertheless, Q1 year-on-year rates of growth have decreased significantly for most states across the board (excluding NH). While the absolute levels of RECs produced in Q1 has increased, harsh winter conditions seemed to affect per-MW productivity for most renewable technologies as generation fell below expectations given installed nameplate capacity.

Explaining the Q3 Excitement: Massachusetts SREC I & SREC II

Karbone Market Research Briefs

Massachusetts solar saw a number of important developments in Q3: SREC I finalized its Program Cap, held the first successful Solar Credit Clearinghouse Auction, and experienced dramatic price appreciation for forward vintage SRECs. SREC II nearly avoided major legislative changes, received an incremental increase in net metering caps, and had DOER growth projections suggest a re-orientation of the market away from Managed Growth-type projects.

Major Changes in Store for Massachusetts Solar?

Karbone Market Research Briefs

On June 11th, key solar policy decision makers unveiled a Proposal that would radically transition solar incentives in Massachusetts away from the SREC market and towards a more feed-in-tariff type regime. The Proposal outlines a Declining Block Solar Incentive Program that would supplant much of the recently launched SREC II program. If implemented, we estimate that the SREC II market size could be reduced from roughly 1 GW to closer to 300 MW.

Massachusetts SREC II Market Update – December, 2013

Karbone Market Research Briefs

Mark Sylvia, MA DOER Commissioner, on December 13 presented to the Electricity Restructuring Roundtable the final policy design for the RPS Solar Carve-Out II Program. The presentation included important developments in the market structure, such as SREC Factor changes, an ACP funded financing program, and raising the Net Metering (NM) Cap, which Karbone will cover in this report.