With the threat of the cessation of the PTC in late 2012, wind was the driving force behind Class/Tier I REC supply expansion in PJM over 2011 and 2012. Karbone estimates more than 5m wind RECs were added to PJM in this period, bringing the total potential generation to more than 19m wind RECs for PJM eligible states.
Recent rule-making by the NJ BPU limited the number of grandfathered grid-tied projects to 12 MW, approving only 3 of the 50 projects. This unexpected BPU decision caused an appreciation in SREC prices above $140 for the first time since July 2012. The NJ BPU rejected 26 projects and suggested they apply under Subsection Q for 80 MW per year of new grid-tied projects. 21 projects totaling 230 MW were deferred a decision pending further review for approval under Subsection S for farmland projects. It is unclear how many of the 230 MW of projects may impact the market.
MA SREC prices have rallied since mid January, with Vintage 2012 prices increasing from $205 to trade as high as $235 this month. Over the same period the vintage 2013 SRECs rallied stronger than 2012’s, moving from $155 to $215, with the spread narrowing from $50 to $20.
The MA market currently has three uncertainties that require clarifying. In the short-term, the focus is on which proposed rule changes will be adopted, and how the Solar Credit Clearing House Auction (SCCHA) will play out. In the medium/long-term, parties are concerned with what happens when the market hits the 400 MW cap. This analysis will seek to analyze these uncertainties.
As of 8 September 2010, the DOER has qualified 8.1 MW of SREC projects. Excluding those with pre‐ 2010 contracts, we estimate the remaining market for 2010 is 9,500 to 13,300 SRECs. The 2011 Minimum Standard is raised to 78,577 SRECs following the TransCanada settlement, making the market potential for 2011 approximately 63,000 SRECs.
The Ohio Alternative Energy Resource Standard (AERS) is one of the most recent state Renewable Portfolio Standards (RPS) to include a solar carve out requirement. Like other states in PJM, the AERS includes an SREC market, distinct from other classes of RECs.
The New Jersey (NJ) Renewable Portfolio Standard (RPS) includes the most ambitious solar carve out of the U.S. states. The 2010 target of 180 gigawatt hours (GWh) of Solar Renewable Energy Credits (SRECs) is unable to be met by the 141 GWh available generation capacity since 2007.
The Massachusetts SREC market has suffered an initial, partial setback in the implementation of its solar carve‐out pricing. The Massachusetts Department of Energy Resources (DOER) set the states’ first solar carve‐out target at 30MW (34,164 MWh or SRECs), known as the 2010 Minimum Standard.