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Posts Tagged ‘SRECs’

Massachusetts Updates 2016 Managed Growth Allocation, Developers Still on Edge

Massachusetts solar developers breathed a sigh of relief after last week’s announcement.

Some developers of 650kW+ solar projects may get their projects built after all.

Some developers of 650kW+ solar projects may get their projects built after all.

After the initial August 26th announcement that the 2016 Managed Growth Capacity Block would be 0MW, the Massachusetts Department of Energy Resources (DOER) opened a public comment period.  As expected, solar stakeholders expressed their concern over the 2016 allocation, citing that the DOER had projected overly ambitious growth in Market Sectors A-C. In response to these comments, DOER adjusted the 2016 Managed Growth Capacity Block allocation from 0MW to 20MW .

What is Managed Growth in Massachusetts?

The Massachusetts SREC-II Program, initiated in April, creates differentiated financial incentives for each market sector (“SREC Factor”) to level the playing field. This program makes smaller solar projects more competitive compared to larger ones by ideally giving financial preference to residential and rooftop projects (a higher SREC Factor close to 1.0) and providing less support for larger projects (ground mount, landfill or brownfield projects less than 650kW.) Previously, this program allocated 26MW and 81MW for the Managed Growth sector in 2014 and 2015 respectively.  As the legislation mandates, the reconsideration and final decision of the 2016 Managed Growth Capacity Block came from the following formula:

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Summary of the Clean Power Plan & Positive Impacts on the Solar Industry

At the direction of President Obama, the U.S. Environmental Protection Agency released the Clean Power Plan, also known as 111(d) on June 2.  It is the first time the U.S. government has sought to cut carbon pollution from existing power plants.  In summary, by 2030, the EPA’s proposed steps should cut national carbon emission from the power sector by 30% – as measured against 2005 levels.

The proposal provides guidelines for states to develop plans to meet state-specific goals to reduce carbon pollution and gives them the flexibility to design their own programs. States can choose a mix of generation using diverse fuels, energy efficiency, and/or demand-side management. States can also choose to work alone to develop individual plans or with other states to develop multi-state plans.

Ultimately, as we look into our crystal ball, we see a large increase in the number of rate cases that utilities bring before their state’s Public Utility Commissions, and subsequent changes in the way utilities are regulated. We also see the following positive impacts for the solar and energy efficiency industries:

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Ohio Becomes the First State to Freeze its Renewable Portfolio Standard

The passage of Senate Bill 310 (SB310) has frozen Ohio’s Renewable Portfolio Standard until 2017, making Ohio the first state to roll back renewable energy and efficiency measures.

The passage of Senate Bill 310 (SB310) has frozen Ohio’s Renewable Portfolio Standard until 2017, making Ohio the first state to roll back renewable energy and efficiency measures.

With the signing of Senate Bill 310 (SB 310), Ohio has become the first state to “freeze” its Renewable Portfolio Standard (RPS). Ohio Governor John Kasich signed the bill into law on June 13th, effectively halting the state’s mandates for efficiency and renewables until 2017. Come 2017, these mandates will pick up where they left off when the freeze occurred, as opposed to the annual increases in renewable energy and efficiency measures that would have occurred with the RPS.

SB310 will significantly harm Ohio’s solar industry by driving SREC prices down in both the Buckeye state as well as the surrounding states such as Kentucky, Pennsylvania, West Virginia, Indiana, and Michigan that sell their SRECs into Ohio. The bill faced tremendous opposition from health and environmental coalitions, as well as a group of 70 businesses and organizations, including Honda and Whirlpool, who urged Governor Kasich not to sign the bill.

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Formal Rulemaking Process Begins for Massachusetts SREC-II Program

On January 3, 2014, the Massachusetts Department of Energy Resources (DOER) announced that they filed revisions to the Renewable Portfolio Standard (RPS) Class I regulation, thus beginning the formal rulemaking process for establishing a framework for the SREC-II program.  The official version of the draft regulation will be published in the Massachusetts Register on January 17, 2014, but in the meantime, the DOER has provided an unofficial version on their website.

Timeline for the Formal Rulemaking Process

The formal rulemaking process begins with a public comment period which includes holding a public hearing.  Written public comments will be accepted from January 3 through 5:00pm on January 29, 2014 and the public hearing will be held on January 24, 2014 from 1:00 to 3:00 pm in the Gardner Auditorium of the Massachusetts State House in Boston.  Following the public comment period, the DOER will submit this proposed final regulation to the Joint Committee on Telecommunications, Utilities and Energy and will incorporate any changes deemed prudent from the public comments.  Within the following 30 days, the Joint Committee will review and submit comments on the regulation back to the DOER.  To conclude, the DOER must consider the Joint Committee’s comments for a period of not less than 30 days, and thereafter, the final regulation will be promulgated as soon as possible.  Based on the estimated outline in the table below, the SREC-II program should become effective in April 2014.

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Everything You Need to Know about the Most Recent Updates to Massachusetts SREC II

Massachusetts Department of Energy Resources (DOER) Commissioner Mark Sylvia recently shared the DOER’s most recent developments regarding its SREC II program.

Massachusetts Department of Energy Resources (DOER) Commissioner Mark Sylvia recently shared the DOER’s most recent developments regarding its SREC II program.

Massachusetts Department of Energy Resources (DOER) Commissioner Mark Sylvia recently shared the DOER’s most recent developments regarding its SREC II program with a packed house at the recent Electricity Restructuring Roundtable on Solar in New England and California.  The official draft has not been published for the public, but is expected to be filed any day now.  Here’s what you need to know.

  1. SREC-II Policy Objectives: Unchanged

The overall policy objectives remained unchanged under this most recent draft. The DOER’s main goals are still to provide sufficient economic support, control ratepayer costs, and create competitive, robust, and progressive market conditions that will maintain and expand PV installations in Massachusetts to reach Governor Deval Patrick’s 1600 MW goal by 2020.  The most significant updates and changes to the original SREC-II draft regulations came instead in the announcement of the key design features, which will drive the structure of the SREC-II Program.

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Ohio’s Renewable Portfolio Standard under Attack… Again

The Ohio SREC market in 2013 is projected to be more than two times oversupplied with an expected 129,000 SRECs to be issued compared to a demand of only 60,000 SRECs.

The Ohio SREC market in 2013 is projected to be more than two times oversupplied with an expected 129,000 SRECs to be issued compared to a demand of only 60,000 SRECs.

As the Ohio General Assembly approaches the final few months of its 2013 legislative session, attention has been brought to the Senate Bill introduced to repeal the state’s Renewable Portfolio Standard. Ohio State Senator Kris Jordan introduced Senate Bill 34 (SB 34) which, if passed, would “repeal the alternative energy resource requirements imposed on electric distribution and electric services companies to provide, by 2025, 25% of their electric supply from alternative energy.” To put it simply, if passed, this legislation would repeal Ohio’s Renewable Portfolio Standard (RPS), and the Ohio SREC market would be dismantled.

This is not the first time that Senator Jordan has attacked the Ohio RPS; similar legislation was introduced by Senator Jordan in 2012, but those previous bills failed to gain any support.  It remains to be seen how SB 34 will move forward in this current legislative session, as it has only been assigned to the Public Utilities Committee. A hearing has yet to be scheduled.

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Sol Systems to Speak at Distributed Solar Summit 2013

Sol Systems to Speak at Distributed Solar Summit 2013

Sol Systems George Ashton and Andrew Gilligan to Speak at Distributed Solar Summit 2013

Another week, another conference.

Next week, Sol Systems will speak at the Distributed Solar Summit in San Diego, California. Sol Systems CFO, George Ashton, and Senior Associate, Andrew Gilligan, will both be featured on Monday, November 18 during the U.S Distributed Solar Markets: Outlook and Analysis portion of the conference. George will speak about policy and incentive frameworks in New Jersey’s solar market. Andrew will discuss the solar policy and incentive frameworks in New York.

Developers interested in financing options for New Jersey or New York solar projects can contact our project finance team at or (888) 235-1538 ext. 2.  Our team is happy to discuss your project with you and assess financing opportunities. Solar installers with customers in need of SREC options in New Jersey can contact our SREC services team at or (888) 235-1538 ext. 1.

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Sol Systems Welcomes Bridget Callahan

Sol Systems Welcomes Bridget Callahan

Sol Systems Welcomes Bridget Callahan to help with the firm’s SREC operations and analytics.

Sol Systems is continuing to expand to accommodate its rapid business growth. This week, Sol Systems is proud to announce the arrival of our new SREC Operations Analyst, Bridget. Welcome to the team, Bridget.

Bridget Callahan joins Sol Systems after graduating from the University of Michigan. Prior to joining Sol Systems, Ms. Callahan worked with the State of Michigan, as well as with several environmental non-profit organizations. As SREC Operations Analyst, Ms. Callahan answers inquiries for Sol Systems’ 4,000 person customer network, manages customer meter readings and production monitoring, conducts policy research and analysis, and interacts with the various public utilities commissions for SREC registrations. She holds a Bachelor in Arts in Public Policy from the Gerald R. Ford School of Public Policy, with a concentration in environmental policy.

At Sol Systems, our biggest asset is our team, and we will continue to hire sharp, passionate team members. We are currently hiring for a Controller. To learn more about careers with Sol Systems, please visit our careers page.

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Massachusetts SREC-II Market Outlook – The New Market Equilibrium?

Sol Systems has put together a prospective view of the supply and demand dynamics of the SREC II market in Massachusetts, based on the DOER’s recent presentation of proposed policies for the program.  The principle takeaway for solar developers in the MA market is that the SREC Factor they bid in a competitive solicitation for projects in the ‘Managed Growth Sector’ will need to be determined at the time of bidding, as the SREC-II market dynamics will be ever-evolving.  They should do this by analyzing the market using the project and SREC data that the DOER is promising will be extensive in the SREC-II program.  This should give project owners assurance that they will not have to blindly determine a competitive SREC Factor to bid for their projects.  

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Legislation Introduced in 2013 to Increase the Pennsylvania Solar Carve-Out

On February 25, 2013, Representative Greg Vitali introduced House Bill (HB) 100 to the Pennsylvania House of Representatives, legislation that would amend the Pennsylvania Alternative Energy Portfolio Standards. HB 100 was later referred to the House Environmental Resources and Energy Committee, and hearing has not yet been scheduled. If passed, HB 100 would take steps to revive the suffering PA SREC market. Similar legislation (HB 1580 and SB 1350) was introduced to the PA legislature in 2012; however, neither of these bills made significant progress in the General Assembly.

The original Pennsylvania Alternative Energy Portfolio Standards Act currently requires Pennsylvania’s electric utilities to obtain eight percent of their power from renewable sources by 2021, and of that eight percent, 0.5 percent of their power must be generated by solar energy systems.

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PUCO Releases New Generation Start Date Eligibility

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.

The Public Utilities Commission of Ohio (PUCO) recently ruled on changing the generation start date for all eligible renewable energy resource generating facilities submitted for approval to the PUCO in 2013.  For all applications received after December 31, 2012, all facilities submitted to the PUCO for approval will have a generation start date of the date the application was filed with the PUCO.

Credit will not be given for generation that occurred before the date of the facility’s application for certification as an eligible Ohio renewable energy resource generating facility. Facility owner’s will be able to report generation from the date of application for Ohio’s purposes, unless the facility is not yet online, in which case the facility owner can begin reporting from the in-service date.

Previously, solar facilities submitted to the PUCO for approval would receive a generation start date beginning on the date the application for the system was approved by the PUCO (which is 61 days after the date filed), or a facility could receive retroactive credit back to the date the facility began reporting so long as there was supporting documentation from a remote monitoring system.  Solar facilities will no longer be able to submit remote monitoring information or documentation to the PUCO for retroactive credit.

This generation start date change will only affect facilities located in OH and adjacent states. Sol Systems has reviewed these generation start date changes and is making the necessary changes to our registration service to allow for timely registration of solar facilities to the PUCO.  Please continue to follow our blog for any further updates to the registrations process.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit

Connecticut Small ZREC Program Open and Accepting Applications

Sol Systems is currently aggregating several small ZREC projects, specifically projects that are 50 kW or larger, have or will be submitted into the CT Small ZREC Program, and are looking for third party financing.

Sol Systems is aggregating projects that are 50 kW or larger submitted into the CT Small ZREC Program and are looking for third party financing.

Connecticut Light & Power (“CL&P“) and United Illuminating (“UI“) officially opened the window for submitting applications into the Connecticut Small ZREC Program on January 8, 2013.  This program will be accepting applications through January 22, 2013.

The Small ZREC Program offers a unique opportunity for projects under 100 kW (AC) to receive financing through a fixed price ZREC contract for 15 years.  The pricing differs between CL&P and UI and is based on the weighted average price of the approved medium ZREC contracts, awarded to projects between 100 kW and 250 kW in later 2012 through a competitive RFP bidding process.  The pricing for each utility is as follows:

UI Rate: $148.89/ZREC
CL&P Rate: $164.22/ZREC

To participate in the Small ZREC Program, projects must meet the following criteria:

  • Located behind contracting utility revenue meter and have a dedicated REC meter
  • Must not have received funding or grants from the Clean Energy Investment Authority or its predecessor, the Connecticut Clean Energy Fund
  • Projects must be in service on or after July 1, 2011
  • No larger than 100 kW (AC)
  • Must have zero emissions – this may include solar, wind, and hydro
  • Developers must have site control

The total number of applications selected will be based on a set budget of committed funds, which is approximately $2.7 million between the two utilities.  In total, $2.36 million is attributed to CL&P and $552,310 is attributed to UI.  The selection process is a first come, first serve process based on date and time of application submission.  All projects submitted in the two week window does not exceed the allotted budget, then all applications will be accepted.  If the total number of projects submitted does exceed the allotted budget, random selection will occur.

Sol Systems is currently working on behalf of several investors who are interested in ZREC-eligible projects.  Our team is currently aggregating several small ZREC projects, specifically projects that are 50 kW or larger, have or will be submitted into the CT Small ZREC Program, and are looking for third party financing.  By aggregating a pool of smaller projects, Sol Systems is helping to bring capital to project sizes that traditionally lack capital, while also providing our investors with the opportunity to diligence and purchase multiple projects in one round of transactions.

If you have a project that has been awarded a ZREC contract and is looking for financing, please contact our team at or (888) 235-1538.  Our team would be happy to discuss your project with you and assess financing opportunities.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes.  Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit

Solar Opportunities in Maryland, D.C., and Virginia

By Josh Garrett for Sol Systems

In preparation for the MDV-SEIA Conference in Washington DC on November 28, we will be previewing some issues and trends to be addressed at the conference. This blog is a brief examination of the solar market conditions in Maryland, Virginia, and Washington, D.C.

In today’s highly fragmented U.S. solar market, regional solar energy incentives run the gamut from highly supportive to non-existent. In the mid-Atlantic region, we have seen fairly strong support for growth, but the level of support certainly varies from state to state. Both DC and Maryland have encouraged the solar renewable energy credit (SREC) market by increasing the SREC requirements. DC has also introduced new pieces of legislation that would provide additional incentives to push DC residents towards solar. Meanwhile, Virginia is creating new incentive programs.  Below, we  provide an overview of policy and SREC market conditions in Maryland, Virginia, and Washington D.C. as a way to explore the overall prospects of each state’s solar industry.


Over the last year, the Maryland legislature has proven its support of solar. It remains to be seen the impact the Maryland legislature will have on solar in 2013; however, previous legislation encourages a promising outlook.

Policy: The Maryland legislature showed continued support for solar in 2012, when Governor Martin O’Malley signed the Renewable Energy Portfolio Standard for Solar Energy and Solar Water Heating Systems Bill (SB 791 and HB 1187) into law. This legislation amended Maryland’s existing renewable portfolio standard (RPS) for solar generation, requiring 2% of the state’s power to come from solar by 2020 instead of 2022. To meet the accelerated schedule, Maryland’s Renewable Portfolio Standard will increase beginning in compliance year 2013 and continue through 2020. The period of greatest demand growth from the RPS is anticipated to be 2016 through 2020. While the new law will have a significant impact on the Maryland solar market over the next eight years, the Maryland legislature has not introduced any further legislation to incentivize the solar market.

SREC Market: Considering the lack of introduced legislation and the oversupply that existed in the 2012 MD SREC market, prices for vintage 2012 SRECs in Maryland have declined year-to-date by 2%, with bids at approximately $160 per SREC and offers at about $185.  However, the volume of trading in SRECs at these price levels is limited. Trading of 2013 SRECs is taking place at higher prices, around $215 per credit, most likely as a result of the boost to the solar RPS requirement in May 2012.  This legislation will truly begin to show its impact starting in 2013.  Sol Systems’ analysis and modeling shows that 2012 will see an oversupply of SRECs, but that 2013-2015 will shift toward undersupply.


For a state without its own SREC market, Virginia has begun to show more support for solar over this past year; however, it is important to note that Virginia is reliant on the SREC market in Pennsylvania, thus legislation in Pennsylvania will continue to have an impact on the Virginia solar market.

Policy (in the state of Virginia): Currently, most Virginia utilities meet their RPS mandates by purchasing RECs from existing facilities, leaving little to no room for creating new solar jobs and expanding solar capacity in the state. However, the State Corporation Commission of Virginia is currently considering two solar energy programs proposed by Dominion Virginia Power that seek to expand solar capacity within the state. The first program would allow the utility to directly finance new solar installations totaling 30 MW of capacity on large rooftops inside the Commonwealth. The second program is a residential solar purchasing plan capped at 3 MW of capacity, which has been dubbed a “demonstration program.” These programs will look to expand solar outside of the mandated RPS requirements to create an additional incentive for VA system owners to go solar.

Policy (in the state of Pennsylvania): Many Virginia solar energy systems that are eligible to produce SRECs must sell into the Pennsylvania SREC market, as DC and Maryland recently closed their borders to out-of-state systems. These Virginia system owners could be affected by Pennsylvania’s Senate Solar Bill (SB 1350), a three-part bill that was introduced in the state legislature but has not yet reached committee consideration. The Solar Bill would increase the solar carve-out requirements in Pennsylvania’s Alternative Energy Portfolio Standard (AEPS) during compliance years 2013 through 2015, hold them steady from 2016 to 2019, and reduce the requirements in 2020 while extending the overall AEPS through 2025.  The bill would also raise the price of Alternative Compliance Payments (ACPs) to $285 per SREC during compliance years 2013 through 2019 before reducing solar ACPs by 2% per year thereafter. Finally, the Solar Bill would enable solar thermal facilities to qualify for SREC production. If carried forward into next year, the bill could combine with its counterpart introduced in the state House of Representatives in 2011 to promote changes to the AEPS and solar carve-out, which would in turn increase SREC prices in Pennsylvania.

Pennsylvania SREC Market: Considering that most SRECs from Virginia can only be sold into Pennsylvania, it is important to note for Virginia system owners that SREC prices are in the midst of a steady decline in the Commonwealth of Pennsylvania, with bids currently at $23 per credit. Offers for SRECs in Pennsylvania are at approximately $27 per credit, with most volume trading around $26 per credit.  Expectations are that the market will be four times oversupplied (though that estimate does not take into account SRECs that will be retired in neighboring states). Unlike DC and Maryland, the Pennsylvania SREC market may continue to decrease if legislative action is not taken.

Washington, D.C.

With the passage of legislation in late 2011 to increase the RPS and solar requirement, DC set a high bar for solar growth.

Policy: To support solar growth, the DC Council introduced two new solar bills in 2012. The DC Council is currently considering the Community Renewable Energy Act of 2012 (B19-715), which was introduced in March 2012. The bill expands the accessibility of solar energy for D.C. residents by establishing Community Generation Facilities and enabling virtual net metering protocols. If passed, residents could invest in a solar facility in their community and reap the energy savings in proportion to their investment through virtual net metering performed by their electric utility.

In addition, the Council approved the Energy Innovation and Savings Amendment Act (B19-0749), known as the Property Tax Exemption bill, in a first vote on November 1, 2012. If enacted, the new law would exempt solar energy systems from the District’s personal property tax, reducing the tax burden on solar energy systems and further incentivizing the construction of solar energy projects. The bill will potentially require one or two additional approvals from the Council before proceeding to the Mayor for final approval. As we look into the start of 2013, it seems DC will remain a strong market for solar.

SREC Market: The positive effects of the 2011 legislation to increase the solar requirement began to ring true in 2012. With energy suppliers focusing on meeting compliance targets at the end of 2012, prices for SRECs started to climb at a steady rate of 5% per month. As of this month, 2012 SREC bids were consistently above $300 per SREC. The Legislation passed in 2011 will take effect starting in 2013 by increasing the District’s RPS while disallowing SRECs from out-of-district systems (those that were not approved before 2012). We expect those changes to drive 2013 SREC prices even higher with the anticipation of a significant oversupply of SRECs in 2013-2014.

The policy frameworks and market opportunities in Maryland, Washington, D.C., and Virginia present an accurate analogy for state and regional markets across the U.S.: on one hand, there are states that offer strong incentives which are expected to endure for several years; on the other, there are places that offer little to no incentives for solar power and are not home to any SREC markets. An in-depth discussion on the Maryland, Virginia, and Washington DC solar markets will occur at next week’s MDV SEIA conference when the region’s largest solar players come together to discuss the specific challenges and opportunities that the region offers.

About Solar Energy Focus 2012

Sol Systems is proud to be sponsoring the Solar Energy Focus 2012 conference which will host 50+ speakers, 12 breakout sessions, 350+ business leaders, investors, legal experts, developers and policy-makers. The conference will take place on November 28, 2012 at the Marriott at Metro Center in Washington, DC.  To register for the conference, please visit

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 solar installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for solar projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit or

Massachusetts Announces 10 Year Forward ACP Schedule

On December 29, the Massachusetts Department of Energy Resources (DOER) announced a rolling 10 year Alternative Compliance Payment (ACP) Rate Schedule for the RPS Solar Carve-out.  The schedule maintains the ACP Rate at its current level through Compliance Year 2013, and then reduces the Rate at 5% per year.

This change to the Solar Carve-out Program will provide much needed visibility with regards to the ACP and should encourage electric suppliers with compliance obligations to participate in long-term SREC contract talks.

The 10 Year Schedule is below. The full announcement can be found here - DOER Announces Forward ACP Schedule.

Compliance Year ACP Rate per MWh
2012 $550
2013 $550
2014 $523
2015 $496
2016 $472
2017 $448
2018 $426
2019 $404
2020 $384
2021 $365
2022 and after added no later than
January 31, 2012 (and annually
thereafter) following
stakeholder review

As the oldest and largest SREC aggregator in the country, Sol Systems currently offers three different types of agreements for Massachusetts homeowners and businesses: Sol Upfront, Sol Annuity, and Sol Brokerage. However, Sol Upfront is only available for systems installed by one of our platinum partners. Please contact your installer or e-mail our Sol team at for information on specific pricing.

In order to obtain specific pricing for commercial systems, we recommend that developers load these projects on SolMarket, our new financing platform. In addition to linking solar developers with quality investors, the SolMarket portfolio team customizes SREC pricing indications for commercial projects and distributes them on a weekly basis.

When is 1 MWh of solar electricity equal to 1 SREC?

Many definitions of solar renewable energy credits (“SRECs”) say that an SREC is equivalent to one megawatt-hour (1,000 kilowatt hours) of electricity generated by a solar facility. While this is mostly true, it’s not always the case that 1 MWh of solar = 1 SREC. In order for an SREC to be created (or “awarded”), the system must receive certification from the state where that SREC will ultimately be sold – and the system must be registered with the regional transmission organization, such as PJM GATS or NEPOOL GIS. These organizations are the entities that acknowledge solar electricity production of 1 MWH and award the system owner with 1 SREC.

In other words, if a solar energy system is not registered with at least one state and registered with PJM GATS or NEPOOL GIS, the system may produce solar electricity without producing any SRECs. This is important because if no SREC is created, no SREC can be sold.

To further complicate matters, each state has different rules about retroactive SRECs — or how far back SRECs can be awarded. In select situations, SRECs can be retroactively awarded years into the past, whereas other circumstances only allow SREC creation from the state’s certification date forward.

Most often, systems are registered with the state in which they are located, but in certain circumstances, SRECs from one state may be sold into another state which has an open SREC policy and a higher price for SRECs.  In cases where the SREC will be sold into a different state, the system must be registered in the state where the SREC will be sold.

In order to ensure that a solar energy system is producing SRECs, the system owner must complete various forms with one or more state agencies.  This paperwork can be submitted by system owners themselves, or it may be done through the installer, or an SREC aggregator, such as Sol Systems — the nation’s largest and oldest SREC aggregator.

Once a system is registered and producing SRECs, the SRECs can be sold to entities that are willing to buy them.

Why would anyone buy an SREC?

Some states in the U.S. have created Renewable Portfolio Standards (RPS) that require energy suppliers and utilities to produce a minimum amount of their energy from renewable energy sources.  These pieces of state legislation essentially create a marketplace for renewable energy at a premium price and thus stimulate the development of renewable energy markets. Some Renewable Portfolio Standards have specific provisions that require a portion of the electricity to come from solar (a “solar carveout”), and these states typically have strong solar energy markets and robust SREC markets.

When faced with an RPS with a solar carve-out, utilities have three options: build solar power facilities and produce the solar energy themselves, purchase Solar Renewable Energy Certificates (SRECs) or pay a Solar Alternative Compliance Payment (SACP) – a set price for each Megawatt-hour (MWh) of renewable energy they fail to acquire.

SREC Prices

The price at which SRECs are sold is dependent on 3 market factors: supply, demand, and the level of the alternative compliance payment (ACP). Demand is driven by state RPS requirements and supply is driven by the number and size of individual solar energy systems which are certified to produce SRECs in a given state.  In markets that are undersupplied, the ACP tends to set a ceiling price on the price of SRECs, so a state with a high ACP often leads to high SREC prices – at least until supply catches up to demand. Depending on the intersection of supply, demand, the level of the ACP, as well as the terms of the SREC contract – SREC prices can vary widely.

For more information about SRECs, please visit

Maryland & DC Promote Solar Thermal through SREC Markets

Solar Renewable Energy Credit (SREC) markets are comprised almost entirely of solar photovoltaic generators. However, recent legal changes offer opportunities for solar thermal developers to participate in two of the country’s most lucrative programs.

As a background, a solar renewable energy credit is a tradable commodity like a carbon credit. However, unlike carbon credits, an SREC signifies the environmental attributes associated with 1 MWH of electricity, or its thermal equivalent, produced by a solar energy generator.

The value of an SREC is derived by a state’s Renewable Portfolio Standards (RPS). A RPS is a state-specific statute dictating that certain percentage electricity must come from renewable energy generators. Thirty-one states within the US have RPS statutes on the books. Of these thirty-one states, seven require a percentage of the renewable electricity production come from solar energy technologies (i.e. solar carve-out). These seven states also define a Solar Alternative Compliance Penalty (SACP), or the penalty a regulated utility or energy supplier must pay if they fail to acquire the dictated number of SRECs to meet the RPS. For example, energy suppliers in MD and DC must surrender $400.00 and $500.00, respectively, for each SREC they fail to acquire to meet the solar carve out defined within the RPS. The SACP functions as the price ceiling for an SREC market.

Currently, only a very small number of solar thermal generators participate in these SREC markets, because until recently solar thermal generators did not meet the definitional requirements of a solar energy generator within RPS statutes. However this is changing.

The SREC landscape for solar thermal generators is now open for system owners in MD and DC. Effective January 1, 2012, the Maryland RPS will allow solar thermal generators to earn SRECs. To earn SRECs in Maryland the following conditions must be met: (1) the system must be installed on or after June 1, 2011, (2) if the system is residentially owned, the facility must meet the Solar Rating & Certification Corporation’s (SRCC) OG-300 standards, (3) if the facility is commercially owned, the components installed must meet the SRCC’s OG-100 standards and an OIML certified meter must be installed to measure generation at the facility, and (4) the facility must be located within Maryland. To participate in the DC SREC market, (1) residentially owned systems must meet the SRCC OG-300 standards, (2) commercially owned systems must utilize components that meet the SRCC’s OG-100 standards and have an OIML meter installed to measure generation, and (3) pending new legislation, the facility must be located within the District.

In light of these recent legal changes, solar thermal developers can now participate in two lucrative SREC markets. In 2015 alone, the Maryland SREC market alone will have a ceiling value of over $100 million. Or, put another way, more than 195 MW-eq. of new compliance appetite is legislated in DC and MD over the next 3 years. To learn more about SREC options available to you, please visit As the country’s oldest and largest SREC aggregator, we can craft the solution that is right for you.

Sol Systems Welcomes Andrew Gilligan To Its Team

Sol Systems is proud to welcome a new member to its team. Andrew Gilligan will be joining the company full-time beginning in late June as an Analyst and will be responsible for customer relations, state registrations, and providing research support on a wide variety of solar topics. Many of Sol Systems’ SREC customers and partners may have already had the pleasure of speaking to Andrew, as he has been an intern with the company for the past 4 months.

“A hard work ethic, leadership ability, and passion for the solar space are characteristics that are hard to find when searching for new employees,” said Yuri Horwitz, President and CEO of Sol Systems. “Andrew has all three traits and more. During the course of his internship, he has proved to be a valuable and committed employee and we are excited he will be joining us full-time. I’m confident our customers and partners will enjoy working with Andrew.”

Andrew comes to Sol Systems from Georgetown University, where he recently graduated magna cum laude with a degree in Science, Technology, and International Affairs and also a certificate in Business Diplomacy. While at Georgetown, Andrew spearheaded launching and running the Georgetown Solar Co-op, a student run organization created to ease the solar procurement process for homeowners. Under his leadership, the Georgetown Solar Coop educated hundreds of prospective customers on the benefits of solar, negotiated price discounts from solar vendors, led numerous homeowners through the solar procurement process from start through installation completion, and participated in local lobbying efforts for shaping the D.C. renewable portfolio standard.

NJ Solar Driven by SRECs (Even More than Before)

New Jersey has been the leading SREC market in the U.S for some time, but the phase-out of the REIP program and the introduction of the SREC Registration Program (SRP) mean that New Jersey’s solar market is now truly driven by SRECs — and market growth appears to be quite robust.

Since the start of 2011, the New Jersey Clean Energy Program has:
• been receiving approximately 575 new applications per month
• been approving about 50 MW of SRP & REIP Applications per month
• seen an average of 16 MW of system completions per month.

The New Jersey Board of Public Utilities Board is proposing the re-adoption of some amendments to its Renewable Energy and Energy Efficiency rules at N.J.A.C. 14:8 (Chapter 8). These rules lay the groundwork for New Jersey’s SREC program.

Some of the tenants and requirements of the Chapter 8 Readoption Proposal are summarized below for the convenience of our readers.

SREC Lifespan
An SREC associated with energy generated on or after July 1, 2010 shall be used to comply with RPS requirements for any one of the following three energy years:
• The energy year in which the underlying energy was generated
• Either of the two energy years immediately following the energy year in which the underlying energy was generated

An SREC based on energy generated before July 1, 2010 shall be used only to comply with the requirements of this subchapter for the energy year during which the underlying energy was generated, and/or the subsequent
energy year.

Once an SREC has been submitted for compliance, the SREC shall be permanently retired.

SREC Generation
In order to measure SREC generation, the Board or its designee shall accept either of the following measurement methods:

• Periodic readings of a meter that records megawatt-hour production of electrical energy. The readings may be taken or submitted by any person, but shall be verified by the Board or its designee, or
• For a solar electricity system with a capacity of less than 10 kilowatts, annual engineering estimates and/or monitoring protocols

SREC Registration Process
In order to qualify to produce SRECs, systems need to go through the SREC Registration Program (SRP) and be issued a New Jersey State Certification Number.

The SRP process requires:
• The submittal of an initial registration package- generally 10 business days after execution of the contract for purchase or installation (whichever comes first) of the photovoltaic panels to be used in the solar facility.
• Construction of the solar facility to not begin until after Board staff has issued a conditional registration for the facility.
• Construction of the solar facility to be completed and local code approval granted prior to the expiration of the conditional registration.

If the applicable submittal deadline is met, SRECs shall be usable for compliance with this chapter immediately upon the issuance of a New Jersey State Certification Number for the facility. However, if the applicable deadline is not met, any SRECs based on electricity generated by the solar facility shall not be usable for compliance with this chapter until 12 months after the solar facility has received authorization to energize in accordance with the Board’s interconnection rules.

Registration of a solar electric generating facility requires completion of the following process:

1. The registrant shall submit an initial registration package to the Board.

2. If the initial registration package is incomplete or deficient, Board staff shall notify the registrant in writing of the deficiencies.

3. Once the registration package is complete, Board staff shall review the package to determine whether the solar facility meets the SREC eligibility requirements of this subchapter. If the facility does not meet these requirements, Board staff shall notify the registrant. The registrant shall revise the package and resubmit it within one year of this notice. Failure to resubmit within this time will result in cancellation of the registration process, in which case a complete new registration process shall be required for the solar facility to obtain a New Jersey State Certification Number.

4. If the solar facility as described in the initial registration package meets SREC eligibility requirements, Board staff shall issue notice to the registrant of a conditional registration for the facility. The notice of the conditional registration shall:
• State that, if the solar facility is constructed as described in the initial registration package, Board staff will issue a New Jersey State certification Number for the solar facility upon construction completion and inspection; and
• Include an expiration date 12 months after the date of the notice

5. After issuance of the notice of conditional registration, construction of the solar facility as described in the initial registration package may begin. Construction of the solar electric generating facility shall be completed prior to expiration of the conditional registration.

The registrant may request one extension prior to the expiration of the conditional registration, and shall include an updated schedule for completion. Board staff may authorize one extension for the project on a case-by-case basis, based on the likelihood of timely and successful completion of the solar facility. If the conditional registration or extension expires before construction is complete, the registrant shall begin the entire registration process again by submitting an initial registration package and the Board staff shall treat the new registration package as if it were a first-time submittal.

The application will require the following:
• Information identifying and describing the owner, host location, builder/installer and operator of the solar electric generating facility
• Basic information describing the solar facility, including its capacity, manufacturer and expected output
• A technical worksheet detailing the technical specifications of the solar facility
• A construction schedule for completing the solar facility, including significant milestones;
• A signed contract or other binding legal document between the owner and installer of the solar facility
• Basic information regarding the cost of equipment and installation
• A site map of the land upon which the generating facility will be located
• Any other data or information necessary for Board staff to determine whether the solar electric generation will meet the requirements for SRECs.

When construction of the solar electric generating facility is complete, the facility owner (or installer) shall submit a post-construction certification and request an inspection or inspection waiver from the Board staff.

A post-construction certification package would include the following:
• A copy of the conditional registration notice issued by the Board
• A final “as built” technical worksheet, detailing the technical specifications of the completed solar electric generating facility, including any changes from the technical worksheet submitted as part of the initial registration package
• Digital photographs of the site and the completed solar facility
• A shading analysis
• An estimate of the electricity production of the solar facility
• Documentation of compliance with all applicable Federal, State and local law, including eligibility for any tax incentives or other government benefits, where applicable.

The facility owner (or installer) should supply a copy of the initial application to interconnect the facility to the distribution and transmission system, as well as the EDC or PJM approval to interconnect and energize the facility; and a statement that an inspection of the solar facility, or an inspection waiver, has been requested through the Board’s NJCEP website, and the date of the request.

After receiving the inspection request and complete final documentation required, Board staff will conduct an inspection or notify the registrant that no inspection is required (waiver).

If no inspection is required, or if the inspection indicates that the solar electric generating facility has been constructed in accordance with the conditional registration, and/or any Board-authorized changes, Board staff shall assign a New Jersey State Certification Number to the solar facility for use in obtaining SRECs from PJM-EIS GATS.

If, after submittal of an initial registration package, an increase or decrease of more than 10 percent in the solar electric generating facility’s generating capacity is planned, the registrant shall notify Board staff by e-mail

Interconnection Review (for systems under 10 KW)
Once a customer-generator has met the level 1 interconnection, the EDC shall notify the customer-generator in writing that the customer-generator is authorized to energize the customer-generator facility, as follows:
• The EDC shall send the authorization to the e-mail address, and to the U.S. Postal Service mailing address that is listed on the customer generator’s submitted interconnection application form; and
• The EDC shall not condition the authorization to energize on the EDC’s replacement of the customer-generator’s meter.

An applicant shall submit an application Interconnection Application/Agreement Form for level 1 interconnection review.

If a customer-generator facility meets all of the applicable criteria above, the EDC notifies the customer-generator under that the facility will be approved, the EDC shall, within three business days after sending the notice of approval do both of the following:

• Notify the applicant by e-mail or other writing of whether an EDC inspection of the customer-generator facility for compliance with this subchapter is required prior to energizing the facility or that the EDC waives inspection; and

• Return to the applicant a level 1 interconnection agreement, unless: Part 1 of the original application, signed by the appropriate EDC representative.

The EDC does not require an interconnection agreement for customer generator facilities that qualify for level 1 interconnection review; or

The applicant has already submitted such an agreement with its application for interconnection.

An applicant that receives an interconnection agreement shall execute the agreement and return it to the EDC. If the EDC requires an inspection of the customer-generator facility, the EDC shall promptly complete the inspection and the applicant shall not begin operating the facility until completion of the inspection.

Upon receipt of the executed interconnection agreement from the customer generator and satisfactory completion of an inspection, if required, the EDC shall notify the customer-generator in writing that the interconnection is approved, conditioned on approval by the electrical code officials with jurisdiction over the interconnection.

If an EDC does not notify a level 1 applicant in writing or by e-mail whether the interconnection is approved or denied within 20 business days after the receipt of an application, the interconnection shall be deemed approved. The 20 days shall begin on the date that the EDC sends the written or e-mail notice or application receipt required.

A customer-generator shall notify the EDC of the anticipated start date for operation of the customer-generator facility at least five days prior to starting operation, either through the submittal of the interconnection agreement or in a separate notice.

Once an applicant receives Part 1 of the application with the EDC signature, and has installed and interconnected the customer generator facility, the applicant shall obtain approval of the facility by the appropriate construction official.

The customer-generator shall submit documentation of the construction official’s approval to the EDC, along with a copy of Part 2 of the application, signed by the customer-generator.

If inspection of the customer-generator facility was waived, the EDC shall, within five business days after receiving the submittal required under above, notify the customer-generator of authorization to energize the facility. The notice to the customer-generator shall be provided in the format required.

If inspection of the customer-generator facility was not waived, the following process shall apply:

• The customer-generator shall submit the construction official’s approval and signed Part 2, and inform the EDC that the customer-generator facility is ready for EDC inspection
• Within three business days after the customer-generator notifies the EDC that the facility is ready for inspection, the EDC shall offer the customer-generator two or more available four-hour inspection appointments.
• The appointments offered shall be no later than 10 business days after the EDC offers the appointments (that is, within 13 business days after the customer-generator submittal.
• The customer-generator shall notify the EDC which of the offered inspection times the customer-generator prefers, or shall arrange another time by mutual agreement with the EDC.
• Within five business days after successful completion of the EDC inspection, the EDC shall notify the customer-generator that it is authorized to energize the facility.

The official version of the Chapter 8 rules was published in the New Jersey Register on May 2, 2011.

About Sol Systems:
Sol Systems is a solar energy finance and development firm that was built on the principle that solar energy should be an economically viable energy solution. With thousands of customers and hundreds of partners throughout the United States, Sol Systems is the largest and oldest SREC aggregator. We provide homeowners, businesses, solar installers, and developers with sophisticated financing solutions that help make solar energy more affordable. Sol Systems also helps energy suppliers and utilities manage and meet their solar RPS requirements efficiently by providing them with access to diverse portfolios of SRECs. For more information, please visit

SRECs: Key Drivers in Solar Growth

Recent reports about both the domestic and global solar market have all pointed towards another year of remarkable growth. In fact, Bloomberg Finance identified Apple’s growth following the release of the iPad last year as the best analogy for the projected growth of the solar industry. Just a few days ago, the CEO of the Solar Energy Industries Association announced that the “solar is the fastest growing industry in America”.

With this incredible growth, it is useful to examine the key drivers behind the acceleration of the solar market. One key driver is the continuous reduction in PV cost, as prices for solar panels have declined by around 75% in the past 10 years. Solar panel prices in the U.S. specifically are set to drop by U.S. $0.20 per watt in 2011, bringing the average panel price to U.S, $1.40 per watt.

The second key driver is government policy and incentives. German and Japanese governments have been two of the leaders in the solar industry because they have legislated high incentives for solar deployment at the federal level. In the United States, however, state policies and utilities have played a larger role in growth, which has been impressive. In fact, the U.S. solar industry experienced a year-over-year growth of 67 percent. Furthermore, this growth is no longer simply due to California; over 16 states installed more than 10 MW in 2010. Solar Energy Industries Association (SEIA) CEO, Rhone Resch said, “the Mid-Atlantic region is beating California as the largest market in the U.S. for PV installations”.

Solar growth in the Mid-Atlantic and Northeastern region is due primarily to policies at the state level, which include both incentive programs and Renewable Portfolio Standards (RPS). These state programs award money to owners of solar systems to help offset the initial cost of the system. Renewable Portfolio Standards that include specific requirements for solar (i.e. solar carve-outs) mandate energy suppliers and utilities to generate or procure a certain percentage of electricity from solar or risk paying a steep Alternative Compliance Penalty (ACP).

Both measures have been effective, but solar carve-outs in the RPS represent a sustainable, market-based approach to solar financing. These solar carve-outs make Solar Renewable Energy Credits, or SRECs valuable, allowing solar system owners to realize the financial benefits associated with clean energy production. The percentage of solar electricity that energy suppliers must obtain increases each year until 2025 for most states with an RPS, guaranteeing that there will be a market for SRECs. Furthermore, an RPS is budget-neutral, and thus state governments do not have to worry about running out of funds prematurely, which has happened to several state solar rebate programs.

The Mid-Atlantic and Northeastern U.S. will have need for more than 3 gigawatts (GW) of new photovoltaic capacity by 2015, which is due in large part to these state solar carve-outs. The new capacity will be a mix of residential and business systems as well as utility-scale projects. Furthermore, with continued reductions in PV cost, there may actually be more solar deployment than is needed to satisfy the RPS. This makes the value of SRECs hard to predict in the short and long term; however, it does not change the fact that SRECs will remain an important piece of the solar financing puzzle for the next decade.

Looking forward, consistent and stable policies coupled with technical improvements will allow the solar industry to continue its remarkable growth.

Financing Residential Solar

Michael Leibreich, chairman of Bloomberg Finance’s Research Group on Energy Finance, recently stated that he believes the cost of developing a solar power project will be cut in half in the next decade. These cost reductions will pave the way for utility scale solar and they will also help make solar a viable option for residential solar.

Residential solar installations will remain a key part of the solar industry’s remarkable growth, and the distributed nature of these systems represents some of the most unique and most advantageous aspects of solar technology; however, reductions in technology costs are not enough to make solar affordable for everyone. Luckily, today, a homeowner has more options than ever to help finance the installation of a solar energy system.

The most basic way is to pay for the system out of pocket. This approach leads to the highest rate of return — assuming the homeowner can take full advantage of the federal investment tax credit/grant, state incentives, and the value of Solar Renewable Energy Credits or SRECs. However, solar PV systems still pose a high initial cost, and many residents do not have the ability to pay for the system completely out of pocket.

A subset of this option is taking out a loan to pay for the system. Residents can take out home equity loans from their banks or secure low-interest loans to cover the system cost from their installers. (In D.C., homeowners have received access to zero-interest loans for the first year through their solar installer.) This approach also allows the homeowner access to all the economic incentives for going solar, which along with energy savings, can be used to repay the loan in a very reasonable period of time.

Two other options that do not require the homeowner to fund the entire cost of the installation would be to (1) lease the system or (2) enter into a Power Purchase Agreement (PPA). Although these structures are now common among commercial solar installations, these financing structures are becoming more popular with homeowners in the past two years.

While the nuances of leasing structures often differ, the customer is basically leasing the solar energy system just like someone leases a car. This approach allows the customer to reduce energy bills without the high initial cost of going solar. However, in leasing a system, the homeowner would not own the system; therefore, they would not receive the federal tax incentives or state rebates – and in most cases they would not be able to take advantage of the economic incentives like selling SRECs.

Finally, a Power Purchase Agreement allows a homeowner to purchase electricity from a system located on their roof at a reduced rate. This means the homeowner will experience savings on their energy bills without large upfront costs. However, just like in leasing the system, the customer will not own the system, be able to take advantage of SRECs, or the federal and state incentives. In effect, they have not “invested” in a solar energy system, but they will still reap financial benefits because they’ve created a hedge against rising utility costs.

It can be a difficult decision for homeowners when selecting which financing option to use. A lot will depend on how the homeowner feels about the high upfront cost associated with owning a PV system. However, if the customer can afford the initial capital, then purchasing the system will provide them with a return on investment over the lifetime of the system.

By owning a solar energy system, the homeowner will be able to monetize all available incentives and also reap the value of producing clean electricity through the selling of SRECs. SRECs are valuable because several states have solar-carve outs in their Renewable Portfolio Standard (RPS) that require energy suppliers to procure a certain percentage of their electricity from solar or pay a steep Alternative Compliance Fee (ACP).

At Sol Systems, we offer 1, 3, 5, and even 10-year agreements for monetizing the SRECs of a system depending on the state. Fixed cost agreements such as Sol Annuity allow customers to confidently know their cash flow due to SRECs and subsequently calculate their payback period more accurately.

It is important for these financing options to remain economical choices as residential solar continues to grow. Furthermore, it is important homeowners take their time and fully understand the advantages and disadvantages before choosing how to finance their solar system.