Pennsylvania SREC Developments

PA SREC UPDATE

On April 19, 2018, the Pennsylvania Public Utility Commission published its interpretation of Act 40 of 2017 signed by Governor Tom Wolf on October 30th 2017 in regards to the compliance eligibility of out of state solar facilities SRECs in the Pennsylvania market.  The commission ruled that unless an out of state solar facility has a binding contract for their SRECs with a renewable portfolio standard (RPS) buyer prior to October 30th 2017 the out of state solar facility will no longer have PA state certification on their SRECs after October 30th 2017.  The SRECs generated (month of generation) prior to October 30th 2017 from an out of state solar facility will retain their PA state certification and the SRECs remain eligible for the full 3 compliance years.  RPS buyers that have a contracted with an out of state facility prior to the October 30th 2017 date have 60 days to petition for qualification with AEPS.

 

Flett Exchange intends to clear all eligible PA certified SRECs.  Out of state PA certified solar facilities intending to sell must contact us and supply proof of certification (CSV file from PJM-EIS of intended inventory to sell) for verification.

 

Link to the Pennsylvania Public Utility Commission’s final implementation order of Act 40 of 2017 http://www.puc.pa.gov/pcdocs/1562754.pdf 

 

-Kevin Flett, Director of Operations

 

PENNSYLVANIA PUBLIC UTILITY COMMISSION HARRISBURG, PENNSYLVANIA 17105-3265

 

Implementationof Act 40 of 2017                         

Public Meeting held April 19, 2018 2631527-LAW

Docket No. M-2017-2631527

JOINT MOTION OF CHAIRMAN GLADYS M. BROWN & VICE CHAIRMAN ANDREW G. PLACE

Before the Commission is the Final Implementation Order (Implementation Order) regarding Act 40 of 2017. Act 40, signed by Governor Tom Wolf on October 30, 2017, inter alia, amends the qualifications to certify Tier I solar photovoltaic share facilities under Pennsylvania's Alternative Energy Portfolio Standards (AEPS) Act. Numerous comments were filedin responsetotheTentativeImplementationOrder(TIO)adoptedonDecember 21,2017,in addition to the Supplemental Interpretation the Vice Chairman and I offered in our Joint Statement. These comments have provided helpful guidance, specifically regarding legislative intent,forourdeliberationsin thisproceeding;therefore,wethankallofthosewhotookthetime to help inform the record. Today, the Commission issues this Final Implementation Order to guide the AEPS marketplace toward compliance with Act40.

 

 

 

The core issues in this proceeding are the Commission's interpretations of Sections 2804(2)(i) and 2804(2)(ii). These read:

 (2)   Nothingunderthissectionorsection4ofthe"AlternativeEnergy Portfolio Standards Act" shall affect any of thefollowing:

 

 

(i)    A certification originating within the geographical boundaries of this Commonwealth granted prior to the effective date of this section of a solar photovoltaic energy generator as a qualifying alternative energy source eligible to meet the solar photovoltaic share of this Commonwealth's alternativeenergyportfoliocompliancerequirementsunderthe"Alternative Energy Portfolio StandardsAct."

 

(ii)   Certification of a solar photovoltaic system with a binding written contractforthesaleandpurchaseofalternativeenergycreditsderivedfrom solar photovoltaic energy sources entered into prior to the effective date of thissection.

 

Interpretation of these sections has been challenging for the Commission, particularly because the verbiage in Section 2804(2)(i) is not precise. The question here is whether or not this statute is intended to 'grandfather' out-of-state facilities certified before October 30, 2017, to generate


Tier I Solar credits. Given this lack of clarity, we issued a Joint Statement in conjunction with adoption of the TIO offering supplemental statutory interpretations to spur comments in an effort to inform the record.1

 

The Office of Consumer Advocate (OCA) succinctly states the challenge in interpreting Section 2804(2)(i) of Act 40.

 

The OCA submits that the language as written in Act 40 is unclear and the OCA is unable to discern the intent of the section as written. 2

 

Likewise, the comments of Citizens for Pennsylvania's Future (PennFuture) share similar sentiments as OCA, stating:

 Section 2804(2)(i) of Act 40 is ambiguous in regard to how and when the qualification of a facility as an alternative energy generator originates.3

 

We too agree that the language of Section 2804(2)(i) is unclear. Consequently, we are obligated, under the rules of statutory construction, to ascertain the intent of the General Assembly. The Rules of Statutory Construction at 1 Pa. C.S. § 1921(b) provide that:

When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.

 

Since, as the OCA and PennFuture point out, the verbiage here is unclear, we must now refer to 1 Pa. C.S. § 1921(c) which provides:

When the words of a statute are not explicit, the intention of the General Assembly may be ascertained by considering, among other matters:

 (2)  The circumstances under which it wasenacted.

(3)  The mischief to beremedied.

(4)  The object to beattained.

 

(6)  The consequences of a particularinterpretation

(7)  The contemporaneous legislativehistory.

(8)  Legislativeandadministrativeinterpretationsofsuchstatute.

 

The comments filed in response to the TIO have proven instructive in regard to why the General Assembly drafted this legislation, why the Governor signed it into law, and the mischief to be remedied.

 

 

 
 

1 Joint Statement of Chairman Gladys M. Brown and Vice Chairman Andrew G. Place entered December 21, 2017 at the instant Docket.

2 Comments ofOCA at page 5 filed February 5, 2018.

3 Comments of PennFuture at page I filed January 18, 2018.


Comments filed by Governor Tom Wolf, Senators Mario M. Scavello, Tom Killion, John

T. Yudichak, Jay Costa, John M. DiSanto, Steward J. Greenleaf, David G. Argall, Wayne D. Fontana, Guy Reschenthaler, and Representatives Michael B. Carroll, Eric M. Roe, Ronald S. Marsico, and Sue Helm are particularly insightful. As lawmakers who effectuated Act 40, these commenters are uniquely qualified to provide the Conunission with information regarding the intent of the statute. Each of the comments provided by lawmakers states that their intent to 'close the borders' for Tier I solar credit qualifications was consistent with the design utilized by a number of our neighboring states to promote economic development. This interpretation is consistent with the supplemental interpretation provided in our Joint Statement and contrary to the proposal of the Conunission in its TIO. Senators Jay Costa and John T. Yudichak descriptively summarize the sentiments and intentions of these lawmakers, stating the following:

 

The Commission's proposed interpretation under the Tentative Implementation Order published in the Pennsylvania Bulletin on January 6, 2018, would "grandfather" systems that are certified in Pennsylvania, rather than physically located in this state. We must respectfully disagree with this interpretation, which we find counter to the intentions of the General Assembly and especially of our colleagues who supported and voted in favor of this legislation.

 

Instead, the joint statement submitted by Chairperson Gladys M Brown and Vice Chairperson Andrew G. Place better reflects our intentions in approving this legislation. Please know that legislation to "close our solar borders" for the purposes of satisfying the Alternative Energy Standards Portfolio Act has been considered in recent sessions and discussions have been exclusive to the physical locations of systems.

 

While we certainly recognize the potential need to address and honor existing contracts, the long-term and primary goals set forth by this legislation have been clear. Specifically, we seek to join our neighboring states that similarly have "closed solar borders" and to advance our commitment to promoting economic and job growth within Pennsylvania's solar energy industry.4

 

In further support of interpreting Sections 2804(2)(i) and 2804(2)(ii) consistent with our Joint Statement, the Department of Environmental Protection (DEP) states that the intention of this provision was to provide certainty that solar photovoltaic energy facilities located within the Commonwealth would not be affected by the changes implemented elsewhere in Act 40.5 DEP also submits that the interpretation outlined in the TIO would essentially nullify the purpose of Act 40 by grandfathering enough currently-certified sources to prevent the law from having any environmental or other co-benefit whatsoever. Comments from the Pennsylvania Farm Bureau also echo this sentiment, stating that TIO interpretation would limit farmers' options for compliance with ever-increasing environmental protection standards.6

 

 

 
 

4 Comments of Senator John T. Yndichak and Senator Jay Costa filed on February 2, 2018.

5 Joint comments of the DEP and Governor Tom Wolf (DEP section at page 1) filed February 5, 2018.

6 Comments of the Pennsylvania Fann Bureau submitted February 5, 2018.


Further, ET Capital Solar Partners submits that the Commission's tentative interpretation of Section 2804(2)(i) would make the additional language of Section 2804(2)(ii) redundant.7 ET Capital Solar Partners states that if the legislative intent of Section 2804(2)(i) follows the Commission's tentative interpretation, there would be no need for the additional language of Section 2804(2)(ii) to further protect existing facilities that have entered into agreements with Pennsylvania electric-distribution companies (EDCs) and electric generation suppliers (EGSs) participating in the Pennsylvania markets. Therefore, ET Capital Solar Partners contends that the language of Section 2804(2)(ii) is further evidence that the legislative intent of Act 40 of2017 is to stimulate further investment in solar facilities within the Commonwealth. Again, the rules of statutory construction are guiding here. 1 Pa. C.S. § 1922(2) states the following:

 

In ascertaining the intention of the General Assembly in the enactment of a statute the following presumptions, among others, may be used:

 

(2) That the General Assembly intends the entire statute to be effective and certain.

 

Case law further clarifies the interpretation of this provision, stating that the General Assembly does not intend words to be "mere surplusage." 8

 

When reviewing the totality of comments described above, it becomes evident that Sections 2804(1)(i), 2804(1)(ii), and 2804(1)(iii) explicitly describe the qualifications for Tier I Solar facilities after passage of Act 40; Section 2804(2)(i) clarifies that all Tier I Solar facilities certified before passage of Act 40 that are located within the geographic boundaries of Pennsylvania are to be held harmless from this legislation; and Section 2804(2)(ii) enjoins the legislation from breaching existing contracts from out-of-state Tier I Solar facilities which were entered into before passage to serve the AEPS needs of Pennsylvania entities. Therefore, we believe we must support the adoption of our interpretations of Sections 2804(2)(i) and 2804(2)(ii) in a manner consistent with our Joint Statement to the TIO. These interpretations are as follows:

 

Sections 2804(2)(i) - We interpret the phrase "[a] certification originating within the geographicalboundariesofthisCommonwealth..."asafacilitylocatedwithinPennsylvania havingreceivedanAEPsTierIsolarphotovoltaic sharecertification.

 

2804(2)(ii)- We interpret this section to only permit out-of-state facilities that are (a) alreadycertifiedasAEPSTierISolarPhotovoltaicandthat(b)haveenteredintoacontractwith a Pennsylvania EDC or EGS serving Pennsylvania customers, for the sale of solar credits, to maintain certification until the expiration of the contract. We further wish to clarify that, consistentwiththecommentsprovidedbyETCapital SolarPartners,thismaintained

 
 

7 Comments of ET Solar Capital Partners submitted January 17, 2018.

8 Thomas Jefferson University Hospitals, Inc. v. Pa. Department of Labor and Industry, 162 A.3d 384, 393 (Pa.

2017), see also Holland v. March, 883 A.2d 449, 455-56 (Pa. 2005); Green Acres Contracting Comp. v. Commonwealth, 163 A.3d 1147 (Pa. Cmwlth. 2017) and Pa. State Police, Bureau of Liquor Control Enforcement v. Legion Post 304 Home Assoc., 164 A.3d 612,619 (Pa. Cmwlth. 2017) (holding that the rules of statutory constructionrequirethatcourts,wheneverpossible,giveeachwordinastatutorysectionmeaningandnottreatany word as surplusage).


certification should only be applicable to the amount of credits contractually committed to by an out-of-state certified facility to an EDC or EGS.9 EDCs and EGSs seeking to qualify credits under this provision are required to file a Petition within 60 days of the entry date of this order. Procedures for the 2804(2)(ii) contract approval process will be provided by the Commission at this docket.

 

Given this interpretation, we are also required to provide implementation procedures associated with banked credits. The AEPS Act permits EDCs and EGSs to bank, or place in reserve, credits produced in one reporting year for compliance in the next two reporting years.10 Implementation procedures are necessary to address handling of a credit generated by an out-of­ state Tier I solar qualified facility before October 30, 2017, and not retired in PJM's Generation Attribute Tracking System before October 30, 2017. Since Act 40 omits any directive expressly empowering the Commission to modify the attributes of such credits, we believe that these credits should retain the tier attribute assigned at the time the credit was generated. To do otherwise would appear to modify the legal status, or tier attribute, of a credit without explicit statutory authority. The Statutory Construction Act does not presume retroactive effect of statutes. 1 Pa. C.S. § 1926 provides:

 No statute shall be construed to be retroactive unless clearly and manifestly so intended by the General Assembly.

 

Further, the Commonwealth Court case provides guidance here when it determined the following:

 

A retroactive law is one which relates back to and gives a previous transaction a legal effect different.from that which it had under the law in effect when it transpired. This Court has held that "[a} law is given retroactive effect when it is used to impose new legal burdens on a past transaction or occurrence. " R & P Services, Inc. v. Commonwealth, Department of Revenue, 541 A.2d 432, 434

(Pa.Cmwlth.1988).However,section1926oftheStatuto1yConstructionAct providesthat"nostatutemaybeconstruedtoberetroactiveunlessclearlyand manifestlysointendedbythe GeneralAssembly."  1 Pa.CS.§19261.1

 

Therefore, given Act 40's omission of any directive to change the attribute of these banked credits, we submit that any out-of-state Tier I solar credit generated before October 30, 2017, should retain its Tier I solar attribute for the banking life span enumerated in AEPS. This interpretation is supported by the comments of the Retail Energy Supply Association, who states that EGSs may elect to procure varying vintage credits for use in future years in accordance with the prevailing banking rules, thus, the ability to rely on banked credits is an important component necessary for EGSs to effectively manage and satisfy their AEPS Act obligations.12

 

 

 
 

9 For purposes of implementation, any alteration, such as a change, update, or extension to a contract applicable

under this provision, and, entered into after October 30, 2017, would not be recognized under 2804(2)(i).

10 The Alternative Energy Portfolio Standards Act of 2004, 73 P.S. §§ 1648.3(e)(6)

ll Kuziakv. Borough of Danville, 125 A.3d470 (Pa. Cmwlth. 2015).

12 Comments of the Retail Energy Supply Association at 7.


In conclusion, we submit that the interpretations provided herein are necessarily required by this Commission consistent with the rules of statutory construction enumerated supra and also consistent with 1 Pa. C.S. § 1921(a), which provides that:

 The object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly. Every statute shall be construed, if possible, to give effect to all its provisions.

 

With this Order we begin the process of implementing Act 40, while recognizing that there are complexities in implementing and complying with the Act that may reveal issues which require further Commission action. The Commission will address any such issues, at this docket, and in a manner that provides all interested parties appropriate notice and opportunity to be heard.

 THEREFORE, WE MOVE THAT:

(1) ElectricDistributionCompaniesandElectricGenerationSuppliers seeking to qualify credits under Section 2804(2)(ii) of Act 40 are requiredtofileaPetitionwithinsixty(60)daysoftheentrydateof thisorder,thespecificprocedures forwhichwillbeoutlinedatthis docket

 (2)  TheLawBureauandtheBureauofTechnicalUtilityServicesprepare a Final Implementation Order consistent with thisMotion.

 

DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.

TAGS:
PennsylvaniaSREC

Has the Pennsylvania SREC Market Found Support?

   Pennsylvania Solar Renewable Energy Certificates (SRECs) or Alternative Energy Credits (AECs) seem to have found support in the $80 range. Over the past year the Pennsylvania SREC market has experienced a precipitous decline, dropping from $300 to $80. This 73% price correction was due to an oversupply of PA SRECs and outdated legislation. If state officials are serious about solar energy development, they will need to address the legislative flaws in Pennsylvania’s Renewable Portfolio Standard (RPS) and implement restrictions that deter extreme SREC volatility. By upgrading the RPS and creating a stable SREC market, Pennsylvania can attract more investment capital, create sustainable in-state jobs, and expand renewable energy development throughout the Keystone State.


 
Oversupplied SREC Market
 
     There are various factors which have led to an oversupply of SRECs in Pennsylvania. One of these factors is the ability for out-of-state SRECs to be used for Pennsylvania compliance. The PA SREC market is unique in that it allows PJM region states to register and sell their SRECs in Pennsylvania. PJM is the Eastern Regional Transmission Interconnection. This renewable energy region consists of all or part of 13 US States and Washington DC. (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia comprise the PJM region.) Some PJM regional states do not have a RPS or a viable SREC market, but can still register and sell their SRECs into Pennsylvania. Allowing out-of-state solar installations to sell their SRECs into the PA SREC market is disenfranchising Pennsylvania solar installations. Instead of rewarding instate solar generators Pennsylvania legislation is diluting their investment by allowing out-of-state installations to flood the PA market with SRECs. For Energy Year 2011 (June 1st-May 31st) 18 MWs needed to be purchased by Load Serving Entities (LSEs) or Competitive Electricity Suppliers (CESs) who serve electricity load into Pennsylvania. This meager SREC demand was met by an overwhelming SREC supply of 72 MWs registered, thus creating an oversupply of 54 MWs or approximately 60,000 SRECs.
 
     Other PJM states like New Jersey have a closed SREC market. New Jersey does not allow other PJM region states to register and sell their SRECs into their home state. This type of legislation helps New Jersey grow its solar renewable energy markets internally, create in-state jobs, and does not force ratepayers to fund outside state solar projects. New Jersey legislators also passed a law in 2010 that deals directly with an oversupplied SREC market. If NJ SRECs decline three consecutive energy years in a row, solar requirements will automatically increase by 20% each year. This law acts as a circuit breaker to keep the market from collapsing and ensures that the NJ SREC market is a viable mechanism for years to come.
 
     Another way for Pennsylvania to control the amount of SRECs that are being registered and sold into its market is to institute a megawatt cap on solar installations. Megawatt caps inhibit large solar farms from dominating a developing market. In essence, they protect the RPS from being satisfied too quickly and flooding the state with SRECs. New Jersey was successful in implementing a 2 MW cap for net-metered systems. The New Jersey Board of Public Utilities (BPU) allowed the SREC market to develop slowly. Once the market was well established and operating efficiently, state officials lifted the 2 MW cap (January 2010) and New Jersey grew into the largest and most active SREC market in the United States. Capping the size of solar facilities creates an even playing field. It encourages distributed generation and allows various entities to participate in developing solar, instead of having the market dominated by a few utility-scale solar facilities.
 
A Stronger Renewable Portfolio Standard (RPS) is Needed
 
     Pennsylvania’s RPS needs to be updated. “When we created the Alternative Energy Portfolio Standards Legislation in 2004, the solar energy requirements were carefully constructed to start low and increase very gradually over the first 10 years.” (Representative Chris Ross, “Proposed Legislation-Solar Renewable Energy Certificates” to the House of Representatives, 5/16/2011). However it has been seven years since state officials have critically reviewed Pennsylvania’s RPS and its effect on the SREC market. Like any other developing market, the PA SREC market and RPS need to be supervised and frequently upgraded for the betterment of its participants. By taking a proactive stance on the RPS and implementing SREC market circuit breakers, Pennsylvania can reduce renewable energy boom and bust cycles.
 
     A sobering exercise is to compare New Jersey’s RPS Requirement in SRECs to that of Pennsylvania’s. The following diagrams illustrate how New Jersey’s RPS is significantly greater than Pennsylvania’s from Energy Years 2011-2016. This is backwards legislation, since Pennsylvania uses the most electricity in the PJM region. Last quarter alone Pennsylvania used 22.44% of PJM region electricity; Virginia was second at 16.62%, Illinois was third at 14.06%, and New Jersey was fourth at 10.92% (Monitoring Analytics). The obvious solution would be for Pennsylvania to increase its RPS and promote renewable energy technologies to reduce the strain on the electricity grid, deter climate change, and purify air quality.
 

 


New Jersey SREC Market

 

 

Energy Year RPS Requirement
(in SRECs)
SACP
EY 2011 306,000 $675
EY 2012 442,000 $658
EY 2013 596,000 $641
EY 2014 772,000 $625
EY 2015 965,000 $609
EY 2016 1,150,000 $594

Pennsylvania SREC Market

 

 

Energy Year RPS Requirement
(in SRECs)
SACP
EY 2011 33,000 TBD 12/2011
EY 2012 53,000 TBD 12/2012
EY 2013 85,000 TBD 12/2013
EY 2014 140,000 TBD 12/2014
EY 2015 245,000 TBD 12/2015
EY 2016 435,000 TBD 12/2016

 
     Interestingly enough, in May of 2011, Pennsylvania State Representative, Chris Ross (Chester County) introduced new legislation that could assist the PA solar industry and SREC market. Ross is proposing legislation that would increase the amount of SRECs that utilities would need to purchase through 2015. His bill would also make Pennsylvania a closed SREC market, disallowing out-of-state generators the ability to register and sell there SRECs in Pennsylvania.
 

Click Here to Download a Draft Copy of HB1580


 
Defined Solar Alternative Compliance Payment (SACP)
 
     Pennsylvania should also enact a competitive and clearly defined Solar Alternative Compliance Payment (SACP). The SACP is a penalty that utilities and electric distribution companies (EDCs) pay if they do not procure enough SRECs in the open marketplace. Unlike other PJM region states which have clearly defined SACPs (DE, NJ, MD, OH and Washington D.C.), Pennsylvania takes a different approach to setting their SACP. Pennsylvania’s SACP is 200% of the average market value of SRECs sold in that energy year and is not disclosed until six months after the close of the energy year. Pennsylvania’s back dated SACP does not help solar development. The state’s “wait and see” approach for reporting their SACP does not bring certainty to a developing solar market. On the other hand, New Jersey provides its solar market with a forward projecting eight year SACP (EY 2009-EY 2016). New Jersey’s SACP is set at $711 in 2009 and gradually declines 2.5% to $594 in 2016. This clearly defined penalty schedule is valuable to solar developers, debt lenders, and equity investors. It allows them to model out forward SREC projections on a percentage basis of the SACP and assume tight, balanced, and oversupplied SREC scenarios. SRECs are the key financial component for successful solar development and a future SACP should be available to the marketplace to allow investors to quantify their risk.
 
Forward Pennsylvania SREC Market Conditions
 
     The PA SREC market is in a contango market. Contango is a commodities term which means that the forward energy years are trading at a premium to the spot energy year. As one goes out on the forward PA SREC curve, future SREC generation can trade at a premium to discounted spot SRECs. This could be happening for few reasons:
 

  1. 1.Pennsylvania’s RPS increases incrementally in the future.
  2. 1.The 73% crash in EY 2011 PA SRECs has stranded and discontinued many Pennsylvania projects. The inability to bring projects to market could diminish the SREC overhang and buyers could be seeking value in lower SREC prices.
  3. 1.After the fall of HB 2405 and HB 1128, State Representative, Chris Ross is proposing legislation that could make Pennsylvania a closed SREC market and increase its RPS for 2013, 2014, and 2015. The market could be viewing this news as a “call option” and purchasing SRECs in hope of legislation being passed and SREC prices increasing in future value.

 

Year 2011 2012 2013 2014 2015
Offers $105 $110 $150 $160 $160
Bids $100 $105 $145 $150 $150




 
     Pennsylvania has the right environment for solar development. Deregulated electricity caps are coming off, which could drive up the price of electricity. Solar energy significantly reduces or neutralizes electricity costs. However Pennsylvania legislators need to implement regulations that stabilize and entice parties to invest in solar. By increasing Pennsylvania’s RPS and closing state boarders to outside solar generators, Pennsylvania can demonstrate that it is serious about renewable energy and the growth of it’s SREC market.
 

Risk Disclaimer:


     Flett Exchange, LLC discloses that there risks associated with the buying and selling of Solar Renewable Energy Certificates (SRECs). SRECs can fluctuate in price, be volatile in nature and there is no guarantee that SREC prices will appreciate or decline over time. SRECs are sensitive to economic, political, legislative, regulatory and other unforeseen factors and can experience periods of illiquidity.
 
     Flett Exchange, LLC is an environmental exchange, brokerage and consulting firm. Flett Exchange, LLC facilitates the transaction and monetization of SRECs. Under no circumstances can Flett Exchange, LLC be held responsible for the actions, expectations or decisions of participating parties. All parties act on their own accord, cost and expense. All parties agree not to hold Flett Exchange or its officers, employees, subsidiaries or affiliates responsible for any wrongdoings. All parties forgo their right to claims, demands, disputes, controversies, complaints, suits, actions, proceedings and past, present or future allegations against Flett Exchange, LLC. This is not a solicitation to buy, sell, or trade SRECs , nor is it a solicitation to buy a solar array or generation facility of any kind.

 

 
More on Flett Exchange:
 
Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,800 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.

TAGS:
PennsylvaniaPress ReleasesSREC

First Energy Corp RFP for Pennsylvania SREC SPAECs Clears $199.10 for 10 Year

First Energy corp’s subsidiary Pennsylvania Power Company (Penn Power) has just announced the results of its RFP for 2,200 Solar Renewable Energy Certificates SREC (SPAECs) a year for 9 years. The average price was for $199.09 per SREC. Deliveries are scheduled to begin June 2011 and end May 2020. The bidding process was conducted by the Brattle Group.
 
First Energy is required to procure SRECs under Pennsylvania’s Renewable Portfolio Standard.
 
The low price of the nine year procurement is most likely the result of the oversupplied Pennsylvania SREC market. Spot prices for PA sited SRECs are currently $120 per SREC. Winners may potentially deliver in SRECs from Delaware and Washington DC which also have an oversupply of SRECs.
 
More on Flett Exchange:
 
Flett Exchange the a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,200 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.

First Energy corp’s subsidiary Pennsylvania Power Company (Penn Power) has just announced the results of its RFP for 2,200 Solar Renewable Energy Certificates SREC (SPAECs) a year for 9 years. The average price was for $199.09 per SREC. Deliveries are scheduled to begin June 2011 and end May 2020. The bidding process was conducted by the Brattle Group. First Energy is required to procure SRECs under Pennsylvania’s Renewable Portfolio Standard. The low price of the nine year procurement is most likely the result of the oversupplied Pennsylvania SREC market. Spot prices for PA sited SRECs are currently $120 per SREC. Winners may potentially deliver in SRECs from Delaware and Washington DC which also have an oversupply of SRECs. More on Flett Exchange: Flett Exchange the a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,200 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.

TAGS:
PennsylvaniaSREC

Pennsylvania SREC price Alert!

Spot Pennsylvania SREC prices on Flett Exchange recently settle at $186. This is the lowest settlement price for PA Energy Year 2011 SRECs to date. Pennsylvania SREC prices have dropped 38% since summer of 2010 when they were consistently trading at $300 per SREC. Price drops are attributed to an oversupply of SRECs due to short-term over investment in solar facilities and the ability for the entire PJM Region to register and sell their SRECs in Pennsylvania. These price drops have still occurred despite large quantities of PA SRECs being exported for renewable portfolio standard needs in Ohio.

Dropping SREC prices are a sign of a properly functioning competitive SREC market. During times of over investment SREC prices drop, thus bringing savings to ratepayers while throttling back over investment. Once SREC prices normalize only the most economical solar projects will be developed. Long term SREC prices correlate to the true cost of developing solar.
 
More on Flett Exchange: 
 
Flett Exchange is the leading SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Thousands of active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and get a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.

Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.

TAGS:
PennsylvaniaSREC

Potential Pennsylvania SREC Oversupply

Although the 2010 legislative session is far from over in Pennsylvania, an attempt to increase solar energy mandates has effectively ended.
 
“For all practical purposes, it’s dead,” Maureen Mulligan, lobbyist for Pennsylvania’s two largest solar-advocacy groups, wrote in an e-mail this past Monday.
 
The latest attempt marks the third time in two years that legislative proposals to boost Pennslyvania’s solar energy mandates has failed to reach a full vote in the state’s House or Senate. This most recent attempt, which began over the summer, hoped to minimize opposition by increasing only the solar energy requirements, rather than proposing higher alternative energy standards across the board. Proponents sought a solar carve-out of 1.5 percent, a full one percent over the current mandate of 0.5 percent required by existing legislation adopted in 2004.
 
Neighboring states, including New Jersey and Delaware have adopted higher mandates since then, something John Hanger, Pennsylvania’s environmental secretary, noted Monday. “We can see the promise,” he said. “But the question is whether we’re going to actually build on this impressive foundation or let it wither.” Referring to the state’s fledgling solar industry, Hanger cautioned that the lack of progress on a solar-only bill would cost the state jobs. He blamed “organized opposition” from the state’s Chamber of Business and Industry and owners of existing power plants for the most-recent failure.
 
But Gene Barr, a chamber official, disagrees. Barr contends there was “widespread opposition to these mandates from virtually all of the state business associations, including energy providers and consumers.”
“The chamber objected to carving out a market for one group of businesses to the detriment of those in the nuclear, natural gas, coal, and other emerging-technology industries,” he said.
 
The coal industry, which provides 54 percent of the state’s electricity, has been under growing competitive pressure, largely because of stricter requirements from the EPA. George Ellis, president of the Pennsylvania Coal Industry, said he was “certainly pleased” the solar bill did not reach a full vote.
As to whether they would try again, Mulligan said, “We’ll see how the elections go and what interest there is, whether it’s worth pursuing anything again.”
 
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 1,900 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and get a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, NC and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
 
Original Reporting By Diane Mastrull from the Philadelphia Inquirer

http://www.philly.com/inquirer/business/20101026_Solar-power_initiative_fails_again_in_Pennsylvania.html

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Attempt to Increase Solar-Power Fails Again in Pennsylvania

Although the 2010 legislative session is far from over in Pennsylvania, an attempt to increase solar energy mandates has effectively ended.
 
“For all practical purposes, it’s dead,” Maureen Mulligan, lobbyist for Pennsylvania’s two largest solar-advocacy groups, wrote in an e-mail this past Monday.
 
The latest attempt marks the third time in two years that legislative proposals to boost Pennslyvania’s solar energy mandates has failed to reach a full vote in the state’s House or Senate. This most recent attempt, which began over the summer, hoped to minimize opposition by increasing only the solar energy requirements, rather than proposing higher alternative energy standards across the board. Proponents sought a solar carve-out of 1.5 percent, a full one percent over the current mandate of 0.5 percent required by existing legislation adopted in 2004.
 
Neighboring states, including New Jersey and Delaware have adopted higher mandates since then, something John Hanger, Pennsylvania’s environmental secretary, noted Monday. “We can see the promise,” he said. “But the question is whether we’re going to actually build on this impressive foundation or let it wither.” Referring to the state’s fledgling solar industry, Hanger cautioned that the lack of progress on a solar-only bill would cost the state jobs. He blamed “organized opposition” from the state’s Chamber of Business and Industry and owners of existing power plants for the most-recent failure.
 
But Gene Barr, a chamber official, disagrees. Barr contends there was “widespread opposition to these mandates from virtually all of the state business associations, including energy providers and consumers.”
“The chamber objected to carving out a market for one group of businesses to the detriment of those in the nuclear, natural gas, coal, and other emerging-technology industries,” he said.
 
The coal industry, which provides 54 percent of the state’s electricity, has been under growing competitive pressure, largely because of stricter requirements from the EPA. George Ellis, president of the Pennsylvania Coal Industry, said he was “certainly pleased” the solar bill did not reach a full vote.
As to whether they would try again, Mulligan said, “We’ll see how the elections go and what interest there is, whether it’s worth pursuing anything again.”
 
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 1,900 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and get a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, NC and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
 
Original Reporting By Diane Mastrull from the Philadelphia Inquirer

http://www.philly.com/inquirer/business/20101026_Solar-power_initiative_fails_again_in_Pennsylvania.html

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Pennsylvania Public Utility Commission (PUC) Finalizes Solar Policy Statement

Harrisburg, PA — On Thursday, September 16th 2010 the Pennsylvania Public Utility Commission (PUC) finalized a policy statement intended to provide the foundation from which the Commonwealth will be able to achieve its progressive solar renewable energy mandates, set forth in its Alternative Energy Portfolio Standards (AEPS). According to the press release published Thursday; the policy is designed to support solar, while minimizing cost for consumers. The commission voted 5-0 to provide the necessary long-term revenue to support both large- and small-scale solar development and to address other barriers stalling wide-scale adoption and deployment of solar renewable energy throughout the state. More than twenty different parties provided feedback on the original draft statement proposed December 10th, 2009 before yesterday’s announcement.
 
The Final Policy Statement:
 

  • Defines both large- and small-scale solar projects;
  • Recommends using competitive requests for proposals (RFPs) to establish solar renewable energy credit (SREC) values recoverable as a reasonable expense,
  • Standardizes contracts for the purchase of SRECs by electric distribution companies (EDCs),
  • Establishes a stakeholder working group of electric distribution companies, electric generation suppliers, commission staff, public advocates, solar aggregators, and other interested parties to ensure SREC contracts reflect the most recent developments in Pennsylvania law and energy policy.
  • Encourages education of potential SREC sellers about the opportunities to sell them to the electric utilities in support of regional development of solar resources.
  • The state Alternative Energy Portfolio Standards Act of 2004 (AEPS) requires EDCs and electric generation supplies to include a percentage of electricity from alternative resources, including solar, in the generation they sell to Pennsylvania customers.
  • The Pennsylvania PUC balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable prices. They protect the public interest, educate consumers to make independent and informed utility choices, further economic development, and foster new technologies and competitive markets in an environmentally sound manner.

 
*For recent news releases, audio of select Commission proceedings or more information about the PUC, visit their website at http://www.puc.state.pa.us.

 

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Pennsylvania SREC Alert!

The first Pennsylvania SRECs/Alternative Energy Credits (AECs) for the 2011 Energy Year (vintage) will be created by PJM-GATS on Friday, July 30, 2010. PA SRECs are generated on an energy year basis which runs from Jun 1 to May 31. Values for 2010 vintage SRECs differ from the values of 2011 SRECs. Valuation differentials between specific vintage SRECs are attributable to the estimated future value of compliance payments (this is currently 200% of the sum of the “market value” of solar AECs) or a lower fixed payment as described in proposed house bill 2405. SRECs are valid for RPS compliance for the year generated and the following 2 years. Some energy suppliers will be limited to the amount of vintages according to when they were required to comply. Sellers will have to check which energy year SRECs they have before they sell them on Flett Exchange. Prices for 2010 PA SRECs have softened lately due to more buyer interest in 2011 PA SRECs.
 
The Flett Exchange trading platform allows for the simultaneous listing of multiple vintages. Our transparent and competitive trading platform ensures that our buyers and sellers achieve the market value for their SRECs at the most competitive rate in the industry. Our brokers are available to answer any questions that you have at 201-209-0234.

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Register Your PA, MI, IN, KY, & WV SRECs in Ohio

Ohio Renewable Portfolio Standard (RPS) buyers can buy 50% of their SRECs from neighboring states. Pennsylvania, Michigan, Indiana, Kentucky, and West Virginia SREC sellers can certify their solar systems in Ohio and have the potential to sell their SRECs into a growing Ohio solar market.

However if too many solar generators register to sell their SRECs in a particular state or region an oversupply scenario could occur. Market saturation could diminish SREC demand and depress prices. It is also important to note, that a solar facility generating SRECs outside of Ohio and also registered within Ohio might not receive the same price of an Ohio sited SREC. For more information please click on the application for certification as an Ohio Renewable Energy Resource Generating Facility.

Click Here To Download Details from Ohio.gov

Contact:
Public Utilities Commission of Ohio
Email: AEPS@puc.state.oh.us
Toll-Free: (800) 686-PUCO (7826)
Phone: (614) 466-3292 (in Columbus area)
Fax: (614) 752-8351
180 East Broad Street
Columbus, Ohio 43215

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PennsylvaniaOhio

US Solar Capacity Surges in 2009 on New Economic Incentives

LOS ANGELES, APRIL 15, 2010 — (Reuters) — Installed solar capacity jumped an astonishing 37% in 2009 following an onslaught of state and federal incentives offered during the recent economic crisis to help prop-up demand for new solar equipment. Grants, subsidies, tax-credits and cash incentives helped push revenue past $4 Billion in 2009, a 36% increase from the previous year.

According to a report released last Thursday by solar advocates it was the fourth straight year of unprecedented growth for the solar photo-voltaic industry here in the United States. This contrasts with the long-standing European solar power industry, which has seen a decrease as it’s mainstay nations ramp-down their incentive programs.

New U.S. solar capacity reached 481 Megawatts (MW) last year, an increase of 130 MW from 351 in 2008. Solar thermal for water heating also rose, but at a more modest 10% on the year. The only decline was seen in solar-pool heating, which saw a 10% decline blamed mostly on the slowdown in the housing sector.

Analysts say that the spike in U.S. growth is also attributed to lower prices of solar hardware, which the Solar Energy Industries Association (SEIA) reported fell an estimated 40% in recent years. “Despite the Great Recession of 2009, the U.S. solar industry had a winning year and posted strong growth numbers… Consumers took notice that now is the best time to go solar,” says SEIA CEO Rhone Resch. The increase in solar was led by California, with New Jersey coming in second place, followed by Florida, then Arizona.

According to the SEIA, six solar utility projects also came on line in 2009, including both solar PV and solar concentration plants. Despite the increase, solar still remains under 1% of utilities generation within the United States. The SEIA is optimistic for the future however and predicts 17 Gigawatts of solar power down the line, enough to power over 3 million homes.

“Now we’re talking gigawatts of solar, not megawatts,” said Resch.

View the SEIA’s 2009 Industry Year in Review Here:

http://seia.org/galleries/default-file/2009%20Solar%20Industry%20Year%20in%20Review.pdf

View the original article from Reuters Here:

http://www.reuters.com/article/idUSN159853820100415

(Reporting by Dana Ford; Editing by Marguerita Choy)

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Why Investors are Attracted to Solar

Solar energy is gaining momentum in the renewable energy world. It is being heralded as a smart investment due to growth prospects, favorable market conditions, federal and state incentives, and more stringent Renewable Portfolio Standards (RPS). Individual and institutional investors are committing capital and taking risk because of potential profits and tax benefits that are associated with developing solar. Existing and newfound factors are driving solar energy to become a more mainstream investment. This article will examine these factors and demonstrate how they are contributing to solar energy’s success.

  • Growth- Over the past decade, technological advancements have made solar energy more affordable, more reliable and less obtrusive. Lower barriers of entry have allowed solar installers, integrators, and developers to offer competitive pricing on residential and commercial facilities and reduce their installed cost per watt.
  • Value- Solar energy is a potential hedge against higher electricity prices. It is estimated that electricity prices could conservatively increase by 3.0% a year. Solar energy is a wise alternative to higher electricity bills and can provide clean, green, and cheaper power. Self-Financing, Solar Lease Financing, and Power Purchase Agreement (PPA) Financing are all financial structures that can accomplish reduced electricity costs.
  • Tradable SREC Markets- Solar Renewable Energy Certificates (SRECs) are environmental attributes that can be transacted and monetized. SRECs are the driving financial component that makes solar economically feasible. SRECs are generated from the production of solar energy and can be monetized on Flett Exchange’s live SREC markets. SRECs are market based. Unlike feed-in tariffs SRECs pass savings on to ratepayers over time, if overdevelopment occurs or if solar becomes less expensive.
  • State Mandated Markets- SREC markets are state mandated. State governments are establishing stringent Renewable Portfolio Standards (RPS) and increasing their solar carve-outs. Electric suppliers need to procure SRECs to meet their RPS. If electric suppliers cannot procure enough SRECs in the open marketplace to satisfy their RPS they are subject to a Solar Alternative Compliance Payment (SACP) which is a penalty payment and can be considerably higher then the spot SREC market.
  • Tax Benefits- Many solar projects are candidates for federal tax incentives and state rebates. The Investment Tax Credit (ITC) returns over 30% of a solar project’s capital cost to investors in the form of a tax credit. Section 1603 of The American Recovery and Reinvestment Act of 2009 (Stimulus Bill) also allows investors to receive a grant in lieu of tax credit when the “specified energy property” is submitted to the “grant program.” State rebates may also be available for residential and commercial solar installations. Rebate programs can differ from state to state and exist on a sliding scale depending on the size of the proposed solar facility.
  • Escalating Fossil Fuel Demand- Global demand for fossil fuels is increasing while supplies are diminishing. Developed and emerging nations are competing for fossil fuels and all petroleum products come with political and environmental risk. Solar energy, on the other hand, is limitless, does not emit harmful emissions, and can be achieved without any political risks. Also if the US Dollar continues to depreciate the price of foreign fuel could continue to rise.
  • Climate Change- Private and public corporations, organizations, agencies, and municipalities are implementing clean energy programs. Climate change is a growing social and political issue, both domestically and internationally. Insightful entities understand the benefits of renewable energy and the risks associated with not staying ahead of the climate curve. These players are implementing clean energy programs and are well positioned if climate legislation gets passed. The recent US healthcare decision demonstrates that political winds can shift momentarily and legislation can be passed swiftly. Renewable energy strategies and sustainability teams are becoming more conventional, as private and public entities recognize their social responsibilities to the environment and potential legislative risk.

Solar energy is a favored renewable energy source. Solar is easy to install, is a hedge against higher electricity prices, generates a SREC revenue stream, and is beneficial to the environment. So far advantageous market conditions have attracted investors to solar.

However the future of the solar market also comes with challenges and risks. Increased competition could create an overpopulated market. Inexperienced players who are attracted by favorable market conditions could sacrifice engineering and construction quality for short term monetary gains. The reduction of federal and state incentives could make solar less appealing. As the solar market evolves it will be interesting to see if it could sustain itself and emerge as an established renewable energy source.

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Solar Financing

olar energy is attracting investment dollars. Competitive returns, lower barriers of entry, state and federal incentives, SREC revenue streams, and progressive Renewable Energy Portfolio Standards (RPS) are advancing solar to the forefront of renewable energy world. As the solar market evolves, so are the financial structures that are assisting investors in financing and completing projects. This article will examine various financing strategies, the risks and rewards associated with them, and the incentives involved with solar investing.

  • Self Financed (Most Risk/Most Reward)– Self financed solar facilities are for residents and entities who want control of their solar destiny. These parties absorb the upfront costs for developing solar and the challenges of operating and maintaining their solar facility. This is the most capital intensive structure and poses the most risk and reward. The risk lies in the development of the project, the failure in properly monitoring and maintaining the facility, and the price associated with the Solar Renewable Energy Certificates (SRECs). The rewards are a reduced rate of electricity for as long as the facility can generate solar energy, declining installation costs, and a revenue stream generated by SREC monetization. Self-financiers take the risk of developing solar because there is the potential for them to payoff the facility in a shortened period of time and realize increased upside profit potential.
  • Solar Lease Financing (Moderate Risk/Moderate Reward)– Solar lease financing structures are being executed in both the residential and commercial markets. The concept is simple, straightforward, and similar to an equipment or automobile lease. Instead of self financing your solar facility, parties can enter into a leasing contract and agree to make monthly lease payments on their solar installation. Similar to a PPA contract the client does not incur the expensive upfront installation costs or the responsibility of operating and maintaining the solar facility. In a best case scenario the lessee can take advantage of higher SREC values and an option to buy out the system in six years, while the lessor obtains the ITC and accelerated depreciation of the system. A solar lease structure is also an alternative to a PPA contract for non-profit organizations who want to take on SREC risk for potential reward, while the lessor passes on the ITC and accelerated depreciation indirectly through a lower lease payment. Solar leasing firms have a set of criteria that clients need to meet in order to participate in their solar leasing program: commercial clients may need to submit audited financial statements and residents may need to have a FICO score of 700 or greater to be considered. However there are also risks associated with solar leases. One risk is that a lessee could go upside down on their contract. This happens when the solar lease is more expensive than the SRECs being monetized. Another risk is the future price of electricity. Lessees could potentially pay more for solar electricity than basic generated electricity if demand diminishes. The financial crisis of 2008-2009 was a reminder that electricity prices do not always go up and that electricity demand could decline during lean economic times. Solar lease financing is becoming more popular because it is affordable, convenient, environmentally responsible, and lowers your electricity bills. However, interested parties should weigh the risks and rewards associated with solar leases and learn more about the leasing company before signing an extended contract.
  • PPA Financed (Less Risk/Less Reward)– A Power Purchase Agreement (PPA) is a contract between a solar electricity generator and a client seeking solar energy. This financial structure is designed to provide the client with a reduced rate of electricity for an extended period of time (10-20 years), no upfront installation cost, and the option to purchase the solar facility at the end of the contract. The PPA Provider designs, develops, operates, maintains, and owns the solar facility located on the client’s property. In turn the client pays the PPA Provider for the electricity generated from the solar facility. PPA Providers enter into these agreements because there is a profitable margin between where solar can be developed and what electricity can be sold for. The PPA Provider can also take advantage of the Investment Tax Credit (ITC) and accelerated depreciation. PPA Providers gain ownership of the SRECs which are generated from the solar facility and can monetize them on the Flett Exchange live markets. This solar structure is popular with non-profit organizations that cannot take advantage of the ITC and realize the accelerated depreciation of their solar facility.

Many solar projects are contingent on tax benefits, rebates, and long-term SREC contracts. Without these incentives and risk mitigation strategies solar projects can be difficult to finance and pose significant risk to investors. Let’s examine some of the incentives and strategies that are allowing the solar market to flourish.

  • Tax Benefits- At this juncture, tax incentives are an integral part of solar financing. The Investment Tax Credit (ITC) returns over 30% of a solar project’s capital cost to investors in the form of a tax credit. Sophisticated investors are utilizing solar as a tax-equity investment vehicle because tax credits can offset tax liability. Section 1603 of The American Recovery and Reinvestment Act of 2009 (Stimulus Bill) also allows investors to receive a grant in lieu of tax credit when the “specified energy property” is submitted to the “grant program.” This program runs out at the end of 2010, and the SEIA www.seia.org is lobbying to have it extended. Both the credit and grant programs promote renewable energy on the institutional level and help incentivize solar development.
  • Accelerated Depreciation- Developers of commercial projects can realize additional tax benefits from the depreciating cost of their solar facility. An entity “can depreciate the installed cost of the system minus 50% of the business Investment Tax Credit (ITC) over the first five years of ownership (SEIA 2008) using the modified accelerated cost recovery system (MACRS) (DSIRE 2008). According to a report by Lawrence Berkley National Laboratory, the tax benefit of this depreciation is equivalent to 26% of the installed cost of the system, 12% of which comes from the ability to accelerate it over a five year period (Bolinger 2009).” –National Renewable Energy Laboratory, “Solar Leasing for Residential Photovoltaic Systems.”
  • Long-Term SREC Contracts- are helpful in financing proposed solar projects. Flett Exchange brokers long-term SREC contracts between qualified institutional counterparties. Our ability to facilitate and streamline long-term SREC contracts is value-added to both buyers and sellers. Buyers gain direct access to large pools of SRECs at a discounted price to satisfy their RPS, while sellers have the ability to mitigate risk and lock-in profits. Counterparty credit risk is paramount in this market. Buyers and sellers enter into bilateral contracts to secure price, quantity, and term of the SREC contract. Counterparties agree to pay or delivery SRECs at a specified future date. Flett Exchange augments this process by employing a stringent vetting process and presenting quality and creditworthy solar projects to the market. Flett Exchange is currently brokering 1-7 year SREC contracts in the open market and growing our ability to facilitate longer term deals for eligible commercial entities.

As the solar markets continue to evolve new and innovative thinking will be the most prized commodity. The emergence of banks, lenders, financial institutions, and new financial structures will be welcomed and as solar makes the transition form a subsidized market to a self-sustaining market.

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Deregulation of Pennsylvania Electricity Markets

Electricity rates in Pennsylvania could soon be on the rise. Businesses, federal agencies, non-profit organizations, and residents could soon experience an increase in their electric bills. The increase in price stems from the deregulation of the Pennsylvania electricity markets.

In the 1990s Pennsylvania lawmakers moved from a regionally monopolized electricity market to a competitive electricity market. Pennsylvania consumers were paying about 15% more for electricity than the national average, so the decision to embrace a competitive electricity market was easy to make. Legislators restructured electricity generation to promote more competition. However to achieve the transition from a regional electricity market to competitive electricity market, legislators had to institute rate caps to protect from unpredictable price fluctuations and implement a “stranded costs” provision for electricity providers to pay for former infrastructure investments. “In return for the loss of their monopoly status, utilities were allowed to collect a surcharge above the price of electricity, otherwise known as stranded costs. Rate caps already have expired for six utilities statewide, and the transition period will end for all state utilities in 2011—ending the rate caps and the collection of stranded costs.” 4/9/2009, Pennlive.com, “Electricity Deregulation is a Win for Pennsylvania” –Elizabeth Bryan. As rate caps and the collection of stranded costs expire the Pennsylvania electricity market could experience unwanted changes during difficult economic times.

Electricity deregulation was established to promote competition and market efficiency. Unfortunately this is not always been the case. In 2001, California experienced the negative repercussions of a deregulated electricity market. California residents were forced to endure volatile electricity prices, while rolling blackouts plagued the state, and electricity could not be supplied during peak hours. For Californians, electricity deregulation equaled disaster.

The expiration of electricity rate caps could bring unwanted price increases to Pennsylvania. Consumers could experience percentage increases in their electric bills as regional rate caps expire. The following map exhibits regional Pennsylvania electricity territories and the electric providers that serve those areas. So far the consequences have been minor with rate cap expirations only affecting 14.1% of the Commonwealth. However from January 2010 – January 2011, rate caps for five major electricity service territories expire and the Pennsylvania electricity market will be completely deregulated.

 

Electricity rate caps for the Duquesne Light Company, PPL Electric Utilities, Inc., West Penn Power Company, Pennsylvania Electric Company, Metropolitan Edison Company, and PECO Energy Company expire between January 2010 – January 2011. This comprises 85.9% of Pennsylvania’s electricity market and could have an impact on electricity prices going forward. Fortunately Pennsylvania has learned from California’s missteps. Lawmakers are forcing utilities to diversify their electricity risk by securing both short- term and long-term contracts. This mixture of contracts could be helpful in mitigating risk, unlike California whose focus was concentrated on short-term contracts only. Regardless of the outcome, the Pennsylvania electricity market is one to monitor in the months and years to come.

Is there a way for Pennsylvanians to protect themselves from the upcoming deregulated electricity markets and future price uncertainty? The answer is yes. Pennsylvanians’ best solution is to embrace renewable energy. Solar energy can solve Pennsylvania’s electricity deregulation issue and act as hedges to potential higher electricity prices. Solar facilities level the playing field and allow businesses, federal agencies, non-profit organizations, and residents to participate in renewable energy, become less dependent on electric companies, and produce electricity during peak demand times. Parties that install solar facilities have the ability to achieve a fixed or reduced cost of electricity for an extended period of time, generate Alternative Energy Credits (AECs) (which are actively traded on Flett Exchange), and embrace clean energy that is absolutely vital to our environment. Pennsylvania also offers state incentives for affordable green energy. If you are a resident interested in solar click on, Pennsylvania Sunshine Program and for businesses interested in solar, click Pennsylvania Solar Energy Program to learn how to achieve clean energy.

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Pennsylvania

PECO Harnesses Solar Power, Company Purchases 6 Megawatts of Solar Credits

Under the direction of the Commonwealth Financing Authority (CFA), the Alternative and Clean Energy Program supplies loans and grants used for the development of clean energy projects in Pennsylvania. The program is administered by the Pennsylvania Department of Community and Economic Development in conjunction with the Department of Environmental Protection.

Highlights of the program are:

Eligible Applicants

• A corporation, partnership, sole proprietorship, limited liability Company, non-profit, or other commercial entity approved by the commonwealth financing authority.
• A non-profit corporation or association whose purpose is the enhancement of economic conditions in their community.
• A municipality, county, or school district.

Eligible Projects

• Solar projects, including facilities to generate, distribute, or store solar energy, as well as manufacturing or assembly facilities for solar panels or other equipment. Solar photovoltaic and solar thermal technologies are eligible.
• The development or construction of facilities used for the research and development of technologies related to solar energy.

Matching Funds Requirement

• Eligible applicants must provide evidence of commitment of matching funds on the project. The amount of the matching investment must be at least $1 for $1 of program funds awarded by the CFA.

Funds are distributed in three ways (loans, grants, or guarantees) .

Grant (Matching Funds To Help Facilitate Project)

• The maximum grant amount for a solar energy project shall not exceed one million dollars or $2.25 per watt, whichever is less. The CFA will consider projects over one million dollars if the project significantly impacts their goal to increase solar energy generation in Pennsylvania.
• The maximum grant for a solar research and development facility or a solar thermal project shall not exceed one million dollars.

Loan (Borrow Money to be Paid Back at Agreed Interest Rate)

• The maximum loan amount for a solar energy generation or distribution project shall not exceed $5 million or $2.25 per watt, whichever is less. In calculating the $2.25 per watt cost, CFA will not include the cost of any energy storage equipment. The CFA will consider loan requests over $5 million for projects that will significantly impact the Authority’s goal to increase the amount of solar energy generated in the Commonwealth.

• Loans will be repaid over a period not to exceed 10 years for equipment and 15 years for real estate.

• The interest rate for the loan will be fixed at the time of approval of the loan. The current interest rates are posted on www.newpa.com

Guarantee (Acts as a Loan Guarantee to Obtain Financing)

• The guarantee will be in the form of a letter of credit.

• Projects applying for the guarantee must invest a minimum of 10% in equity as part of the project financing.

• The term of the guarantee will not be more than 5 years.

• The amount of the guarantee will not exceed $30 million.



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Pennsylvania Sunshine Solar Rebate Program

The Pennsylvania Sunshine Program was originated to offer rebates as incentives for the installation of solar energy systems. The program was authorized in July 2008, by the Pennsylvania legislature and began accepting applications in May 2009, under the direction of the Department of Environmental Protection (DEP). The program will provide $100 million in rebates for residential and small business solar electric (solar photovoltaic) and solar hot water (solar thermal) installations. Rebates are set up on a declining scale as goals are met in installations. Rebates will only cover up to 35% of system installation charges.

Residential Solar Photovoltaic Rebates

 

Step No. Megawatts (MW) in Step Rebate Amount ($/Watt)
1 10 $2.25
2 10 $1.75
3 10 $1.25
4 10 $0.75

 

Small Business Solar Photovoltaic Rebates

 

Step No. MW in Step 3-10 kW Rebate Amount ($/Watt) 10-100 kW Rebate Amount ($/Watt) 100-200 kW Rebate Amount ($/Watt)
1 10 $2.25 $2.00 $1.75
2 10 $1.75 $1.50 $1.25
3 10 $1.25 $1.00 $0.75
4 5 $0.75 $0.50 $0.25

 

Residential and Small Business Solar Thermal Rebates

 

Step No. No. of Systems in Step Rebate Amount
1 1,500 25%
2 1,500 20%
3 1,500 15%
4 1,500 10%

 

Information Sourced From: www.state.pa.us

Highlighted requirements for the Pennsylvania Sunshine Solar Rebate Program:

Residential:
• Must be a Pennsylvania resident.
• Own the home and use it as primary residence (no vacation homes or investment real estate properties).
• Households are permitted only one photovoltaic and one solar thermal rebate.

Small Business
• Must be for-profit entity.
• Located within Pennsylvania.
• Have no more than 100 full-time employees.
• Small businesses can receive multiple rebates but the projects must be completed before they submit any another applications.

Both resident and small business applications must be submitted through a qualified installer on behalf of the applicant.

Please refer to this page on the Pennsylvania Department of Environmental Protection site for more requirements and a list of qualified installers: Click Here To Learn More.

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Pennsylvania

Pennsylvania SREC Market Heats Up

Solar energy is growing in Pennsylvania. The Keystone State is diligently working to make solar power a significant part of its renewable energy policy. Solar developers, installers and integrators are migrating to Pennsylvania to capture a growing market share. The key factors that are contributing to Pennsylvania’s SREC market are:

1. Shortage of Installations – The shortage of solar installations in Pennsylvania could be beneficial to short-term SREC pricing. The lack of solar generators in PA could keep SREC prices buoyant as qualified buyers need to procure SRECs to satisfy Pennsylvania’s Alternative Energy Portfolio Standard (AEPS). This underlying bid could push SREC prices higher if the buyers are forced to pay Alternative Compliance Penalty (ACP). The cap for PA SRECs is 200% of the average market value for SRECs. With Pennsylvania SRECs trading a weighted market value of $297 in October on GATS, this could translate to $594 cap by the end of the energy year.

2. House Bill 80 and Senate Bill 92 – Can establish Pennsylvania as a leader in renewable energy and attract businesses that are environmentally conscious and support the state’s economy. These bills attempt to:

  • Raise the amount of solar generated electricity sold in Pennsylvania from 0.5% to 3% by 2026. This amount of solar energy will power approximately 438,000 homes;
  • Increase the amount of electricity sold in Pennsylvania from Tier I clean energy sources, such as wind, from 8 percent in the current statute to 20 percent in 2026 and;
  • Make enough clean energy to power 2.1 million Pennsylvania homes by 2026;
  • Extend the timeline for the Alternative Energy Portfolio Standards (AEPS) Act to 2026 and strengthen Pennsylvania’s competitive position by sending a strong, long-term market signal for new investment.
  • Solar energy can also benefit Pennsylvania’s economy. The Solar Energy Industries Association (SEIA) estimates that the Advanced Energy Portfolio (AEP) will support over 14,000 jobs in the solar industry, with at least one third by Pennsylvania residents. 
    Source: http://www.PennFuture.org

 

3. PECO Request for Proposal – PECO is making a concerted effort to promote solar and make projects feasible in Pennsylvania. In October of 2009, the company issued a 6 Megawatt Solar Request for Proposal (RFP) and may enter into fixed agreements if the solar project and prices are right. PECO is committed to reducing, offsetting and displacing harmful emissions and supporting Pennsylvania’s Alternative Energy Portfolio Standards (AEPS). This RFP will total 80,000 solar alternative energy credits or 8,000 credits per year spanning a 10 year lifetime.

Pennsylvania has the opportunity to implement a competent renewable energy policy. Renewable energy can reduce the Pennsylvania’s addiction to brown power, upgrade electric infrastructure, create jobs and decrease harmful emissions. Progressing thinking and wise actions can steer the state in the right direction and make renewable energy a reality.

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Pennsylvania

Pennsylvania may increase Solar RPS from .5% to 3% by 2024

There is a proposal in the Pennsylvania House of Representatives which if passed will increase PA’s Solar RPS currently set at .5% to 3% by 2024. This indicates the strength of the solar industry and the states willingness to support its growth.

for more information following the below link

Pennsylvania House Bill 80

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Pennsylvania

Flett Exchange Expands SREC Markets to DC, DE, MD & PA

Flett Exchange is pleased to introduce four new solar markets. Our online auction-exchange now hosts live Solar Renewable Energy Certificate (SREC) markets for the District of Columbia, Delaware, Maryland and Pennsylvania.
 

For the past two years Flett Exchange has established a premier presence in the New Jersey SREC market. Our online auction-exchange has completed over $1.7 million in transactions for 2009 and has over 680 customers. Flett Exchange has an extensive network of Load Servicing Entities (LSEs) in the PJM-GATS region which increases SREC liquidity and price discovery. Our mission is to bring our diligent solar service to the DC, DE, MD and PA SREC markets and help increase solar transparency.

 
The solar market structures for DC, DE, MD and PA are similar to New Jersey. The DC, DE, MD and PA SREC markets clear through The Generation Attribute Tracking System (GATS) and all solar owners registered with (GATS) are eligible to participate in our markets. Load Servicing Entities (LSEs) use the Flett Exchange to buy SRECs to satisfy their Renewable Portfolio Standards (RPS) requirements.

 
Flett Exchange looks forward to bringing transparency, price discovery and immediate execution for DC, DE, MD and PA SREC markets. Our online auction-exchange is supported by knowledgeable professionals who provide personalized service. Flett Exchange’s online auction-exchange is the most reliable and cost-effective solution to transacting and monetizing your SRECs. For a free account or immediate assistance call (201)-209-9426 or go to flettexchange.com and discover our SREC, NJ Class 1 REC, RGGI, Interest-Rate, Physical Gold and Silver markets.

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PennsylvaniaMarylandWashington DC

Flett Exchange LLC launches Pennsylvania Alternative Energy Market for Solar

Flett Exchange LLC announces the launch of its Pennsylvania’s Solar Renewable Energy Certificate (SREC) market. Load Serving Entities in the State are required to purchase .5% of their total energy output from solar energy systems by 2021. Similar to New Jerseys SREC program each certificate will represent 1000kWh of renewable energy.  Details on the PA market can be found at Pennsylvania AEPS Website.

Flett Exchange will leverage its experience in the New Jersey markets to help match LSEs and solar systems owners with its value added transparent web based trading/auction platform. The Exchange has brokered over $1.7 million in transactions year to date with over 650 customers. Flett Exchange’s NJ SREC market has operated continuously for two and a half years allowing buyers and sellers 24 hours access to live pricing information and the immediate ability to monetize their SRECs.

Flett Exchange looks forward to bringing transparency, price discovery and immediate execution for DC, DE, MD and PA SREC markets. Our online auction-exchange is supported by knowledgeable professionals who provide personalized service. Flett Exchange’s online auction-exchange is the most reliable and cost-effective solution to transacting and monetizing your SRECs. Buyers and sellers meet on Flett Exchange to negotiate price and quantity of Solar Renewable Energy Certificates (SRECs). Our internet-based auction platform brings transparency and price discovery to SRECs markets allowing Flett Exchange users place working orders in live. Public entities can auction their SRECs on the Flett Exchange platform and obtain a competitive price in a transparent manor. The solar community is choosing Flett Exchange because our trading platform is easy to use, always reliable and absolutely secure. For a free account or immediate assistance call (201)-209-9426 or go to www.flettexchange.com and discover our SREC, NJ Class 1 Rec, RGGI, Interest-Rate, Physical Gold and Silver markets.

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Pennsylvania

PPL Electric to Procure AECs through Default Service Procurement Plan

On Thursday, June 18, 2009, the Pennsylvania Public Utility Commission (“PUC”) approved, with modifications, PPL Electric Utilities Corporation’s (“PPL Electric”) default service procurement plan to serve retail customers for the period beginning January 1, 2011. The plan provides for the procurement of Alternative Energy Credits (“AECs”) to meet compliance with Pennsylvania Alternative Energy Portfolio Standards Act (“AEPS Act”). Through a series of solicitations, PPL Electric will procure over 850,000 AECs for delivery periods between 5 months and 5 years in duration.

As a requirement of bidder qualification, each prospective supplier must show that it or its guarantor is rated. RFP documents including the RFP schedule will be posted to the RFP web site (www.pplpolr.com) as soon as they become available.

To receive more information about the PPL Electric RFPs, visit the RFP web site where you can register to receive announcements and updates for the PPL Electric RFPs: register now!

To find out more information about how to participate in a bidder information session scheduled for July 8, 2009

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Pennsylvania