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Washington D.C. has passed a law (B24-0950 / L24-0314) to change its renewable energy infrastructure requirements, making the District’s climate goals more aggressive than previously anticipated.
With the number of installs in Washington DC doubling in the past few years, The Local Solar Expansion Act aims to re-balance the supply-demand fundamentals for the market. The bill will change the current solar carve-out from 10% of all delivered electricity to 15% by the year 2041. Additionally, the SACP (Solar Alternative Compliance Payment, or “penalty price”) is being reduced from $500.00 to $480.00 starting in 2024, and then gradually coming off $20.00 each year. This penalty price provides a theoretical ceiling for the cost of Solar Renewable Energy Credits (SRECs) in any given year. With that price being altered to a more conservative ramp-down, investor confidence will remain high and allow for further investment in the district. Although it is one of the smallest SREC markets in the country, the law’s passing allows Washington D.C.to remain one of the most premium.
Year |
Previous RPS |
New RPS |
Previous ACP |
New ACP |
2023 |
2.85% |
3.00% |
$500 |
$500 |
2024 |
3.15% |
3.65% |
$400 |
$480 |
2025 |
3.45% |
4.30% |
$400 |
$460 |
2026 |
3.75% |
5.00% |
$400 |
$440 |
2027 |
4.10% |
5.65% |
$400 |
$420 |
2028 |
4.50% |
6.30% |
$400 |
$400 |
2029 |
4.75% |
7.00% |
$300 |
$380 |
2030 |
5.00% |
7.65% |
$300 |
$360 |
2031 |
5.25% |
8.30% |
$300 |
$340 |
2032 |
5.50% |
9.00% |
$300 |
$320 |
2033 |
6.00% |
9.65% |
$300 |
$300 |
2034 |
6.50% |
10.30% |
$300 |
$300 |
2035 |
7.00% |
11.00% |
$300 |
$300 |
2036 |
7.50% |
11.65% |
$300 |
$300 |
2037 |
8.00% |
12.30% |
$300 |
$300 |
2038 |
8.50% |
13.00% |
$300 |
$300 |
2039 |
9.00% |
13.65% |
$300 |
$300 |
2040 |
9.50% |
14.30% |
$300 |
$300 |
2041 |
10.00% |
15.00% |
$300 |
$300 |
Flett Exchange will continue monitoring Washington, D.C. SREC markets and provide any additional updates as they are released.
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The DC market has been on a downward trend, moving against fundamentals based on the new RPS. However due to the grandfathering of the old DC renewable portfolio standard (RPS) buyers are not obligated to pay over $300 per SREC for some of their obligations. We are seeing just that happen now, lower SREC payments. It is unknown to how much of a supply the buyers have covered at the upper, new, RPS, level vs the old.
The normal reaction, in a quickly dropping SREC market, of a SREC seller is to hold. We've witnessed this in the OH, PA, NJ and MD markets and in most cases (except for NJ due to they passed legislation to correct/re-tune the RPS) it does not work. Holding in this situation creates a potential glut of SRECs for the next energy year, the carry over of unsold SRECs, and will push pricing even lower. New SREC sellers are calculated in at a lower SREC price and will be willing to sell at the new lower levels.
Kevin Flett
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.
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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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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.
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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New JerseyPennsylvaniaOhioMarylandWashington DCPress ReleasesSREC
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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.
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.
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.
TAGS:
New JerseyPennsylvaniaOhioMarylandWashington DCPress ReleasesSREC
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Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia SREC generators can register their solar systems in the District of Columbia. This provides the following SREC sellers the potential to sell their SRECs into the District of Columbia 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 Washington, DC and also registered within Washington, DC might not receive the same price of a purely sited Washington, DC SREC.
DC RPS Rules:
http://www.dcpsc.org/pdf_files/commorders/dcmr15/Chapter29.pdf
Filing Instructions for District of Columbia:
http://www.dcpsc.org/pdf_files/customerchoice/electric/Electric_fileInstruc.pdf
Applications (2 options):
Streamlined application (for generators that already have certification in the PJM region):
http://www.dcpsc.org/pdf_files/customerchoice/electric/Electric_Streamline_app.doc
Regular application (for generator that not been certified in the PJM region):
http://www.dcpsc.org/pdf_files/customerchoice/electric/Electric_application.doc
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Washington DCSREC
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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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Flett Exchange LLC announces the launch of its District of Columbia Solar Renewable Energy Certificate (SREC) market. Load Serving Entities in the State are required to purchase .4% of their total energy output from solar energy systems by 2020. 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 or at https://www.flettexchange.com/markets/washington-dc/market-data
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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Washington DC