Overview of Massachusetts SREC Program
What is a SREC? Solar Renewable Energy Certificates (SREC) are created from every megawatt hour of electricity produced by a solar generator. A 10 kW system produces about 12 SREC’s a year. SRECs are sold separately from electricity and are created regardless of the electricity is used on site or sold elsewhere.
Who buys SRECs? Electricity suppliers must buy SRECs to meet the Massachusetts RPS requirement. A Solar Alternative Compliance Payment (SACP) of $550 per megawatt hour is charged by the state if they do not comply. This effectively sets a ceiling price for SRECs. The state has set the requirement for the SREC program at 52 megawatts of solar in 2011. The equivalent of approximately 63,000 SRECs in 2011.
How do your sell SRECs? Since individual solar owners do not produce enough SRECs to sell directly to buyers an intermediary must exist. Solar Farm Bank (SFB) is the link that connects buyer s and sellers.
How much are Massachusetts SRECs worth? The State of Massachusetts has set a mart for SRECs that creates a price range of $300- $600 per SREC. There are several levers available to the state to ensure that pricing stays within this range. In years where there is an SREC shortage, pricing will be close to $600. If there is oversupply of SRECs then market prices will be at or near $300. The state ensures this floor price by having a last chance fixed-pricing auction at the end of the year. Buyers can bid to purchase the SRECs that are available at $300 per SREC. If there are still unsold SRECs remaining after this auction the state will adjust the capacity requirements for the following year to compensate for the surplus and increase the life of the unsold SRECs from 2 years to 3 years, ensuring a stable SREC price. This gives solar owners an assurance that prices will be above $300.
Massachusetts SREC Program Logistics
- SFB will submit your PV project application to the Department of Energy Resources (DOER). Once this application is approved , the solar system will be added to the NEPOOL-GIS tracking Platform.
- The solar electricity generation is reported to the Production Tracking System (PTS). PTS will then transfer the data to SFB’s GIS account.
- SFB will mint quarterly to GIS, on a one quarter delay, for sale.
- Each SREC must be opted into the last chance fixed-price auction if unsold at the end of the year. Facilities are eligible for auction for up to 10 years. SRECs are re-minted and granted additional life when placed in the auction.
Quarterly SREC Creation Dates
|Q1||Jan – Mar||July 15th|
|Q2||Apr – Jun||October 15th|
|Q3||Jul – Sep||January 15th|
|Q4||Oct – Dec||April 15th|
Solar Farm Bank Aggregation Logistics
- Form for enrollment sent to SFB
- SFB prepares and submits your application to the DOER for approval and sets up your SREC account.
- Once set up your reading will be reported to NEPOOL-GIS.
- SFB canvas in to BOTH the commodities market and public auctions to secure the strongest value for you SRECs.
- Payment is made by check directly for the completed sale.