Solar renewable energy credit markets continued their mixed ways to conclude May, sliding again in New Jersey but strengthening further in Pennsylvania and Maryland.
Maryland SREC prices advanced again in value, market sources said, as legislation that will increase the state's renewable portfolio standard became law. During the week ended May 30, Maryland reporting year 2019 SRECs were priced at $75.00/MWh, up $1.25, while 2020 SRECs were assessed at $70.50/MWh, increasing $3.50 week on week.
Maryland Gov. Larry Hogan allowed Senate Bill 516 to become law without his signature. The bill will require the state to get half of its energy from renewable sources by 2030. In addition to the 2030 targets, the legislation will require the state to conduct research on strategies to reach 100% renewable energy sources by 2040, among other initiatives.
Hogan, while expressing his concern that the bill is flawed, said he would allow it to become law without his signature in the hopes of "opening the door for a productive conversation to truly advance clean and renewable energy in our state," according to a May 22 letter to state Senate President Thomas "Mike" Miller Jr. In early April, as the bill made its way to the governor's desk, Maryland SREC prices spiked $30.
Pennsylvania SREC prices were firm to higher at the end of May. Pennsylvania reporting year 2019 SRECs were unchanged on the week at an average of $43.75/MWh, as reporting year 2020 SRECs were priced at $51.00/MWh, up 33 cents week over week.
In recent weeks, Pennsylvania SREC markets advanced amid the introduction of legislation in the Pennsylvania General Assembly designed to increase the demand for wind and solar in the state. Under Senate Bill 600, the state's alternative energy portfolio standard would be updated for the first time since it was established in 2004. The bill would expand the Tier I requirement from 8% by 2021 to 30% by 2030 and would expand the solar carve-out from 0.5% by 2021 to 10% by 2030.
In the New Jersey solar market, prices extended lower due to ongoing lackluster buying interest. Energy year 2019 SRECs in New Jersey came in at $230.67/MWh, easing about 50 cents. Garden State energy year 2020 SRECs lost nearly $1 from the week prior to post an index at $230.50/MWh during the period under review.
Following sharp losses the week before, Massachusetts SREC I and II markets were mixed but mostly higher to round out the month. The Massachusetts vintage 2018 solar I market saw an index at $397.50/MWh, declining nearly $7.50 from the week before. The Massachusetts vintage 2019 SREC I market was assessed at $381.50/MWh during the week ended May 30, up more than 50 cents. Massachusetts vintage 2018 SREC IIs rose $2 to $303.50/MWh, with vintage 2019 SREC IIs up $3 on the week to $305.92/MWh.
The Massachusetts Department of Energy Resources, or DOER, will hold the state's annual clearinghouse auction in July. The auction is designed as a price support mechanism for the market in years when more SRECs are produced than compliance buyers need.
The SREC compliance obligation — the amount of SRECs suppliers are required to purchase in any given year — is determined by a formula that takes into account the amount of SRECs to be generated, SRECs banked from previous periods, and the number of SRECs deposited and purchased in the clearinghouse auction.
The DOER said auction accounts are now open for deposits, which will be accepted through June 15. However, because the SREC I and II markets are undersupplied, the agency said it does not anticipate that there will be a need for deposits into either auction I or II accounts this year. The DOER is encouraging entities to sell their SRECs in the over-the-counter market before the June 15 deadline.