After spiraling lower during the final week of July, over-the-counter prices for in-state solar renewable energy credits in Ohio were mixed during the week ended Aug. 1, still reeling after legislation was passed that would eliminate the state's solar carve-out starting in 2020.
Dropping $7 the week prior, Ohio 2019 in-state solar RECs were down almost $3 during the week ended Aug. 1 to $6.83/MWh. Ohio 2020 in-state solar RECs, which dropped $14.50/MWh in the prior week, rose 13 cents to an average of $8.13/MWh.
Market analysts anticipate the impact of the legislation will ultimately work to push Ohio in-state SREC prices down to the $4.00/MWh level. Although it remains unclear, it is likely that Ohio-generated SRECs will be eligible to be sold in the Pennsylvania Tier I REC and Ohio REC market instead, analysts said.
The Ohio legislation signed into law by Gov. Mike DeWine at the end of July would also lower and freeze the state's renewable energy mandate from 12.5% to 8.5% in 2026. As of Aug. 1, Ohio-located 2019 RECs came in at $5.38/MWh, up 7 cents, while 2020 RECs saw an index at $5.62/MWh, losing 1 cent week over week.
In Massachusetts, prices for 2019 and 2020 SREC Is were again unchanged on the week at $381.08/MWh and $345.83/MWh, respectively. Prices for Massachusetts 2019 SREC IIs eased 34 cents to $303.08/MWh, while 2020 SREC IIs were steady at $287.00/MWh.
Although results are still being finalized, all of the SREC Is and SREC IIs submitted were sold in the first round of the Massachusetts Annual Solar Clearinghouse Auction on July 25. According to the Massachusetts Department of Energy Resources, 21 entities bid on 9,780 SREC Is, above the available auction volume of 632 credits. Additionally, 21 entities bid on 63,388 SREC IIs, well above the available auction volume of 4,626 SREC IIs.
The auction serves 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 credits 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.
In New Jersey, SREC markets were aimed higher during the week ended Aug. 1 due to increased buying interest. Energy-year 2019 SRECs in the Garden State were eyed at $234.83/MWh, up $2.25, while energy-year 2020 SRECs were priced at $229.25/MWh, rising 75 cents from the week before.