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Mass. solar I, II renewable energy credit prices sink amid lackluster buying


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Mass. solar I, II renewable energy credit prices sink amid lackluster buying

During the week ended May 23, over-the-counter solar renewable energy credit markets were volatile, holding firm in New Jersey, swinging higher in Maryland and tumbling in Pennsylvania and Massachusetts.

Massachusetts SREC I and II prices sank sharply as buying interest waned. The Massachusetts vintage 2018 solar I market was assessed at an index of $404.83/MWh, with the vintage 2019 SREC I market eyed at $380.92/MWh, losing $12 to $14 on the week. Massachusetts vintage 2018 SREC IIs notched an average at $301.50/MWh, with vintage 2019 SREC IIs coming in at $302.92/MWh, tumbling $29.00 and $14.50, respectively, from the week before.

As usual, 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.

"Given current market pricing, SRECs and SREC IIs sold outside of the auction will likely be substantially more valuable to owners and will avoid unnecessary Alternative Compliance Payments being made by retail electricity suppliers," the agency added.

In Massachusetts, the Alternative Compliance Payments rates for the 2018 compliance year are $426/MWh for solar I and $350/MWh for solar II.

Elsewhere, buying interest worked to lift Maryland SREC prices, with reporting year 2019 SRECs priced at $73.75/MWh, rising almost $13 week over week. Maryland reporting year 2020 SRECs were up more than $7 on the week to an index at $67.00/MWh.

Republican Gov. Larry Hogan said he will allow Maryland Senate Bill 516, which will hike the state's renewable portfolio standard, to become law without his signature. The bill will require the state to get half of its energy from renewable sources by 2030. In early April, Maryland SREC prices spiked $30 after the legislation was approved and made its way to the governor.

New Jersey solar markets were unchanged during the week ended May 23 amid limited buying activity. Garden State energy year 2019 SRECs were flat at an average of $231.08/MWh, and energy year 2020 SRECs were steady at $231.42/MWh.

Following recent strength, Pennsylvania SREC markets eased during the week ended May 23. Pennsylvania reporting year 2019 SRECs ran at $43.75/MWh, down 83 cents, with reporting year 2020 SRECs assessed at $50.67/MWh, faltering $1.50 on the week.

Pennsylvania solar prices had been aimed higher in recent weeks, drawing support from 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.

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