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Ohio solar renewable energy credit markets rebound after recent plunge

Rebounding from recent weakness, Ohio in-state solar renewable energy credit prices at the over-the-counter market swung higher during the week ended Aug. 8.

Losing a cumulative $10 in the prior two weeks due to recently passed legislation that would eliminate the state's solar carve-out starting in 2020, Ohio 2019 in-state SRECs were up 11 cents to $6.94/MWh. Ohio 2020 in-state SRECs were priced at an index of $8.50/MWh, gaining 50 cents from the week before.

The impact of the legislation could push Ohio in-state SREC prices down to the $4.00/MWh level, analysts have noted. 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, they added.

The legislation signed into law by Ohio 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. During the week ended Aug. 8, Ohio-located 2019 RECs were down 2 cents week over week to an average at $5.36/MWh, while 2020 RECs also dropped 2 cents in value to $5.60/MWh.

Running higher a week earlier, New Jersey SREC markets continued to advance due to ongoing active interest from the buy-side. Energy-year 2019 SRECs notched a weekly index at $234.92/MWh, up 9 cents, while energy-year 2020 SRECs came in at $229.58/MWh, increasing 33 cents week over week.

Class I REC prices in the Garden State were aimed slightly higher as well during the week of Aug. 8. New Jersey vintage 2019 class I RECs gained 2 cents to an index at $6.28/MWh. Vintage 2020 class I RECs in the state posted an average for the week at $6.41/MWh, rising 6 cents from prior assessments.

To the north in Massachusetts, prices for 2019 and 2020 SREC Is were flat to mostly stronger during the week ended Aug. 8. Massachusetts 2019 SREC I prices were steady at $381.08/MWh, as 2020 SREC Is rose $1.25 to $347.08/MWh. Massachusetts 2019 SREC IIs were up 42 cents to $303.50/MWh, and 2020 SREC IIs increased $1 on the week to $288.00/MWh.

All of the SREC Is and SREC IIs submitted 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.

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