SREC II Extension

In recognition of the time necessary to fully implement the new Solar Massachusetts Renewable Target (SMART) program and its obligation to have an orderly transition between the SREC II and SMART programs, DOER will grant good cause extension requests for projects that seek one. Under the terms of the extension, SREC II systems that qualify and can demonstrate that they are mechanically complete or operational by March 31, 2018 will receive the following SREC Factors, pursuant to the SREC Factor Guideline pdf format of SREC Factor Guideline
(NOTE: SREC II systems with a capacity equal to or less than 25 kW DC will still receive an SREC Factor of 0.8, provided the facility receives its authorization to interconnect before the effective date of the SMART program).

Market Sector

Mechanically Complete by 1/8/2017

Mechanically Complete (& 50% of Construction Cost Expended) by 5/8/2017

Mechanically Complete by 3/31/2018

Mechanically Complete After 3/31/2018

A (<= 25 kW)

1.0

0.8

0.8

0.8

A (>25 kW)

1.0

0.8

0.7

0.65

B

0.9

0.7

0.6

0.55

C

0.8

0.65

0.55

0.5

Managed Growth

0.7

0.55

0.5

0.45

In order to obtain an extension for good cause, facilities must submit a Statement of Qualification Application through the online SQA, and then complete and submit the following Good Cause Extension Request Form to DOER.SREC@state.ma.us:

SREC II Good Cause Extension Request docx format of Good Cause Extension Request Form

Minimum Standard

Each Retail Electricity Supplier, both regulated utilities and competitive suppliers, must demonstrate to DOER in an Annual Compliance Filing that it complied with the RPS Minimum Standard for the prior calendar year (Compliance Year). The Minimum Standard for the Class I Solar Carve-Out II is the percentage of a Supplier's total retail load obligation that must be met by the ownership of Solar Carve-Out II Renewable Energy Certificates (SREC IIs) issued by the NEPOOL GIS, with each SREC II signifying one MWh of electrical energy from a Generation Unit that has been qualified by DOER under the Solar Carve-Out II Program.

The Solar Carve-Out II Minimum Standard is part of, not in addition to, the RPS Class I Minimum Standard. The Minimum Standard for the RPS Class I Solar Carve-Out II of each year is calculated and announced in accordance with the provisions of the RPS Class I Regulation in 225 CMR 14.07(2). More details on the methodology used to calculate the Minimum Standards for Compliance Years 2016 and 2017 can be found below.

RPS Class I Solar Carve-Out II Compliance Obligations and Minimum Standards

Compliance Year

Compliance Obligation (MWh)

Total Retail Load Obligation from 2 Years Prior (MWh)

Solar Carve-Out II Minimum Standard (%)

2014

41,279

48,992,429

0.0843%

2015

161,958

49,252,581

0.3288%

2016

377,877

48,192,291

0.7851%

2017

1,374,406

48,009,721

2.8628%

2018

1,952,434

46,864,431

4.1661%

2018 Minimum Standard

DOER has calculated what the 2018 SREC II Compliance Obligation and Minimum Standard will be for load under contracts signed after May 8, 2016. DOER has determined that the Compliance Obligation will be approximately 1,952,434 MWh and that the Minimum Standard will be approximately 4.1661%, which is a small increase from the preliminary Minimum Standard announced in July. The 2018 Compliance Obligation for load under contracts signed on or before May 8, 2016 will be approximately 1,302,902 MWh and a final Minimum Standard of 2.7802%. The details of how the final Minimum Standards are calculated can be found here:

CY2018 Calculation of Minimum Standard Guideline xlsx format of CY2018 Calculation of Minimum Standard Guideline

Pursuant to 225 CMR 14.07(3)(a)1, all Retail Electricity Suppliers are exempt from any incremental obligations resulting from the provisions contained in the RPS Class I Emergency Regulation filed on April 8, 2016, which expanded the Solar Carve-out II (SREC II) Program Capacity Cap. As such, it was necessary for DOER to establish a baseline Compliance Obligation and Minimum Standard that would have applied had the Emergency Regulation not been filed.

To determine this baseline Minimum Standard, DOER first determined the amount of capacity that it expects would have been in operation had the SREC II Program Capacity Cap not been expanded. This amount is estimated to be the equivalent of approximately 947.7 MW.

Having determined this value, DOER analyzed the percentage shares of MW currently qualified under each of the four SREC II Market Sectors, and multiplied each of these percentages by 947.7 MW. Next, DOER multiplied these totals by the corresponding SREC Factors, a 13.71% expected capacity factor, and 8,760 hrs/year and determined the expected MWh/year for 2018 that would have resulted had the SREC II Program Capacity Cap not been expanded. Lastly, DOER added the auction volume and banked SREC II volume from the 2016 Compliance Filings. In calculating the auction volume for the CY-2 input, DOER estimated the number of SRECs generated by facilities that were both qualified after the extension went into effect on April 8, 2016 and were interconnected and generated SRECs in 2016. Based on the application data that was available, DOER estimated that approximately 45,000 additional SRECs were created as a result of the extension; therefore the Auction volume calculated for CY-2 for the baseline is 45,000 less than the actual Auction total for that year. This resulted in a reduction of the baseline Compliance Obligation and Minimum Standard from the preliminary ones announced last month and yielded a total final baseline Compliance Obligation of approximately 1,302,902 MWh and a final Minimum Standard of 2.7802%:

 

Market Sector% Share of Qualified CapacityMW at Original SREC II CapSREC FactorCapacity FactorHrs/YearExpected MWh
Market Sector A55%5171.013.71%8,760621,221
Market Sector B20%1910.913.71%8,760206,922
Market Sector C17%1630.813.71%8,760156,796
Managed Growth8%760.713.71%8,76063,783
 Total Generation1,048,677
Rollover Auction Volume (CY-3)45,856
Rollover Auction Volume (CY-2)198,377
Banked Volume9,992
Total Obligation1,302,902

Prior Minimum Standard Calculations

CY 2017 Calculation of Minimum Standard Guideline xlsx format of Determination of the CY 2017 Total Compliance

CY 2016 Calculation of Minimum Standard Guideline xlsx format of CY 2016 Calculation of Minimum Standard Guideline

Alternative Compliance Payments and the Solar Credit Clearinghouse II

A retail electricity supplier with a compliance obligation must pay one Alternative Compliance Payment (ACP) for every MWh of its compliance obligation that it does not meet with an SREC II. The ACP rate provides a price ceiling for the market.

The Solar Credit Clearinghouse II Auction is a fixed price auction that takes place following the close of each NEPOOL GIS trading year. SREC II owners that are unable to sell their SREC IIs by the close of the trading year are able to make deposits into the account. Bids are then received for the volume of SREC IIs that bidders wish to buy at the fixed price established by regulation. All deposits are assessed a 5% fee by DOER, resulting in payments to depositors that are 95% of the value paid by bidders.

The following table reflects the schedule of ACP Rates and the Auction Bid Prices found in the RPS Class I Regulation (225 CMR 14.00):

Solar Carve-Out II Auction and ACP Price Schedule

Compliance Year

Auction Bid Price

Minus 5% Auction Fee

ACP Rate per MWh

2014

$300

$285.00

$375

2015

$300

$285.00

$375

2016

$300

$285.00

$350

2017

$285

$270.75

$350

2018

$271

$257.45

$350

2019

$257

$244.15

$333

2020

$244

$231.80

$316

2021

$232

$220.40

$300

2022

$221

$209.95

$285

2023

$210

$199.50

$271

2024

$199

$189.05

$257

2025

$189

$179.55

$244

2026

$180

$171.00

$232

2027

$171

$162.45

$220

Managed Growth Capacity Blocks

The 2017 Managed Growth Capacity Block has been set at zero megawatts. DOER has released the following analysis relating to its calculation of the 2017 Managed Growth Capacity Block.

2017 Managed Growth Calculation Guideline xlsx format of 2017 Managed Growth Calculation Guideline

2016 Managed Growth Calculation Guideline xlsx format of 2016 Managed Growth Calculation Guideline

Managed Growth Capacity Block Allocations

The following is a list of projects that have received an Assurance of Qualification and have been allocated a position under a Managed Growth Annual Capacity Block. Projects on the Waiting List are also listed.

Managed Growth Capacity Block Allocations xlsx format of Managed Growth Capacity Block Allocations

Qualified Projects

DOER has granted Statements of Qualification to the following Generation Units: Solar Carve-Out II Qualified Units xlsx format of Solar Carve-Out II Qualified Units
file size 9MB

Calculation of Solar PV Capacity Factor

As required by regulation, DOER completed an analysis of the average solar PV capacity factor for projects participating in the Solar Carve-Out. Using six years of production data from January 2010 through December 2015, DOER determined that the average capacity factor of systems operating during this period was 13.51%. This new capacity factor was used to help project the number of SRECs that will be generated in 2017 as part of the DOER’s Determination of CY2017 Total Compliance Obligation. The details of how this calculation was made can be found in the Determination of Average Solar PV Capacity Factor xlsx format of Determination of Average Solar PV Capacity Factor
file size 5MB