Will SRECs Save the U.S. Solar Industry?
California may be the America’s reigning Little Germany for PVinstallations, but states with Solar Renewable Energy Credit (SREC)markets may be where new solar dreams are made. Results from theinaugural SEIA/GTM Research U.S. SolarInsight™ (to be launched at Solar Power International in mid-October) show that the seven states with SREC markets haveinstalled a combined 110 MWdc in the first half of 2010. If second half installations continue at a similar pace, year-on-year growth will beover 148% in these states, dwarfing a 28% year-on-year growth for theoverall U.S. market’s pace. In actuality, growth rates for all marketswill be higher, as SEIA/GTM Research forecasts nearly 870 MWdc of U.S.PV installations in 2010, owing to uniformly strong second half surges.
New Jersey clearly leads SREC states with a phenomenal 59.4 MWdcinstalled in the first half of 2010 — already surpassing last year’stotal installed capacity. However, the remaining SREC states ofDelaware, Maryland, Massachusetts, North Carolina, Ohio and Pennsylvania are also rocketing off with a combined 33.6 MW installed in the secondquarter alone. As covered in PVNews’ October issue, Pennsylvania installations this year have reached a stellar 14.4 MW –despite the lack of any new utility solar projects — in the first halfof 2010 from just 3.9 MW in 2009.
SRECs are specialized tradable renewable/alternative energy credits(measured in MWh) created by generation portfolio standards that require a certain percentage of the utilities’ electricity to be generated from solar. Due to this PV “carve-out,” SRECs have a built-in premium incomparison to RECs from other sources. The price of SRECs is determined by the supply of solar generation and the demand to meet state RPSrequirements, with a price ceiling created by the Solar AlternativeCompliance Payment (SACP) — the penalty that electricity suppliers must pay if they fail to acquire the requisite SRECs. In some states, likeMassachusetts, a price floor is created to lessen the risk offluctuating SREC prices.
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