To our NH customers,

We and our installer partners have been receiving a lot of questions regarding the recent REC payment.  I hope this brings some clarity as to why the sudden drop in the REC price.

The significant drop in the per REC price is due to a reduction in the demand for RECs.  New Hampshire’s Renewable Portfolio Standard (RPS) statute, RSA 362-F that created the demand for solar RECs, requires each electricity provider (utility company) to meet customer load by Purchasing or Acquiring certificates that represent generation from renewable energy sources based on total megawatt-hours supplied.  The RPS for a Class II solar facility is set at a very small .3% of the electricity sold each year.  Without an increase in this percentage rate, the supply has already and will continue to far exceed the demand.

As stated above, there are two ways the electricity provider can satisfy their RPS obligation They can either Purchase RECs or Acquire them.

Purchase – Renewable Energy Credits (RECs) from facilities registered to create RECs can be sold to the electricity provider.  All Knollwood Energy customers are in this category.  The price the utility pays for a REC is based on supply and demand.

Acquire – The electricity providers are allowed by state law to subtract a percentage of all net metered systems that DO NOT REGISTER TO CREATE RECs from their RPS obligations.  By subtracting this percentage, the electricity provider is able to take a percentage of these facilities and satisfy some of  their requirement for FREE.  It is impossible to be able to predict how much the utility will be able to acquire from unregistered systems.  Basically, using a set formula, the state determined that there was about 18MW of solar installed but not registered for RECs.  Again, according to the formula established by the legislature, this reduced the demand from .3% to .06%, or dropping the requirement to purchase by about 80%.  As soon as this information became public, demand for the RECs plummeted and prices fell.

As shown above, there is a growing problem in the class II solar REC market.  Since the RPS requirement is very small,  1)  The utilities are able to satisfy a significant amount of their RPS requirement without the need to purchase RECs because many new and older arrays are not register for RECs.  2)  As more systems are being installed, the supply exceeds the demand.

Legislation to increase the demand for SRECs, SB129 is going to be voted on June 1, 2017.  It is imperative that this bill is passed.  It does not address that the utilities can satisfy some of their requirement for free but it does increase the base level of demand.

http://gencourt.state.nh.us/bill_Status/billText.aspx?sy=2017&id=957&txtFormat=html

What you can do to increase the demand for solar in NH:

Contact your legislature and encourage them to vote for SB129.

All solar arrays regardless of how old must be registered for RECs.  Please have everyone you know with a solar array contact Knollwood Energy asap.

Thanks,

Alane Lakritz

President

Knollwood Energy of MA LLC

862-432-0259

www.KnollwoodEnergy.com

Your best resource for selling and buying Renewable Energy Credits!

A reminder to our customers: Knollwood Energy handles all of the paperwork required to submit the Statement of Qualification application and file the extension paperwork on behalf of our customers.

Update from DOER: The Department of Energy Resources has finalized the SREC Factors to be applied to those SREC II projects that seek a good cause construction deadline extension through the start of the Solar Massachusetts Renewable Target (SMART) program.

All Solar Carve-out II Renewable Generation Units that currently have a Statement of Qualification and have not yet obtained an extension as of today will have their Statements of Qualification revoked and have their application status changed to “rejected.” Once rejected, these applicants may submit new applications for these facilities and seek extensions for good cause. Any extension obtained shall be effective until March 31, 2018 at the factors listed below. Facilities that can demonstrate that they are mechanically complete or commercially operational by a date later than March 31, 2018, but earlier than the effective date of the SMART program, will continue to have their SREC Factors reduced as prescribed in the SREC Factor Guideline.

Under the terms of the extension, a solar facility that:
1. has not received an extension to the deadlines set forth in 225 CMR 14.05 (9)(s)4.a. prior to the effective date of the revised SREC Factor Guideline;
2. receives an extension for good cause pursuant to 225 CMR 14.05(9)(s)4.c.; and
3. can demonstrate that they are mechanically complete or commercially operational by March 31, 2018

will receive the SREC Factors identified in the following table, pursuant to the SREC Factor Guideline.

Market Sector          SREC Factor

A                                 0.7

B                                 0.6

C                                 0.55

Managed Growth    0.5

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.

To qualify for a good cause extension, an applicant must submit a new application through DOER’s online Statement of Qualification Application. The applicant must then fill out the SREC II Good Cause Extension Request Form, and email the form to DOER.SREC@state.ma.us with the subject line “SREC II Reduced Factor Good Cause Extension Request”.

If you have any questions on this extension, send them to DOER.SREC@state.ma.us.

Here’s an update from the Massachusetts Department of Energy Resources (DOER) regarding the next solar incentive program:

On January 31, 2017 DOER presented the final design for the next solar incentive program, the Solar Massachusetts Renewable Target (SMART) Program.  The presentation can be found here, along with an audio recording of the meeting.

In addition to presenting the final proposal for the SMART Program, DOER also announced a plan to provide an orderly transition from the SREC II Program as the development of the SMART Program is finalized.  In order to ensure that there is not a significant gap in between the programs, projects over 25 kW DC can now receive an extension to their construction deadlines under the SREC II Program until the SMART Program goes into effect. Projects that apply for and receive this extension will be qualified with a reduced SREC Factor according to their  Market Sector classification. The proposed SREC Factors under this extension are as follows:

Market Sector                   SREC Factor

A                                          0.7

B                                          0.6

C                                          0.55

Managed Growth.            0.5

Interconnected projects 25 kW DC and less will continue to be qualified at an SREC Factor of 0.8 until the next program begins.

DOER has updated the SREC Factor Guideline and the Extension Guideline to reflect these changes, and will be accepting comment on the revised Guidelines through February 17, 2017.  Please direct comments to the SREC Inbox at DOER.SREC@state.ma.us.

Regards,

Michael Judge

Director, Renewables Division

Department of Energy Resources

The Massachusetts Department of Energy Resources (DOER) announces plans for the next generation solar incentive program and transition to the new program from the the current SREC 2 program. The following is information from DOER:

Final Proposal for Next Generation Incentive Program 

DOER would like to invite stakeholders to attend a briefing on January 31, 2017 at which the final proposal for the design of the next generation incentive program will be presented to the public. This proposal will be used by DOER as the framework for the regulation to implement the program, which DOER plans to file in the coming weeks.

We thank all of the stakeholders who have participated over the last several months in working with DOER to develop a long-term, stable, and sustainable solar program as envisioned by An Act Relative to Solar Energy signed into law by Governor Baker in 2016. Our next program will enable the Commonwealth to continue the robust growth in solar development while doing so at a reasonable cost for ratepayers.  This program is another step forward in accomplishing our mission to create a clean, affordable, resilient energy future for Massachusetts.

The following is an update on the Massachusetts solar successor incentive program stakeholder process prepared by the DOER and presented at the most recent stakeholder meeting held on December 1.
A revised incentive program proposal is currently being developed, and it is anticipated that this will be available later this month.  The DOER is committed to filing emergency regulations for the successor program in January, and has reaffirmed that the gap between SREC II and the new program is a priority issue they are addressing.

Click here to view the report.

Update from DOER:

“In February of 2016, the Department of Energy Resources (DOER) selected Sustainable Energy Advantage, LLC (SEA) to analyze and compare solar program design alternatives. SEA’s report completes two main tasks:
1.  Evaluate current solar costs, revenue requirements and needed incentive levels across multiple types of solar projects;
2.  Compare the costs of program alternatives based on the revenue requirements determined in Task 1.

The solar program options that are analyzed in the report include a declining block tariff, a competitive bid/ standard offer, and SREC III.
The SEA Report and accompanying revenue and incentive requirement workbooks are now posted to DOER’s website for stakeholders to review.”

Regards,
Michael Judge
Director, Alternative and Renewable Energy Division
Department of Energy Resources

NOTE:  If you are already in either SREC 1 or SREC 2 program, you are in that program, and the following does not apply:

Are you wondering about what happens before and after 1/8/2017 with the Massachusetts Solar Renewable Energy Credit II program and before the start of Incentive 3? We hope the following will help to clarify the changes for you:

A message from The Department of Energy Resources: “DOER has spent the past few months working on the development of the next solar incentive program for the Commonwealth. At this time, the Department would like to share the straw proposal for the design of the program with all interested stakeholders. As such, we will be holding a public meeting at the following date and location to present our proposal:

As the Federal Reserve Building requires a list of all attendees in advance of the meeting, please fill out the following form to RSVP if you would like to attend:

https://goo.gl/forms/NI3kARKiRNuTtYT93

If you plan on attending, please RSVP by 5:00PM, Tuesday September 20.”

Regards,

Michael Judge

Director, Renewable and Alternative Energy Development

Massachusetts Department of Energy Resources