Oversubscribed SREC Market Threatens Future Growth of Solar in DC

Posted on November 19, 2010. Filed under: News, Uncategorized | Tags: , , , , , , , , , |

Solar installations in the District of Columbia have been growing rapidly over the last several years thanks to the District’s popular Renenewable Energy Incentive Program (REIP) as well as numerous Solar Co-Ops that have sprung up around the city. But the growing number of residents and businesses in the District taking advantage of solar is also growing because of the Renewable Portfolio Standard (RPS). An RPS requires electricity suppliers to generate a certain percenatage of their load with renewable energy. The solar carve out DC’s RPS requires suppliers to include .028% solar in 2010 and escalates to require .35% in 2019.

 How does this impact people who want to install solar? In order to meet these requirements, suppliers purchase Solar Renewable Energy Credits from solar installations. For every 1000kwh a solar system generation, one SREC is created. Owners of a solar installation are paid for these credits as long as electricity suppliers need to buy them to meet the RPS. The price of credits varies based on the Alternative Compliance Payment that utilities must pay if they do not meet the RPS as well as the supply of SRECs in the market.

Currently, the DC market is in trouble. According to Sol Systems, the market is severely oversupplied with over 16,000 more SRECs being created than required by the RPS. 10,000 of these are out-of-state SRECs from a large 10MW solar generator in Illinois. This generator was accepted into the DC market because at the legislation is currently written, generators from the PJM region can sell SRECs into the DC market.

If amendments are not made, it is likely that the DC SREC market will crash in the near future and an important source of financing for DC solar installations will decline or dissappear.

The solar community lead by Sol Systems and the Mt. Pleasant Solar Co-Op are reaching out to DC Council members to push for legislation that will change the RPS regulations to expand the DC SREC market and include a carve out for SRECs produced in DC.

If you’re a DC resident, let your elected official know that you support solar in DC through a strong SREC market. Clean Currents has joined Sol Systems and others in the solar community in reaching out to Councilmember Mary Cheh about on this issue and hope she will be an advocate for improving the DC RPS.  Stay posted for Action Alerts from Clean Currently if (when!) important RPS legislation is considered by the DC Council.

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