Take advantage of the current incentive program while you may still qualify!
History of Massachusetts Renewables Portfolio Standard (RPS) and Solar Carve-Out
The Massachusetts Solar Renewable Energy (SREC) incentive program was implemented in response to the 2008 Green Communities Act that supports energy efficiency and encourages investment in renewable energy in our state.
The law requires each regulated electricity supplier/ provider serving retail customers in the state to include 15% qualifying renewables in the electricity it sells by December 31, 2020. The Massachusetts Department of Energy Resources (DOER) regulates the RPS and has developed a corresponding program and rules.
In 2010 the Massachusetts’ Solar Carve-Out program was developed to provide a means for solar renewable energy certificates (SRECs) to be created and verified based on the production of a solar system. This program allows electric suppliers to buy these certificates in order to meet their solar RPS requirements. All electric suppliers must use SRECs to demonstrate compliance with the RPS. All solar electric facilities in Massachusetts are eligible to participate in the program provided they meet certain criteria.
Solar Renewable Energy Certificates (SRECs) are Performance Based Incentives and offer a substantial revenue stream for owners of photovoltaic systems for up to 10 years!
An SREC is a tradable certificate that represents all the positive, renewable environmental attributes of electricity generated from a solar electric system. These certificates are created based on the solar production from a solar system. Each time a system generates 1,000 kilowatt hours (1 megawatt hour) of electricity, an SREC is created which can then be sold or traded.
The original program, referred to as SREC 1 was created as a Massachusetts specific solar carve-out of the New England REC market. In 2014 the program was expanded and the SREC 2 program was launched to bring Massachusetts to its goal of installing 1,600 MW of solar capacity by 2020.
The SREC 2 program, which is quite different than the initial program provides different incentive factors for specific market sectors. This means that the percentage of power production eligible for SREC aggregation will depend on the system size, location and how much power is being consumed onsite for facilities over 25 kW. This ranges between 70-100%.
The price or value of an SREC is established by the state and market availability, although the Department of Energy Resources (DOER) has created some market stability by offering a state Solar Credit Clearinghouse Auction. This Auction ensures that if SRECs are not able to be sold on the open market, they will be purchased by the state through this mechanism.
The state guaranteed floor price will diminish from $285-$189 per certificate over the 10 year period. In addition to the SREC incentive, the state has implemented a Solar Loan Program for residential systems offering low interest rates and additional moderate income based incentives. The SREC II program is further explained here on the DOER website.
Eligibility for Massachusetts Solar Carve Out Program
SRECs represent a significant potential revenue stream for PV owners, and we encourage all eligible system owners to take advantage of this program.
Please note that the current SREC program will soon be replaced with a new incentive program in 2018 which is not expected to be as lucrative but will bring a more stable, predictable form of additional income to solar system owners.
How Solar Renewable Energy Credits Can Benefit You!
A typical 5 kW sized solar system in MA will generate roughly 5 SRECs per year for the renewable electricity you produce. SREC’s are guaranteed payments from the utility companies or their representatives to you for 10 years. So, if you sell 5 of them each year and you are able to sell them for an average of $200 each over that timeframe, that’s about $1,000 a year for 10 years – or $10,000.
To get more information about how this all works, please call or email our our experts at Clean Energy Design, LLC. who can help get you a customized quote.
For more information on the Massachusetts Solar Carve Out program of 2017 please go to the DOER website.