OK, so not exactly the Northeast but close enough. More importantly, Ohio’s solar market is very similar to those of neighboring states in that it is premised upon a RPS solar carve-out. 0.5% of Ohio’s total electricity supply by 2024, that is; half of which must be derived from in-state solar resources.
As we reported on back in March, there has been some solar trouble in Ohio. At that time, First Energy Corp had filed force majeure claiming they were unable to locate and secure a sufficient number of Solar Renewable Energy Credits (SRECs) to satisfy its 2010 solar obligation. Remarkably, this was the second year in a row First Energy filed for force majeure despite *good-faith* efforts. Two years of force majeure? Seems like there’d need to be a whole lot of good-faith going on. We’re not buying it. Again, our previous reporting details our doubts.
Despite *finding* 1,629 of the 3,206 SRECs required to meet their 2010 solar in-state obligation and refilling a force majeure application for a lesser amount, we are of the opinion that First Energy’s claims that Ohio’s solar market remains underdeveloped is the very reason to implement a solar carve-out.
And although indications are that First Energy will be soliciting for long-term SREC contracts moving forward (10-year terms), the absence of these opportunities was undoubtedly the primary reason that First Energy was unable to *find* sufficient SRECs in 2009 and 2010.
As experience from other neighboring markets demonstrates (e.g., Pennsylvania), of which First Energy is also active we might add, new and substantial solar development in any nascent market requires long-term revenue certainty for project developers and financiers. Without question, long-term SREC contracts can provide this requisite certainty.
Despite pushback from industry and a variety of other intervening stakeholders, including us, on August 3, 2011 the PUCO granted First Energy’s force majeure application. We can only hope that First Energy’s recently approved RFP to purchase SRECs through 10-year contracts will be enough good faith.
And as an aside, we will be closely watching developments around the Governor’s 21st Century Energy & Economic Summit coming up in September. But don’t go running off to get your ticket, invite only. Unfortunately we didn’t get the invite, but even more troubling, neither did any of our knowledgeable industry representatives. Some others did though. Stay tuned…
The Solar Northeast signing off.