William Nelson of Bloomberg New Energy Finance (BNEF) and Brad Browery of SRECTrade know Solar Renewable Energy (SREC) Markets like the back of their hands. Maybe better. They joined us for the latest edition of our Get Some Sun webinar series to offer their insights on the diverse and often complex nature of SREC markets. If you missed it or liked it so much you want to watch it again, here is the full recording for your viewing pleasure …
SRECs provide a way of accounting for a unit of solar energy produced. These certified units can be bought and sold, usually to electricity suppliers that are required to meet Renewable Portfolio Standards or similar renewable energy requirements. In doing so, they *should* provide a predictable revenue stream for solar projects. There are currently 8 or so states, primarily on the east coast, that have SREC markets driving solar development.
As Will and Brad point out, SREC markets have and will continue to deploy solar in a major way in many U.S. markets. However, SREC-driven solar growth has not been without hiccups. There have been a host of persistent issues that have challenged the efficiency and consistency with which the SREC model has supported the growth of solar. Most notably, SREC oversupply – the result of more than enough solar development to meet SREC requirements – has driven down their value in states like Pennsylvania. This in turn undermines the mechanism’s ability to support further solar development.
In light of this challenge, places like Delaware, Connecticut and Massachusetts have refined their SREC program designs – interesting variations that offer new ways to think about the long-term sustainability of these programs.
It remains essential to scrutinize the good, the bad and the ugly when it comes to this important solar policy mechanism so we can continue improving program design and building solar markets that offer consistent development opportunities.
For the real policy wonks and market regulars out there, be sure to check out the information on SRECTrade and BNEF early and often. Of particular interest is the quarterly SREC Market Monitor, a partnership of SRECTrade and GTM Research that offers the most primary historical and forward-looking analysis on seven SREC markets on the East Coast.