Massachusetts, through the Department of Energy Resources
(DOER), announced it has received more than 550 megawatts (MW) of
Statement of Qualification Applications (SQAs) to date for solar
projects seeking to qualify as a Solar Carve-Out Generation Unit
capable of creating valuable Massachusetts solar renewable energy
credits (SRECs). This remarkable level of activity far exceeds the
goals of Governor Patrick's administration to achieve 250 MW of
solar in the Commonwealth by 2017 and satisfies a regulatory cap of
400 MW of solar that will be able to qualify for the Massachusetts
Renewable Portfolio Standard (RPS) Solar Carve-Out program. Because
of the tremendous volume of applications, DOER is certain that more
than 400 MW of the applications received are administratively
complete.
This announcement comes on the heels of a recent announcement by
Governor Patrick's administration of a new goal for 1,600 MW of
solar generation to be installed in the Commonwealth by 2020 and
DOER's announcement that, for the first time, SRECs had been
deposited in the Solar Credit Clearinghouse Auction account in
anticipation of the first-ever Solar Credit Clearinghouse Auction,
scheduled for July 26.
What Does This Mean for Massachusetts Solar
Stakeholders?
Although most market participants have been aware of the intense
solar development in Massachusetts in the past year or two, few (if
any) could have forecasted the 400 MW Solar Carve-Out regulatory
cap would be reached by mid-2013, four years ahead of the initial
goal of 250 MW by 2017. Solar projects that ultimately do not
receive a Statement of Qualification as a result of the cap being
reached will still be able to qualify as RPS Class I Renewable
Generation Units capable of producing conventional Class I
Renewable Energy Credits (RECs). However, conventional Class I RECs
have sold for substantially less money in the marketplace when
compared with SRECs (which are available only to Solar Carve-Out
units) since the inception of the Solar Carve-Out program.
DOER will continue to accept applications and will allow two weeks
for applicants to address any deficiencies before rejecting the
applications. However, applications submitted at this time are not
guaranteed to be granted a Statement of Qualification; further,
this current practice is anticipated to continue only until June 7,
when DOER anticipates promulgating the proposed revisions to the
Solar Carve-Out regulations, which will include a new Assurance of
Qualification process. DOER has requested that developers submit
applications only for projects that are well-prepared for
construction and voluntarily withdraw applications or SQAs for
projects that are not in active development.
What's Next?
DOER has committed that, no later than June 4, it will post on its
website the current list of projects that have received or will
receive a Statement of Qualification. Further, DOER has indicated
that it will post a list of projects, in order of their eligibility
for qualification, that have SQAs deemed administratively complete
but exceeding the 400 MW cap of qualified capacity, as well as a
list of pending applications under review.
DOER is scheduled to announce its proposed post-400 MW solar
program on June 7 in response to input solicited on the issue from
various solar industry stakeholders. With a new goal of 1,600 MW by
2020, the June 7 unveiling of proposed new rules for solar
exceeding the current 400 MW cap will certainly shape whether and
how future projects may benefit from Massachusetts' solar
initiatives. In the meantime, DOER stated it will work diligently
to explore opportunities to maintain market activity and keep
stakeholders informed.
Day Pitney LLP's energy team will continue to keep our clients
and friends abreast of the latest developments in this
ever-changing and expanding marketplace. Expect to see a follow-up
alert describing the proposed post-400 MW Massachusetts market
policy and any changes to the existing Solar Carve-Out
program.
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