United States: SREC-II Begins The Next Chapter Of Solar In Massachusetts

The Department of Energy Resources (DOER) began 2014 by proposing on Friday, January 3, new regulations for furthering Massachusetts Governor Deval Patrick's goal of 1,600 megawatts of solar generation in the Commonwealth by 2020.1 These regulations, which are in draft, outline the details for a new type of solar renewable energy credits (SRECs) dubbed "SREC-II."

Key Elements for SREC-II

Following are some of the noteworthy elements of these proposed regulations:

  • Plans for consistent annual solar growth toward the 1,600 MW goal through 2020.
    • Compliance Obligation of retail electric providers steadily increases each Compliance Year.
    • DOER will post a Guideline explaining how it will calculate the Compliance Obligation, along with current, publicly available data needed for the calculations.
  • Differing "SREC Factors" to balance growth among solar sectors.
    • SREC Factor is the amount of SREC-IIs created for each megawatt hour (MWh) of solar electricity generation (ex: 2 MWh of generation for a 0.9 Factor unit=1.8 SREC-IIs).
      • 1.0 Factor: Any-size project that is (i) a Solar Parking Canopy Generation Unit, (ii) Emergency Power Generation Unit or (iii) Community Shared Solar Generation Unit. Also any Generation Unit 25 kW or smaller. Capacity is measured as the total nameplate capacity on a single parcel of land or on a roof of a single building, whichever is less ("Market Sector A").
      • 0.9 Factor: (i) Any-size Building Mounted Generation Unit or (ii) any ground mounted Generation Unit with a capacity greater than 25 kW that has 67 percent or more of annual electric output used by an on-site load ("Market Sector B").
      • 0.8 Factor: (i) Any Generation Unit located at an Eligible Landfill or Brownfield or (ii) any Generation Unit with a capacity of 500 kW or less that does not qualify in Market Sector B ("Market Sector C").
      • 0.7 Factor: Any Generation Unit that does qualify in Market Sector A, B or C (dubbed the "Managed Growth" sector, this sector will likely include the largest solar projects).
  • DOER will establish a number of MWs that may qualify each Compliance Year as SREC-II Generation Units in the Managed Growth Sector.
    • Compliance Year 2014 -- 26 MW; Compliance Year 2015 -- 80 MW.
    • No later than June 30 of each Compliance Year, DOER will announce the annual capacity block for the next two Compliance Years.
    • DOER's allocation of applications toward the capacity block will be based on the order in which it receives administratively complete applications.
      • DOER will post on its website a periodically updated list of the capacity of SREC-II Generation Units qualified under each annual capacity block.
  • DOER will re-review the SREC Factors no later than March 31, 2016.
    • DOER will consider available market data and analysis pertaining to the growth rates and market penetration of the market sectors along with external changes in state and federal policies and global markets, with a goal of maintaining the growth in SREC-II and reducing the cost of the program to ratepayers.
    • Any changes to the SREC Factors will apply to Generation Units qualified on or after January 1, 2017.
  • Projects will be eligible to generate SREC-IIs for 10 years.
    • SREC Factors for a Generation Unit will remain in effect for the entire 40 quarters of SREC-II eligibility.
    • Incentives decline over time through 10-year schedule of SREC-II Clearinghouse Auction prices and Alternative Compliance Payment (ACP) rates.
      • Set auction price begins at $300 (minus 5 percent DOER administrative fee) in Compliance Years 2014-2016 and gradually declines to $199 in 2024.
      • ACP rate begins at $375 in Compliance Years 2014-2015 and gradually declines to $257 in 2024.
      • Values for 2025 and after will be added annually no later than January 31, beginning 2015.
    • Projects will generate Class I Renewable Energy Credits (RECs) after they are no longer eligible for SREC-IIs.
  • DOER will grant an Assurance of Qualification or queuing position to all SREC-II Generation Units that have either:
    • Been approved to interconnect to the grid by the applicable local distribution company, OR
    • Provide evidence of all of the following:
      • An executed Interconnection Service Agreement
      • Adequate site control
      • All necessary governmental permits and approvals to construct the Generation Unit except for ministerial permits (e.g., building permit)
    • DOER will issue a Guideline outlining the process for providing Assurance of Qualification or queuing position, subject to stakeholder review and comment.
  • DOER will establish a program utilizing ACP funds to enhance the availability of ownership financing options.
    • Focus on residential and not-for-profit organization Generation Units.
    • Will likely create a new sector opportunity for the financing industry.

What's Next?

The proposed regulations are now available on DOER's website and are to be published in the Massachusetts Register on January 17. DOER will hold a public hearing on January 24. Written comments may be submitted to DOER between now and January 29. Further details regarding both the public hearing and comment period can be found here. Following the public hearing and comment period, DOER may revise the proposed regulations based on input it receives and then will provide them to the Joint Legislative Committee on Telecommunications, Utilities and Energy. The Joint Committee will review the proposed regulations and may submit comments back to DOER within 30 days, which DOER must consider for a period of not less than 30 days. Based upon this process, the final regulations are likely to be promulgated in the late first-early second quarter of 2014 timeframe.

In light of the first-come, first-served nature of the qualification process, we recommend that any large, ground-mounted project within the Managed Growth sector strive to expediently position itself to obtain the interconnection approval or necessary evidence discussed above in order to obtain an Assurance of Qualification or queuing position. The related Guideline to be developed by DOER with stakeholder review and comment will govern the SREC-II qualification process. As always, Day Pitney LLP will continue to stay abreast of the latest Massachusetts solar market developments and update our clients and friends.

Footnote

1 Governor Patrick's new announced goals followed achievement last year, four years early, of the goal of 250 megawatts (MW) of installed solar electric generation in the Commonwealth. May 30, 2013, Client Alert

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions