Solar Renewable Energy Certificate (SREC) Markets: Status and Trends

Abstract

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SMART-SREC: A stochastic model of the New Jersey solar renewable energy certificate market

“…Among the now 30 states with enforceable RPS standards, 14 states have set up markets to trade SRECs. Bird et al (2011) provides a comprehensive summary of their development up through summer 2011. Among these, the New Jersey market is by far the most dominant, with the highest recorded prices so far at nearly $700 (per MWh) and the most ambitious future requirement levels at 4.10% of the state's electricity usage by 2028.…”

“…Among these, the New Jersey market is by far the most dominant, with the highest recorded prices so far at nearly $700 (per MWh) and the most ambitious future requirement levels at 4.10% of the state's electricity usage by 2028. While SREC markets in the U.S. are all relatively small and young, they are projected to grow rapidly in the near future, from around 520 MW in 2011 to around 7.3 GW in 2025 (Bird et al (2011)), with about half of that total coming from New Jersey. In the year 2013 in New Jersey, 1.3 million SRECs were issued (i.e., from 1.3 GWh of power), which at recent prices of about $150 corresponds to about $200 million of revenues for solar generators.…”

“…Seifert et al (2008), Howison & Schwarz (2012), ) which differ in their specification of the underlying cumulative emissions process which determines the payoff of the allowance at maturity. A key modeling choice is how to incorporate the 2 See for example Wiser et al (2010) and Bird et al (2011), both sponsored by the Department of Energy's National Renewable Energy Laboratory, for summaries of the development of SREC markets across the U.S. through 2011, or alternatively the New Jersey Clean Energy Program's annual reports and regularly updated news on the New Jersey market at NJCleanEnergy (2015). feedback of price onto emissions rate, as this can be specified as an optimal control problem for a central planner (as in Seifert et al (2008)) or alternatively as an automatic abatement produced by the structure of the market and in particular the merit order for electricity (as in ).…”

Assessing the Value of Distributed Solar Energy Generation

“…States with a mandatory RPS typically allow utilities to meet their requirements by purchasing solar renewable energy credits (SRECs), which the owners of distributed solar PV systems can sell based on the amount of electricity that their systems create [12]. Owners of PV systems in states without a mandatory RPS can sometimes sell SRECs to outof-state utilities [13]. For example, system owners in Virginia can sell SRECs in the Pennsylvania market.…”

ADAPT: A Price-Stabilizing Compliance Policy for Renewable Energy Certificates: The Case of SREC Markets

“…2 or 3 credits per MWh) to specifically promote investment in solar energy. To further promote the use of solar energy, 14 states have established separate solar set-asides and tradeable SRECs, and have been successful in increasing investment in solar generation ( [27,28,5,4,12]). The New Jersey (NJ) SREC market is the biggest in the US, has recorded prices near $700 per SREC, and has the most ambitious target of over 4% of electricity from solar by 2028.…”