Massachusetts is increasingly being seen as a promising growth market in the Northeast. Though New Jersey and Pennsylvania have historically been the focus of developers in the area, with the expected downturn in these two markets, Massachusetts has recently gained attention.
According to GTM Research and the Solar Energy Industries Association's latest quarterly U.S. Solar Market Insight report, in the second quarter of 2011, Massachusetts installed 0.9 megawatts of residential capacity and 4.5 megawatts of non-residential capacity, for a total of 5.4 megawatts. This represents a 12 percent increase over the first quarter. In particular, the state saw a boom in commercial installations on landfills and brownfields.
Massachusetts' solar renewable energy credit (SREC) market contributed to the growth of installed capacity in the state. The Solar Carve-Out program sets a portion of the required renewable energy to come from qualified, in-state, interconnected solar facilities. The program is intended to support approximately 400 megawatts of solar facilities over the life of the program, with a compliance obligation of 81,559 megawatt hours by Compliance Year 2012.
While the price of SRECs is determined primarily by market availability, the Massachusetts Department of Energy Resources (DOER) has created some market stability through the Solar Credit Clearinghouse Auction and the Solar Alternative Compliance Payment (SACP). The Solar Credit Clearinghouse is used when SREC generators cannot sell SRECs on the open market. With prices fixed at $300 per megawatt-hour, the auction acts as a price floor. Additionally, the SACP, which set 2011 prices at $550 per megawatt-hour, acts as a ceiling on SREC value because it is the per-megawatt-hour payment that electricity suppliers must make if they do not obtain enough SRECs to cover their RPS obligation.
On August 2, the Massachusetts DOER proposed an amendment to the SACP schedule that would establish a 10-year SACP schedule to be extended annually. This change would provide longer-term visibility into SREC market dynamics and would help developers achieve project financing.
Further growth can be expected as investors gain confidence with Massachusetts’ complicated yet well-designed SREC market.
The U.S. Solar Market Insight: 2nd Quarter 2011 report is part of an annual subscription that provides the most relevant, solar-specific analysis to solar PV and concentrating solar (CSP and CPV) professionals each quarter. U.S. solar heating and cooling data is collected and reported annually in the Q4 report.
Download a free executive summary of the U.S. Solar Market Insight: 2nd Quarter 2011 report, or purchase a subscription at http://www.greentechmedia.com/research/solarinsight.