Virginia Market Details
The VA SREC Market is an open market where prices are determined by market forces. Key factors include the Alternative Compliance Penalty along with supply and demand based on the Renewable Portfolio Standard (RPS).
Virginia passed the Virginia Clean Economy Act in 2020, essentially opening the possibility of an SREC market. Virginia-sited systems are presently eligible to register in the Pennsylvania Tier I REC market.
We do not currently have a known timeline for the VA market, though we expect the market to continue to mature. The Virginia State Corporation Commission (SCC) is currently working on setting the regulations for the solar carve out of the Virginia Clean Economy Act’s Renewable Portfolio Standard, which will provide much needed clarity regarding project eligibility, requirements, and future expectations.
ACP and Market Trend
The VA Market is in its infancy, and the pricing is fluctuating on a sale-by-sale basis. Pricing is expected to be on the high end (closer to the ACP) as the supply is still low within the first few years. As more solar systems complete SREC registration, the supply and demand structure will evolve with the potential to heavily affect pricing.
The Alternative Compliance Penalty (ACP) is set by the RPS and can be viewed as a soft benchmark for what the REC will be valued at. The ACP is a fee imposed on utilities and mandated purchasers for shortfalls in REC procurement. The VA SACP is set at $75 in 2021 for Distributed Generation (<1 MW) and increases by 1% annually thereafter.
Retroactivity and Eligibility Start Date
A system’s eligibility to start generating RECs is based on the system’s online date. A system that is not registered in the same year as its online date can generate RECs back to the beginning of the calendar year of registration.
Example: A facility that is online on 5/10/2020 and is registered on 8/20/2022 will only receive SREC payments back to January 1, 2022.
REC Shelf Life
VA SRECs have a shelf life of 5 years.
Example: A SREC generated in 2022 can be counted towards the 2022, 2023, 2024, 2025 or 2026 compliance periods.