ABP: Performance Calls and Drawdowns

Performance Evaluations 

If your system underperforms during any year in the 15 year period and fails to generate the RECs projected for that year, the utility may “claw back” REC payments. This means that you may have to pay the utility back for some RECS that were not generated. The projected delivery schedule will be included in your REC contract and updated once the IPA has confirmed your systems participation and delivery schedule.

A performance call is a notification by CSG letting you know that your solar system has underperformed and a utility claw back is due. A performance evaluation is done on an annual basis to assess your three-year rolling REC generation. 

Performance Collateral Drawdown

The ABP requires all homeowners submitting an application to the program to place 5% of the total contract value on file as collateral. This Performance Collateral is held for the term of the contract to cover any underproduction that may occur over the next 15 years.

If all RECs are delivered accordingly, the homeowner will receive the 5% collateral back in full at the end of the term.  In the event that a collateral drawdown occurs and there is money remaining at the end of the term, the homeowner will receive the remaining amount.

If your system underperforms, the additional collateral on file will be pulled first, and you will be issued an invoice. If a client is unresponsive about the system's underperformance, it will be charged to your credit card on file. 

How likely is it that my system will underdeliver RECs?

It's possible that you may have to make a small drawdown payment to CSG for a year with slight underproduction during to variables like weather.

What does this look like? For example, if your REC price is $65.61, and you underproduce by a REC or two, CSG drawdown your collateral between $65.61 and $131.22 for the year you underproduced. (REC price may vary).

It is unlikely that you would owe much more than that and not already know that there is an issue with your system. Your system would need to have a prolonged problem that would be easily noticeable in your inverter dashboard in order to trigger a large drawdown payment.

In this case, any production issues due to malfunctions from the solar panels, the inverter, or the power optimizers would be covered by the manufacturers’ warranties.

Collateral Drawdown Example

Below is an example calculation:

ABP Block Price:

$65.61/REC

System Delivery Target for delivery years 1-3: 

Year 1: 14 RECs

Year 2: 14 RECS

Year 3: 14 RECs

System’s actual REC Generation for years 1-3:

Year 1: 14 RECS

Year 2: 15 RECS

Year 3: 11 RECs

Calculation:

   42  (System Delivery Target for years 1-3)

- 40  (Actual REC Generation) 

--------------------------------------------

= 2  (System Delivery under performance) 

ABP Block Price = $65.61 x 2

Collateral Drawdown: $131.22 is due in year 3

What happens if I overproduce RECs?

If you have a year where you deliver more RECs than contracted, that overproduction can help you offset deficiencies in REC delivery in later years, but only within the three-year review period and not later.