Massachusetts Market Details
Market Overview
The MA SREC Market is an open market where prices are determined by market forces. Key factors include the Alternative Compliance Penalty and supply and demand based on the Renewable Portfolio Standard (RPS) under NEPOOL.
In July 2018, Massachusetts passed an updated renewable portfolio standard (RPS) that requires its utilities to produce 40% of their electricity from renewable resources by 2030. The original RPS required 1,600 MW of solar by 2020 through a "solar carve-out," so-called because it carves out a piece of the overall renewable target exclusively for solar.
Under this program, SRECs are used to track the electricity generated by solar projects. For the first ten years of a solar energy system's lifespan, one SREC is generated for every megawatt-hour (MWh) of electricity a solar energy system produces. For example, the average MA homeowner buying a 5-kilowatt system should expect to generate approximately 6 MWh of solar electricity annually.
Utilities purchase SRECs to comply with the solar component of the RPS. The owners of solar panel systems – from individual homeowners to large-scale solar developers – can sell their SRECs to utilities through the state's SREC market. CSG now only registers Class I RECS.
Class I RECs
Under the current RPS solar energy is classified as Class I. Class I RECs represent a distinct category of commodities that differ from SRECs, which pertain solely to the solar carve-out within the Renewable Portfolio Standard (RPS) and typically command a lower market value. Within the Class I REC market, a diverse array of renewable energy sources is represented making the supply higher and demand lower.
ACP and Market Trend
The Department of Energy Resources (DOER) has made the determination that the 2024 Solar Carve-out Compliance Obligation will be 8,457 MWh and that the Minimum Standard shall be 0.019% of total retail electricity sales.
Retroactivity / Eligibility Start Date
Class I RECs are issued quarterly on a one quarter delay. Eligibility to produce Class I RECs can begin with the system’s interconnection, so long as the certification application is submitted prior to the interconnection quarter’s application deadline.
Otherwise, eligibility will be based on the application date and its corresponding quarter. System owners should apply for certification around the date of interconnection to ensure they receive Class I REC eligibility for all generation produced following interconnection.
REC Shelf Life
MA SRECs have a shelf life of 3 years. Example: A SREC generated in 2022 can be counted towards the 2022, 2023, or 2024 compliance periods
MA LEGACY PROGRAMS
SREC I and SREC II
Massachusetts has two separate SREC programs: SREC I and SREC II. Homeowners who installed solar before 2014 were eligible for the SREC I program, which is the original SREC program in the state. That program reached its cap before 2014, leading the state to create a successor program: SREC II. November 26, 2018, marked the last day solar Generation Units in Massachusetts were able to qualify for the SREC II Program. Both SREC programs have advantageous pricing, though the value of SRECs tends to be higher in the SREC I program than in SREC II.
Smart Program
The SREC II program reached its cap in 2017. As a result, the state created a new solar incentive program known as the Solar Massachusetts Renewable Target (SMART). The state launched this program in late 2018. Property owners are not eligible for both incentives. However, if you were accepted into the SREC II program prior to the start of SMART, you are grandfathered into the program for the full 10 years. The Smart Program is also now full.
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