Dear Solar Carve-Out Stakeholder:
Pursuant to 225 CMR 14.07(2) and (3), DOER is required to calculate the Solar Carve-out and Solar Carve-out II Compliance Obligations and Minimum Standards for each Compliance Year by no later than August 30th of the preceding year. As has been the practice to date, DOER announces a preliminary Compliance Obligation and Minimum Standard prior to conducting the Solar Credit Clearinghouse Auctions (“Auctions”). For Compliance Year 2017, the formula in 225 CMR 14.07(2)(g) will be used to calculate the Solar Carve-out Compliance Obligation, and the formula in 225 CMR 14.07(3)(e) and (f) will be used to calculate the Solar Carve-out II Compliance Obligation.

DOER would like to emphasize that this is only a preliminary announcement and that final Minimum Standards will be announced no later than August 30th.

Solar Carve-out (SREC I Program)

Based on the information available at this time, DOER estimates that the final 2017 Compliance Obligation for the SREC  I Program will be approximately 783,181 MWh and that the Minimum Standard will be approximately 1.6313%. Should this year’s SREC I Auction not fully clear in the first two rounds, the 2017 Compliance Obligation and Minimum Standard will be increased to 785,077 MWh and 1.6352%, respectively. The details of how this preliminary Minimum Standard was calculated are available on the DOER’s website.

The 2017 Minimum Standard for load under contracts signed prior to June 28, 2013 will be 0.9861%.

Solar Carve-out II

Pursuant to 225 CMR 14.07(3)(a)1, all Retail Electricity Suppliers are exempt from any incremental obligations resulting from the provisions contained in the RPS Class I Emergency Regulation filed on April 8, 2016, which expanded the Solar Carve-out II (SREC II) Program Capacity Cap. As such, it is necessary for DOER to establish a baseline Compliance Obligation and Minimum Standard that would have applied had the Emergency Regulation not been filed.

To determine this baseline Minimum Standard, DOER analyzed the percentage shares of MW currently qualified under each of the four SREC II Market Sectors. DOER then multiplied these percentages by the original 947 MW SREC II Program Capacity Cap. DOER multiplied these totals by the corresponding SREC Factors, a 13.51% expected capacity factor, and 8,760 hrs/year and determined the expected MWh/year that would have resulted had the SREC II Program Capacity Cap remained 947 MW. Lastly, DOER added the auction volume and banked SREC II volume from the 2015 Compliance Filings. This yielded a total baseline Compliance Obligation of 1,102,311 MWh and a Minimum Standard of 2.2960%:

If the upcoming SREC II Auction does not fully clear in the first two rounds, the baseline Compliance Obligation and Minimum Standard for 2017 will be 1,169,357 MWh and 2.4357%, respectively.

Using all of the available information at this time, DOER has calculated what the preliminary 2017 SREC II Compliance Obligation and Minimum Standard will be for load under contracts signed after May 8, 2016. DOER has determined that the Compliance Obligation will be approximately 1,496,188 MWh and that the Minimum Standard will be approximately 3.1164%. Should this year’s SREC II Auction not fully clear in the first two rounds, the 2017 Compliance Obligation and Minimum Standard will be increased to 1,563,234 MWh and 3.2561%, respectively. The details of how this preliminary Minimum Standard was calculated are also available on the DOER’s website.

Next Steps

The first rounds of both the SREC and SREC II Solar Credit Clearinghouse Auctions are scheduled to take place on July 29, 2016. Should these auctions not fully clear, a second and third round will be held as necessary the following week. Once both auctions have concluded, DOER will be able to make its final determination of the Compliance Obligations and Minimum Standards for 2017. The announcement of the final Minimum Standards will occur no later than August 30, 2016. More information on the auctions taking place later this month are available on the DOER’s auction website.

Auction Volume Update

Lastly, the volume of certificates available in both the SREC and SREC II Solar Credit Clearinghouse Auctions has been slightly updated as follows since DOER’s initial announcement on July 6^th:

SREC I: 1,896

SREC II: 67,046

Sincerely,

Michael Judge

Director, Renewable and Alternative Energy Development

Massachusetts Department of Energy Resources