With the signing of Senate Bill 310 (SB 310), Ohio has become the first state to “freeze” its Renewable Portfolio Standard (RPS). Ohio Governor John Kasich signed the bill into law on June 13th, effectively halting the state’s mandates for efficiency and renewables until 2017. Come 2017, these mandates will pick up where they left off when the freeze occurred, as opposed to the annual increases in renewable energy and efficiency measures that would have occurred with the RPS.
SB310 will significantly harm Ohio’s solar industry by driving SREC prices down in both the Buckeye state as well as the surrounding states such as Kentucky, Pennsylvania, West Virginia, Indiana, and Michigan that sell their SRECs into Ohio. The bill faced tremendous opposition from health and environmental coalitions, as well as a group of 70 businesses and organizations, including Honda and Whirlpool, who urged Governor Kasich not to sign the bill.
How will the RPS freeze affect the Ohio SREC market?
The Ohio SREC market has been stifled as a result of the bill’s passage and few trades are occurring; those holding SRECs are looking to sell, but there are very few interested in buying, due to the uncertainty generated by the freeze. The price of in-state SRECs, out of state SRECs, and Pennsylvania SRECs have remained equal, suggesting that compliance buyers knew the bill would pass once it moved to the governor’s desk. The Ohio SREC market had been illiquid for some time before the freeze, with the price of SRECs falling from $65/SREC in the middle of May to the current price of about $50/SREC. The PA SREC market will likely experience an influx of SRECs, which will drive the price down.
The passage of SB310 is a major setback for the renewable industry in Ohio. Prior to the freeze, Ohio was # 8 in the country in terms of renewable energy job creation, with the solar industry alone creating 3,800 jobs. With the freeze, the state has seriously disabled incentives for renewables, which will harm the REC markets as well as the solar job market. Yet, hope remains that this legislation will come under review before the 2017 end date. The new proposed regulations released by the Environmental Protection Agency limiting carbon dioxide emissions from coal power plants may force the state to revisit the importance of energy efficiency and renewable energy sooner than the bill intends.
Developers interested in financing options for commercial Ohio solar projects can contact our project finance team at firstname.lastname@example.org or (888) 235-1538 ext. 2. Our team is happy to discuss your project with you and assess financing opportunities. Solar installers with customers in need of SREC options in Ohio can contact our SREC services team at email@example.com or (888) 235-1538 ext. 1.
About Sol Systems
Sol Systems is a renewable energy finance firm that provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. Founded in 2008, Sol Systems focuses on meeting the industry’s most critical solar financing needs, including tax structured investments, capital placement, debt financing, and SREC portfolio management. To date, the company has facilitated financing for thousands of distributed generation solar projects and hundreds of millions in investment on behalf of Fortune 100 corporations, utilities, banks, family offices, and individuals. For more information, please visit www.solsystemscompany.com.