Bring on the mad rush to qualify for SREC II. Hurry up before it’s too late!
In case you haven’t heard, the Massachusetts SREC-II program is a mere 22MW away from reaching its cap.
You may be asking yourselves what happened. So were we… until we did some digging. Here’s how it happened:
- On Tuesday, January 5th, the Massachusetts Department of Energy Resources (DOER) announced that 120MW would be set aside in the SREC-II program for projects under 25kW. This left a little over 250MW for all other projects over 25kW before reaching former Governor Patrick’s goal (and the overall SREC program’s cap) of 1,600MW.
- On Monday, January 25th, the DOER released an updated Solar Carve-Out II Qualified Units list. Only a little over 100MW were left of the 250MW from two weeks earlier.
- On Monday, February 1st, the DOER again released its weekly Solar Carve-Out II Qualified list, sharing that only 22MW were left for projects over 25kW. Only slightly over 94MW of the 120MW remains for projects under 25kW in the small solar set aside.
Wow. That’s some drastic growth. The caps are filling up quickly, but how do we separate the “real” from the “aspirational” projects?
Qualifying Units List: Explained
In the DOER’s qualified units list, systems are separated out into three categories:
1) Solar energy systems with a MA RPS ID# currently generating SRECs;
2) Systems with a pending application status, meaning they have been awarded an Assurance of Qualification (AOQ) but have not received a State of Qualification (SOQ) because they are not yet operating and generating SRECs;
3) Systems with an application under review, meaning an application has been submitted but the DOER has not completed its review.
Systems that are under review are waiting to be notified by the DOER of the application’s completeness. This generally happens within a few weeks of the application being submitted. If an application is incomplete, then the entity who filed the application will have two weeks to cure any deficiencies. If a deficiency is not cured within that period, then the application will be rejected. Keep in mind a complete application includes an executed interconnection agreement!
Any systems in the pending stage most likely have been granted a nine (9) month window to reach commercial operation (COD). If these projects are unable to be completed in that time, they may apply for an extension.
Will All Qualifying Units Make the Cut?
On the DOER’s most recent list from February 1st, 140MW of system applications were Under Review (63MW of which are in National Grid) and another 340MW of systems (of which 195MW are in National Grid) are categorized as having a Pending status.
In other words, not all of the projects currently in the Qualified Units list are necessarily qualified for the Massachusetts SREC II program. Instead, developers operating in Massachusetts – a top 3 solar state in Q3 2015 and #6 in the country overall – noticed the limited capacity left in the SREC-II program and acted accordingly. They shuffled through their own “active projects” lists and submitted applications for any projects with a recently executed interconnection agreement – or any projects with the hope of having an executed interconnection agreement within the next few weeks. A mad rush appears to be underway, similar to what the state saw as the SREC-I program – and net metering allocations – quickly reached their respective caps.
A small glimmer of hope may still exist for projects without SREC allocations. Given this information, we could see systems fall out of the list due to incomplete applications or due to their inability to reach their COD deadlines in time (think National Grid projects that have not secured a NEM cap allocation and are less likely to get an SREC allocation extension).
Still Reading? Stop Now, and Submit Your Application!
The magnitude of such circumstances is unclear, but what is obvious is the value in submitting an application now for any mature projects with the hopes that these projects will eventually move forward from the wait list that is expected to show up on future DOER weekly Solar Carve-Out II Qualified lists.
If you have a project that has received an AOQ or a project under review and don’t have financing, please reach out to our Project Finance team at finance@solsystems.com.
ABOUT SOL SYSTEMS
Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for over 400MW of solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. Sol Systems provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. The company’s tailored financial services include tax structured investments, project acquisition, and SREC portfolio management. Inc. Magazine named Sol Systems on its annual Inc. 5000 list of the nation’s fastest-growing private companies for a third consecutive year. For more information, please visit www.solsystems.com.
