SREC Procurement Program

Summary

NOTE: The 2019 SREC Procurement Results were posted. The overall weighted average for the solicitation was $32.75 per SREC. 

Delaware Solar Renewable Energy Certificate (SREC) Procurement Program is designed to assist in the creation of a market for SRECs and to provide a mechanism for the procurement of SRECs to ensure that retail electricity suppliers meet the requirements set forth in Delaware's Renewable Energy Portfolio Standards Act (REPSA).

The program utilizes a public solicitation for SRECs for different tiers of solar generators based on capacity. The Sustainable Energy Utility (SEU), contracted with InClime, will administer all aspects of the bid process for each utility that decides to participate. Delmarva Power is the only participating utility at this time; therefore, the estimates for procurement are based Delmarva Power’s projected need for SRECs in compliance year.

• New systems are defined as having a final interconnection approval after the closing date of the preceding auction process (i.e. May 24^th, 2014 for the 2015 auction). Existing systems are defined as having a final interconnection approval date before the closing date of the preceding auction process (May 24^th, 2014 for the 2015 auction).

Project Eligibility

Project must be certified in DE to create SRECs and can be in the service territory of any utility in DE. SRECs created in previous energy years are not eligible for the auction. Proposed projects are required to begin operating within one year of the award date. Projects that certified using Delaware parts and labor qualify for additional 10% bonus for each category.

Program Tiers

Solicitation is divided into different tiers based on size and interconnection date.  For 2015 solicitation, new projects (N-1, N-2, N-3) were projects interconnected on or after May 5, 2014 and existing projects (E-1, E-2) were projects that were connected before May 5, 2014. Each program tier have different applicable pricing, bid rules and other contract terms and conditions. Applicants can submit an application for only one tier; however, under certain limitations the SEU may accept bids from a lower tier to fill the requirements of a higher tier.  The table below provides summary of program categories for the 2015 solicitation period.

All system tiers are subject to competitive bid pricing. There will be no administrative pricing for any tier, and grant amounts will not be considered in determining winning bids. All contracts have a 20-year term with payment amounts indicated below. All applicants must submit fixed dollar amount bids for the first 10 years, after which from a standard price of $35 per SREC will be paid out for next 10 years. Contract terms are non-negotiable.

History

In September 2011, Delmarva Power & Light filed an application with the Delaware Public Service Commission to seek approval of a pilot program for the procurement of SRECs. Through this application, Delmarva sought approval to implement a pilot program calling for the SEU to acquire, through an open procurement process, the SRECs needed for Delmarva Power to purchase its minimum number of SRECs for compliance year 2011 as set forth in state's RPS. Delmarva submitted a compliance filing for the State of Delaware Pilot Program for the Procurement of Solar Renewable Energy Credits in February 2012, as required by PSC Order No. 8093.

The 2012 pilot program created a multi-tiered solicitation for long-term SRECs that included multiple system sizes and customer classes under 20 year SREC purchase contracts. Standard offer contracts were awarded to systems less than 250 kW for years 1-10, with a rate of $50 per SREC for years 11-20. Systems 251 kW to 2 MW were subject to competitive bid pricing for years 1-10, with a rate of $50 per SREC for years 11-20. In April 2012, the SEU, contracting with SRECTrade, opened the first round of solicitations and awarded contracts to 166 solar PV systems totaling an estimated 7.7 MW of capacity. The 2014 solicitation reduced the SREC price from year 8 to 20 to $35 from $50.