Solar Renewable Energy Credits (SREC)
In Delaware, the Renewable Portfolio Standard (RPS) requires electricity suppliers to secure a portion of their electricity from solar generators. The SREC program provides a means for Solar Renewable Energy Credits (SRECs) to be created for every 1000 kilowatt watt-hours of solar electricity created.
The SREC is sold separately from the electricity and represents the “solar” aspect of the electricity that was produced. The value of an SREC is determined by the market subject to supply and demand constraints. SRECs can be sold to electricity suppliers needing to meet their solar RPS requirement.
The DESEU supports the RPS standard and therefore supports the SREC market with programs.
Annual SREC Procurement Program
In 2011, the Delaware legislature amended the solar portion of the state Renewable Portfolio Standard (RPS) to switch the burden of acquiring SRECs away from the power providers to the electric distribution companies in Delaware. This amendment drastically reduced the number of buyer participants, effectively making Delmarva Power, the largest electric distribution utility in Delaware, the de-facto long term buyer for the majority of the DE SREC requirement. In response, Delmarva Power proposed the implementation of an SREC procurement program, called the Annual SREC Procurement Program that provides 20 year contracts to SREC sellers on a competitive basis.
Delmarva, which has selected the DESEU to operate the program, plans to run at least one solicitation each spring in order to fulfill its long-term SREC needs. The solicitation is run as an on-line auction. Facilities that qualify as having been built with either Delaware labor or Delaware manufactured parts may be granted an SREC bonus of 10% for each qualification. For example, a facility that qualifies as having been built with Delaware labor may be granted the equivalent of 10% SREC bonus for every SREC produced. A facility that is certified as having been built with both DE parts and labor is qualified for a 20% bonus for every SREC produced, etc.