Solar, the postscript

The Massachusetts last chance auction for SRECs was completed last week. This is the mechanism that SunBug described to me as a price floor for SRECs, a mechanism to guarantee that SRECs would always be worth a minimum of $300 each. It’s an annual fixed price auction at $300, but Massachusetts forgot to require the utilities to actually buy the leftover SRECs at that auction.

There were 38,866 SRECs available. How many cleared? All? Almost all? 75%?

3.

Not 3%. Just 3.

They sold 3 SRECs at the last chance auction. Out of 38,866.

Maybe it looks better in dollar figures. The state put a lot of work into auctioning off $11,659,800 in SRECs. The utilities collectively purchased $900. The state probably spent two to three orders of magnitude more than that to run the auction.

The state did jump in and announce that they were buying all the rest of the SRECs themselves, in a one-time gimmick designed to shift everyone’s embarrassment and anger down the road a year. And they stated very clearly that they won’t do that again.

So there you have the final word on the state’s price support mechanism for SRECs. It was a colossal failure.

If you’re planning on putting in solar in Massachusetts, don’t do it based on fantasies about how much income you’re going to get from SRECs. The state might change the rules, but as things stand now there is no price floor. The folks saying that a long-term target of $150 per SREC is reasonable look a lot more plausible now.