Evolution of SRECs

The political process in the United States is typically bottom-up whereby municipalities first test out policies around the country. Then states learn from these policies and various states begin passing legislation at the state level. As more states adopt policies, and experiment or alter them, the question is then asked whether to go federal with policy.

This is the process RPS, solar carve-out, and SREC markets are facing now. Many policies are being proposed, and there is a discussion about whether the USA should adopt a federal RPS, and associated tiers or carve-outs [45]. This study suggests that as far as SRECs are concerned, the policies within the USA are too new and untested to with far too little information to consider a national SREC policy. Additionally, each energy market in the USA has different

characteristics, energy costs vary, wind, natural gas, solar radiation all vary widely. For these reasons, a federal SREC policy seems premature and difficult to implement.

46 6.7 SREC as a Long-Term solution

Solar carve-outs and associated SREC markets are mostly planned through 2020-2024, and thus have about a 10 or 15 year lifespan at the moment with any further extension difficult to predict or understand. For this reason, the incentives provided by SREC mechanisms weaken with each passing day and year.

As a result, SRECs at the moment are not a long-term solution as a solar policy. However, the commitment to funding over the next 15 years makes it a longer term plan than the rebates and tax credits with sunsets of usually a few years. Nevertheless, without longer term commitments to the SREC plans, one can expect them to be short-term to medium-term at best [17].

47

Appendix 1: State Information

State 2010 SACP SREC

48

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