Delaware

A Delaware SREC Pilot Procurement Program was approved in November of 2011 by the Delaware Public Service Commission. The details of the pilot program can be found here.

In 2005, Senate Bill 74 established a renewables portfolio standard (RPS) requiring Delaware retail electricity suppliers to purchase 10% of the electricity sold in the state from renewable sources by 2019. Senate Bill 19 of 2007 increased the RPS target to 20%, and added a requirement that a portion of the requirement be met with solar photovoltaic (PV) resources. The standard was expanded again to 25% renewables and 3.5% photovoltaics by 2026 by S.S. 1 for S.B. 119 enacted in July 2010. The PV target began at 0.011% for the June 2008 - May 2009 compliance year (CY 2009) and accelerates slowly over time towards an ultimate target of 3.5% for compliance year 2025-2026. The RPS applies to the state's investor-owned utilities, retail electricity suppliers, municipal utilities, and rural electric cooperatives. Municipal utilities and rural electric cooperatives are allowed to opt out of the RPS requirements if they establish a comparable RPS program for their own ratepayers by 2013, and establish a green energy fund.

Under Delaware law, a solar renewable energy credit (SREC), is equivalent to one megawatt-hour (MWh) of retail electricity sales in the state that is derived from a qualifying PV resource. Electricity suppliers must purchase SRECs in order to meet their compliance obligations under the law, or pay a Solar Alternative Compliance Payment (SACP) for any shortfalls in SREC purchases. The SACP operates as a ceiling on the price that a supplier would pay for SRECs used for compliance with the Delaware RPS. In general, the SACP is initially set at $400 per MWh, but increases to $450 per MWh if the electricity supplier has opted for the ACP in any previous year, and then increases to $500 with any subsequent uses. The Delaware Energy Office has the authority to review and adjust the ACP and SACP given certain market conditions. As of August 2012, sales of Delaware-sourced SRECs tracked on the PJM-EIS Generation Attributes Tracking System (GATS) averaged $189 per MWh, down from $260 MWh average for June 2010-August 2011.

Under this system SRECs represent a potentially significant source of revenue for owners of qualifying PV facilities with a value determined by demand in the trading market. In Delaware, net metering customers retain ownership of SRECs (or RECs) for energy produced and consumed by the customer. A generator remains eligible to generate SRECs for as long as the facility remains certified as an eligible generator. SRECs submitted for compliance with the RPS must have been created no more than three years prior to the year in which they are used for compliance. In other words, an SREC may generally be used for compliance by an obligated electricity supplier for the compliance year during which it was generated or the two subsequent compliance years.* An obligated entity may use an SREC to comply with the PV carve-out of the RPS or with the general renewables requirement. For the purposes of compliance, an SREC generated by a customer-sited facility physically located within Delaware and installed on or before December 31, 2014 is granted a 300% multiplier if used to fulfill the general renewables requirement. Thus, one SREC equals one SREC for the PV carve-out, but three RECs used to fulfill the general renewables requirement.*

In order to begin producing Delaware-eligible SRECs, generators must be certified by the Delaware Public Service Commission (PSC) as an eligible generator. In order to qualify as an eligible generator, customer-sited facilities (i.e., behind the meter facilities) must be physically located within the state of Delaware. Generation from other facilities qualifies for Delaware's standard if the generator is located within the PJM footprint, or if the electricity is imported into the PJM and tracked through the PJM Market Settlement System. When the generator has been issued a certification number, they may create an account with the PJM-EIS Generation Attribute Tracking System (GATS). The GATS is used to track the generation and transfer of SRECs from an eligible facility. SRECs are created in the GATS based on energy production meter readings uploaded to the system by the generator. Unlike some other states, Delaware does not allow small generators to use engineering estimates of energy production as the basis for creating SRECs.

The passage of S. B. 124 in July of 2011 amended the Delaware RPS to allow energy output from a Qualified Fuel Cell Provider Project in fulfilling a portion of the requirements under the RPS Act. A qualified fuel cell provider project is a fuel cell power generation project located in Delaware owned and/or operated by a Qualified Fuel Cell Provider. A qualified provider is defined in S.B. 124 as a commercial operation which manufactures fuel cells capable of being run on renewable fuels and is designated as an economic development opportunity by the Delaware Economic Development Office and the DNREC. The energy produced by such projects shall fulfill the commission-regulated electric company's state-mandated REC and SREC requirements. The fulfillment of the equivalent of 1 REC is equal to each MWh of energy. These projects will fulfill no more than 30% of the SREC requirements at a ratio of 6 MWh of RECs per 1MWh of SRECs.

* The Delaware Sustainable Energy Utility (SEU) is required to act as a REC aggregator for customer-sited renewable energy facilities. The three-year REC lifetime is "tolled", or suspended, during any period in which a REC is held by the SEU.

** Delaware also has allows a small credit bonus of 10% for solar electricity produced by solar (or wind) installations for which at least 50% of the equipment (on the basis of cost) is manufactured in Delaware, or for which 75% of the labor and construction is performed by an in-state workforce.