Solar Renewable Energy Certificates Program (SRECs)

Summary

Compliance goals were revised by House Bill 6 in 2019 that reduced the renewable portfolio requirements of all electric distribution utilities in the state. House Bill 6 eliminated the solar carve-out in Ohio's Alternative Energy Portfolio Standard (AEPS). House Bill 6 also created a Renewable Generation Fund to provide fixed payments for energy generated by certain renewable facilities; this was changed to only solar by House Bill 128 in 2021. Solar facilities that obtained a certificate for construction of a major utility facility before June 1, 2019 are eligible for payments of $9.00 per SREC. Payments will end in 2028. Generation from solar facilities that receive SREC payments from Ohio's Solar Generation Fund is subtracted from utilities' requirements under the AEPS. Section 4928.642 is the revised section and reads as follows.

Beginning with compliance year 2020, the public utilities commission shall, in accordance with this section, reduce the number of kilowatt hours required for compliance with section 4928.64 of the Revised Code for all electric distribution utilities and all electric services companies in this state. The commission shall determine each utility's and each company's reduction by taking the total amount of kilowatt hours produced, if any, by all qualifying solar resources, as defined in section 3706.40 of the Revised Code, during the preceding compliance year, allocating that total among all electric distribution utilities and electric services companies in proportion to their baselines for the subject compliance year, and subtracting that allocated amount from the utility's or company's compliance amount as otherwise determined under section 4928.64 of the Revised Code.

Solar Renewable Energy Certificates (SRECs) represent the renewable attributes of solar generation, bundled in minimum denominations of one megawatt-hour (MWh) of production. The legislation creating Ohio's AEPS program, (S.B. 221), mandates the creation of SRECs and Solar Alternative Compliance Payments (SACPs). To be in complaince with AEPS, Ohio retail electricity suppliers must either purchase or generate SRECs OR pay a Solar Alternative Compliance Payment (SACP) for any shortfalls in SREC purchases. 

SRECs have a lifetime of five years following their initial acquisition. Generators must register with the Public Utilities Commission of Ohio (PUCO) to become a certified facility, eligible to generate SRECs for compliance under Ohio's Alternative Energy Resource Standard (AERS). Once PUCO certification is received, the generator must also register with an attribute tracking system (such as PJM-GATS or M-RETS). To 

If utilities cannot acquire SRECs, then they are required to pay a Solar Alternative Compliance Payment (SACP) to remain in compliance with Ohio's Alternative Energy Portfolio Standard. SACP prices were initially set at $450/MWh by SB 221 in 2009 and were on schedule to drop by $50 every two years until a $50/MWh minimum was met in 2024. In 2014, SB 310 froze the SACP at $300/MWh for 2014, 2015, and 2016, and stipulated that in 2017 SACPs resume the scheduled fall by $50 every two years to a minimum of $50/MWh by 2025.

Compliance payments are deposited into the Ohio Advanced Energy Fund, which provides financial support to renewable energy and energy efficiency projects within the state. Utilities may not pass along the cost of compliance payments to their customers. PUCO may grant a force majeure determination, thereby relieving the utilities of their obligation to pay SACP, if utilities are able to prove they were unable to procure enough SRECs to satisfy the requirements due to conditions beyond their control. Historically, utilities have generally been able into compliance without paying the ACP.

Interested system owners must reserve a case number on the web site above. For applications received after December 31, 2012, credit will only be given for generation that occurred after the facility's application date.