MODELING SREC MARKETS
Will Harrel
MA SYSTEM OVERVIEW
For every MWh of solar photovoltaic (PV) energy
produced, 1 Solar Renewable Energy Credit (SREC)
is created
 These SRECs are sold from the solar generators to
load-serving entities (LSEs), who must purchase a
certain number of SRECs
 If an LSE does not meet its requirement, it must pay
the ACP

◦ The ACP is currently $600 per SREC
◦ This acts as a price ceiling for SRECs

Excess unsold SRECs can be sold to MA government
◦ $300 per SREC with a 5% fee
◦ This acts as a price floor
MA SYSTEM OVERVIEW (CONTINUED)

The total requirement for the next year is
set using a formula
◦ Initially 30 MW ≈ 34,000 SRECs

The requirement for an individual LSE is
proportional to its market share
GOAL: FIND THE FORWARD PRICE CURVE

The forward price curve is based on two
categories
◦ Decisions made by agents
 LSEs
 Generators
◦ Randomness in the system
 Decision profiles of other generators
 Costs, electricity price, future ACP, and more
HOW DO WE ACCOMPLISH THIS?
Multi-agent stochastic simulation
 Simulation run 100’s of times

◦ Agents “learn” from outcomes in previous
runs

Find averages and spreads
◦ Price and Capacity
RESULTS—LOTS OF UNCERTAINTY
≥50% at ACP,
≥25% at price floor
≥50% at price floor
TRADITIONAL ACP
VARIABLE ACP
TRADITIONAL ACP
≥50% at ACP,
≥25% at price floor
≥50% at price floor
VARIABLE ACP