PA Tier II Market Overview
(Partners)
Market Details
Market Overview
The PA Tier II Market is an open market where prices are determined by market forces. Key factors include the Alternative Compliance Penalty and supply and demand based on the Renewable Portfolio Standard (RPS). The Maryland legislature has recently passed legislation to make the program even more robust.
In 2012, Maryland became the first state in the country to make the energy generated by Geothermal Heating and Cooling Systems (GHC) technologies eligible for the Renewable Portfolio Standard (RPS) as a Tier 1 renewable source. House Bill 1007, passed in 2021, created a carve-out for geothermal.
Market Trend
Current market prices are at ACP for systems installed prior to 1/1/2023 are $30.00/REC as a Tier I renewable sources. Systems installed on or after 1/1/2023 are anticipated to receive ~$100/REC under the new carve out. As this market is considered in its infancy, the market is undersupplied and pricing can be volatile. The quantity of RECs is based on the energy efficiency of a system. A System will generate a set number of RECs annually based on the total conditioned square footage, the type of heating system being replaced, water heater type, and other home energy efficiency factors.
Retroactivity / Eligibility Start Date
A system’s eligibility to start generating RECs is based on the system’s date of installation and inspection date. A system that is not registered in the same year as its installation can generate RECs back to the beginning of the calendar year of registration.
REC Shelf Life
MD SRECs have a shelf life of 3 years.
Example: A SREC generated in 2022 can be counted towards the 2022, 2023, or 2024 compliance periods.
Referral Payments for Installers
As an installer you will receive a set price per ton referral bonus for information sharing and converting your customer to be our registered customers. CSG is currently offering $40/ton. Referral Payments are sent quarterly.
Example:
| Ton | $/tonReferred | Total Referral Earnings |
| 6 | $40.00 | $240.00 |
Contract Options for Customers
Full Upfront - One Upfront Lump-Sum Payment
This option is one payment upfront. This is a “pre-payment” for 25 years of GRECs generated. We calculate this payment based on the size of the system and the energy efficiency of a system. Determining factors include the total conditioned square footage, the type of heating system being replaced, water heater type, and other home energy efficiency factors. Payment is made in full within 60 days of all registrations being approved.
Market-Based - Current Market Rate Minus Commission
Payments will be made by January 31 for the previous years REC delivery. Pricing per REC will be the current market value and a 5% commission will be withheld from payment.
Registration
Overview of the Process and Timeline
The registration process will begin after a system has been installed and inspected and the system owner has signed a REC contract with Carbon Solutions Group. MD requires systems to be registered with the state of Maryland and PJM GATS (A REC generating and tracking system). This process generally takes between 1 - 3 months. Payment to the customer is dependent on the payment option chosen during contracting.
Information/Documentation Requirements
MD
- System Details
- Owner and Installer Affidavits
- Local building permit final approval and/or proof of paid invoice
- ClimateMaster Saving Calculator (Residential)
- Installer’s Engineering Study (Non-residential)
- Certificate of Good Standing if the owner is a corporation
PA
*EE/DSM Measure
*Energy Efficiency Ratio (EER)
*Heating Seasonal Performance Factor (HSPF)
System Photo
Local building permit final approval and/or proof of paid invoice
Installation agreement
We appreciate the opportunity to work with you.
Carbon Solutions Group Contact Information
Setup a call with us: www.calendly.com/SREC_Customer_Call
Phone: 888-237-7732
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