System Dynamic Modeling of Solar REC Markets

The Massachusetts Department of Energy Resources (DOER) contracted MCG to build a system dynamics computer simulation model of DOER’s solar renewable energy credit (SREC) program.

The DOER employed system dynamics to better understand potential SREC market behavior, such as how PV developers may make decisions about initiating new installations, what strategies utilities would use to purchase SRECs, and how adjustments to the minimum standard growth rate could meet policy goals while minimizing ratepayer impact. Model results led DOER to make fundamental changes to the SREC program design, which were eventually written into regulations. MCG and DOER also co-authored a report entitled System Dynamic Modeling of the Massachusetts SREC Market, which describes the project in detail.