Alternative Compliance Payment (ACP)

If an electricity supplier fails to meet their state's RPS requirements by securing the necessary number of RECs, it must pay a penalty called an Alternative Compliance Payment (ACP). The ACP effectively sets a price ceiling on RECs since an energy supplier would never purchase a REC priced above the ACP.

In states with a solar carve-out, energy suppliers can also be charged a penalty called the Solar Alternative Compliance Payment (SACP). Just as the ACP sets a price ceiling on RECs, the SACP effectively sets a price ceiling on SRECs since an energy supplier would never purchase an SREC priced above the SACP.