The IPA Letter of Credit must be in an amount of $8 times the number of RECs that the Bidder can win across all systems for the five (5) Delivery Years under the applicable supplier contracts.
For existing systems, you multiply:
- the annual volume of RECs for that system (which can be found in the Bid Form provided with the Part 1 Notification);
- by $8/REC;
- by 5 years (for years 1 through 5 of the delivery term).
For new systems, you:
- multiply the annual volume of RECs for that system (which can be found in the Bid Form provided with the Part 1 Notification) by $8/REC and by 4 years (for years 2 through 5 of the delivery term);
- to this total, you add the sum of the first year volumes times $8/REC.
For example, if you plan to bid on two 500 kW systems as follows:
| System | Technology | Size (kW) | New or Existing? | Annual Volume (RECs) | First Year Volume1 | Collateral Requirement (years 2-5) | Collateral Requirement(First Year) | Total Collateral Requirement |
| System 1 | Solar | 500.00 | New | 701 | 100 | = 701 x 4 x 8 = $22,432 | = 100 x 8 = $800 | = 22,432 + 800 = $23,232 |
| System 2 | Wind | 500.00 | Existing | 630 | 630 | = 630 x 4 x 8 = $20,160 | = 630 x 8 = $5,040 | = 20,160 + 5,040 = $25,200 |
| Total Required IPA Letter of Credit Amount: | $48,432 | |||||||
1 Please note that the first year volume of RECs for new systems cannot exceed the annual volume of RECs for that system.