PA Tier II AEC market prices: historical and current
The Pennsylvania Alternative Energy Portfolio Standard (AEPS) program publishes weighted average Alternative Energy Credit (AEC) prices for each compliance year. Tier II AEC prices have increased substantially over the past several years, driven by growing AEPS compliance obligations and constrained supply. This page summarizes historical Tier II pricing and what drives market movements. All data sourced from PennAEPS (pennaeps.com).
Tier II AEC pricing by compliance year
| Compliance Year | Weighted Avg Price | Price Range | ACP |
|---|---|---|---|
| 2024–25 | $26.92 | $0.01 – $41.00 | $45.00 |
| 2023–24 | $26.68 | — | $45.00 |
| 2022–23 | $18–22(est.) | — | $45.00 |
| 2021–22 | $14–18(est.) | — | $45.00 |
| 2020–21 | $10.86(est.) | — | $45.00 |
Source: Pennsylvania Alternative Energy Portfolio Standard Program (PennAEPS), pennaeps.com. Prices reflect certified Tier II AEC retirements for each compliance year. Approximate values noted where official data has not been published. ACP = Alternative Compliance Payment — the penalty rate paid by EGSs in lieu of purchasing AECs.
What drives Tier II AEC prices?
ACP ceiling
The Alternative Compliance Payment (ACP) rate of $45.00/AEC acts as a natural price ceiling. When AEC market prices approach the ACP, EGSs may choose to pay the penalty rather than buy credits. This creates a soft cap on market pricing.
AEPS obligation growth
Pennsylvania's AEPS requires increasing percentages of alternative energy each compliance year. As the Tier II obligation grows, demand for AECs increases — driving prices upward when supply doesn't keep pace.
Supply constraints
The Tier II supply pool is limited by the number of active, PennAEPS-certified projects and generators. Energy efficiency projects have a 15-year deemed life, but new project enrollment is required to replace retiring credits. Periods of constrained supply — particularly for demand-side management credits — push prices toward the ACP ceiling.
Market timing
Most EGS AEPS compliance filings occur in the spring following each compliance year (June 1–May 31). AEC procurement activity typically peaks in Q1–Q2 of the calendar year, influencing spot and contracted pricing.
At $26.92/AEC (2024–25 weighted avg), a 500 kW CHP system running 8,000 hours annually generates approximately $107,000 in AEC revenue per year — for up to 15 years.
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