It’s Official: Renewable & Storage Assets Must Participate in PJM’s Capacity Market – Are You On The List?

On February 20, 2025, the Federal Energy Regulatory Commission (FERC) approved PJM’s proposal to eliminate the categorical exemption for intermittent renewable and energy storage assets to participate in its capacity market. This ruling takes effect immediately and requires all existing solar, wind, and battery storage projects with Capacity Interconnection Rights (CIRs) to participate in PJM’s Reliability Pricing Model (RPM) starting with the 2026/27 BRA, scheduled for July 9, 2025. PJM recently posted the list of existing resources required to offer into RPM auctions starting with the 2026/27 BRA on their RPM webpage here.

This change represents a major policy shift for renewable and storage asset owners in PJM. While capacity revenues may now be available to assets that previously hadn’t accessed them, so are new market obligations and risks. In this article, we detail what you need to know, the deadlines that are rapidly approaching, and how our team is helping solar and storage developers and asset owners in PJM prepare for mandatory market participation.

In a decisive move, FERC accepted PJM’s December 2024 proposal to eliminate the long-standing RPM must-offer exemption for intermittent and storage resources. The ruling applies to all operational projects with CIRs, including standalone solar, standalone wind, standalone storage, and any mix of wind-solar-storage hybrid systems.

Previously, these resources were exempt from participating in RPM due to their limited dispatchability and/or duration and perceived performance risk. However, the scale of renewable deployment and its increasing overlap with traditional generation ownership required market reform.

PJM argued that allowing renewable or storage asset owners to be exempt from capacity auctions could enable the withholding of supply, ultimately inflating price signals, potentially to the advantage of companies also owning traditional thermal assets, and compromising system reliability. FERC agreed, stating that the change will help ensure more accurate auction outcomes, reflect available capacity in the market, and eliminate the risk of market manipulation.

Affected battery and solar asset owners must now comply with an advanced regulatory timeline:

• February 21, 2025: Rule became effective
• March 11, 2025: Deadline to request a unit-specific Market Seller Offer Cap (MSOC)
• April 20, 2025: Deadline to accept IMM determination of MSOC
• July 9, 2025: 2026/27 BRA opens and mandatory participation begins

Additionally, any renewable or storage project currently in development will be required to participate in RPM auctions immediately following achieving its commercial operation date (COD). Planning ahead and managing key pre-auction deadlines will be critical, as failing to do so could create unnecessary financial risk for projects. In particular, the first relevant pre-auction deadline for the subsequent 2027/28 BRA is the binding Notice of Intent (NOI), which is due no later than June 7, 2025.

Mandatory participation in PJM’s capacity market means new risk exposure and upside potential. To balance that shift, PJM has implemented additional reforms, including:

• Updated MSOC Rules: Intermittent and storage resources can now request to price their offers based on a unit-specific price, allowing for a more tailored approach to managing risk.
• Modified Performance Assessment Interval (PAI): PJM previously narrowed the triggers for when non-performance charges can be assessed, lowering the likelihood of penalties during normal grid conditions.
• Penalty Cap: Penalties are now capped at 150% of a resource’s actual annual capacity revenue, rather than the higher administratively-set Net Cost of New Entry rate (Net CONE).

Despite these beneficial changes, the operational and financial challenges of entering the capacity market for the first time should not be underestimated.

SYSO has spent years helping renewable and storage developers navigate PJM’s evolving market design. With the RPM must-offer rule now approved, we’re working hands-on with clients to:

• Determine Qualification: We assess whether your project is required to participate, including nuances for hybrid assets.
• Quantify MSOC Strategy: We guide clients through the new unit-specific MSOC process to request realistic offer price caps.
• Forecast Capacity Value: SYSO helps determine your likely capacity value based on PJM’s accreditation rules and auction planning parameters.
• Ensure Operational Readiness: For projects that face additional dispatch requirements, SYSO’s 24/7 Network Operations Center (NOC) provides turnkey support.

Whether your project is in the queue or already online, SYSO has the experience and infrastructure to help you succeed in this new PJM landscape. The upcoming auction is just around the corner. With new rules now in effect, proactive planning isn’t optional, especially if you have any projects in PJM’s RPM must-offer list for the 2026/27 BRA. Contact our team today to start building your capacity market roadmap!