  Solar Renewable Energy Certificate (SREC) markets are a market-based system
that incentivizes solar energy generation. A regulatory body imposes a lower
bound on the amount of energy each regulated firm must generate via solar
means, providing them with a tradeable certificate for each MWh generated.
Firms seek to navigate the market optimally by modulating their SREC generation
and trading rates. As such, the SREC market can be viewed as a stochastic game,
where agents interact through the SREC price. We study this stochastic game by
solving the mean-field game (MFG) limit with sub-populations of heterogeneous
agents. Market participants optimize costs accounting for trading frictions,
cost of generation, non-linear non-compliance costs, and generation
uncertainty. Moreover, we endogenize SREC price through market clearing. We
characterize firms' optimal controls as the solution of McKean-Vlasov (MV)
FBSDEs and determine the equilibrium SREC price. We establish the existence and
uniqueness of a solution to this MV-FBSDE, and prove that the MFG strategies
form an $\epsilon$-Nash equilibrium for the finite player game. Finally, we
develop a numerical scheme for solving the MV-FBSDEs and conduct a simulation
study.

Mathematical Finance;Systems and Control;Theoretical Economics;Systems and Control;Optimization and Control;Trading and Market Microstructure