The New Jersey SREC market rallied up in the last week. Prices for energy year 2013 SRECs broke above $120 briefly on Monday, February 4th on the Flett Exchange SREC marketplace. This is up significantly from the low of $60 in October. As of this writing bids were $110 for energy year 2013 SRECs and $100 for the older 2012 vintage SRECs.
The market has trended higher as the rate of new solar installations in New Jersey have ratcheted back down during the last six months. Also, the first effects of the new legislation that was passed in July are also being felt. This past week there was a very large electricity auction (the BGS or the Basic Generation Services Auction) in which the winners win the ability to supply electricity for a period of 3 years in New Jersey. These 3 years correspond with the increase in SREC demand that was included in that new law. Electric companies have to procure a larger amount of SRECs and as a result this has supported SREC prices recently. This accounted for the quick jump in prices during the past week.
Increased demand should keep a floor under the market however; a prolonged rally will most likely be muted because of the very low price of new solar installations. New solar installations are only half of the cost that they were as recently as 2 years ago. Some installations in New Jersey are reportedly being built for $2 to $2.50/watt. The low cost of installation means that SREC prices do not have to be much higher than $120 to $150. If SREC prices go much higher than that a large amount of new solar will be built which will in turn depress SREC prices again.
It is also expected that the next round of selling from the Electricity Distribution Companies (EDC’s) will be announced soon. The last auction was in October. This auction may have as many as 70,000 to 90,000 SRECs. It is likely that buyers will temper their bids in the spot market until after the large auction.
As we have suggested in the past, we recommend selling your SRECs on a consistent basis to average out the prices during the year.
Flett Exchange customers can sell their SRECs in a variety of ways.
3. Do it all on-line by accessing our trading platform.
We will process your payment the same day. Customers can also place orders to sell SRECs at higher prices by either calling our trading desk at 201 209 0234 or by logging on to their Flett Exchange account and placing their orders themselves.
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DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.