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New Jersey Solar Renewable Energy Certificate (SREC) prices are declining. With the robust pace of installations there will most likely be an oversupply of SRECs in the New Jersey market in Energy Year 2012. This includes production from June 2011 to May 2012. Prices for this period are approximately trading around $550 per SREC, which is 15% lower than the current trading price of $655 for Energy Year 2011 SRECs. If the rate of solar installations continues at this rate, prices can be expected to drop into the $400s and even into the $300s for the Energy Year 2012 SRECs.
Most solar investors only look at the spot price of SRECs. They are unaware of the recent drop in forward prices until the end of July when the new Energy Year rolls over and SRECs are minted. Development will most likely continue at the rapid clip until the lower prices are widely known within the industry. Most installers will increase sales while the prices are high and look to lock in contracts.
The high spot prices of New Jersey SRECs has brought in increased competition and has lowered install costs significantly. The competitive nature of higher SREC prices created lowered margins and brought to a mature solar industry to NJ in a short period of time.
Long-Term 10 year SREC contracts recently awarded to installations in JCP&L, ACE, and RECO SREC solicitations will have to be absorbed by ratepayers for years to come. Most of these contracts were awarded at prices as high as $450 for periods as long as 10 to 15 years and have not even been built yet. Lower SREC prices are designed to eliminate higher cost projects and only low cost projects will develop.
Solar developers can lock into 3 to 5 year bilateral contracts directly with Load Serving Entities (LSEs). Flett Exchange actively brokers these contracts.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
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