New Jersey SREC prices have rallied from an all-time low price of $60 in October to $80 most recently on the Flett Exchange trading platform. We think the market has found its bottom at this time.
We think that a bottom is put in place for three main reasons:
1. selling volume decreased dramatically at the $60 level
2. solar installation rates have started to decrease
3. most new solar investment cannot be supported by SREC levels below $90.
On Flett Exchange we have witnessed decreasing volume of selling at these low price levels. Many solar owners have opted to “sit it out” this fall and wait and see what prices will do. Our trading screen indicates that selling interest will pick up again at $95 and there should be resistance at that level and higher.
The amount of new solar installed on a monthly basis is the largest factor determining future SREC prices in New Jersey. Remember, the whole reason SREC prices crashed is because too much solar was put in too quickly. A build rate of only 10mw per month would have satisfied the power companies’ requirements. At one point earlier this year the 12 month average was 37 Mw installed per month. October 2012 solar installations were only 16Mw which is the lowest monthly install figure since May of 2011. With the new legislation that was passed in July an average of 15 to 17Mw per month is needed. Any more than this will put the market oversupplied once again. The next two months of installations are expected to be double this number however, the overall trend is decreasing.
The price of new solar installed has plummeted in the past year and it is expected to continue to decrease for the next 12 months. The decreasing cost of new solar installations means that the added revenue stream from SRECs does not have to be as high. However, a $60 SREC is not high enough to encourage most new solar development at these install prices.
We suggest to our sellers to sell consistently to average out your SREC sales for the year. Don’t get overzealous! Last year some people did not sell when the market rallied and are still holding all of their SRECs. It is next to impossible to sell the high so an averaging approach reduces your risk of holding large volumes of SRECs at low prices.
Flett Exchange customers can sell their SRECs in a variety of ways:
1. You can call us in the office at 201-209-0234
2. Check the price on our website www.flettexchange.com and send the SRECs to us on GATs
3. Do it all on-line by accessing our trading platform. www.flettexchange.com/portal/
You can always ask us a question at
More about 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). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 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. (201) 209-0234.
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.