New Jersey SREC Prices Remain High on Lower Solar Installations

New Jersey SREC update August 2015:
The first of the energy year 2016 SRECs were minted on July 31st. Prices continue to remain strong in the mid $220s. It appears that there is still active buying by electric companies for their 2015 compliance which is due this fall.
Sellers continue to sell at these high prices and volume has been robust. Most sellers that have accumulated SRECs are selling which is why the exchange has seen selling activity in all energy years – 2013, 2014, 2015 and now 2016.
SREC Prices Remain High on Lower New Solar Installations
On July 23rd the NJ Office of Clean Energy released their NJ_Solar_Market_Update_06_30_2015-3 of how much solar was installed in June. There were 14.4 Mw installed bringing the statewide total capacity to 1,500.7 Mw. This is another relatively light month of new solar installations. The average amount of new solar installed during the last six months was only 11.5/Mw. These low monthly installation reports continue to have a bullish effect on the SREC prices. (We feel there is some type of disconnect and that a large amount of projects will hit at any month.)
BPU Auction Clears at $246.42
The BPU conducted an auction for 42,000 SRECs on July 14th and the clearing price was $246.42. This was more than $10 over the price traded in the market which may indicate that there were a few buyers that were being forced to pay up to make compliance for energy year 2015. Prices have been $15 to $20 below that level since the auction.

Where are prices going from here?

As long as buyers need SRECs for their ry 15 compliance due this fall the prices will remain strong. Once they are done we expect the market to pull back to $200 or less this fall. We also expect a very large new solar installation number to hit in the next few months. It just does not make sense that solar installations are so low on a monthly basis while the economics (low installation costs and high SREC prices) are so favorable. If new installations are being withheld they will have to hit the states reports at some time. In the meantime the current numbers from the state indicate a continually strong SREC market.

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.

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