SREC Market in NJ Collapses!

Sales for Solar Renewable Energy Certificates (SRECs) for the reporting year 2007 are coming to a close before their Aug. 31st expiration. Buyers for the publics’ SRECs have been scarce, presumably because utilities have already met Renewable Portfolio Standard (RPS) requirements for the year-end true-up period OR are willing to pay $300 each for Solar Alternative Compliance Payments (SCAPs). The question remaining is how the following years’ markets will work if supply far outweighs demand.

The best price now being paid for 2007 SRECs is $35.00. Offers to sell have continued to drop lower and lower as the month continued, showing the lowest price at $100. 00 — a far cry from the hoped for price of well above $200. Past low monthly averages for the reported ten months of this year hover around $138 with reported highs averaging close to $255. Reported lows are likely due to deals that were contracted for multiple years when that price seemed attractive. In a healthy open market, SREC sales would be likely to fetch far above this price.

Due to the scarce market for buyers, system operators who have either been allotted their SRECs too late into the true-up period or who haven’t taken the time to post them are left out in the cold. SREC owners are anxious to find an efficient marketplace where they can be sold. Currently, acceptable buyers are no where to be found.

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New Jersey