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SREC prices continue to surge. Flett Exchange customers sold SRECs on December 3 at $625 and the next order to sell sits at the $650 level. This is a quick accent to the $711 cap for the 2009 energy year.
There is a shortfall of solar installed at the present time. The Board of Public Utilities BPU requires Electric Producers to produce a certain percentage via solar and if they do not they must buy SRECs. This is all spelled out in the Renewable Portfolio Standard RPS. The Electric producers paid the fine SCAP to the State for the shortfall last year and it is expected that the payments will be much higher for the current energy year.
This shortfall has propelled the SREC prices higher. These higher prices should encourage more solar installations. The BPU has also taken extra steps to facilitate more solar installations. The absence of long term contracts for SRECs has been a hurdle in the past. Without long term contracts, solar developers can not obtain bank financing for good projects. The BPU recognized this and ordered the Local Distribution Companies LDCs (Jersey Central Power and light, ACE) to offer 10 to 15 year solar contracts. The necessary legal steps are being taken and solar developers will be able to submit proposals to the LDCs for long term contracts in the first quarter of 2009.
The SREC market looks tight for the balance of the 2009 energy year. 2010 looks tight as well unless all goes smoothly with the long term contracts and all associated solar project installs.
On the other hand energy use in New Jersey has decreased in the past few months due to the slowing economy. This is a moving target that affects the amount of SRECs needed. However, this factor is most likely not going to offset the increasing requirement for solar and the shortfall in installations to meet that target.
Call Flett Exchange LLC at (201) 209-0234 or email us at SREC@flettexchange.com to buy or sell SRECs.
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