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Why Has the Price for June 2025 Generated New Jersey SRECs Dropped?
Owners of solar in New Jersey who earn legacy SRECs have experienced a larger than usual decrease in SREC prices with their June 2025 SREC production. Prices are $160 compared to $188 for May and earlier SRECs.
The prices are lower each year for a few reasons. This is OK and expected by solar owners. However, this year is different and SREC prices are a little lower.
Normal reasons why prices are lower each June:
1. Energy years for New Jersey SRECs run June to May. Each June the fine energy companies pay if they do not procure SRECs from solar owners in New Jersey drops $10. The fine for June 2025 to May 2026 is $198 – down from $208 the year earlier.
2. Time Value of money. Energy companies do not have to pay the fine if they do not procure SRECs until December of the following year. Your June 2025 SRECs do not have to be turned in by the energy companies until December 1, 2026. The cost of money for most energy companies is 6-8%. An SREC bought in June 2025 is worth at least $14 less than the fine paid 17 months later.
Why are SREC prices lower this year?
In March 2025 two bills were introduced into the New Jersey legislature. If passed, they would have reduced SREC prices in June 2025 50-75% or eliminate them quicker. The bills are S4300 and A5460. Both bills were pushed by the New Jersey BPU and the Governor’s office. If passed they would affect over 100,000 homeowners and over 5,500 businesses, towns, schools and non-profits with solar in New Jersey. The reason behind the bills is to reduce SREC payments to people who already invested in solar and use the money to incentivize new solar installations. Increased electricity costs in New Jersey (in part because of costs associated with solar development) have become a political liability. Instead of curtailing spending on new solar the BPU has decided to reduce payments to New Jersey residences and businesses who already invested and rely on SRECs to pay back that investment. Both bills did not advance before the summer legislative recess. It is expected that depending upon what happens with the governor’s election these bills or others cutting SRECs will be pushed later this year.
Electricity costs in New Jersey have risen in the last eight years mainly due to Trenton legislators and the New Jersey BPU. They have blocked new natural gas plants to replace retiring gas, coal and the Oyster Creek nuclear plant while at the same time incentivized more solar. Gas plants can generate power 24 hours a day. Solar can only generate when the sun is out. The shortage of generation when people actually need it has caused capacity prices to rise thus increasing electricity rates. Those same legislators intended to replace the retiring gas, coal and nuclear plants with wind built in the Atlantic Ocean. This did not materialize and now there is a shortage of electricity and rising electricity prices for New Jersey.
The price hikes for electricity in New Jersey will not go away for years. The quick installation of natural gas combined cycle plants for baseload and simple cycle gas turbines for short term peak power is the quickest and cheapest route to lower power prices in New Jersey. Pennsylvania is the Saudi Arabia of natural gas in the US with plentiful cheap supply. The New Jersey BPU is fast tracking battery energy storage systems with more ratepayer subsidies which will further increase rates and increase the risk of elimination of your SRECs. Pressure on politicians to do something about electric rates will continue. This increases the risk of change-in-law reducing your SREC payments. The problem of high electricity prices will not go away overnight which means legislative changes reducing your SRECS will not go away soon either.
Should you hold your SRECs and wait for the prices to go up?
We suggest to sell your SRECs on a consistent basis. If you hold them, and a new bill is introduced in the next few months that eliminates the requirement for energy companies to buy SRECs, your SRECs will become stranded. Sell each month or at least four times each year. If you hold and wait to sell until next year, you may make another $10 to $20 per SREC. If the legislation resurfaces the SREC prices may drop significantly.