Posted on April 3, 2024

Solar installed in New Jersey prior to 2017 generate SRECs for 15 years. After that time they generate Class 1 RECs. SRECs are worth $200 or more. Class 1 RECs trade for $30 today and go only as high as $50.

It is confusing as to when your system is going to convert from SRECs to Class 1 RECs. Here is what you need to do to figure this out.

1. Look up your online date for your solar facility on GATS. This is listed under the facility and it is also on each SREC as “Vintage (month and year of commercial operation): Part 4 - Vintage Vintage (month and year of commercial operation): 07/2008
2. New Jersey law says that a solar array generates SRECs for 15 full energy years. This means that you get SRECs for up to 15 years and eleven months, depending on what month your array went online.
3. Energy years start in June and end in May.

Here is a Key:

If your array went online from July 2007 and up to and including June 2008 the last SREC you will mint is May 2023. Your first Class 1 REC will be your June 2023 generation.

If your array went online from July 2008 and up to and including June 2009 the last SREC you will mint is May 2024. Your first Class 1 REC will be your June 2024 generation.

If your array went online from July 2009 and up to and including June 2010 the last SREC you will mint is May 2025. Your first Class 1 REC will be your June 2025 generation.

And so on…

When you produce Class 1 RECs you sell them the same way on Flett Exchange. You can either check the price on the Flett Exchange website https://www.flettexchange.com/ and transfer them on GATS to Flett Exchange, LLC or you can list them for sale on the Flett Exchange trading platform and transfer them on GATs to Flett Exchange,LLC. when you are filled. 

Since Class 1 RECs are lower priced we suggest to wait 6 months to a year to sell them in bulk. Class 1 RECs are only good for 3 energy years so do not wait too long or they will go worthless. SRECs are good for up to 5 energy years. 

It is very important to enter your meter readings within 30 days after your system gets converted to a class 1 facility. If you do not put in your meter readings within 30 days all of the months that you deserve to earn SRECs will be created as Class 1 recs. You may lose thousands of dollars!!!

GATS will send you an email that says the following:

“Your solar electric generation facility's NJ SREC eligibility period will reach the end of its qualification life within Energy Year ("EY") 2021 which ends on May 31, 202X. All generation should be entered prior to the last business day in June. Facility eligibility will be changed from Solar (SREC) to Class I (REC) on July 1, 202X. “

Flett Exchange is the largest exchange for New Jersey Solar Class 1 RECs. Many energy companies compete to purchase SRECs and Class 1 RECs on our exchange which ensures you get the going market price. 

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New JerseySRECResearchSolarNJ Class 1

Posted on March 5, 2024

Flett Exchange operates a market for Maryland Geothermal RECs, or commonly called GRECs. Owners of certified geothermal facilities in Maryland – homes, businesses, schools, hospitals – sell their GRECs on Flett Exchange. Energy companies purchase GRECs on Flett Exchange to comply with Maryland’s Renewable Energy Portfolio. If energy companies do not purchase enough GRECs they have to submit a compliance payment to the state of Maryland. That compliance payment is $100 until 2025 and is reduced after that. See the compliance schedule decrease under “specifications”. 

Owners of geothermal facilities can register and sell their GRECs directly on Flett Exchange. Flett Exchange also offers full-service GREC management. For full-service managed clients Flett Exchange will register your system with the state of Maryland, register with the database that creates GRECS, and sell your GRECs along with all of our other GREC clients. Sellers benefit from the increased prices due to the large volume Flett Exchange transacts. 

The following are some of the main aspects of the MD GREC Market:

1. Installation date: January 2023 cut-off. Prior to January 2023 MD geothermal facilities produced Class 1 RECs. January 2023 or later installations produce GRECs. 

2. MD Class 1 REC price cap: $30

3. MD GREC price cap: $100 -moving down to $65. See the schedule.

4. Residential and non-residential geothermal facilities in Maryland qualify for GRECs differently. 

1. Residential:

1. installed in a residential home that is not owned by a business. The system must meet ENERGY STAR standards and not feed electricity back into the grid.

2. Non-residential:

1. At a commercial building; or

2. At multi-family housing units that qualified as low- or moderate-income housing on the date the system was installed on the property; or

3. At institutions that primarily serve low- or moderate-income individuals and families, including i) schools with a majority of students who are eligible for free and reduced prices meals; ii) hospitals with a majority of patients eligible for financial assistance or who are enrolled in Medicaid; and iii) other facilities that serve individuals and families where a majority of those is enrolled in Federal or State Safety Net Programs.

4. A system with a 360,000 BTU capacity is eligible for geothermal renewable energy credits only if the Company installing the system provides for its employees:

1. Family-sustaining wages;

2. Employer-provided health care with affordable deductibles and co-pays;

3. Career advancement training;

4. Fair scheduling;

5. Employer-paid workers’ compensation and unemployment insurance;

6. A retirement plan;

7. Paid time off; and

8. The right to bargain collectively for wages and benefits

5. Low income carve-out. Energy companies must procure 20% of the GREC obligation from low-income geothermal facilities. Low or Moderate Income (LMI) for GREC purposes is a household with an aggregate annual income that is below 120% of the area median income. The ability to qualify for the low-income tag on the GRECs may help in the future if the GREC market gets oversupplied because these may retain value longer. 

6. New Geothermal facilities must register with the Maryland Public Service Commission and GATS. Flett Exchange will register for full-service GREC clients.

Register for either a do-it-yourself or a managed GREC account on Flett Exchange to take the first step to receive payments for your GRECs. 

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MarylandPress ReleasesSRECResearchMaryland GREC

Posted on Feb. 13, 2024

All RECs registered in GATS from solar and wind facilities in PJM installed after January 1, 2003 can be used for New Jersey Class 1 compliance. Also, New Jersey Solar facilities that have outlived their SREC qualification of 15 years (or 10 years if the SRP registration for the solar project was filed on or before October 29, 2018) qualify as Class 1 RECs. These can be purchased by energy companies to satisfy their class 1 compliance. The life of the Class 1 rec is three energy years. Energy years run June to May. Compliance is done in the fall of each year.

How do I sell my Class 1 RECs?

If your New Jersey solar facility no longer qualifies for SRECs you can sell them as Class 1 RECs on Flett Exchange. It is the same process as you did with your SRECs except you sell them on the Class 1 market of Flett Exchange. If you have an account with Flett Exchange you can transfer them on GATS to the Flett Exchange account. Enter the Class 1 sell-now price published on the www.flettexchange.com homepage. We will process the trade, email you a confirmation and issue payment the next day. 

New Jersey Class 1 REC Value

The range for Class 1 RECs in New Jersey is $0 to $50. $50 is the Alternative Compliance Payment (ACP), or fine, that energy companies in New Jersey have to pay if they do not procure enough Class 1 RECs. The value for Class 1 RECs is $30 at the beginning of 2024 and is expected to move up to the $40 to $45 levels during the 2025 to 2030 timeframe. This rise is expected because New Jersey law requires energy companies to either produce more renewable energy or buy more Class 1 RECs in the coming years. 

TAGS:
New JerseyPress ReleasesSRECResearchSolarNJ Class 1

Posted on April 27, 2023

Washington D.C. has passed a law (B24-0950 / L24-0314) to change its renewable energy infrastructure requirements, making the District’s climate goals more aggressive than previously anticipated.  

With the number of installs in Washington DC doubling in the past few years, The Local Solar Expansion Act aims to re-balance the supply-demand fundamentals for the market. The bill will change the current solar carve-out from 10% of all delivered electricity to 15% by the year 2041. Additionally, the SACP (Solar Alternative Compliance Payment, or “penalty price”) is being reduced from $500.00 to $480.00 starting in 2024, and then gradually coming off $20.00 each year. This penalty price provides a theoretical ceiling for the cost of Solar Renewable Energy Credits (SRECs) in any given year. With that price being altered to a more conservative ramp-down, investor confidence will remain high and allow for further investment in the district. Although it is one of the smallest SREC markets in the country, the law’s passing allows Washington D.C.to remain one of the most premium. 

Flett Exchange will continue monitoring Washington, D.C. SREC markets and provide any additional updates as they are released.   

TAGS:
Washington DCResearch

Posted on Jan. 21, 2022

Flett Exchange is now a market participant within the Virginia Solar Renewable Energy Credit (VA SREC) space, completing our first transactions as the new guidelines have become available.  We are now able to procure RECs and provide pricing for VA credits that have the appropriate accreditations on the GATS platform.  

While the specifics of the market rules and regulations are still coming to light, Virginia has emerged as a new and interesting space for solar development in the US.  Following the passing of the Virginia Clean Economy Act of 2020 (VCEA), both Dominion and Appalachian Power Company are now tasked with completing a Renewable Portfolio Standard on behalf of the customers they serve.  The VCEA mentions a few stipulations, but all RECs generated from 2017 and forward are eligible to be bought and sold for buyers to meet compliance. The amount of credits that both Dominion and APCo must procure to meet their compliance ramps up year over year with the hopes of incentivizing solar development within the state.  Both utilities must be 100% carbon free by the year 2050.

As it pertains to the residential customer, 1% of all RECs bought must come from facilities that are considered “Distributed Generation”, i.e. facilities that are less than 1MW in size.  This is designated by GATS by having a “D” applied to one’s Virginia State Certification Number.  

We have posted our current pricing for VA SRECS on our website under the “Virginia” tab. Like many other PJM markets, there is an Alternative Compliance Payment, or ACP, that places a “cap” on the value of each credit. The ACP is $75 for 2021 and increases 1% each year.  As we continue to monitor the amount of solar that is installed within Virginia, the price of spot market transactions will fluctuate with supply-demand fundamentals.  Any updated pricing will be reflected as such.

Flett Exchange has completed all  necessary set up to make sure that it provides liquidity and transparency to owners of the Virginia small distributed facilities.  In order to begin selling  through our exchange, register for an account on the Flett Exchange website.  We are happy to assist you with any questions you might have.

TAGS:
SRECVirginia

Posted on April 13, 2021

The Maryland legislature passed legislation that will raise the fine (Solar Alternative Compliance Payment) for power companies if they do not procure enough MD SRECs from solar owners. The current legislation sets a fine of $80 per SREC for 2021 and lowers each year to $20.35 by 2030. The bill raises that fine $15 to $20 each year. As of publication we are awaiting the Governor to sign it into law. The proposed fines are shown below.

The same bill also decreases the amount of solar that the energy companies have to procure. Taking into account the amount of solar installed in Maryland and the growth rate this should not have an effect on solar owner’s prices of their SRECs. The only way it will is if an unexpected amount of solar is installed in the next few years.

This is welcome news for solar owners in Maryland along with homeowners and businesses planning on installing a new solar array. The current SREC price caps were inhibiting solar development. We expect the rate of solar installations to increase in Maryland if this bill is passed.

Click here to view the full Amendments.

The following is the text for the Amendments to Maryland Senate bill 65 2021-2022 legislative session:
 

SB0065/773192/1                 

BY:     Economic Matters Committee   

AMENDMENTS TO SENATE BILL 65 

(Third Reading File Bill) 

AMENDMENT NO. 1

            On page 1, in line 2, strike “Qualifying” and substitute “Tier 2 Renewable

Sources, Qualifying”; in the same line, after “Biomass” insert “, and Compliance Fees”; in line 3, after the first “of” insert “altering the renewable energy portfolio standard for certain years; extending the eligibility of certain Tier 2 renewable sources for purposes of the renewable energy portfolio standard in certain years; altering the compliance fee for a shortfall from the required percentage of energy from certain Tier 1 renewable sources for the renewable energy portfolio standard in certain years;”; in line 7, after “Act;” insert “providing for the effective dates of this Act; making a conforming change;”; in line 11, strike “and” and substitute a comma; in the same line, after “(s)” insert “, and (t)”; in line 16, strike “and” and substitute “, 7–703(b)(16) through

(25),”; and in the same line, after “7–704(a)” insert “, and 7–705(b)(2)”.

AMENDMENT NO. 2

On page 1, after line 20, insert:

“Article – Public Utilities

7–701.

            (a) In this subtitle the following words have the meanings indicated.

            (t) “Tier 2 renewable source” means hydroelectric power other than pump                        storage generation.

7–703.

            (b) Except as provided in subsection (e) of this section, the renewable energy                     portfolio standard shall be as follows:

                        (16)     in 2021[,]:

                                    (I)       30.8% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least 7.5% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)                                 of this subtitle derived from offshore wind energy; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (17)     in 2022[, 33.1%]: 

                                    (I)        30.1% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [8.5%] 5.5% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)

of this subtitle derived from offshore wind energy; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (18)     in 2023[, 35.4%]: 

                                    (I)        31.9% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [9.5%] 6% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)

                                    of this subtitle derived from offshore wind energy; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (19)     in 2024[, 37.7%]: 

                                    (I)        33.7% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [10.5%] 6.5% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)

                                    of this subtitle derived from offshore wind energy; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (20)     in 2025[, 40%]: 

                                    (I)        35.5% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [11.5%] 7% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)

            of this subtitle, not to exceed 10%, derived from offshore wind energy; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (21)     in 2026[, 42.5%]: 

                                    (I)        38% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [12.5%] 8% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)

of this subtitle derived from offshore wind energy, including at least 400 megawatts of Round 2 offshore wind projects; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (22)     in 2027[, 45.5%]: 

                                    (I)        41.5% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [13.5%] 9.5% derived from solar energy; and

                                    [(ii)] 2. an amount set by the Commission under § 7–704.2(a) of this subtitle derived from offshore wind energy, including at least 400 megawatts of Round 2 offshore wind projects; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (23)     in 2028[, 47.5%]: 

                                    (I)        43% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [14.5%] 11% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)

of this subtitle derived from offshore wind energy, including at least 800 megawatts of Round 2 offshore wind projects; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES;

                        (24)     in 2029[, 49.5%]: 

                                    (I)        47.5% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least [14.5%] 12.5% derived from solar energy; and

                                    [(ii)] 2. an amount set by the Commission under § 7–704.2(a) of this subtitle derived from offshore wind energy, including at least 800 megawatts of Round 2 offshore wind projects; and

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES; AND

                        (25)     in 2030 and later[,]: 

                                    (I) 50% from Tier 1 renewable sources, including:

                                    [(i)] 1.             at least 14.5% derived from solar energy; and

                                    [(ii)] 2.            an amount set by the Commission under § 7–704.2(a)

of this subtitle derived from offshore wind energy, including at least 1,200 megawatts of Round 2 offshore wind projects; AND

                                    (II)      2.5% FROM TIER 2 RENEWABLE SOURCES

7–705.

 (b) (2) If an electricity supplier fails to comply with the renewable energy portfolio standard for the applicable year, the electricity supplier shall pay into the Maryland Strategic Energy Investment Fund established under § 9–20B–05 of the State Government Article:

(i) except as provided in item (ii) of this paragraph, a compliance fee of:

1. the following amounts for each kilowatt–hour of shortfall from required Tier 1 renewable sources other than the shortfall from the required Tier 1 renewable sources that is to be derived from solar energy:

A.        4 cents through 2016;

B.        3.75 cents in 2017 and 2018;

C.        3 cents in 2019 through 2023;

D.        2.75 cents in 2024;

E.        2.5 cents in 2025;

F.        2.475 cents in 2026;

G.        2.45 cents in 2027;

H.        2.25 cents in 2028 and 2029; and

I.         2.235 cents in 2030 and later;

2. the following amounts for each kilowatt–hour of shortfall from required Tier 1 renewable sources that is to be derived from solar energy:

A.        45 cents in 2008;

B.        40 cents in 2009 through 2014;

C.        35 cents in 2015 and 2016;

D.        19.5 cents in 2017;

E.        17.5 cents in 2018;

F.        10 cents in 2019;

G.        10 cents in 2020;

H.        8 cents in 2021;

I.         6 cents in 2022;

J.         [4.5] 6 cents in 2023;

K.        [4] 6 cents in 2024;

L.        [3.5] 5.5 cents in 2025;

M.       [3] 4.5 cents in 2026;

N.        [2.5] 3.5 cents in 2027 [and 2028];

O.        [2.25] 3.25 cents in [2029] 2028; [and]

P.        [2.235] 2.5 cents in [2030 and later] 2029; and

Q.        2.25 CENTS IN 2030 AND LATER; AND

3. 1.5 cents for each kilowatt–hour of shortfall from required Tier 2 renewable sources; or

                                    (ii)       for industrial process load:

                                    1.         for each kilowatt–hour of shortfall from required Tier

1 renewable sources, a compliance fee of:

A.        0.8 cents in 2006, 2007, and 2008;

B.        0.5 cents in 2009 and 2010;

C.        0.4 cents in 2011 and 2012;

D.        0.3 cents in 2013 and 2014;

E.        0.25 cents in 2015 and 2016; and

F.        except as provided in paragraph (3) of this subsection,

0.2 cents in 2017 and later; and

                                                2.         nothing for any shortfall from required Tier 2 renewable sources.

 SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read as follows:”.

 On page 4, in line 15, strike “through 2020”; in line 18, strike “2.” and substitute “3.”; in line 20, strike “3.” and substitute “4.”; in the same line, after “That” insert “Section 2 of”; and after line 22, insert:

            “SECTION 5. AND BE IT FURTHER ENACTED, That, except as provided in

Section 4 of this Act, this Act shall take effect June 1, 2020.”.

DISCLAIMER: Maryland SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
MarylandSRECSolar

Posted on April 29, 2020

NO.

All new solar installed after April 30, 2020in New Jersey will qualify for a TREC instead of an SREC. If you already have solar you still generate SRECs. TRECs have no correlation to the value of your SRECs. 

New Jersey electricity retailers are required to purchase a certain number of SRECs each year. The number that they buy is a preset percentage set by a schedule. It is determined by law. 

If you installed solar prior to November of 2018 you get 15 years of SRECs. If you installed between November 2018 and April 2020 you qualify for 10 years of SRECS. If you install after April 30, 2020 you get TRECs. Simple.

The new TRECs ensure that new solar installations do not compete with you selling your SRECs. 

You do have to worry about the decrease in electricity demand due to Covid-19 shut-downs in regard to your SREC prices. If shut-downs extend for a prolonged period of time, and if economic activity does not pick up to previous levels, energy companies will not be forced to buy as many SRECs from you. This may lead to an oversupply of SRECs and subsequent price-drop.

We suggest to always sell your SRECs on a consistent basis, especially when SREC prices are 90% of their potential which they are now.

TAGS:
New Jersey

Posted on March 10, 2020

DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
New JerseyResearchSolar

Posted on Dec. 10, 2019

This is a bill, not yet a law.

This bill would allow the Board of Public Utilities (BPU) to increase the cost to customers of the State’s Class I renewable energy requirement during energy years 2022 through 2024 above the current limit of seven percent of the total paid for electricity by all customers in the State, under certain conditions.

Under the bill, the BPU could only make this increase if the cost of the Class I renewable energy requirement is less than nine percent of total energy costs during energy years 2019 through 2021 (the limit set by current law). In addition, the total amount paid by customers during energy years 2019 through 2024 could not exceed the sum of: (1) nine percent of total energy costs during energy years 2019 through 2021; and (2) seven percent of total energy costs during energy years 2022 through 2024, i.e. the maximum amount allowed by current law over that six-year period.

“Energy year” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends.

https://www.njleg.state.nj.us/2018/Bills/S4500/4275_I1.HTM

     “Energy year” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends. 

DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
New JerseyPress ReleasesSREC

Posted on Nov. 15, 2019

DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
New JerseySRECSolar

Posted on Aug. 9, 2019

The New Jersey Board of Public Utilities (NJBPU) today proposed a rule to amend the Solar Renewable Energy Certificate (SREC) program. The rule proposal amends the SREC Registration Program (SRP) to include a process for the Board determining that 5.1 percent of the electricity sold in New Jersey has been attained from solar electric generation facilities. The Clean Energy Act of 2018 requires the closure of the current SREC program to new applications either when the state meets the 5.1 percent milestone or by June 2021, whichever comes first. The proposed rule will be published in the New Jersey Register with a 60-day public comment period.

“New Jersey’s solar program has been incredibly successful, recently surpassing 110,000 solar installations, creating an estimated 7,000 jobs, and rapidly approaching the 3 Gigawatt milestone. The state has a strong interest in seeing an effective solar program continue,” said NJBPU President Joseph L. Fiordaliso. “As we transition to a new solar program central to our goal of achieving 100 percent clean energy by 2050, we remain committed to ensuring a healthy solar market which continues to play a critical role for the benefit of all New Jersey residents.”

Under the rule proposed today, NJBPU staff would provide the Board with quarterly status reports on the progress toward the 5.1 percent threshold until it appears that this milestone will be reached within six months. Subsequently, staff will provide monthly forecasts. As soon as the 5.1 percent milestone is reached, staff will recommend the Board terminate the SRP. At that point, projects conditionally registered after October 29, 2018 which have not commenced commercial operations will not be certified as eligible to create SRECs.

The Board will publicly announce that the 5.1 percent milestone has been reached when the state’s installed solar capacity is estimated to have produced 5.1 percent of the retail sales estimated to have been sold over the previous twelve months. The Board is committed to providing an open and transparent public dialogue prior to the termination of the SREC registration program on whether Board action is necessary to ensure that the solar market in New Jersey continues to remain healthy.

About the New Jersey Board of Public Utilities (NJBPU)

The NJBPU is a state agency and regulatory authority mandated to ensure safe, adequate and proper utility services at reasonable rates for New Jersey customers. Critical services regulated by the NJBPU include natural gas, electricity, water, wastewater, telecommunications and cable television. The Board has general oversight and responsibility for monitoring utility service, responding to consumer complaints, and investigating utility accidents. To find out more about the NJBPU, visit our web site at www.nj.gov/bpu.

About the New Jersey Clean Energy Program (NJCEP)

The NJCEP, established on January 22, 2003, in accordance with the Electric Discount and Energy Competition Act (EDECA), provides financial and other incentives to the State's residential customers, businesses and schools that install high-efficiency or renewable energy technologies, thereby reducing energy usage, lowering customers' energy bills and reducing environmental impacts. The program is authorized and overseen by the New Jersey Board of Public Utilities (NJBPU), and its website is www.NJCleanEnergy.com.

DISCLAIMER: Maryland SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

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New JerseyPress ReleasesPublic Auctions

Posted on May 29, 2019

May 29, 2019

New Law

This past weekend Maryland Governor Larry Hogan did not veto the Clean Energy Jobs Act which is now law. It requires at least 50% of the electricity in Maryland be derived from Tier 1 renewable sources which are at least 14.5% in-state solar by year 2030. It provides an immediate stimulus for solar by increasing the demand in 2019 to 5.5% up from the old requirement of 1.95%

Big Win for Owners and Investors in MD Solar

This law is a boon for owners of existing solar in MD, new investors of solar and any of the associated businesses involved in the development of solar projects.

SRECs; Then and Now In MD

SREC’s are the primary funding sources for solar in MD. Flett Exchange has run a market for MD SRECs since July of 2009. At that time the goal was to obtain 2% solar by year 2022 and SREC prices on Flett Exchange were $370 for MD SRECS. During the last 10 years the price to install solar decreased significantly and the 2% goal in MD was achieved quicker than expected. The state legislature and governor in MD were unsuccessful in putting new solar growth targets into law for a few years. This resulted in a slow-down of new solar development and the prices for SRECs decreased in response. Prices for MD SRECs dropped below $30 in 2016 and traded under $10 until recently. Due to the anticipated and eventual passage of this Clean Energy Jobs Act SREC prices have moved up above $60 as of today. We provide historical pricing on our website for your reference based on our Flett Exchange Daily Settlement price. Current owners of Solar in MD are taking advantage right now and selling their SRECs as the prices rise on the Flett Exchange MD SREC spot market via immediate delivery and payment.

What’s Next for Solar in MD?

The major take-away of this new law is that it creates a strong, long-term goal for demand for SRECs which is what solar investors look for.  As opposed to other states, it takes a well-balanced approach by protecting ratepayers by way of a lower compliance payment which starts at $100 and gradually decreases to $20.23 by year 2030. This is important in that solar investors want to be confident that the mandates are less likely not to be rolled back due to rate increases. The following is a table comparing the previous solar mandates to the new ones implemented via the Clean Energy Jobs Act:

How do you Sell SRECs if you own Solar in MD?

Flett Exchange is celebrating a decade of servicing Maryland solar owners this summer! We look forward to the next ten years and assisting our current and all future Maryland Solar investors. We offer a do-it-yourself SREC service for those who don’t mind handling the GATS meter readings and transfers. If you sign up you gain access to our exchange 24x7 for immediate transfer and payment. For those who want a hassle-free full-service brokerage we offer Flett REC Manager. We will handle all of your meter readings, SREC minting in GATS and process your sales and payments immediately upon SREC creation. We are efficient at what we do so we have low fees to match. Our goal is to help you maximize your revenues on your solar investment! Sign up for either service on our website.

www.flettexchange.com

DISCLAIMER: Maryland SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
MarylandSRECMaryland Clean Jobs ActSolar

Posted on April 30, 2019

DISCLAIMER: Pennsylvania SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
PennsylvaniaPress ReleasesSREC

Posted on April 9, 2019

DISCLAIMER: Maryland SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
MarylandPress ReleasesSREC

Posted on March 4, 2019

DISCLAIMER: Pennsylvania SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
PennsylvaniaSREC

Posted on Feb. 12, 2019

The Staff of the New Jersey Board of Public Utilities (“BPU”) invites all interested parties and members of the public to participate in the continued public stakeholder process to fully inform the design of the New Jersey solar transition required by P.L. 2018, c.17 (the “Clean Energy Act”). This process will include the comments and input received previously, and will build upon the experience of the State and of other jurisdictions. Likewise, this approach is intended to be completed by the statutory deadline, and to provide stakeholders the certainty necessary for continued success for the solar industry.

On May 23, 2018, Governor Phil Murphy signed the Clean Energy Act, which directs the BPU to:

adopt rules and regulations to close the [Solar Renewable Energy Certificate] SREC program to new applications upon the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system. The board shall continue to consider any application filed before the date of enactment of P.L.2018, c.17. The board shall provide for an orderly and transparent mechanism that will result in the closing of the existing SREC program on a date certain but no later than June 1,2021.

Additionally, the Clean Energy Act directs the Board of Public Utilities to:

 

1Not a Paid Legal Advertisement

complete a study that evaluates how to modify or replace the SREC program to encourage the continued efficient and orderly development of solar renewable energy generating sources throughout theState.

Furthermore, the Clean Energy Act mandates that:

the board shall ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection shall not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively, and shall not exceed seven percent of the total paid for electricity by all customers in the State in any energy year thereafter. In calculating the cost to customers of the Class I renewable energy  requirement imposed pursuant to this subsection, the board shall not include the costs of the offshore wind energy certificate program established pursuant to paragraph (4) of this subsection. The board shall take any steps necessary to prevent the exceedance of the cap on the cost to customers including, but not limited to, adjusting the Class I renewable energyrequirement.

 

 

SREC Transition Principles

Staff will be guided by the following “SREC Transition Principles”:

1.     Provide maximum benefit to ratepayers at the lowestcost;

2.     Support the continued growth of the solarindustry;

3.     Ensure that prior investments retainvalue;

4.     Meet the Governor’s commitment of 50% Class I Renewable Energy Certificates (“RECs”) by 2030 and 100% clean energy by2050;

5.     Provide insight and information to stakeholders through a transparent process for developing the Solar Transition and SuccessorProgram;

6.     Comply fully with the statute, including the implications of the cost cap;and

7.     Provide disclosure and notification to developers that certain projects may not be guaranteed participation in the current SREC program, and continue updates on market conditions via the New Jersey Clean Energy Program (“NJCEP”) SREC Registration Program (“SRP”) Solar ActivityReports.

 

 

Program Assumptions and Overview

The Clean Energy Act defines the transition point as “the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system.” For purposes of this proposal, “attainment” means that 5.1% of the actual kilowatt-hours sold in the state are being generated by solar electric power generators. This will result in the following categorization ofSRECs:

·       Legacy SRECs: SRECs created by projects that filed an SRP Registration and entered into operation prior to the attainment of the 5.1% transitionpoint.

·       Pipeline SRECs: SRECs created by projects that filed an SRP Registration but which have not entered into commercial operation prior to the attainment of the 5.1% transition point.

·       Successor SRECs: SRECs created by projects that filed an SRP Registration (or replacement mechanism) after the attainment of the 5.1% transitionpoint.

o The SREC Successor Program is the program for the allocation and valuation of Successor SRECs. The current SREC program is designated as “current SREC program”.

In this proposal, SREC Transition (or Solar Transition) is defined as those steps necessary for the definition of the 5.1% transition point; the treatment of Legacy SRECs; the treatment of Pipeline SRECs; and the treatment of Successor SRECs.

Stakeholder Process

Working within these principles and assumptions, Board Staff wishes to bring together all interested stakeholders, beginning in January, for a full discussion of the benefits and liabilities of the different approaches to developing and implementing a SREC Transition in compliance with statutory requirements.

Staff would like to set forth the following proposed schedule for the process of developing the SREC Transition process:

Dec 2018:                               Staff releases Solar Transition Straw Proposal Jan – Feb2019:                             Stakeholder meetings on the StrawProposal

April –July2019:                   Working groups & workshops conducted onspecific

elements of the Transition

Aug – Sept2019:                    Rule proposal presented toBoard

Sept – Nov2019:                    Public comment period on rule proposal Dec 2019:                                       Amendments to ruleproposal

Jan – Feb2020:                      Public comment period on rule proposal March 2020:                            Rule adopted byBoard

 

The first Solar Transition Stakeholder Meeting will be held:

Date:        Friday, January 18,2019

Location: Rutgers University College Avenue Student Center 126 College Ave, New Brunswick, NJ 08901 Multipurpose Room, 2nd Floor.

Time:       10a.m.

 

Stakeholders wishing to speak are asked to register in advance to solar.transitions@bpu.nj.gov no later than 5:00 p.m. on Wednesday, January 16, 2019. Stakeholders wishing to speak without prior registration will be allowed to sign up to do so upon arrival to the Stakeholder Meeting, and will be called to speak following the preregisteredspeakers.

Additional stakeholder meetings will be announced subsequently.

Written comments are also encouraged and must be submitted to Aida Camacho-Welch, Secretary, New Jersey Board of Public Utilities, Post Office Box 350, Trenton, New Jersey,

08625. Written comments may also be submitted electronically to solar.transitions@bpu.nj.gov in PDF or Microsoft Word format. All comments must be received on or before 5:00 p.m. on Friday, February 22, 2019. Please note that these comments may be considered “public documents” for purposes of the State’s Open Public Records Act. Stakeholders may identify information that they wish to keep confidential by submitting them in accordance with the confidentiality procedures set forth in N.J.A.C.14:1-12.3.

 

 

Request for Comments

In light of the statutory directives and the SREC Transition Principles, Staff invites stakeholders to submit comments on the SREC Transition and SREC Successor Program. Additionally, Staff seeks detailed comments on the following issues and questions.

Board Staff strongly requests that stakeholders submit quantitative information to support any assertions pertaining to numerical aspects of the SREC Transition and the SREC Successor Program. Stakeholders are therefore highly encouraged to include, as part of any comments, any calculations, graphs, and tables that are relevant and illustrative to the content of the comments. The calculations, graphs or tables must include an attachment which  clearly explains all assumptions used and a copy of any data employed (in a Microsoft Excel file or other easily shared data tool). Stakeholders may identify information that they wish to keep confidentialbysubmittingtheminaccordancewiththeconfidentialityproceduressetforthin

N.J.A.C. 14:1-12.3.

In addition to the below question, Staff also wishes to set forth the following proposal for discussion and consideration:

·       Defining attainment as being met when 5.1% of the actual kilowatt-hours sold in the  state come from solar electric powergenerators.

 

·       Recognizing that, based on the definitions proposed above, Pipeline SRECs are those projects that have filed an SRP Registration but have not entered into commercial operation prior to the attainment of the 5.1% trigger. Recognizing that those Pipeline SRECs will not be used for satisfaction of the RPS of the Legacy SRECs, in order to ensure that the current market does not becomeover-supplied.

 

·       Developing a process whereby the Pipeline SRECs are eligible for either a transitional program or able to roll into the SREC Successor Program, as developed. As part of the design process, the Board would consider how to ensure that Pipeline SRECs are considered and provided value (including whether to develop a separate program for Pipeline SRECs, or roll those Pipeline SRECs into the SREC Successor Program, as developed).

 

·       Over an 18-month period, closely monitor the price cap to ensure that it is not exceeded, with the recognition that the Board could exercise its authority to reduce the Class I RECs in the event of the cap beingexceeded.

With that in mind, Staff presents the following questions for consideration and discussion:

1)    In your direct experience, how has the current SREC program functioned over the past 5 years?

 

2)    How should any proposed SREC Successor Program be organized in conformance with the Clean Energy Act and Staff’s SREC Transition Principles? Please provide detailed quantitative and qualitative responses as to the perceived pros and cons of each of the followingoptions:

a.     a fixed priceSREC;

b.     a market-determined SREC;and

c.     any otheroption(s).

 

3)    Based on your response to question 2 above, provide precise quantitative and  qualitative recommendations as to how your preferred SREC Successor Program model would be implemented, keeping in mind the necessity of satisfying the “SREC Transition Principles” set forthabove.

 

4)    How should Legacy SRECs be valued? Should these Legacy SRECs be valued under the SREC Successor Program or valuedseparately?

 

5)    How should Pipeline SRECs be valued? Should these Pipeline SRECs be valued under the SREC Successor Program or valuedseparately?

a.     Should the Board continue the current SREC program as a separate program? If so,how?

b.     Should the Board include the current SREC program within the SREC Successor Program? If so,how?

 

6)    For any solar transition, should the Board set a megawatt (“MW”) target for annual new solar construction? If so, should those targets be defined as percentage of retail sales or a set MW cap? Under what circumstances and/or assumptions is this targetachievable?

 

7)    In any SREC Successor Program, should the Board seek to set annual MW capacity caps for new solar construction or percentages of retail sales? Why or why not? If yes, what should be the value through 2030 and why? If yes, should the Board seek to set differentiated capacity caps under the solar RPS based on projecttype?

 

8)    In the SREC Successor Program, should the Board provide differentiated SREC or solar value incentives to different types of projects? Should such differentiated SREC compensation be created through SREC multipliers, through an add-on valuation, or through some other method? Based on what factor(s) should any SREC compensation bedifferentiated?

 

9)    How should the cost cap be measured? Should any “head space” under the cost cap in the first years be “banked”? Why or whynot?

 

10)Can and should the cost cap be determined based on net costs that include some type of valuation of associated benefits? If so, what should those qualitative and quantitative benefitsbeandhowshouldtheybeassignedavalue?IftheBoardcanandshould

consider a net benefits test, should other cost impacts be included? Which ones? Why? If other cost impacts should not be included, whynot?

 

11)What steps should the Board take to implement the cost cap? In particular, please discuss the pros and cons of decreasing the Class I REC Renewable Portfolio Standards. Should any measures implemented differentiate among the different type of Class I renewable energy technologies? Should these measures differentiate among the different market sectors (e.g. utility-scale grid supply versus small residential systems)? Should these measures be technology neutral? Why or whynot?

 

12)Should the solar industry transition into a true, incentive-free market as the costs of solar begin to approach “grid parity be a goal, or even a consideration, of the SREC Successor Program? If so, how can a SREC Successor Program assist that transition? Should a transition also encompass changes to the net metering program (cf. ongoing FERC/PJM review of DERaggregation)?

 

13)Please provide comments on any significant issues not specifically addressed in the questions above, making specific reference to their applicability in the New Jersey context. Please do not reiterate previously madecomments.

DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
New Jersey

Posted on Oct. 29, 2018

The Clean Energy Act, signed by Governor Murphy on May 23, 2018, included the following provision:

“For all applications for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.) the SREC term shall be 10 years.” L. 2018, c. 17, §2(d)(3).

At its agenda meeting earlier today, the New Jersey Board of Public Utilities clarified the language above as follows:

• SRP REGISTRATIONS SUBMITTED IN THE ONLINE PORTAL ON OR BEFORE TODAY’S DEADLINE1 AND DEEMED COMPLETE WILL RECEIVE A 15-YEAR SREC QUALIFICATION LIFE.

• SRP REGISTRATIONS SUBMITTED IN THE ONLINE PORTAL AFTER TODAY’S DEADLINE WILL RECEIVE A 10-YEAR SREC QUALIFICATION LIFE.

• APPLICATIONS RECEIVED BY THE BOARD FOR CONDITIONAL CERTIFICATION PURSUANT TO SUBSECTION T PRIOR TO TODAY’S DEADLINE THAT FULFILL ALL CONDITIONS ESTABLISHED BY THE BOARD SHALL RECEIVE A 15-YEAR SREC QUALIFICATION LIFE.

1 The “Deadline” is defined as 11:59:59 PM EST on October 29, 2018

Additional details are as follows:

SRP Eligibility Process

To qualify for a 15-year SREC qualification life, a registration must be submitted in the online portal (http://njcepsolar.programprocessing.com/) under the status Application Received on or before 11:59:59 PM EST on October 29, 2018 (Deadline), and:

1. Contain all the items and information identified on the SRP Checklist required to be deemed complete, or

2. Within two weeks of an email from the Program Manager/Administrator to the registrant identifying one or more minor deficiencies with the registration, successfully resolve those minor deficiencies. a. If the minor deficiencies are not successfully resolved within two weeks from the date of the email, the registration will be rejected and the registrant would be required to resubmit a new registration packet.

For the avoidance of doubt:

A. Any registrations submitted after today’s Deadline will only be eligible for a 10-year SREC qualification life.

B. Any registration submitted in the online portal under the status Application Received on or before the Deadline, but that is determined to be incomplete due to a major deficiency, will be rejected and if resubmitted after the deadline will only be eligible for a 10-year SREC qualification life.

C. Any registration submitted in the online portal under the status Application Received on or before the Deadline, but that is determined to be incomplete due to a minor deficiency, will have two weeks to successfully resolve the minor deficiencies to remain eligible for a 15-year SREC qualification life.

D. Registrations having the status Pending Uploads as of the Deadline will not be considered submitted in the online portal and therefore will not be eligible for a 15-year SREC qualification life.

 For information regarding the definition of Major/Minor Deficiencies, please see:

http://www.njcleanenergy.com/srpforms

________________________

Implementation of New Jersey 10 Year SREC term

TAGS:
New JerseySREC

Posted on Sept. 19, 2018

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.

TAGS:
Washington DCPress ReleasesSREC

Posted on Sept. 11, 2018

September 2018

In May 2018 New Jersey AB 3723 was passed which instituted major changes to the New Jersey solar incentive market revolving around SRECs.

History:

New Jersey was one of the early leaders in providing ratepayer incentives through SRECs to solar owners. Flett Exchange launched its’ New Jersey SREC market in June of 2007 to help facilitate an open and competitive market. The SREC program was created to provide a long-term 15 year pay-back as opposed to the large up-front incentive program that existed in New Jersey. Solar installation costs dropped quicker than expected during the last decade. As of the fall of 2018 New Jersey has close to 100,000 solar installations and produces over 3% of its electricity from solar. A major market reform was instituted in 2012 which increased demand for solar. This increase in demand averted a collapse in in SREC prices which kept solar investors whole and provided demand for a few more years of new solar development which satisfied solar developers. This same change slashed the cost cap by more than 50% to protect ratepayers. By 2016 it was apparent that once again costs to install new solar dropped quicker than expected. AB 3723 was passed in May 2018.

AB 3723 major changes:

1. Closes the current SREC program to new applicants by June 2021

2. Mathematically attempts to close the SREC program by timing the curtailment of supply of new solar while increasing demand at the same time thus “pinning” high SREC prices for the next 10 – 15 years.

3. Adds a 7% cost cap by 2022 that is complicated/impossible to model and relies on BPU action and will most likely not kick in for years. The cost cap favors the wind development portion of the RPS by protecting it from this cap. The solar portion will be most likely be ratcheted down through reduced solar compliance costs.

(Plain English: Bail-out legislation for current solar owners (Attempts to keep SREC prices above $200 for years) that at the same time gives solar developers 2 to 3 years to cash in on projects before a new incentive program is created. Ratepayers who pay for it will never understand it which limits/reduces political risk for passing it. Provides for costs shifting 5+ years out from solar compliance to wind compliance thus potentially reducing SREC prices at that time)

Price Projection and Risks for Sellers of New Jersey SRECs:

AB 3723 prevented the New Jersey SREC market from a collapse which was inevitable by 2019-2021 due to the pace of solar development in New Jersey which was significantly more than what the legislation called for. In all SREC markets that experienced similar events – PA, MD, OH, SREC prices dropped to $10 or less for years. It appears that SREC prices will remain at the $180 to $250 range for the next 3 to 5 years (2018 to 2020/22) Analysis for prices and hedging strategies going out 3+ years are available to our registered and active customers.

DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.

TAGS:
New JerseySRECResearch

Posted on April 19, 2018

On April 19, 2018, the Pennsylvania Public Utility Commission published its interpretation of Act 40 of 2017 signed by Governor Tom Wolf on October 30^th 2017 in regards to the compliance eligibility of out of state solar facilities SRECs in the Pennsylvania market.  The commission ruled that unless an out of state solar facility has a binding contract for their SRECs with a renewable portfolio standard (RPS) buyer prior to October 30^th 2017 the out of state solar facility will no longer have PA state certification on their SRECs after October 30^th 2017.  The SRECs generated (month of generation) prior to October 30^th 2017 from an out of state solar facility will retain their PA state certification and the SRECs remain eligible for the full 3 compliance years.  RPS buyers that have a contracted with an out of state facility prior to the October 30^th 2017 date have 60 days to petition for qualification with AEPS.

Flett Exchange intends to clear all eligible PA certified SRECs.  Out of state PA certified solar facilities intending to sell must contact us and supply proof of certification (CSV file from PJM-EIS of intended inventory to sell) for verification.

Link to the Pennsylvania Public Utility Commission’s final implementation order of Act 40 of 2017 http://www.puc.pa.gov/pcdocs/1562754.pdf 

-Kevin Flett, Director of Operations

PENNSYLVANIA PUBLIC UTILITY COMMISSION HARRISBURG, PENNSYLVANIA 17105-3265

Tier I Solar credits. Given this lack of clarity, we issued a Joint Statement in conjunction with adoption of the TIO offering supplemental statutory interpretations to spur comments in an effort to inform the record.1

 

The Office of Consumer Advocate (OCA) succinctly states the challenge in interpreting Section 2804(2)(i) of Act 40.

 

The OCA submits that the language as written in Act 40 is unclear and the OCA is unable to discern the intent of the section as written. 2

 

Likewise, the comments of Citizens for Pennsylvania's Future (PennFuture) share similar sentiments as OCA, stating:

 Section 2804(2)(i) of Act 40 is ambiguous in regard to how and when the qualification of a facility as an alternative energy generator originates.3

 

We too agree that the language of Section 2804(2)(i) is unclear. Consequently, we are obligated, under the rules of statutory construction, to ascertain the intent of the General Assembly. The Rules of Statutory Construction at 1 Pa. C.S. § 1921(b) provide that:

When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.

 

Since, as the OCA and PennFuture point out, the verbiage here is unclear, we must now refer to 1 Pa. C.S. § 1921(c) which provides:

When the words of a statute are not explicit, the intention of the General Assembly may be ascertained by considering, among other matters:

 (2)  The circumstances under which it wasenacted.

(3)  The mischief to beremedied.

(4)  The object to beattained.

 

(6)  The consequences of a particularinterpretation

(7)  The contemporaneous legislativehistory.

(8)  Legislativeandadministrativeinterpretationsofsuchstatute.

 

The comments filed in response to the TIO have proven instructive in regard to why the General Assembly drafted this legislation, why the Governor signed it into law, and the mischief to be remedied.

 

 

1 Joint Statement of Chairman Gladys M. Brown and Vice Chairman Andrew G. Place entered December 21, 2017 at the instant Docket.

2 Comments ofOCA at page 5 filed February 5, 2018.

3 Comments of PennFuture at page I filed January 18, 2018.

Comments filed by Governor Tom Wolf, Senators Mario M. Scavello, Tom Killion, John

T. Yudichak, Jay Costa, John M. DiSanto, Steward J. Greenleaf, David G. Argall, Wayne D. Fontana, Guy Reschenthaler, and Representatives Michael B. Carroll, Eric M. Roe, Ronald S. Marsico, and Sue Helm are particularly insightful. As lawmakers who effectuated Act 40, these commenters are uniquely qualified to provide the Conunission with information regarding the intent of the statute. Each of the comments provided by lawmakers states that their intent to 'close the borders' for Tier I solar credit qualifications was consistent with the design utilized by a number of our neighboring states to promote economic development. This interpretation is consistent with the supplemental interpretation provided in our Joint Statement and contrary to the proposal of the Conunission in its TIO. Senators Jay Costa and John T. Yudichak descriptively summarize the sentiments and intentions of these lawmakers, stating the following:

 

The Commission's proposed interpretation under the Tentative Implementation Order published in the Pennsylvania Bulletin on January 6, 2018, would "grandfather" systems that are certified in Pennsylvania, rather than physically located in this state. We must respectfully disagree with this interpretation, which we find counter to the intentions of the General Assembly and especially of our colleagues who supported and voted in favor of this legislation.

 

Instead, the joint statement submitted by Chairperson Gladys M Brown and Vice Chairperson Andrew G. Place better reflects our intentions in approving this legislation. Please know that legislation to "close our solar borders" for the purposes of satisfying the Alternative Energy Standards Portfolio Act has been considered in recent sessions and discussions have been exclusive to the physical locations of systems.

 

While we certainly recognize the potential need to address and honor existing contracts, the long-term and primary goals set forth by this legislation have been clear. Specifically, we seek to join our neighboring states that similarly have "closed solar borders" and to advance our commitment to promoting economic and job growth within Pennsylvania's solar energy industry.4

 

In further support of interpreting Sections 2804(2)(i) and 2804(2)(ii) consistent with our Joint Statement, the Department of Environmental Protection (DEP) states that the intention of this provision was to provide certainty that solar photovoltaic energy facilities located within the Commonwealth would not be affected by the changes implemented elsewhere in Act 40.5 DEP also submits that the interpretation outlined in the TIO would essentially nullify the purpose of Act 40 by grandfathering enough currently-certified sources to prevent the law from having any environmental or other co-benefit whatsoever. Comments from the Pennsylvania Farm Bureau also echo this sentiment, stating that TIO interpretation would limit farmers' options for compliance with ever-increasing environmental protection standards.6

 

 

4 Comments of Senator John T. Yndichak and Senator Jay Costa filed on February 2, 2018.

5 Joint comments of the DEP and Governor Tom Wolf (DEP section at page 1) filed February 5, 2018.

6 Comments of the Pennsylvania Fann Bureau submitted February 5, 2018.

Further, ET Capital Solar Partners submits that the Commission's tentative interpretation of Section 2804(2)(i) would make the additional language of Section 2804(2)(ii) redundant.7 ET Capital Solar Partners states that if the legislative intent of Section 2804(2)(i) follows the Commission's tentative interpretation, there would be no need for the additional language of Section 2804(2)(ii) to further protect existing facilities that have entered into agreements with Pennsylvania electric-distribution companies (EDCs) and electric generation suppliers (EGSs) participating in the Pennsylvania markets. Therefore, ET Capital Solar Partners contends that the language of Section 2804(2)(ii) is further evidence that the legislative intent of Act 40 of2017 is to stimulate further investment in solar facilities within the Commonwealth. Again, the rules of statutory construction are guiding here. 1 Pa. C.S. § 1922(2) states the following:

 

In ascertaining the intention of the General Assembly in the enactment of a statute the following presumptions, among others, may be used:

 

(2) That the General Assembly intends the entire statute to be effective and certain.

 

Case law further clarifies the interpretation of this provision, stating that the General Assembly does not intend words to be "mere surplusage." 8

 

When reviewing the totality of comments described above, it becomes evident that Sections 2804(1)(i), 2804(1)(ii), and 2804(1)(iii) explicitly describe the qualifications for Tier I Solar facilities after passage of Act 40; Section 2804(2)(i) clarifies that all Tier I Solar facilities certified before passage of Act 40 that are located within the geographic boundaries of Pennsylvania are to be held harmless from this legislation; and Section 2804(2)(ii) enjoins the legislation from breaching existing contracts from out-of-state Tier I Solar facilities which were entered into before passage to serve the AEPS needs of Pennsylvania entities. Therefore, we believe we must support the adoption of our interpretations of Sections 2804(2)(i) and 2804(2)(ii) in a manner consistent with our Joint Statement to the TIO. These interpretations are as follows:

 

Sections 2804(2)(i) - We interpret the phrase "[a] certification originating within the geographicalboundariesofthisCommonwealth..."asafacilitylocatedwithinPennsylvania havingreceivedanAEPsTierIsolarphotovoltaic sharecertification.

 

2804(2)(ii)- We interpret this section to only permit out-of-state facilities that are (a) alreadycertifiedasAEPSTierISolarPhotovoltaicandthat(b)haveenteredintoacontractwith a Pennsylvania EDC or EGS serving Pennsylvania customers, for the sale of solar credits, to maintain certification until the expiration of the contract. We further wish to clarify that, consistentwiththecommentsprovidedbyETCapital SolarPartners,thismaintained

7 Comments of ET Solar Capital Partners submitted January 17, 2018.

8 Thomas Jefferson University Hospitals, Inc. v. Pa. Department of Labor and Industry, 162 A.3d 384, 393 (Pa.

2017), see also Holland v. March, 883 A.2d 449, 455-56 (Pa. 2005); Green Acres Contracting Comp. v. Commonwealth, 163 A.3d 1147 (Pa. Cmwlth. 2017) and Pa. State Police, Bureau of Liquor Control Enforcement v. Legion Post 304 Home Assoc., 164 A.3d 612,619 (Pa. Cmwlth. 2017) (holding that the rules of statutory constructionrequirethatcourts,wheneverpossible,giveeachwordinastatutorysectionmeaningandnottreatany word as surplusage).

certification should only be applicable to the amount of credits contractually committed to by an out-of-state certified facility to an EDC or EGS.9 EDCs and EGSs seeking to qualify credits under this provision are required to file a Petition within 60 days of the entry date of this order. Procedures for the 2804(2)(ii) contract approval process will be provided by the Commission at this docket.

 

Given this interpretation, we are also required to provide implementation procedures associated with banked credits. The AEPS Act permits EDCs and EGSs to bank, or place in reserve, credits produced in one reporting year for compliance in the next two reporting years.10 Implementation procedures are necessary to address handling of a credit generated by an out-of­ state Tier I solar qualified facility before October 30, 2017, and not retired in PJM's Generation Attribute Tracking System before October 30, 2017. Since Act 40 omits any directive expressly empowering the Commission to modify the attributes of such credits, we believe that these credits should retain the tier attribute assigned at the time the credit was generated. To do otherwise would appear to modify the legal status, or tier attribute, of a credit without explicit statutory authority. The Statutory Construction Act does not presume retroactive effect of statutes. 1 Pa. C.S. § 1926 provides:

 No statute shall be construed to be retroactive unless clearly and manifestly so intended by the General Assembly.

 

Further, the Commonwealth Court case provides guidance here when it determined the following:

 

A retroactive law is one which relates back to and gives a previous transaction a legal effect different.from that which it had under the law in effect when it transpired. This Court has held that "[a} law is given retroactive effect when it is used to impose new legal burdens on a past transaction or occurrence. " R & P Services, Inc. v. Commonwealth, Department of Revenue, 541 A.2d 432, 434

(Pa.Cmwlth.1988).However,section1926oftheStatuto1yConstructionAct providesthat"nostatutemaybeconstruedtoberetroactiveunlessclearlyand manifestlysointendedbythe GeneralAssembly."  1 Pa.CS.§19261.1

 

Therefore, given Act 40's omission of any directive to change the attribute of these banked credits, we submit that any out-of-state Tier I solar credit generated before October 30, 2017, should retain its Tier I solar attribute for the banking life span enumerated in AEPS. This interpretation is supported by the comments of the Retail Energy Supply Association, who states that EGSs may elect to procure varying vintage credits for use in future years in accordance with the prevailing banking rules, thus, the ability to rely on banked credits is an important component necessary for EGSs to effectively manage and satisfy their AEPS Act obligations.12

 

 

9 For purposes of implementation, any alteration, such as a change, update, or extension to a contract applicable

under this provision, and, entered into after October 30, 2017, would not be recognized under 2804(2)(i).

10 The Alternative Energy Portfolio Standards Act of 2004, 73 P.S. §§ 1648.3(e)(6)

ll Kuziakv. Borough of Danville, 125 A.3d470 (Pa. Cmwlth. 2015).

12 Comments of the Retail Energy Supply Association at 7.

In conclusion, we submit that the interpretations provided herein are necessarily required by this Commission consistent with the rules of statutory construction enumerated supra and also consistent with 1 Pa. C.S. § 1921(a), which provides that:

 The object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly. Every statute shall be construed, if possible, to give effect to all its provisions.

With this Order we begin the process of implementing Act 40, while recognizing that there are complexities in implementing and complying with the Act that may reveal issues which require further Commission action. The Commission will address any such issues, at this docket, and in a manner that provides all interested parties appropriate notice and opportunity to be heard.

 THEREFORE, WE MOVE THAT:

(1) ElectricDistributionCompaniesandElectricGenerationSuppliers seeking to qualify credits under Section 2804(2)(ii) of Act 40 are requiredtofileaPetitionwithinsixty(60)daysoftheentrydateof thisorder,thespecificprocedures forwhichwillbeoutlinedatthis docket

 (2)  TheLawBureauandtheBureauofTechnicalUtilityServicesprepare a Final Implementation Order consistent with thisMotion.

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.

TAGS:
PennsylvaniaSREC

Posted on April 13, 2018

The following is a write-up by Michael Flett – President of Flett Exchange, LLC in response to the passage of A-3723 in the New Jersey legislature and now on the desk of Governor Murphy to sign into law.

Renewable energy in America affects everyone today. The societal benefits are obvious - less pollution and infinite energy. In New Jersey, solar energy production is subsidized by the public either as a taxpayer through federal or state incentives or as a regular electricity consumer. They need to be part of the conversation.

Where is the support for this bill?

Due to the widespread benefits and costs one would assume that when crafting solar legislation it would include any and all stakeholders. That was not the case here in New Jersey where a renewable energy bill was quietly folded into a three bill package that included a nuclear subsidy bill and a health care insurance bill!  The environmental community, who you would think, strongly supports renewable energy called for the process to slow down for a more deliberative process in order to create a long term program that would include community solar, not just a “pilot” program. That was certainly not the case with this bill. A small group of solar owners along with financial solar dealers spearheaded the quick passage of this bill in Trenton. If enacted, this law would close the successful free-market SREC program for all future solar development after 2021. As written, it will come at a multibillion dollar cost to ratepayers and divert future payments away from new solar development.  All coming about without the widespread support and dialogue with environmentalists, ratepayers, business owners or even the majority of the homeowners or businesses that invested on solar on their homes and businesses. Flett Exchange has thousands of customers who own solar in New Jersey. These investments were made because of the SREC program and this bill extinguishes that program and causes uncertainty.

SREC = Competition = Fairness

New Jersey has been a nationwide leader for 15 years in solar development. The reason for this success is the open and competitive nature of our incentive program based on the SREC. New Jersey, in its wisdom over a decade ago, made the decision to let the market decide the most economical price for solar to bring in investment and at the same time protect the ratepayer.  Due to the rapid reduction in cost of solar, an adjustment in the states’ law around solar was made in 2012. It worked beautifully. Solar was built. State renewable goals were met. The price to the ratepayer dropped as well. There was absolute freedom for homeowners and business to compete and install solar and earn SRECs.

Due to the success of the SREC program, New Jersey achieved all of its solar build-out goals and under budget. Now, like in 2012, the laws need to be adjusted to bring in the next phase of investment in New Jersey. Consistency needs to be maintained to maintain investor confidence, protect the ratepayer, protect past investments in solar infrastructure and bring more solar to everyone. The open and free SREC market is that tool. It allows for the freedom to compete and allow homeowners and business to install solar. It ensures that if prices drop for solar energy technology in the future, the public who pays for it with their electricity bill, will not be stuck for decades with long term contracts.  The proponents of this bill are only interested in maximizing their rate of return when it comes time to selling their solar projects. They do not have the public’s interest at heart. We can do better.

Now, like in 2012, the cost to install solar has again plummeted.  The state law can be adjusted to bring in the next phase of investment in NJ based on a free and open market called the SREC. The current bill phases out the tools that made New Jersey a solar leader.

Why Remove Fairness from a Successful Program?

Why? Because by closing the SREC program large solar owners will land a multi-billion dollar payday.

Here’s how:

There are over 2,000 Mw of solar installed statewide. There are a few owners with control of 100 Mw each. Based on current free market SREC prices, the typical owner of 100 Mw of solar will earn $50 to $70 million dollars over the next 10 years in SREC payments. (This revenue is based on the forward 10 year curve of SREC prices in a freely traded SREC market prior to the run-up in prices due to this bill)

A-3723, as written, abolishes the SREC market and maximize payments. Those same large owners will earn $250 million in the next 10 years – a $180 to $200 million windfall – each. (The back-end of the SREC curve moves up due to the artificial demand created by this bill) If you add up the total amount for all 2000 Mw installed in New Jersey the cost to the ratepayer over 10 years is $8.5 billion – up from $1.4 to $2.8 billion based on the freely traded SREC. This bill as written will cost the ratepayers of New Jersey $5.7 to $7.1 billion more over 10 years! The majority of this money builds NO new solar! These projects will be sold quickly and when the real costs materialize the public will demand action. To put this in perspective, $6 billion would build an additional 3,000 Mw of new solar at an install cost of $2 a watt. $2 a watt is a fair install price for new solar for medium sized distributed systems that would benefit typical small business’ and homeowners in New Jersey.

The proponents of the legislation have provided one sided cost analysis. All the press releases and articles actually mention that it will save money which is only attainable in economic models in which the inputs are misleading and statistically near impossible.

How do we Maintain Fairness?

The New Jersey legislature and governor need to address solar development today as it was addressed in 2012. All stakeholders have to be heard. The cost analysis needs to be vetted. A clear path forward for the cost of solar development in the future needs to be planned. Plain and simple the path is:

• Maintain open and free access to solar for all investors - SRECs
• Maintain the competitive nature of the SREC market to protect ratepayers
• Increase solar requirements – increase RPS
• Decrease costs- (solar is cheaper now) – decrease the SACP
• Introduce community solar
• Maintain and grow the solar labor market

A-3723 demands closure of the SREC market and re-direction of ratepayer funds away from long term new solar build-out that we have today. A clear reversal of past success.

The passage of A-3723 deviates from all of the success of the market based program that is responsible for the financing of over 80,000 solar installations in New Jersey. If enacted the bill will result in a quick short-term boost in SREC payments to investors of solar in New Jersey. This has happened already in the run-up in prices from $170 to $240 in the past 6 months because of the prospect of the legislation being passed. In reality, owners of solar are being duped into supporting this legislation because of the short-term run-up in prices. In the long term it puts all solar investment in New Jersey at risk by replacing free-market mechanisms by a law that is vague in its long-term support of solar. It de-links past investment in solar from future long-term solar build out. This is a dangerous proposition for those who own solar and rely on SRECs to pay back their investment in the clean energy future of New Jersey.

Short-Term Flips – No Long-Term Path – Sorry, New Jersey

Not one segment wins in the passage of this law except for a few select solar financers. In the next few years they will be able to flip projects for huge profits to unsuspecting investors who will get caught holding the bag in the long term. New Jersey homeowners and businesses who invested in solar and relying on SRECs will be in limbo without the continuation of the SREC program. Finally, and most importantly, the environment loses, the ratepayer loses, labor loses, and the new Investor in solar loses. When the costs are calculated in the next few years it will be apparent at the magnitude of ratepayer funds that were squandered and could have been used in an efficient manner to build out our renewable energy future. The right choice is to continue with a competitive and free incentive SREC market for the benefit of everyone in New Jersey as outlined above.

This bill is not law until Governor Murphy signs it. He can also significantly change it so it retains SRECs, maintains competition, and protects current solar investors and ratepayers or veto it and start over. Most importantly, the bill needs to be changed so that ratepayer funds are used in the most efficient manner to achieve our renewable energy goals. 

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.

TAGS:
New JerseySREC

Posted on July 27, 2017

As expected, the prices of the 2017 vintage New Jersey SRECs are starting to converge with the prices of the 2018 vintages. Prices for 2017 were trading in the $220 to $230 range in recent weeks and have moved down to the $170 level today. After some up and down movement in the next few months they will be trading at a $5 discount to the 2018s which are now at $175.

The sudden move happened because there was an orderly expiration of the July delivery of the 2017 vintage SREC futures contract on Intercontinental Exchange. There was over 230,000 contracts in open interest in the July 2017 contract which is close to 10% of the whole years SREC obligation by all energy suppliers. Futures contracts can exhibit volatility in the last few trading days going into expiration if there is an imbalance of physical to deliver against the futures contract. For this reason the prices were held up for a longer period of time until the contract expired. The lack of volatility in this expiration means that all sellers had procured enough SRECs to satisfy delivery in the GATs by Monday, July, 31^st.

The 2017 energy year is expected to be oversupplied by 7%. In the 2018 energy year it is expected that the installed solar in the whole state will oversupply the energy companies mandated compliance by about 14%. This is the reason why the 2018 vintage is trading at a discount to the 2017 prices last year. Of course the prices will move during the year as we see how much new solar is installed.

As always, we stress to our solar owners to sell consistently during the year to get an average price and not hold.

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.

TAGS:
New JerseyPress ReleasesSREC

Posted on April 4, 2017

SREC Prices are Stable – For Now……
 
After rallying to $250 in the beginning of January the SRECs moved down to $210 and are now steady in the $225 to $230 range.
 
SREC Supply / Demand for This Year
 
SREC supply for RY 2017 is expected to be sufficient.  According to our estimates, SRECs produced this year ending in May along with supply left over from previous years will be about 4% more than what is needed by electricity suppliers. This justifies the prices that have been trading in the $200 to $250 range during the past few months.
 
SREC prices for Future Years – (Actual)
 
The following are current prices for SRECs trading between large commercial solar owners and electricity suppliers in the over-the-counter market.  You will notice that prices decrease in coming years.
 
Ry 2018: $200   (June 2017 to May 2018)
Ry 2019: $160   (June 2018 to May 2019)
Ry 2020: $130   (June 2019 to May 2020)
Ry 2021: $85     (June 2020 to May 2021)
 
3 year strip: $163

4 year strip: $143
 
SREC oversupply estimates for Future Years – (Flett Exchange Estimates)
 
Based on our supply / demand models we expect the supply of SRECs to continue to outpace the requirements in an accelerated fashion. This oversupply will put pressure on SREC prices. An oversupply of SRECs is a result of investors and developers installing more solar than is required by law. The only two ways to avoid an oversupply is for:
 
1. Investors and developers to not overbuild
2. The legislature in New Jersey pass a law to increase the solar requirements. (This happened in 2012)
 
Multiple years of overdevelopment of solar creates an overabundance of SRECs that never go away.
 
Ry 2017: 4% oversupply
Ry 2018: 10% oversupply
Ry 2019: 20% oversupply
Ry 2020: 34% oversupply
Ry 2021: 50% oversupply
 
SREC Price Projections for Future years – (Flett Exchange Estimates)
 
If the oversupply estimates in our models are correct our price estimates are as follows. We expect a drastic drop-off to occur between 2019 and 2020. Our low price may seem extreme but we base it on price action in other states that have become oversupplied – PA – $5, MD $8 and OH – $6.
 
Ry 2018: $140-$220      (this starts this summer)
Ry 2019: $90 to $180
Ry 2020: $40 to $130
RY 2021 on $5 to $85
 
3 year strip estimate: (ry 18 – ry 20): $90 to $176

4 year strip estimate (ry 18 to ry21): $55 to $123
 
Summary:
 
The goals for solar installations set out by New Jersey law under the SREC program have worked perfectly.  The free market price of SRECs has saved the ratepayers of New Jersey hundreds of millions of dollars while it encouraged new investors to install new solar at ever cheaper prices. Outside of a minority of failed (overpriced) fixed price SREC contracts encouraged by solar developers with the blessing of the Board of Public Utilities the ratepayers of New Jersey have benefited from the freely traded SREC market and will continue to benefit for decades to come. Based on SREC market prices the solar development industry in New Jersey passed its inflection point last year and is now starting to turn. This is caused by the decrease in the rate of new solar development under current legislation. For years the legislation encouraged significant new solar development during a time when solar costs have decreased significantly. That law now calls for a lower amount of solar growth. Developers and investors must re-calibrate and develop at a slower pace equal to the mandates by this law. If not, solar development in New Jersey will halt and all investors will suffer. Ratepayers will have to pay more in the future in solar subsidies to jump-start new solar development if confidence by investors in New Jersey solar is lost.
 
If you already own solar in New Jersey and rely on SREC payments to make your investment whole you are at the mercy of new solar investors. If the new investors in solar install at a cheaper price or are willing to accept a lower return on capital then they will continue to push SREC prices lower.  That is only fair since it is an open market and anyone is allowed to invest in solar on their property.
 
Outside of a purely competitive, slight oversupply of SRECs caused by market efficiency there are two (2) controllable factors that can cause an overinvestment above legislated goals. If they are not addressed the result will be a protracted oversupply of SRECs ($10 SRECs):  (Prices in NJ dropped to $60 in 2012 when the developers overbuilt.)
 
1. A lack of knowledge by new solar investors about the amount of solar required under the law. Let’s get down to it. Solar is sold by salesmen. If they want to make the sale they will not give the customer the full story about the risk of SREC oversupply and their ability to repay with SRECs. (To most solar sales people credit they probably don’t know the risk themselves) By the time most people who are signing contracts this spring get the array installed they will get a year or less of $200 SRECs. Their systems will just add to the oversupply of SRECs.
 
2. Fixed, long term, above market priced contracts for SREC granted by the BPU are being awarded and will continue to be awarded as the market gets oversupplied.  The New Jersey Board of Public Utilities actually awarded 10 year fixed contracts just recently at $165 for 10 years fixed. Above market pricing similar to this also happened in 2011 exacerbating the oversupply of solar at that time. The overpayment of SRECs above the free market is absorbed by ratepayers which they will never know. Equally damaged by these contracts are solar investors like yourself that are not lucky enough to have an installation available at the time of the BPU solicitation. This will add uncompetitive solar installations to an oversupplied market and force SREC prices lower for all other solar investors outside of those whose losses are absorbed by the ratepayers.
 
Call to Action:
 
As for solar owners we suggest to sell your SRECs on a monthly basis and not bank any SRECs. The sale of your SRECs at prices in this $200+ area will be needed to average out your sales over the years. Future years need to be discounted based on the high probability of significantly lower prices 3+ years out. In the beginning of August your first 2018 SRECs will be minted. Those prices will be $20 to $30 less than the ones you will be selling in July. We suggest to not hold those and continuously sell them even if they are under $200. Remember, our price estimate for ry 18 (June 2017 to May 2018) is $140 to $220. With that estimate a $190 SREC is still in the middle of the range.
 
As we have since 2007, we will continue to monitor the New Jersey SREC market for you, provide transparent and actionable pricing via our exchange and offer information to help you make the best of your solar investment. In 2012 members of our team testified numerous times at the New Jersey Statehouse during the last update to solar legislation. Hopefully, through transparency of information the market will not get oversupplied as it was last time and solar investment can proceed at the legislated pace.  We will update you with SREC supply and price projections as they develop.

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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Nov. 3, 2016

NEW JERSEY SREC PRICES END A FOUR YEAR RALLY
 
The four year uptrend in spot New Jersey SREC prices between 2012 and early 2016 has officially ended. The market is now in a downtrend. It is making new lows and subsequently lower highs on any rallies. We should expect to see the market find new lows and trade off of varying levels of support as it digests and interprets how new investors react to lower SREC values. Will they throttle back and keep in line with State requirements or will they overbuild like they have in the past?
 
Prices trended higher from a low of $60 in the fall of 2012 to a high of $290.09 on June 13th of 2016. This can be attributed to the adjustment in the law governing solar development which was passed in 2012. The law achieved its goals up to this point as the amount of solar installed has almost exactly matched solar growth rates in the past few years. Prices are now under $220. Short-term support is at $200 and $180. If the market holds $200 now we may not see the $180 level until next spring after the BGS auction.
 
The end of the rally occurred as there were enough SRECs to satisfy all of the energy companies’ compliance needs for the RY 2016 deadline on November 1st. After hitting a low of $235 in August, RY 2016 SRECs led the way and rallied up to $265 briefly on September 27th. At that time the buying for the RY 2016 compliance dried up and energy companies could relax and take their time procuring SRECs for next years’ compliance. Requirements for SRECs increase next year however, new solar installations have been running higher than the State requirement which will produce enough of a cushion so that buyers do not have to worry about a shortfall.
 
Many sellers are still selling their SRECs on the spot market however, buyers and sellers of large blocks of SRECs have been actively negotiating 3 year deals at the $180 level for RY 17, 18 and 19 SRECs. The prices implied for each of these individual years shows where the market prices SRECs in the future:
 
NJ2017=$220
NJ2018=$200
NJ2019=$120
 
Due to the steep discount that the market is placing on SRECs three years out there is less incentive to bank and hold SRECs as sellers have in the past.
 
Year after year there has been significant SREC buying in February as winners of the statewide BGS auction hedge out a portion of their 3 year obligations. The question each year is if prices will rally because of the BGS auction. When the market was in a bull trend there was always a rally on each BGS auction. Now that the clear uptrend has stalled that rally may not repeat itself. At least possibly not to the same degree. Between now and the end of this calendar year we can expect SREC prices to find a support level in anticipation of the BGS buying. Support levels are $200 and $180. A BGS rally off those levels will run into resistance at $220 and $235.
 
Based on current market conditions we recommend to our sellers to sell spot SRECs on a continual basis, especially if the market rallies.

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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Aug. 16, 2016

After reaching a four year high price of $290.09 on June 13^th New Jersey SREC prices have dropped $50 to the $240 level.
 
There are two major reasons why the uptrend has stalled and prices have corrected slightly:
 

1. Most New Jersey electricity compliance buyers have finished procuring their RY 2016 SRECs. Buyers needed to purchase and retire approximately 2,090,000 SRECs (They could use any SRECs generated between August of 2012 and May of 2016). In GATS there are 2,167,382 SRECs available which leaves about a 77,000 oversupply. There will be less than that available because some sellers hold their SRECs and some have been purchased for hedging purposes by other buyers. This leaves the RY 16 market almost “balanced”.  This justifies last year’s uptrend and previous $290.09 high price. Now that they have finished buying for this year the buyers seem to be stepping back and taking their time. They now have over a year to buy for their next compliance.
    
2. The New Jersey BPU reported an increase in the amount of solar being installed. In July they released a report showing upward adjustments to the amount of solar installed last year along with a few completions of large scale grid connect projects. Since February the BPU has reported an additional 186 Mw installed which has also led to the price correction.

It is not expected that the market will drop quickly to levels seen in 2012 in the next year. The 2012 law throttled back the amount of large scale solar farms that can quickly oversupply an SREC market. Also, there has been a shift to more very small residential installations in the last few years and less medium size commercial installations. A surprise oversupply is unlikely however, we need to be on the lookout for a steady increase in supply. The BPU reports new solar installations monthly.
 
As for prices, sellers should not rely on steady uptrends like they saw in the 2013 – 2016 timeframe. Prices will more than likely swing like we have seen recently. We suggest to our sellers to sell if there is any short-term appreciation and if not, make sure that a periodic selling approach is taken to mitigate holding too many SRECs on a protracted down-trend.

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.

TAGS:
New JerseyPress ReleasesSREC

Posted on April 27, 2016

Supply and Demand. This is the main driving factor in MD SREC pricing.

Currently there is 478 mw of solar installations registered in PJM-EIS, the website that creates SRECs.  These facilities will generate an estimated 570,000 SRECs for the 2016 calendar year. Add in the unsold SRECs from 2014 and 2015 (around 100,000 SRECs) and we are looking at an oversupply of 230,000 or more SRECs after the buyers turn in their 2016 SREC purchases.

The 2017 vintage is oversupplied. The RPS requires approximately 615,000 SRECs to be turned in for 2017 compliance year. With the 230,000 plus SREC carry over from 2016 plus the current 478 mw of solar generating SRECs right now that demand is met and oversupplied again by approximately 115,000 SRECs. As the year goes along and more solar is installed the market become more and more oversupplied.

Build Rates: Maryland has been installing more and more solar year over year.  In 2013 around 40 mw was installed, 2014 around 60 mw and in 2015 124 mw!  Yes, in 2015 twice as much solar went on-line then 2014.   If this trend continues, installing double the 2015 number, we could potentially see 248 mw installed this year.  Is this build rate sustainable? Potentially yes, but that’s an aggressive amount to install. However, just this year MD has installed almost 100 mw’s and its only been 4 months. If the 2016 build rate does in fact double we could project a 400,000 SREC oversupply for 2017. If the build rate remains the same, 10 to 11 mw a month, an oversupply of 200,000 plus SRECs could happen.

Legislative variable: Will the current house bill HB116 http://tinyurl.com/zeklecq that just passed in the House and Senate fix the problem? The bill does call to increase the solar carve out. For 2017 the RPS for solar will be increased from 0.95% to 1.15% or increase the demand from 615,000 SREC to about 725,000 SRECs. This increase would soak up the oversupply of SRECs but not if the current build rate continues. The date in which the bill will reach the Governors desk has not been scheduled yet.

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.

TAGS:
MarylandPress ReleasesSREC

Posted on March 8, 2016

New Jersey SREC Prices Slip But Remain Close to Highs
 
The New Jersey SREC market reached a four year high on February 5th with a settlement of $289.78 on the Flett Exchange trading platform. Prices retraced $14 back down to $275 and are now trading close to $280 today.
 
Why have SREC prices risen?
 
SREC prices have remained stable and risen during the past few years because the majority of new solar installed in New Jersey are small lease systems on single family homes as opposed to large scale solar farms which can at times take up 50 or more acres of farmland. Legislation passed in 2012 limited the amount of cheaper large scale grid connect projects in favor for net metered projects (solar on or next to buildings that offset that buildings electricity). Smaller systems cost more than large systems to build so they need a higher SREC price. However, with spot SREC prices at $280 to $290 and 3 year SREC contracts at $245 we should see an increase in new solar construction in the next year.
 
What are solar owners doing with their SRECS?
 
Solar owners in New Jersey are taking advantage of the rising SREC prices and are selling any banked SRECs that they have accumulated along with any that they produce on a month to month basis. We suggest to our solar owners to sell on a consistent basis, especially as prices rise.
 
How do I sell?
 
If you are a Flett Exchange customer and would like to sell your SRECs for immediate payment and delivery you can always log into your Flett Exchange account or give us a call on the trading desk at 201-209-0234. If you are a new customer you can register for an account here. If you have a large amount of SRECs call and we will try to sell your SRECs at higher block prices.
 
The Quickest and Easiest way to sell:
 
Customers can also check out our “sell now price” on our website and transfer your SRECs to “Flett Exchange, LLC” at that price on GATS. We will take care of the rest for you and mail your check or send your proceeds via ACH.
 
Thank you for your continued business over the years!
 
Mike, Shean, Kevin, Brian and Mike

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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Jan. 6, 2016

New Jersey SRECs Rally to Highest Levels in 4 Years!
 
The New Jersey SREC market rallied to the highest levels in four years yesterday. The previous high was $282.58 on December 29, 2011 on the 2012 vintage. Yesterdays’ settlement on Flett Exchange surpassed it by just 23 cents at $282.81 for the spot 2016 vintage.
 
The 2016 vintage SREC has rallied a whopping 30% on the spot market since it started trading in July at $220 on Flett Exchange.
 
Where have SREC prices traded in previous years?
 
You can check out daily historical pricing and charts for New Jersey SRECs on Flett Exchange by clicking here. Our pricing goes back almost 9 years to June of 2007. All our pricing is based on the volume weighted average price of actual spot sales of SRECs by solar owners.
 
Why have SREC prices gone up?
 
Flett Exchange sellers, who are all solar owners, have been actively selling into this rally to take advantage of the high prices. Power companies, who are required to provide a portion of their electricity sales from solar, have been competitively procuring SRECs thus pushing prices higher. The fundamental rise in prices is partially attributable to the low rate of solar installations in New Jersey during the last year. Also, prices have risen in past years in the winter due to the hedging for a large electricity auction which is conducted each year. This may have been the case again this year giving solar owners an opportunity to capitalize on high prices once again.
 
What should I do if I have SRECs?
 
We suggest to our sellers to continue to sell at these high prices. High SREC prices encourage new solar to be installed at a higher rate because those investors will achieve higher returns on their investment. There is generally a lag of over a year in new investment in solar in response to high SREC prices. We should expect an increase in new solar installations this year which should have a dampening effect on New Jersey SREC prices.
 
What is the highest price New Jersey SRECs can go to?
 
The SACP – or the price level that energy companies will be fined for not buying enough SRECs this year – is $323. In prior years, when there were not enough SRECs produced to satisfy the amount required, (which is not the case this year) the market did not trade at the SACP. Most buyers only paid 95% of that value. 95% of this years’ cap is $306.85 for those of you who are looking for an upside objective.
 
How do I sell?
 
If you are a Flett Exchange customer and would like to sell your SRECs for immediate payment and delivery you can always log into your Flett Exchange account or give us a call on the trading desk at 201-209-0234. If you are a new customer you can register for an account here. If you have a large amount of SRECs call and we will try to sell your SRECs at higher block prices.
 
The Quickest and Easiest way to sell:
 
Customers can also check out our “sell now price” on our website and transfer your SRECs to “Flett Exchange, LLC” at that price on GATS. We will take care of the rest for you and mail your check or send your proceeds via ACH.
 
Thank you for your continued business over the years!
 
Mike, Shean, Kevin, Brian and Mike

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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Nov. 3, 2015

New Jersey SREC prices rallied over $240 early this week to reach the highest levels since 2012! Prices are up over 30% from this time last year.
 
Prices are strong because the amount of solar installed in New Jersey on a monthly basis as reported by the Office of Clean Energy this year has been low. During the last 6 months there were only 13 Mw installed on an average basis on the reports. Monthly builds near 20Mw over a longer period of time is what is estimated to be needed to supply the energy companies with their mandated SREC requirement.
 
The overall supply for SRECs is less this year because most of the oversupply has been retired as a result of the legislation enacted in 2012. It requires a significant increase in SREC obligations in the short term. Also, that same legislation limited the installation of new large scale solar farms that led to the majority of the SREC crash in 2012.
 
We do expect to see a backlog of new larger solar farms hit the monthly installation numbers in the next few months along with other new projects that are vying for EDC fixed rate contracts. In the past solar developers have waited to install new solar in order to be eligible for the BPU mandated 10 year SREC contracts that shift risk from solar owner to the ratepayer.
 
Depending upon when this backlog of projects hits the market will determine a potential top of the market. If it does not happen for a few months the market may continue to rally. If it happens this month we may be nearing a potential top of the market.
 
We suggest to our solar owners to sell SRECs on a consistent basis to better achieve an average SREC price over the year. This also limits the risk of not selling your SRECs and the prices dropping as they did 3 years ago.
 

Flett Exchange - New Jersey SREC Price / Supply November 2015

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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Aug. 5, 2015

NJ_Solar_Market_Update_06_30_2015-3-3 pdf

TAGS:
New JerseySREC

Posted on Aug. 5, 2015

 
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.

TAGS:
New JerseySREC

Posted on March 12, 2015

SREC prices have risen 29% to $214.72 average in February 2015 compared to $166.30 in February 2014. Prices are currently trading $200 for new SRECs for immediate payment and delivery on the Flett Exchange trading platform. This is off from 3 year highs of $220 reached last month.
 
Prices rose in January and February due to the active hedging leading up to and after the BGS auction in which energy providers contract to sell electricity to New Jersey customers who do not choose a 3rd party supplier. The auction winners competitively manage their SREC obligations by buying spot and long term contracts from solar owners and shovel-ready solar projects. In another closely watched auction Electric Distribution companies of New Jersey sold 32,766 SRECs yesterday at a clearing price of $211.01. (Larger volumes tend to get a premium on the auctions)
 
The New Jersey Office of Clean Energy reported that 17.8 Mw of solar was installed in February bringing the total up to 1,456 Mw of operating solar. This amount of solar almost exactly matches the average amount of solar installed during the past 6, 12 and 24 months. It appears that the solar development in New Jersey is under control and is developing in line with state growth goals set out by legislation.
 
Prices for SRECs may drop in the future if the development exceeds the state mandates which is why we monitor the monthly build rates. We suggest to sell your SRECs on a consistent basis when prices are high like they are now.
 
The following is a chart showing SREC prices compared to monthly install rates.
 

New Jersey Solar - SREC Prices and Mw Installation Rates - February 2015

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.

TAGS:
New JerseySREC

Posted on Jan. 8, 2015

New Jersey SREC Prices Reach 3 Year Highs!
 
New Jersey SREC prices have rallied to the highest level seen since January 2012! SRECs are trading above $200 for both 2014 and 2015 energy years.
 
Prices have rallied for a few reasons:
 
1. Legislation passed by the Democrats and signed into law by Governor Christie in the summer of 2012 to save the solar market is working.
 
2. The new solar installations have been very light on a monthly basis as reported by the New Jersey Board of Public Utilities. Only 7.7 Mw were installed in November.
 
3. Prices have rallied in prior years at this time of the year due to energy companies buying SRECs for hedging purposes.
 
4. There are not as many SRECs available for sale on the spot market the first half of the energy year because many of the large installations use their first SRECs to deliver against long term contracts.
 
We expect the rate of solar installations to pick up in the coming months due to the favorable economics of solar investing in New Jersey – low panel prices coupled with higher SRECs and historically high electricity prices in New Jersey. If there are high installation rates on a continual basis it will lead to lower SREC prices in the future. In the meantime prices seem to be on an up-trend.
 

If you would like to take advantage of the higher prices and sell any of your SRECs you have a few options at Flett Exchange:
 
1. Log into your account on the Flett Exchange Trading Platform to list your SRECs for sale at any price you like.
 
2. Check our ” Sell Now Price” on our Website and transfer your SRECs to Flett Exchange LLC on GATs.
 
3. Call our trading desk at 201-209-0234 and speak to one of our brokers who can help you with GATs transfers.
 
4. Large volume sellers can call our brokerage desk (201-209-0234) for direct OTC spot and forward bilateral contracts.
 
As always, we remit payment within 24 hours for spot transactions.

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.

TAGS:
New JerseySREC

Posted on Aug. 6, 2014

The first of the new 2015 Energy Year SRECs were minted in GATS last Friday. Prices for spot SREC sales during the last year rallied in all of the major SREC markets covered by Flett Exchange. This was mostly due to new solar development being under control along with successful legislative action taking effect in New Jersey. Solar owners were able to sell their SRECs at higher prices in all markets compared to the previous year.
 
Here are some pricing highlights:
 

RY 2013 RY 2014
 
New Jersey: $100.70 $155.65
 
Pennsylvania: $14.05 $35.66
 
Maryland: $126.15 $131.56
 
DC: $433.22 $466.60
 

(These prices are the average daily Flett Exchange settlement prices for both energy years. A listing of settlement prices back to 2007 can be found at
 

http://markets.flettexchange.com/new-jersey-srec/ 
 
The market price for SRECs for the next 12 months will be determined by 3 major factors:

 
1. The rate and cost of new solar installed
 

2. The buying/hedging activity of the electric companies
 

3. Legislative changes or new government incentives/policies
 

We suggest to our customers to sell on a consistent basis – especially if prices are at the higher end of the range. The current prices in New Jersey, which are in the $155 to $165 range, represent a subsidy of 15 to 16 cents per kilowatt hour which is almost what you would pay without solar! Remember, the idea of an SREC market is to encourage new solar development while financing previous development. It is a delicate balance subject to open competition. If solar becomes less expensive, and it has, SREC prices over the long term will continue to drop. The open and competitive aspect of SRECs allows new entrants to invest and install new solar. If the cost of installing new solar becomes less expensive (this is the reason why SREC prices have dropped over the years) new solar investors will be willing to accept a lower SREC price – even if you do not.
 

Flett Exchange customers can log into their personal account to sell and see the following information:
 

• Historic SREC charts back to 2006
• Personal SREC sales and revenue charts for all Flett Exchange transactions (you can export to PDF or excel for your accountant or your own records)
• Live SREC prices
• Sell your SRECs like you would sell a stock on our market with over 6,500 other solar owners and dozens of electric company buyers

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.

TAGS:
New JerseySREC

Posted on June 30, 2014

New Jersey SREC prices have been strong this year and are currently at the $180 level for the 2014 vintage SRECs. Prices have been strong due to compliance buying by energy providers. After the buying for this years’ compliance is done we expect SREC prices to drop back down. Prices could drop to $120 or lower by this fall/winter. We suggest to our sellers that you sell any accumulated SRECs into this price rally.
 
There is a chance that prices could continue to move up a little more this summer however, we suggest to take advantage of these high prices in case they drop. In the past we have found that sellers that miss selling at the high prices tend to hold SRECs for over a year and resort to hoping and praying for prices to recover. If trends continue as they have during the past few years solar will continue to become cheaper and a lower SREC value will be needed to convince new investors to build more solar.
 
CHECK YOUR GATS ACCOUNT FOR OLDER SRECS BEFORE THEY EXPIRE!
 
Some solar generators hold SRECs for many years. If you have old Energy Year 2012 (generated from June 2011 to May 2012) solar credits sitting in your GATs account you must sell them because if you do not they will lose significant value soon! Energy companies cannot use these SRECs for solar compliance after this fall. Prices for these older SRECs trade at a slight discount at this time. Prices are listed in real time on our Flett Exchange trading platform and also on our website. If you have any of these older SRECs sell them on our platform or call us and we can walk you through the sales process. We have found energy companies willing to purchase these SRECs at this time.
 
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 Sell Now Price (for the correct SREC year) on our website and send the SRECs to us on GATS
 
3. Do it all on-line by accessing our trading platform.
 
We will process your payment the same day. Customers can also place orders to sell SRECs at higher prices by either calling our trading desk at 201 209 0234 or by logging on to their Flett Exchange account and placing their orders themselves. Checks go out the same day. Established customers can request EFT.

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.

TAGS:
New JerseySREC

Posted on March 5, 2014

It has been 3 months since our last New Jersey SREC market update. During that time SREC prices moved up from the $145 area in December 2013 to a high of $185 in February 2014 and have moved back down to the mid to high $150s. $185 was the highest price for New Jersey SRECs since May 2012. Many of our customers who have been holding off for higher pricing participated on this move and sold many banked SRECs.
 
Upward price movement and market firmness can be attributed to the compliance requirement of close to 1,600,000 SRECs due this fall. This requirement is significantly higher than last year’s requirement of 596,000. It is the first compliance year covered under the solar legislation passed in 2012.
 
There will be more than enough SRECs minted and available in GATS to satisfy this fall’s requirement. Here are the existing and expected SRECs:
 
2012 in GATS= 45,860
2013 in GATS = 763,487
2014 in GATS = 790,029 (June 2013 to Jan 2014 production)
 
Balance of 2014= 450,000 (estimate of Feb to May 2014 production with Feb light due to snow)
 
SREC supply for 2014 compliance= 2,049,376 (Estimated available)
 
Estimated ry 2014 SREC demand= 1,600,000 (based on 78 Gigawatt hours of NJ electric consumption)
 
Estimated ry 2014 oversupply= 449,376
 
Based solely on the estimated available SRECs above, it would appear that the market should remain stable to weak as the spring and summer arrive and buyers finish their SREC purchases. However, there are a host of other factors that can have market-moving effects. The following is a list of bullish and bearish factors that may have an impact on pricing in the next 6 to 7 months as we approach compliance:
 
BULLISH FACTORS:
 
1. It is hard to buy SRECs in bulk in a short amount of time. If some buyers wait until the end of the year to finish buying for their 2014 compliance they may push the market higher in search of SRECs.
 
2. Buyers hedging for future years purchase SRECs in the spot market and hold them for future compliance years. This reduces the pool of available SRECs for buyers that need them for the October 2014 deadline.
 
3. 100% of the SRECs are never sold each year. There are a variety of reasons why. Some buyers feel they are worth more so they don’t sell, some don’t enter meter readings in time and some altogether forget about them (it is hard to believe but some people or businesses don’t need the money right away- must be nice!)
 
4. Speculative buyers may purchase SRECs from solar owners and force compliance buyers to pay higher prices as the compliance deadline approaches.
 
BEARISH FACTORS:
 
1. If prices go up too much compliance buyers who have bought spot SRECs for future compliance years may choose to use those SRECs for this compliance year or sell them to other compliance buyers to do the same.
 
2. SREC markets are based on law and confidence in the law. If there is any potential change in law that may possibly reduce the need to purchase SRECs in future years then buyers will not buy any more SRECs from solar owners other than what they need immediately.
 
3. If it appears that a dramatic increase in solar installations may happen like it has in the past, (due to overdevelopment) then buyers will back off of the spot market once they have procured their 2014 compliance needs. (no risk EDC contracts, large grid connect permissions from the BPU and a steady increase in lease installations have a good chance of oversupplying the market)
 
As you can see, there are many factors that can come into play in the pricing of SRECs going into compliance. We try to give our customers, both buyers and sellers, as much information as possible. You can always see our live pricing on our website along with historical pricing going back to 2007. If you log into your Flett Exchange account you can transact SRECs 24 hours a day, see all of your sales history along with historical graphs. Also, feel free to call us directly with any questions or if you need help transferring SRECs on GATS. As always our sellers are paid the same day via check or EFT – your choice!

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.

TAGS:
New JerseySREC

Posted on Dec. 16, 2013

The rate of new solar installations in New Jersey has been dropping for over a year. This low build rate coupled with the increasing SREC demand put in place by legislation over a year ago is why SREC prices are up 100% from a year ago. Prices for new SRECs are currently in the $140s.
 
There were only 13 Mw of new solar installed in New Jersey for the month of November. This marks 6 months in a row of low installations. As we have mentioned before, a monthly build rate of 15 to 17Mw a month over the next few years will keep the New Jersey SREC market “balanced”. The average build rate for the last 6 months was only 11.6 Mw.
 
Why is there less new solar being built in NJ now?
 
The low build rates today can be attributed to the low SREC prices last year. The projects being turned on now were in the planning phases about a year ago. Since SREC prices were under $100 very few projects were financeable. We can expect the build rate to increase in the next 6 to 12 months because of the higher SREC prices that we are seeing now.
 
The amount of new solar is likely to increase next year.
 
There will be an increase of installations due to another round of EDC (Electric Distribution Company) fixed rate SREC solicitations next year. These solicitations shift SREC risk away from solar developers and onto the ratepayers. Since there is no financial risk these programs are guaranteed to be oversubscribed.
 
Over the next 3 years there will also be a number of large grid connect projects installed. These projects are typically 7Mw each and will produce thousands of SRECs a year. The solar legislation that passed in the summer of 2012 allowed for a limited amount of grid connect solar to be installed. A limit was passed on new grid connect solar to help prevent a quick oversupply like the one that led to a collapse 2 years ago.
 

Where are Prices going?
 
New Jersey SREC prices should stay stable going into the New Year. Many sellers have been attempting to sell at $150 and it appears that it may happen again soon. The trend is slightly higher; however, it will be limited as buyers are offered multi-year contracts by new solar installations. Most new solar can be installed with a 3 to 5 years price in the $140 range. This shift from spot markets to multi-year contracts should limit the ultimate upside of the spot SREC market.
 
The SREC market is still oversupplied for the current year; however, the new SREC requirements put into place by legislation are just starting to kick in. Electricity companies in New Jersey will need to procure over 1,400,000 SRECs going forward each year compared to only 770,000 last year.
We recommend to sell SRECs on a continual basis, especially as prices move up. If you have a large facility (250kw or larger) we recommend that you lock into a long term contract as the prices rise. Flett Exchange brokers long term contracts for its customers directly with energy companies.
 
If you would like to sell any SRECs before the end of the year feel free to log on and sell or give us a call.

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.

TAGS:
New JerseySREC

Posted on Oct. 22, 2013

Prices for New Jersey solar renewable energy certificates (SRECs) have risen in the past few months. On October 4th the 2014 energy year SRECs settled at $149.63 on the Flett Exchange Trading Platform. This is the highest price yet for the 2014 SRECs on the spot market, 30% higher than the low price of $115 on July 16th and significantly higher than the $60 all-time low SREC price last October. The Electric Distribution Companies (PSE&G, Atlantic City Electric, Jersey Central Power & Light and Rockland Electric) conducted a large SREC auction on October 17th for 76,417 energy year 2014 SRECs. It cleared at $147.00 per SREC. Prices as of this publication are slightly lower.

SREC prices are steady now because of 2 factors:

1. Legislation passed in July of 2012 dramatically increased the amount of SRECs that the energy companies need to procure on a yearly basis. Demand for SRECs this energy year will be close to 1.5 million SRECs which is up from the previous legislation which required 772,000.

2. The pace of solar development was slow in the past year due to the lower SREC prices. There were only 8 Mw of new solar activated per month in August and September. The average amount of solar in the last 6 months was only 14.9 Mw per month compared to 28.5 Mw a month at this time last year. It is estimated that 15-17 Mw is needed per month to achieve a perfectly “balanced” market.

The stable and upward pricing should be tempered eventually by the following:

1. It is expected that the monthly install rate should increase next year due to the rising SREC prices.

2. The New Jersey Board of Public Utilities approved another round of Solar Loans and fixed rate Electric Distribution Company SREC contracts for the next year. These contracts shift all risk away from solar developers and onto the rate-payers so it is virtually guaranteed that the build-rate will increase during the next year.

We don’t expect spot SREC prices to experience a new downtrend much at all during the next 8 to 10 months. SREC demand should remain strong due to hedging activity on the part of the energy companies.

We expect there to be periodic, short-lived rallies during the year. With that in mind, we suggest that SREC producers sell every time the market moves up. In the past, rallies in the SREC market only last a few days because it is usually a result of a buyer procuring large volumes. We suggest that if you have a price that you would like to sell your SRECs you should list them for sale on the Flett Exchange trading platform or call us 201-209-0234 to list them for you. This will ensure that you do not miss the selling opportunities.

The stable SREC prices right now will invoke developers to install solar at an increasing rate so it is highly unlikely for the SREC market to stay at high prices for a prolonged period of time. If the spot SREC prices get too high energy companies will contract directly with new solar developers for their next few years of SRECs. The cost to install solar is very low and new solar can be installed with SREC prices in the mid $100s on reasonably priced projects if the developer can get a 3-5 year contract. If prices move too high in the spot market buyers will hedge in the 3- 5 year market as they have in the past. We highly doubt we will see another 80 mw installed in one month like we did in February of 2012 due to the constraints put on large solar farms but it is relatively easy to maintain 20 to 25 Mw per month. That level of new solar installations on a monthly basis should appear again in about eight months to a year and may reverse this stable 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.

TAGS:
New JerseySREC

Posted on Aug. 20, 2013

The New Jersey Office of Clean Energy released the July solar installations last week. There are now 23,076 solar installations in the state with a total capacity of 1,106 Mw. There were only 11.5 Mw installed in July. This is the lowest amount of solar installed in one month since May of 2011. A continued trend of low installation months such as this should support the SREC market.

The amount of solar installed on a monthly basis is one of the most important tools used by market observers to determine if the New Jersey solar market will be overdeveloped compared to goals set by solar legislation. In previous years development outpaced sate goals. It is estimated that an average of 15 to 17 Mw a month is the pace of development needed. If more solar is installed than needed the SREC market can crash as it has in the past. If the pace of installation declines the SREC market will increase to encourage more solar development.

As shown by the chart above, the monthly rate of installations has been steadily decreasing.  The 6 and 12 month moving averages are close at 21.5 mw per month. In early 2012 the 6 month average was as high as 47Mw per month!

SREC pricing has been steady this year. We attribute this to 2 main factors. The first is the controlled pace of development and the second is electric suppliers hedging activities in preparation for the increase of SRECs required for energy year 2014. SREC demand increases over 140% from 596,000 in energy year 2013 to approximately 1,440,000 in energy year 2014. Energy year 2014 just started in June.

 

Legislation signed into law last year rescued the New Jersey solar market from collapse in both solar jobs and values of SRECs used by investors in solar projects. Those investors are homeowners, businesses and schools in New Jersey with solar. Ratepayers without solar who are obligated to buy SRECs due to previous commitments set forth by the BPU also benefitted from the legislation.

In previous years the fall has been a time of light SREC volume due to weak SREC prices. We do not expect the market to drop this fall anywhere close to the $60 level that it had last year due to the above factors. Electric suppliers have been active in the spot market hedging forward production due to the fact that SRECs now have a 5 year life. They will most likely continue to procure SRECs at a steady pace in the spot market. We expect there to be an increased interest in buyers procuring 2 and 3 year contracts from large solar facility owners. (Flett Exchange is active in brokering both spot and forward contracts directly between electric companies and solar owners)

As always, we encourage solar owners to sell consistently during the year. If prices increase you should sell your production forward for 2 to 3 years.

If you have a large volume (100, 500, 1,000) of spot SRECs to sell call us directly on the trading desk. For large volume the prices are typically a few dollars over our spot price on the screen, we do not charge you commission, you get paid the same day and you do not have to execute pages of contracts.

We would like to thank all of our customers for your business. Use of our exchange helps us bring market transparency to the New Jersey SREC market. This helps both buyers and sellers make the market more efficient thus bringing more solar to New Jersey!

TAGS:
New JerseySREC

Posted on April 23, 2013

The New Jersey Office of Clean Energy reported that 18 Mw of solar was installed during the month of March. This brings the installed capacity of solar in New Jersey to 1,026Mw. There are now 20,887 solar arrays in operation statewide.

NJ Solar - Mw Installed - March 2013

The installation of 18 Mw in March reinforces the downward trend of solar installations in New Jersey. The average rate of installations need to be in the 15 to 17Mw per month range to match goals set out by the state. If the installation rate stays at this level it is expected that the SREC market will continue to stabilize.

Upon the release of this news by the New Jersey Office of Clean Energy the SREC market moved up $5. Prices for immediate delivery of SRECs are now $110 on the Flett Exchange marketplace.

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 5,000 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.

TAGS:
New JerseySREC

Posted on March 21, 2013

The New Jersey Office of Clean Energy reported that 35 Mw of solar was installed during the month of February. This brings the installed capacity of solar in New Jersey to over 1 Gigawatt! There are now 20,340 solar arrays in operation statewide.

The 35 Mw for February was higher than expected and almost double what the state needs to install on a monthly basis in order to stay in line with the Renewable Portfolio Standard requirements. The monthly install rates are watched closely because they determine the value of the Solar Renewable Energy Credits (SRECs). It is estimated that monthly install rates need to be 15 to 17 Mw a month average to keep the market balanced. 

Even though the installation rate in February was quite high, the average rate per month has been decreasing steadily. If this solar development trend continues for the next six months it will send a signal that the market is under control. One needs to keep in mind the timeframe of solar development. The 35 Mw of capacity that came on line this month represents decision making from a year to a year and a half ago. Also, some of the projects that are coming on line now are projects with fixed rate SREC contracts. Once this development pipeline runs its course the true rate of installations based on SRECs at the $100 level will be seen for the next year in the future. We should expect the average build rates to continue to decrease as the development pipeline starts to represent projects built with the current SREC prices.

As far as prices are concerned for this spring and summer we don’t expect the market to drop below $85. Every time the market has dropped below $100 the volume of selling decreases significantly. Since there is a large oversupply of SRECs compared to this year’s requirement we don’t expect prices to move much over the recent highs of $125. However, if compliance entities wait until this summer to procure their energy year 2013 SRECs that are due in the fall then there could be a short lived squeeze above $150. We only put a 10% chance of this happening.

After trading briefly over $120 the NJ 2013 vintage SREC prices are trading $105 to $110 right now. The electric distribution companies auctioned off a large block of SRECs on March 19,2013. The volumes and clearing prices are as follows:

538 NJ 2012 vintage SRECs sold for $110.15 each
57,287 NJ 2013 vintage SRECs sold for $112.01 each

As we have suggested in the past, sell your SRECs consistently during the year, especially during times of rising prices.
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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Feb. 11, 2013

The New Jersey SREC market rallied up in the last week. Prices for energy year 2013 SRECs broke above $120 briefly on Monday, February 4th on the Flett Exchange SREC marketplace. This is up significantly from the low of $60 in October. As of this writing bids were $110 for energy year 2013 SRECs and $100 for the older 2012 vintage SRECs.

The market has trended higher as the rate of new solar installations in New Jersey have ratcheted back down during the last six months. Also, the first effects of the new legislation that was passed in July are also being felt. This past week there was a very large electricity auction (the BGS or the Basic Generation Services Auction) in which the winners win the ability to supply electricity for a period of 3 years in New Jersey. These 3 years correspond with the increase in SREC demand that was included in that new law. Electric companies have to procure a larger amount of SRECs and as a result this has supported SREC prices recently. This accounted for the quick jump in prices during the past week.

Increased demand should keep a floor under the market however; a prolonged rally will most likely be muted because of the very low price of new solar installations. New solar installations are only half of the cost that they were as recently as 2 years ago. Some installations in New Jersey are reportedly being built for $2 to $2.50/watt. The low cost of installation means that SREC prices do not have to be much higher than $120 to $150. If SREC prices go much higher than that a large amount of new solar will be built which will in turn depress SREC prices again.

It is also expected that the next round of selling from the Electricity Distribution Companies (EDC’s) will be announced soon. The last auction was in October. This auction may have as many as 70,000 to 90,000 SRECs. It is likely that buyers will temper their bids in the spot market until after the large auction.

As we have suggested in the past, we recommend selling your SRECs on a consistent basis to average out the prices during the year.

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 Sell Now Price http://markets.flettexchange.com/new-jersey-srec(for the correct SREC year) on our website and send the SRECs to us on GATs (below is a walkthrough)

GATS Transfer Walkthrough: http://www.flettexchange.com/index.php?page=SREChelp

3. Do it all on-line by accessing our trading platform.

We will process your payment the same day. Customers can also place orders to sell SRECs at higher prices by either calling our trading desk at 201 209 0234 or by logging on to their Flett Exchange account and placing their orders themselves.

You can always ask us a question at:

info@flettexchange.com

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.

TAGS:
New JerseySREC

Posted on Jan. 14, 2013

The New Jersey Office of Clean Energy reported a build of 9Mw for the month of December. (This is a preliminary number as of January 7th). If this is actually close to the final number, it indicates that the solar industry in New Jersey is finally starting to develop within the goals of the Renewable Portfolio Standard RPS set out by law.
 

In the previous two years solar development has been in excess of the RPS goal and caused a glut of solar credits. The ratepayers in New Jersey are protected from over-development by a competitive solar credit market based on supply and demand.
 

The following is a chart which shows the monthly build rates of solar compared to the RPS goals set out by law. We ran a 6 and 12 month moving average as well. There is an overlay of the SREC pricing (a monthly average of Flett Exchange daily SREC settlement prices) which demonstrates the supply-

demand relationship.

 
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.

TAGS:
New JerseySREC

Posted on Dec. 10, 2012

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
 
info@flettexchange.com
 
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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Oct. 22, 2012

Jersey City, NJ:The electric distribution companies (EDC’s) sold 60,600 New Jersey SRECs at $70.50 each today in an auction. This was the price for energy year 2013 SRECs. They sold over 5,000 energy year 2012 SRECs yesterday at $70.02 each. The EDC’s sell SRECs every quarter.
 
Based on an estimated average price of the long term contracts of $350 each, this auction produced approximately an $18 million loss for the quarter. The loss is spread out among the ratepayers.
 
These SREC prices match what customers have been selling on the Flett Exchange trading platform during the last few weeks.
 
Why are prices so low?
 
Prices for New Jersey SRECs have been very weak in the past few months because of the significant oversupply due to overbuilding versus the requirement set out by the State. The oversupply is going to persist until the requirements put forth by new legislation kick in for energy year 2014. At that time SREC buying obligations increase by almost 300%. Surplus SRECs from current years will be needed in those years.
 
The amount of solar installed dictates how many SRECs are produced. If too much solar is installed compared to New Jerseys requirements then the surplus will continue and prices will stay low. We estimate that if more than 15mw a month are installed on average then the market will be oversupplied. The average install rate in the last 4 months has been about 24 mw. This is still too much but it is down significantly from an average of over 37 mw for a one year period ending this past spring. The trend is going in the right direction to balance the market.
 
What will make prices rise again?
 
Install rates are expected to drop in the first quarter of next year as the project pipeline gets built out. New installs are expected to drop due to the low SREC price. If all goes to plan the market will self correct.
 
Based on low installed costs we hear that if SRECs were to rally to $120 new installs would pick up. $70 SRECs only support the very cheapest projects. Projects at this level seem speculative based on the low rate of return at current electricity prices and SRECs. Those investors may justify their actions if they have a bullish view on solar install prices, electricity prices and SRECs.
 
Two major events that could make solar more expensive is a heavy tariff on Chinese solar panels and a elimination of Federal tax incentives for new solar.
 
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.

TAGS:
New JerseyPress ReleasesSREC

Posted on Aug. 21, 2012

Solar renewable energy certificates settled at $97.75 today on the Flett Exchange SREC marketplace. This price is for immediate delivery and payment for the 2012 reporting year SRECs. The new 2013 reporting year SRECs settled at $100. This is the first time that prompt year New Jersey SRECs have settled under $100 for since May 1, 2012. The energy year 2012 SRECs traded as low as $95 during the session.
 
Prices have dropped because developers installed more solar than the aggressive solar mandates in New Jersey. Reporting year 2012 compliance called for 442,000 SRECs to be purchased by electric providers. Solar installations generated 689,550 SRECs, or 56% more than needed.
 
Buyers are still buying for their energy year 2012 compliance which ends in a few weeks. Prices do have a chance of spiking up if they have not yet purchased all they need. Flett Exchange customers can place orders above the market to take advantage of upward price spikes.
 
The requirements were increased significantly with the passage of the new bill last month. However, the excess SRECs do not need to be turned in until the Fall of 2014. Electric companies who need to buy SRECs are most likely waiting to see if installations over the next year stay in line with the State requirements. Developers installed 21 mw in July. This is a decrease from previous months. Installation totals will need to stay at this level or lower to decrease the likelihood of another oversupply.
 
Flett Exchange customers have access to the SREC market 24 hours a day via its trading platform and also broker assisted trades Monday to Friday 8am to 5pm. Sellers on Flett Exchange have sold SRECs as high as $160 since the beginning of July.
 

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.

TAGS:
New JerseySREC

Posted on July 23, 2012

Trenton, NJ: Governor Chris Christie signed S1925 / A2966 into law today. This law makes adjustments to the solar incentive program in New Jersey.
 
     As most of our customers know by now, solar development in NJ during the past 2 years has exceeded State mandates for solar. Since the payments for solar production are based on a market structure called the Solar Renewable Energy Certificate (SREC), the overbuilding of solar in relation to State mandates has resulted in lower SREC prices. This had a negative effect on investors who have already installed solar and those who would like to install solar now. On the other hand, ratepayers have benefited from the low SREC payments.
 
     Since the passage of the last solar legislation over two years ago, there were two major changes in solar that required this new legislation. First, the cost of solar panels has dropped significantly and second, the solar industry in New Jersey has increased in size and has become a job creator.
 
     These events created a unique opportunity for lawmakers to adjust the program for the benefit of both ratepayers and solar investors. Simply put, reduce cost exposure for ratepayers over the long term while increasing solar development in the short term.
 
     It is encouraging to see that the Christie administration and the Democratic Controlled State Senate and Assembly came to agreement on a bill that takes advantage of external changes in the solar industry (declining solar costs coupled with an increasing willingness of investors to invest in NJ solar) and brings those advantages to ratepayers and solar investors alike. With an estimated 3 billion dollars invested so far in New Jersey solar infrastructure, political stability is the most important factor in attracting cheap capital to build out the remainder of the solar capacity mandated by State Law.
 
Here are some of the changes implemented by the new legislation:
 

1. Increase RPS: (Renewable Portfolio Standard) Increase the amount of SRECs that need to be purchased in the short term to absorb the oversupply and maintain a higher build rate
2. Decrease the SACP: (Solar Alternative Compliance Payment) Lower the fine level from $600+ to $339 and lower to protect ratepayers.
3. Limit solar farm development
4. Incentivize solar development on landfills, brownfields and large net metered projects.
5. Aggregated net metering for electricity consumption by certain governmental bodies and school districts.

 
     Investors new and old in New Jersey solar still have to keep in mind the risk of overbuilding in the future still exists. Many solar developers lobbied for throttle mechanisms to help guarantee profits to solar owners by crowding out future development of solar in case of an overbuild situation again. This approach was rejected. Instead, land use and consideration for net benefits for net metered projects took precedent. These were all alluded to in the Energy Master Plan put out by the Christie Administration late last year. Many people in New Jersey have started to complain about solar farms and the legislature and Governors office has heard them.
 
The following have had instrumental input in either creating this legislation or influencing its outcome:
 
Governor Chris Christies’ office
Stephen M. Sweeney – Senate President
Senator Bob Smith – Environment and Energy Committee
Assemblyman Upendra Chivukula – Telecommunications and Utilities Committee
Stefanie A. Brand, Esq – Director, Division of Rate Council – State of New Jersey
 
     New Jersey Renewable Energy Coalition – a coalition of industry investors, headed by Tony Pizzutillo, was able to marry the objectives of both the Governor’s Energy Master Plan with Legislative leadership. Also, the Coalition successfully identified statewide labor organizations as proponents of the industry.
 
     There are many other renewable energy coalitions, environmental groups, electricity companies, large electricity consumer advocates, labor organizations along with New Jersey business owners and individuals who worked tirelessly over the past year to advance this legislation. I don’t feel that any one group got exactly everything they wanted but in the end it is a good piece of legislation.
 
     The only guarantee is that inputs will change as the years go on. If they are as extreme as they have been in the past two years future “tweaks” will be needed. I look forward to adding whatever information I can about SREC market structure, investors in solar and electric company interaction with RPS requirements.
 
This is a good day for all in New Jersey!

TAGS:
New JerseySREC

Posted on June 26, 2012

The following are two articles recapping the NJ solar bill that was passed by the New Jersey Legislature. It is awaiting Governor Christies’ signature. The legislation is geared to support the Solar Renewable Energy Credit SREC market, sustain solar development in the Garden State and protect ratepayers.

SREC prices have firmed up in recent weeks in anticipation of passage of the bill. Prices rallied from $130 two weeks ago to $150 today for spot sales of energy year 2012 SRECs.

Greentechmedia

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.

TAGS:
New JerseySREC

Posted on June 26, 2012

The New Jersey Legislature passed a bill A2966 on June 25, 2012 aimed at supporting solar development in New Jersey. It is now up to Governor Christie to sign the bill into law. He has 45 days to do so.

Solar development in New Jersey during the past year exceeded the State mandates by over 300%. The result was a collapse of the prices of Solar Renewable Energy Certificates. Without a fix, solar installations would have stopped and people who invested in solar would have experienced a few years of SREC prices in the $40 to $60 range until state mandates caught up.

SREC prices for spot delivery were trading $146.56 before the bill passage and experienced a small move up after passage. Forward pricing for energy years 2013 to 2015 were trading $150 to $160 before bill passage and were “talked” up to $180 – $190 in the morning after passage. We will see if actual trading in the forwards transpires at these levels and holds.

Solar development during the next 6 – 9 months will dictate what energy providers are willing to pay for spot and forward contracts. The new State mandates are geared for a 25mw a month build compared to the old mandates which allowed for 10mw a month to be built before the market became oversupplied. The past 12 months experienced a 37mw a month build.

Electric companies are buying their last SRECs for this Septembers’ compliance period right now. If the new bill is signed into law the electric companies will need to turn in over approximately 1,600,000 SRECs in September of 2014 compared to the current requirement for the same period of 772,000. The higher mandate decreases the likelihood that SRECs will be oversupplied as they are now and allows for a quicker adoption of solar in New Jersey.

Pricing for energy year 2012 SREC are expected to stay under $200 unless solar development in the state decreases substantially over the next few months.

Ratepayers are protected in this bill by the lowering of the fine levels levied against power suppliers in the case of a shortage of SRECs. Fine levels are being reduced from $600+ to $339 starting in energy year 2014. For the most part solar development risk will still rest on developers with ratepayers reaping the benefit of decreasing solar costs and increased competition in the solar industry as they have in the past in New Jersey.

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.

TAGS:
New JerseySREC

Posted on June 14, 2012

During a town hall meeting in Haddonfield on Tuesday, June 12, Governor Christie commented on the Senate and Assembly bills aimed at stabilizing the solar industry in New Jersey.

As for the Solar bills he said: “If they pass I will sign them”. He commented that the bills “will help to continue to support the solar industry which is a big job creator in this State”.

The Governor was referring to the Senate bill S1925 with primary sponsors Senator Bob Smith and Senate President Stephen Sweeney and Assembly bill A2966 with Assemblyman Upendra Chivukula as that bills primary sponsor. A bill is expected to be presented to the Governor for signature this month.

The spot SREC market has been trading between $130 and $140 during the past week. Without the potential passage of this bill, the SREC market would have most likely been trading below the $85 low experienced a month ago. The bill calls for significant increases in SREC purchases from energy providers, but not until the fall of 2014.  Long-term SREC prices will be less volatile with upper limits reduced.  SREC price caps are being reduced from the $600+ range to $339 and less starting in energy year 2014. The short term upward price movement due to bill passage should be limited due to the oversupply of SRECs this year and the next year. The oversupply will presumably be used for compliance in the fall of 2014.

Power producers, who are required by law to buy SRECs, will watch the pace of solar development over the next 6 months to determine if the market will be oversupplied once again. If developers throttle back to 20 mw /month or less the SREC market should stabilize and forward 3 year pricing should be in the upper $100s to low $200 range.

During Governor Chris Christies’ speech he commented on the expected closure of the Oyster Creek Nuclear plant, which is the countries oldest, in eight years. The expansion of solar along with the addition of “3 new natural gas fired power plants will be built in New Jersey in the next 5 years” should help keep power in New Jersey “cleaner and more affordable”.

Mark Incolllingo, a volunteer member of Haddonfield’s Sustainable NJ Green Team, asked the question in the following link to a video of a town hall meeting.

Here is a link to the video posted on the Star Ledger website on NJ.com:

http://videos.nj.com/star-ledger/2012/06/governor_responds_to_audience.html

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.

TAGS:
New JerseySREC

Posted on June 5, 2012

Solar owners in New Jersey who rely on estimates to earn Solar Renewable Energy Certificates (SRECs) will be required to have a production meter by November 30, 2012 or they WILL NOT earn SRECs starting with December 2012 generation.

Solar owners in New Jersey with arrays that are 10kw and less were given the option to rely on estimates or they could read the actual electric generation off of a meter. The electric production of a solar array is needed to generate SRECs.

Many solar owners that have relied on estimates do not have the required production meter (ANSI) Standard C12.1-2008 compliant productions meter) and will need to have one installed by a licensed electrician. Most meters on the inverters are not acceptable. Also, the net meter provided by the electric distribution companies are not capable of providing gross data for the purposes of generating SRECs.

We recommend that you call your solar installer first to find out if you have a production meter already. In some instances solar owners may void the installer warranty if they have another entity work on the array.

Solar owners who rely on estimates can still sell their SRECs on Flett Exchange or they can subscribe for Flett REC Manager Services. With Flett REC Manager Services our customers send their meter reading to Flett Exchange and we sell the SRECs automatically. It is easy!

Click on Services on the top of this page and select “managed SREC services” or fill out the forms below and email or fax them back to flett exchange.

www.flettexchange.com/pdf/Flett_Exchange_REC_Manager.pdf

www.flettexchange.com/pdf/Schedule_A.pdf

Here is the announcement by the New Jersey Board of Public Utilities:

RE, Small Wind and NM/INX List Members:

The Chapter 8 readopted regulations with amendments approved by the Board on May 23, 2012 were published in today’s New Jersey Register.  The readopted portions of the regulations were effective on May 1, 2012 and the amendments, new rules, repealed rules and recodification became effective today with their publication in the New Jersey Register.  As a result, two important provisions of the amendments with transition or grace periods were triggered.

1. SREC Registration Requirements

Within the NJ Renewable Portfolio Standard (RPS) regulatory amendments, at N.J.A.C. 14:8-2.4 Energy that qualifies for an SREC; registration requirement – under subsection (c) “June 4, 2012” was inserted for the placeholder language in the rule proposal; “effective date for this new rule”.  Likewise, under subsection (c) 1. ii “June 4, 2012” was inserted replacing the “effective date for this new rule” placeholder language and the deadline for submittal of an initial registration package was updated to “July 4, 2012” replacing the placeholder language; “30 days after the effective date of this new rule”.

2. Production Meter Requirements for Solar Electricity to be eligible for SRECs in NJ’s RPS

Within the NJ Renewable Portfolio Standard (RPS) regulatory amendments, at N.J.A.C. 14:8-2.9 Issuance of RECs and SRECs  - subsection (c) the date “ December 4, 2012” was inserted replacing placeholder language in the rule proposal which previously stated; “six months after the effective date of this amendment”.  The effect of this new rule will be that beginning December 4, 2012 all solar facilities connected to the distribution system in New Jersey seeking eligibility to create SRECs eligible for use in NJ’s RPS must have a production meter capable of measuring generation.

The NJ RPS has historically required solar systems greater than 10 kW to submit metered production data from meters compliant with the American National Standards Institute (ANSI) Standard C12.1-2008.  And NJ’s SREC Registration Program and its predecessor SREC Only-Pilot Program required all solar systems to have an ANSI compliant production meter installed regardless of system size.  However, the RPS regulations had allowed solar systems less than 10 kW to create SRECs from engineering estimates and the NJCEP rebate programs did not require ANSI compliant production meters to be installed.  The net meter installed by the Electric Distribution Companies are NOT capable of providing gross generation data useful for purposes of SREC creation.

As a result of the regulatory change and a lack of production metering, some solar systems less than 10 kW may require the installation of ANSI Standard C12.1-2008 compliant productions meter.  The practical implications from the new regulation’s effective date of June 4 which triggers the December 4, 2012 commencement of the requirement and the processes for SREC creation at the PJM-EIS GATS tracking system require that solar electric systems lacking production meters must have them installed by November 30, 2012 to ensure that solar electric generation in December 2012 be eligible for SRECs.  Board staff is working with our RE Market Managers and the staff at PJM-EIS GATS to further inform stakeholders of these changes, to provide links to lists of eligible ANSI-compliant SREC production meters, and solar installers or licensed electricians able to install them.

TAGS:
New JerseySREC

Posted on May 16, 2012

The long awaited legislation to fix the solar market in New Jersey has been introduced! Senator Bob Smith and Senate President Stephen Sweeney introduced Senate bill S-1925 on May 14, 2012. Here are the main points:

1. Increase the RPS starting in Energy Year 2014. (this is the amount of SRECs that the power companies are required to purchase)
2. Lower the SACP (this is the fine that power companies must pay if they cannot purchase SRECs.)
3. Switch the RPS to a percentage from a fixed number.  (this makes it easier for power companies to plan SREC purchases and also protects ratepayers in case overall power consumption drops statewide in the future)
4. Limit solar farm (grid connected solar) development to 100mw per year for 3 years.
5. Requirement for solar farms to obtain BPU approval to receive SRECs in the future. (this will help prevent large solar farms from overbuilding and give latitude to the BPU to approve projects that meet certain criteria)
6. Introduction of net-metering for schools and municipalities. (this allows for these public entities to site solar in a 3 square mile radius from buildings and net-meter)
7. Establishes a Solar Registration Program for new projects. (this will provide a much needed insight into the pipeline of solar projects in development)

The bill addresses the recent overbuilding in solar in New Jersey and attempts to bring the SREC market back into equilibrium. It also increases the amount of solar development for the next few years to provide a robust labor market for the solar installation community. The fine levels that power companies used to have to pay have been ratcheted down to $350 from the previous $600+ range. The reduced cost of solar in the past few years has enabled the NJ program to reduce SACP levels AND increase the amount of solar installed in the short term. Depending upon the final numbers, ratepayers will realize over 3.5 billion dollars in savings, or over 1 billion dollars in NPV.(8.37%) during the course of the program out to year 2028.

The bill is a result of continuous negotiations between the Democratic legislature who sponsored the bill, union leaders, and the Governors Office with technical guidance by the BPU staff. Various segments of the solar installation community along with solar investors have been lobbying hard as well. The State of New Jersey Division of the Rate Counsel set a high bar early on in negotiations creating an “anchor” savings number of 1 billion dollars in NPV for ratepayers.

We should expect some minor revisions to the bill, especially the SACP and RPS numbers (both of which need to increase slightly), as it works its way through the legislative process. The bill will have vulnerability if any special interests try to insert last minute additions.

Needed adjustments to this bill:

SACP numbers should be moved closer to the $400 level from the proposed $350. Low SACP numbers inhibit the medium term SREC market of 2-3 years. Solar investors will be looking to sell 3 year strips in the low to mid $200 range. If the SACP is $350 or lower then electric companies will not enter into these contracts because there is no upside since a low SACP acts as their hedge. A $400 SACP gives buyers an incentive to enter into 3 year contracts in the low $200 range. Since the NJ SREC market will be working off a 600,000 oversupply of SRECs that will not need to be turned in until September of 2014 it is imperative that a 2-3 year SREC market is vibrant. There is also an increasing probability that solar panels may rise in price in the next year due to Anti-dumping tariffs against Chinese solar panels by the US Department of Commerce DOC. There is talk of a proposal that may require 70% US made parts in Chinese solar panels to qualify for the Federal investment tax credit ITC. New York State Senator Charles Schumer mentioned “China’s unfair trading practices” recently when speaking about Solar. New York State is gearing up for a solar market that will compete with New Jersey in the next few years. Too low of an SACP may drive investment dollars from NJ to NY. These are strong arguments for a $400 SACP.

The proposed increase in the amount of SRECs required to be purchased by electric companies RPS should also be increased slightly. The proposed schedule is a start but slight increases in energy years 2014 -2018 may be enough to balance the market and sustain growth.

Here is the bill:

(go to the bottom for a summary of the bill)

TAGS:
New JerseySREC

Posted on May 3, 2012

NJ BIZ released a report that a “Bill Addressing solar incentives could be proposed today”

Go to NJ biz.com to read the full report.

 
www.njbiz.com/article/20120503/NJBIZ01/120509923/Sources:-Bill-addressing-solar-incentives-could-be-proposed-today

Solar installers and investors in New Jersey have been expecting a legislative fix to the SREC market. The market prices have collapsed to the $100 level this past year due to overbuilding of solar compared to the state requirements. Changes in legislation could correct the market to take into account the lower cost of solar. Potential changes to legislation are an increase in the renewable portfolio standard RPS and a decrease in the solar alternative compliance payment SACP.

Activity was brisk on the spot market on Flett Exchange today with the market rallying $7.50 for a settlement of $110.00 for energy year 2012 SRECs. As of 3pm the market was showing buyers willing to pay $110 per SREC with sellers willing to accept $120 to sell.

Selling volume continues to be light with many sellers still holding out for higher prices. Large blocks of SRECs are commanding higher prices once again. Flett Exchange brokers large blocks for single sellers directly or through aggregation, thus achieving premiums for its sellers. Large sellers are encouraged to call the trading desk directly at 201-209-0234.

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 4,200 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.

TAGS:
New JerseySREC

Posted on April 30, 2012

All New Jersey solar owners that rely on estimated meter readings for solar arrays of 10Kw or less may soon be required to have a revenue grade meter installed. If the meter is not installed the owner will not be able to earn SRECs. As of now, there is no exact date for when the meter needs to be installed. The rule amendment still needs to be adopted by the NJ BPU Board as proposed. The rule will go into effect 6 months after the date of the adoption by the board.

A revenue grade meter that meets the ANSI C12.1-2008 will be required. Solar owners who are on estimates now can call their installer to see if they need to have a new meter installed. We have heard of some instances where a solar owners’ warranty with their installer will be voided if they do not use the same installer to install the meter! Check with your installer first.

From our experience over the years, most of our customers who are on actual meter readings say that they earn more SRECs then they would have if they were on estimates!

More information can be found on the New Jersey Clean Energy Program website at the following link:
http://www.njcleanenergy.com/renewable-energy/programs/metering-requirements/production-meter-requirements-solar-projects-srecs

Flett Exchange customers that are on estimates will need to enter meter readings on GATS themselves or if you are a managed client you can email us the meter readings each month.

Feel free to call us if you need any help entering meter readings in GATs for the first time. If you would like to join our REC Manager Service here at Flett Exchange send us an email at info@flettexchange.com and we will set you up. To learn more about our easy hands-free Rec Manager program click: http://www.flettexchange.com/index.php?page=recman>

TAGS:
New Jersey

Posted on April 23, 2012

The New Jersey SREC market traded below $100 for energy year 2012 SRECs on Thursday, April 19, 2012. The settlement price on the Flett Exchange was $88.94. The New Jersey 2012 SREC market has been plummeting since a peak of $282.50 on December 29, 2011. Last year at this time, the 2011 SRECs were trading $655.

The SREC prices in New Jersey have collapsed because investors installed too much solar compared to this years’ NJ State mandates. Month after month new solar arrays are being turned on adding more of a surplus. The New Jersey Office of Clean Energy announced this week that there were 41 Mw installed state-wide in March. This brings the installed capacity to 729Mw. There will be enough solar to produce at least 900,000 SRECs for energy year 2013. The current State law mandates the purchase of only 596,000 for energy year 2013. This year there will most likely be a surplus of 200,000 SRECs.

The NJ SREC market will most likely be oversupplied for years to come UNLESS there is new legislation requiring the energy companies to purchase more SRECs. There is a high possibility that this may happen in the next few months. The reason is because current State law mandating solar is outdated based upon the significantly lower cost to install solar today. When the law was put into place in January of 2010 it assumed that the cost to install solar would drop by 2.5% per year. Install costs have dropped 30% to 40% in the last 2 years. There is now an opportunity to adjust the law to take advantage of these positive developments. The adjustments that can be made would soak up the oversupply created in the last year, reduce ratepayer exposure by lowering the fine or SACP level, and accelerate the rate of solar installations. The States’ Renewable Portfolio Standard goals would be achieved sooner and cheaper then previously anticipated.

One reason why the market is continually adding capacity when it is so grossly oversupplied is because solar facilities that were given fixed long term contracts at higher prices under the EDC financing continue to be built. The owners of those projects have no SREC price risk. The ratepayer makes up any losses for those fixed rate contracts, which last 10 years. Once those projects finish, the monthly build rates are expected to drop. This should happen this summer.

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 4,200 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.

TAGS:
New JerseySREC

Posted on April 17, 2012

The Maryland Senate passed legislation, Senate Bill 791, increasing the minimum percentage of  Tier 1 renewable energy the must be derived from solar in the Maryland renewable energy portfolio standard. It will increase the amount of Solar Renewable Energy Certificates SRECs that the energy companies will have to buy from owners of solar. Now, the Governor just has to sign it.

The increases run from energy year 2013 to 2021. Matter deleted is in [brackets], amendments are in bold.

(8) in 2013, 8.2% from Tier 1 renewable sources, including at least

2 [0.2%] 0.25% derived from solar energy, and 2.5% from Tier 2 renewable sources;

3 (9) in 2014, 10.3% from Tier 1 renewable sources, including at least

4 [0.3%] 0.35% derived from solar energy, and 2.5% from Tier 2 renewable sources;

5 (10) in 2015, 10.5% from Tier 1 renewable sources, including at least

6 [0.4%] 0.5% derived from solar energy, and 2.5% from Tier 2 renewable sources;

7 (11) in 2016, 12.7% from Tier 1 renewable sources, including at least

8 [0.5%] 0.7% derived from solar energy, and 2.5% from Tier 2 renewable sources;

9 (12) in 2017, 13.1% from Tier 1 renewable sources, including at least

10 [0.55%] 0.95% derived from solar energy, and 2.5% from Tier 2 renewable sources;

11 (13) in 2018, 15.8% from Tier 1 renewable sources, including at least

12 [0.9%] 1.40% derived from solar energy, and 2.5% from Tier 2 renewable sources;

13 (14) in 2019, 17.4% from Tier 1 renewable sources, including at least

14 [1.2%] 1.75% derived from solar energy, and 0% from Tier 2 renewable sources;

15 (15) in 2020, 18% from Tier 1 renewable sources, including at least

16 [1.5%] 2.0% derived from solar energy, and 0% from Tier 2 renewable sources;

17 (16) in 2021, 18.7% from Tier 1 renewable sources, including at least

18 [1.85%] 2.0% derived from solar energy, and 0% from Tier 2 renewable sources; and

19 (17) in 2022 and later, 20% from Tier 1 renewable sources, including at

20 least 2% derived from solar energy, and 0% from Tier 2 renewable sources.

Since SREC demand is based on a percentage of power in Maryland instead of a fixed rate the ultimate SREC requirement in future years is very hard to estimate, especially 5 to 10 years out. Large amounts of energy efficiency could decrease electricity consumption in the future, while increasing economic activity coupled with electric vehicles could increase electricity demand in the future. The law increases help with short term demand, however long term SREC demand is hard to quantify.

Owners of solar in Maryland utilize Flett Exchange to sell their SRECs directly to the highest bid on the Flett Exchange Maryland SREC Market. Electric companies utilize Flett Exchange to purchase SRECs to comply with Maryland renewable portfolio standards (RPS). The RPS  requires the purchase of SRECs by electric suppliers if those suppliers do not generate a minimum percentage of the supplied electricity with solar.

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 4,200 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.

TAGS:
MarylandSREC

Posted on March 1, 2012

In past years, waiting until the end of the energy year to sell spot SRECs has always brought higher prices for sellers. This year things may not be that straightforward because it is the first year that there are more SRECs produced than electric producers are required to purchase. The energy year in New Jersey runs from June until May. Traditionally the prices have been highest in the summer month’s right after the end of the energy year and before compliance payments are due. Energy Producers are required to purchase SRECs or make compliance payments to the State of New Jersey for any shortage of SREC purchases. Buyers have stopped buying SRECs in late August in past years to give enough time to complete filing paperwork. This year buyers will stop buying when they have fulfilled their requirement. It is difficult for sellers to determine when, and at what price the buyers will finish.

This energy year (2012) the SREC market is estimated by some to be oversupplied by over 200,000 SRECs. The purchase requirement is for 442,000 SRECs but the Statewide installed solar capacity may produce somewhere around 650,000 SRECs. The only hope to support and possibly push prices higher for a few years is for the State of New Jersey to pass some type of legislation to increase the RPS (renewable portfolio standard). The RPS dictates the amount of SRECs that need to be purchased. Because of this oversupply, waiting until the summer months to sell all your SRECs could be a mistake. Buyers may have already met their compliance by then and not need to buy any more SRECs for this energy year.

Banking SRECs is a topic that has come up quite often. NJ SRECs can be used for compliance in the energy year that they are produced and two subsequent energy years. Since the SRECs are usable for three energy years compliance buyers have the option to purchase SRECs for future compliance. They will only do this if the price of the SRECs is low enough to justify purchasing and holding SRECs for the next few years. Anyone who banks SRECs should keep in mind that if the installation of new solar continues at current rates, prices may never go back up significantly without some type of legislative intervention. Holding your SRECs may leave you exposed to the decay of time. SRECs that have less of a life have a tendency to be discounted. Energy year 2012 SRECs held over for next year may be worth about $20 to $30 less than the spot market 2013 SRECs. Regardless, without a change is legislation, approximately 200,000 SRECs will have to be held by a combination of sellers holding and buyers banking.

Selling at the highest price is generally the luck of timing. Selling SRECs on a monthly or quarterly basis will reduce the likelihood of selling all of your SRECs at the market lows.

Even if you sell SRECs at low prices now, and prices increase in the future, at least you get to participate at the higher prices for future SRECs that you generate. If you hold all of your SRECs and the prices continue to drop you will have all your SRECs to sell at low prices. Your system produces SRECs for 15 years in NJ.

We may see some type of legislation introduced this spring/summer similar to the bill that failed to be posted in the last State Legislature. That legislation called for an increase in the RPS. If that bill was introduced and passed by the Legislature we understand that the Governors office was willing to negotiate and pass a bill supporting the SREC market and those residents, business, schools and municipalities that invested in solar. The prices were expected to be supported and trade between $300 and $400 if that bill was passed. The future legislation is not expected to increase the RPS until 2014 because the BGS auction was just conducted. The details of this potential legislation will dictate the level of support. It may be expected to support the spot SREC market in the $200 to $300 range due to the delay until 2014. If no legislation is passed, it is expected that the SREC market will remain weak and stay that way for years.

There is an outside chance that SREC prices could rally if a large segment of the marketplace holds out to sell for higher prices. This year energy companies have already secured SREC supply from long term contracts, spot purchases during the last seven months and SRECs sold through the EDC auctions. (Two weeks ago the EDC’s sold over 26,000 SRECs at $171.63) The rest of their purchases will have to come from the spot marketplace. We estimate that there are approximately 250,000 SRECs that need to be purchased on the spot market this year. If the oversupply is 200,000 SRECs then the market will only become short if the spot sellers collectively hold back 45% of their production. Based on conversations with many of the sellers we feel that the market as a whole is unconsciously collectively doing just that. Our trading screen is loaded with sellers who have placed orders going back to last August at higher prices. As prices go lower the volume of selling on Flett Exchange has decreased. There will be a price point in which buyers will not be able to procure enough SREC for this year’s compliance. We are not sure if that price is $150 or $100 but we are approaching it soon. The answer to that will lie in what price level are sellers willing to hold onto 200,000 SRECs for one more additional year. We don’t place a high probability on a significant rally. We decided to write about it here only to hedge against the possibility of it happening and being criticized by sellers if a significant rally scenario materializes.

Since solar install costs have decreased substantially SREC expectations should be recalibrated to the $150 to $350 range for the long term. There may be a possibility of prolonged periods of lower prices if the capacity remains overbuilt compared to State goals.

We will keep our customers up to date on any legislation as it becomes available. Flett Exchange representatives will also stay engaged on the legislative front to communicate the supply/demand dynamics of the SREC market to the State Legislature and Governors Office. We are committed to protecting our customers who have installed solar so that they are not disenfranchised by future policy decisions. We also support legislation and policy that rewards those who took risk to install renewable energy but not legislation that shifts risk to ratepayers or energy providers and guarantees fixed subsidies.

I know this is complicated for many of the sellers. Feel free to call us here on the trading desk if you have any questions. If you would like to sell SRECs you can log onto the trading platform with your user name and password or call one of us on the trading desk and we can execute the sale for you. You can also transfer SRECs to us on GATS and we will execute the trade for you if you have an account. Check our homepage for our “sell now” price. We will issue the check the following day. Our number is 201-209-0234. Live prices are available on our trading platform 24 hours a day. We provide daily settlement prices for SRECs on our website as well at www.flettexchange.com.

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 4,000 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.

TAGS:
New JerseySREC

Posted on Feb. 24, 2012

The Electric Distribution Companies (EDCs) sold 26,480 New Jersey Solar Renewable Energy Certificates (SRECs) yesterday. The clearing price for the auction was $171.63. The SRECs were auctioned off by NERA Economic Consulting, a consultant to the Board of Public Utilities. This was the lowest price for a spot sale of SRECs since the $180.00 settlement price on September 7, 2011 on the Flett Exchange.

The auctions are conducted quarterly. Due to the large volume of SRECs in these auctions, the clearing price is significant to the marketplace. Prior to the auction the settlement prices on Flett Exchange have been consistently trading at $195 for the past 30 days.

The SRECs in this auction are from solar installations that were given 10 year fixed price contracts by the local distribution companies JCP&L, Atlantic City Electric, Rockland Electric Company. Some of the SRECs are from the facilities that borrowed under the PSE&G Solar Loan Program and PSE&G investment under Solar for All. The Board of Public Utilities ordered the EDC’s to enter into long term fixed rate contracts 3 years ago to spur solar development in New Jersey. The majority of the SRECs from the JCP&L, ACE and RECO long term contracts were in excess of $400 per SREC. The ratepayer will have to make up the difference of the long term purchase price and the auction sales price achieved yesterday. Most ratepayer losses will be in excess of $230 per SREC. Solar developers are paid their contract price of $400 or more for most of the SRECs. The PSE&G loan program had a sliding fixed price scale that has lower SREC prices and the 11% interest paid by solar developers is credited back to ratepayers, less costs incurred by PSE&G.

The prices for New Jersey SRECs have been under pressure during the last year due to overbuilding by solar developers. Developers have continued to install solar even though the installed capacity is in excess of the mandated SREC purchase requirements set forth in law. At the current time there is 649 mw of installed solar capacity installed in the State of New Jersey. This installed capacity, along with future installs, (estimating that installations will drop off significantly) will produce in excess of 200,000 SRECs in addition to next years 596,000 purchase requirements for electric providers. This year there is also expected to be over 200,000 extra SRECs compared to the purchase requirement of 442,000 SRECs. Even though the requirement increases significantly every year, the SREC market in New Jersey is expected to be oversupplied possibly to 2017. There has been a political push in the last 8 months to increase the amount of SRECs the electric companies have to purchase.

The majority of investors in solar in New Jersey did not get the long term ratepayer fixed price SREC contracts. Those investors rate of return have dropped significantly due to the overbuilding of solar and subsequent SREC price drop. The ratepayers in New Jersey are benefitting directly by the lower SREC prices (except for those facilities that were covered by EDC long term contracts). Some homeowners, businesses, and municipalities who installed solar in the last year at high install rates and expected to sell SRECs at $600 or more are having a hard time making loan payments. New solar facilites are much cheaper today compared to previous years. This is due to the low prices of solar panels along with the mature installation infrastructure in New Jersey that has increased competition. These new facilites will only need an SREC value of $200 to $300 to reach the same rate of return more expensive facilities needed.

Details and press releases will be posted on www.solarrec-auction.com

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 4,000 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, CT, MA, and DC and 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

TAGS:
New JerseyPress ReleasesSREC

Posted on Jan. 17, 2012

The New Jersey SREC market has slid below $200 for the first time since September 15, 2011. The Flett Exchange marketplace settled at $195.50 today for immediate payment and delivery. Oversupply of SRECs and the lack of corrective legislative action has caused the SREC market to drop over $80 in the last week.  Draft recommendations by the Office of Clean Energy suggesting the continuation of Electric Distribution Companies EDC long term contracting were discussed last week during a renewable energy committee meeting. This has caused further weakening in the SREC market. Long term EDC contracting is backed by ratepayers with 10 year fixed contracts.  These contracts allow new solar to be developed risk free by solar developers. Continuation of these programs may further exacerbate oversupply and depress prices. There are still close to 88mw of EDC backed projects in the pipeline that will be installed in the next 6 months.  The majority of the installations in New Jersey do not have ratepayer backed contracts. The owners of those systems may experience significant price discounts if the solar development continues in excess of the states RPS. All previous EDC backed long term contracts are at above market rates with the difference absorbed by ratepayers.

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 3,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, CT, MA, and DC and 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

TAGS:
Press ReleasesSREC

Posted on Jan. 10, 2012

The much anticipated solar legislation (s-2371) failed to be posted during the last day of the New Jersey Legislature. The main intention of this legislation was to increase the amount of SRECs that the power companies in New Jersey have to purchase. This is needed to soak up the excess amount of SRECs because developers installed 3 times more than the amount of solar required in the present year due to dropping installed costs of solar and large solar installations. If the legislation is not passed it is expected that the SREC market will continue its crash and the amount of installations will have to virtually cease for the next few years before the State mandates catch up. Investors in solar will suffer from low SREC prices and solar business in New Jersey may have to close down.

The bill would have also lowered fine levels levied against power companies if they did not produce a certain amount of solar power each year. The potential savings to homeowners, municipalities and business’ would have been close to 1 billion dollars over the course of the legislation if it was passed.

The bill was introduced by the Democratic controlled legislature, sponsored by Senator Bob Smith.  The Republican Governors office submitted responses on Sunday for the legislature to consider. The Governors office supported an increase in the RPS to stabilize the market. The deal fell apart because of a disagreement of how to handle grid connected projects. The Christie administration suggested having all non-net metered projects seek Board of Public Utility BPU approval. These projects would not be approved if they would have a detrimental effect on the SREC market. The issue was too complicated to be resolved in the short amount of time left in the last day of the legislative session.

The bill will have to be introduced in the next legislative session.

The SREC market has dropped instantly to $200.

More on 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 3,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, CT, MA, and DC and 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

TAGS:
New JerseyPress ReleasesSREC

Posted on Jan. 6, 2012

The New Jersey Telecommunications and Utilities Committee passed s-2371 yesterday. It now needs to be passed by the legislature. This bill has a new schedule that will soak up the oversupply of SRECs due to the overbuilding of solar in the State in the past 12 months. Solar developers have flooded the market by installing an average of over 30mw a month in the last year compared to the build requirement of only 10mw a month.
 
If passed by the legislature it will eventually have to be approved by Governor Christie before it becomes law. He can either sign it as is, conditionally veto it or pocket veto it. This all has to be done by midnight on Monday January 9th 2012 before the end of this legislative session.
 
If it is not passed with this build-out schedule it is expected that the SREC market will collapse instantly to the $150 lows experienced this past summer, or even lower. It then has the potential to move under $100 if the build rate of solar continues through the spring and summer. It is expected that the market will be 35 to 45% oversupplied with solar and SRECs compared to this years’ mandates. Energy companies are required to purchase 442,000 SRECs in the current Energy Year. There will most likely be 600,000 to 650,000 SRECs produced. The extra 150,000 to 200,000 SRECs will sit in the market and depress prices for years even if solar development decreases 95%. If the legislation passes as is the SREC prices should stabilize and potentially move into the mid $300s.
 
If the legislation is passed without major changes and is signed by Governor Christie the prices should stabilize. Even with the increases shown in the bill the solar industry will sill have to contract by 50% in the coming 5 years to avoid another overbuild situation. The passage of this bill will most likely help retain 60% of the solar jobs in New Jersey.
 
State Senator Bob Smith and Assemblyman Upendra Chivakula have been diligently monitoring the solar industry in New Jersey during the past few months and support this legislation to avoid an absolute crash of the solar industry in New Jersey. The bill takes into account recent developments of the significant decreases in the installed cost of solar due to the low prices of solar panels and the mature solar industry in New Jersey.
 
The Division of the Rate Council office of New Jersey has been diligently challenging the bill and has reportedly been advocating for significant savings to ratepayers. They are a critical piece of this process. It is expected that the Christie Administration will not even consider the changes if there are not savings to homeowners and business in the State. Without the ratepayer advocates office this bill would most likely not had the concessions which the Christie Administration is most likely looking for.
 
The following is the new RPS and SACP schedule. For the most part it requires the energy companies to purchase more SRECs in the next few years. This added cost is offset partially by the decrease in the SACP or “fine” that power companies have to pay if there is not enough solar installed. The SACP levels are decreased based upon the lower cost of installing solar today versus the cost of solar when the original law was passed just two years ago. Everyone can calculate savings in different ways and make the numbers look different. It is in our opinion that there is 800 million in potential savings to ratepayers if this bill passes. This is using a high NPV of 8.37. If a lower NPV is used the savings will go easily over 1 billion dollars. The savings are measured out to 2026 to make a comparison and we used the SACP which is what the rate payer advocate uses. These new SREC requirements will only increase the solar build rates from the current 10mw to 14 to 18 mw per month for the next few years. The industry built over 30mw a month this year. The ultimate amount of solar is not being increased, it is just happening sooner. This is logical since the cost of solar is almost half of what it was just a few years ago. New Jersey will get solar quicker and cheaper with this new schedule.
 
The following is the new schedule:
 
EY2013 1,020 Gwhrs

EY2014 1,264 Gwhrs

EY2015 1,450 Gwhrs

EY2016 1,680 Gwhrs

EY2017 1,987 Gwhrs

EY2018 2,180 Gwhrs

EY2019 2,368 Gwhrs

EY2020 2,510 Gwhrs

EY2021 2,709.658 Gwhrs

EY2022 2,929.164 Gwhrs

EY2023 3,166.451 Gwhrs

EY2024 3,422.96 Gwhrs

EY2025 3,700.249 Gwhrs

EY2026 4,000 Gwhrs

EY 2027 4,200 Gwhrs

EY 2028 4,400 Gwhrs

EY 2029 4,600 Gwhrs

EY 2030 4,800 Gwhrs

EY20312 , and for every energy year thereafter, at least 2[5,316] 5,0002
 

Old Schedule:
 
1[EY 2013 596 Gwhrs

EY 2014 772 Gwhrs

EY 2015 965 Gwhrs

EY 2016 1,150 Gwhrs

EY 2017 1,357 Gwhrs

EY 2018 1,591 Gwhrs

EY 2019 1,858 Gwhrs

EY 2020 2,164 Gwhrs

EY 2021 2,518 Gwhrs

EY 2022 2,928 Gwhrs

EY 2023 3,433 Gwhrs

EY 2024 3,989 Gwhrs

EY 2025 4,610 Gwhrs

EY 2026 5,316 Gwhrs
 
New SACP (fine)
 
EY 2013 $437

EY 2014 $422

EY 2015 $407

EY 2016 $393

EY 2017 $377

EY 2018 $362

EY 2019 $347

EY 2020 $334

EY 2021 $320

EY 2022 $307

EY 2023 $298

EY 2024 $289

EY 2025 $281

EY 2026 $272

EY 2027 $270

EY 2028 $265

EY 2029 $260

EY2030 $255

EY2031 $2502
 
Old SACP (fine):
 
EY 2013 $641

EY 2014 $625

EY 2015 $609

EY 2016 $594

EY 2017 $475*

EY 2018 $463*

EY 2019 $451*

EY 2020 $440*

EY 2021 $429*

EY 2022 $418*

EY 2023 $418*

EY 2024 $407*

EY 2025 $397*

EY 2026 $387*

EY 2027 $377*

*proposed
 

The Christie Administration will need to review the bill. There are also other aspects in the bill that will be considered and have the potential of preventing its passage. One last minute insertion by some solar industry insiders is a requirement that the ratepayer back a minimum of 30% of all new development in the State by forcing long term SREC contracts on ratepayers
 
Here is the bill:
 
ASSEMBLY TELECOMMUNICATIONS AND UTILITIES COMMITTEE

A M E N D M E N T S

to

[First Reprint]

SENATE, No. 2371

(Sponsored by Senator SMITH )

REPLACE TITLE TO READ:

An Act concerning 1[certain contracts for the purchase of]1 2[solar renewable energy 1[certificates] portfolio standards1] energy efficiency and renewable energy2 and amending P.L.1999, c.23.

INSERT NEW SECTION 1 TO READ:

21. Section 3 of P.L.1999, c.23 (C.48:3-51) is amended to read as follows:

3. As used in P.L.1999, c.23 (C.48:3-49 et al.):

“Assignee” means a person to which an electric public utility or another assignee assigns, sells or transfers, other than as security, all or a portion of its right to or interest in bondable transition property. Except as specifically provided in P.L.1999, c.23 (C.48:3-49 et al.), an assignee shall not be subject to the public utility requirements of Title 48 or any rules or regulations adopted pursuant thereto;

“Base load electric power generation facility” means an electric power generation facility intended to be operated at a greater than 50 percent capacity factor including, but not limited to, a combined cycle power facility and a combined heat and power facility;

“Base residual auction” means the auction conducted by PJM, as part of PJM’s reliability pricing model, three years prior to the start of the delivery year to secure electrical capacity as necessary to satisfy the capacity requirements for that delivery year;

“Basic gas supply service” means gas supply service that is provided to any customer that has not chosen an alternative gas supplier, whether or not the customer has received offers as to competitive supply options, including, but not limited to, any customer that cannot obtain such service for any reason, including non-payment for services. Basic gas supply service is not a competitive service and shall be fully regulated by the board;

“Basic generation service” or “BGS” means electric generation service that is provided, to any customer that has not chosen an alternative electric power supplier, whether or not the customer has received offers for competitive supply options, including, but not limited to, any customer that cannot obtain such service from an electric power supplier for any reason, including non-payment for services. Basic generation service is not a competitive service and shall be fully regulated by the board;

“Basic generation service provider” or “provider” means a provider of basic generation service;

“Basic generation service transition costs” means the amount by which the payments by an electric public utility for the procurement of power for basic generation service and related ancillary and administrative costs exceeds the net revenues from the basic generation service charge established by the board pursuant to section 9 of P.L.1999, c.23 (C.48:3-57) during the transition period, together with interest on the balance at the board-approved rate, that is reflected in a deferred balance account approved by the board in an order addressing the electric public utility’s unbundled rates, stranded costs, and restructuring filings pursuant to P.L.1999, c.23 (C.48:3-49 et al.). Basic generation service transition costs shall include, but are not limited to, costs of purchases from the spot market, bilateral contracts, contracts with non-utility generators, parting contracts with the purchaser of the electric public utility’s divested generation assets, short-term advance purchases, and financial instruments such as hedging, forward contracts, and options. Basic generation service transition costs shall also include the payments by an electric public utility pursuant to a competitive procurement process for basic generation service supply during the transition period, and costs of any such process used to procure the basic generation service supply;

“Board” means the New Jersey Board of Public Utilities or any successor agency;

“Bondable stranded costs” means any stranded costs or basic generation service transition costs of an electric public utility approved by the board for recovery pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.), together with, as approved by the board: (1) the cost of retiring existing debt or equity capital of the electric public utility, including accrued interest, premium and other fees, costs and charges relating thereto, with the proceeds of the financing of bondable transition property; (2) if requested by an electric public utility in its application for a bondable stranded costs rate order, federal, State and local tax liabilities associated with stranded costs recovery or basic generation service transition cost recovery or the transfer or financing of such property or both, including taxes, whose recovery period is modified by the effect of a stranded costs recovery order, a bondable stranded costs rate order or both; and (3) the costs incurred to issue, service or refinance transition bonds, including interest, acquisition or redemption premium, and other financing costs, whether paid upon issuance or over the life of the transition bonds, including, but not limited to, credit enhancements, service charges, overcollateralization, interest rate cap, swap or collar, yield maintenance, maturity guarantee or other hedging agreements, equity investments, operating costs and other related fees, costs and charges, or to assign, sell or otherwise transfer bondable transition property;

“Bondable stranded costs rate order” means one or more irrevocable written orders issued by the board pursuant to P.L.1999, c.23 (C.48:3-49 et al.) which determines the amount of bondable stranded costs and the initial amount of transition bond charges authorized to be imposed to recover such bondable stranded costs, including the costs to be financed from the proceeds of the transition bonds, as well as on-going costs associated with servicing and credit enhancing the transition bonds, and provides the electric public utility specific authority to issue or cause to be issued, directly or indirectly, transition bonds through a financing entity and related matters as provided in P.L.1999, c.23, which order shall become effective immediately upon the written consent of the related electric public utility to such order as provided in P.L.1999, c.23;

“Bondable transition property” means the property consisting of the irrevocable right to charge, collect and receive, and be paid from collections of, transition bond charges in the amount necessary to provide for the full recovery of bondable stranded costs which are determined to be recoverable in a bondable stranded costs rate order, all rights of the related electric public utility under such bondable stranded costs rate order including, without limitation, all rights to obtain periodic adjustments of the related transition bond charges pursuant to subsection b. of section 15 of P.L.1999, c.23 (C.48:3-64), and all revenues, collections, payments, money and proceeds arising under, or with respect to, all of the foregoing;

“British thermal unit” or “Btu” means the amount of heat required to increase the temperature of one pound of water by one degree Fahrenheit;

“Broker” means a duly licensed electric power supplier that assumes the contractual and legal responsibility for the sale of electric generation service, transmission or other services to end-use retail customers, but does not take title to any of the power sold, or a duly licensed gas supplier that assumes the contractual and legal obligation to provide gas supply service to end-use retail customers, but does not take title to the gas;

“Buydown” means an arrangement or arrangements involving the buyer and seller in a given power purchase contract and, in some cases third parties, for consideration to be given by the buyer in order to effectuate a reduction in the pricing, or the restructuring of other terms to reduce the overall cost of the power contract, for the remaining succeeding period of the purchased power arrangement or arrangements;

“Buyout” means an arrangement or arrangements involving the buyer and seller in a given power purchase contract and, in some cases third parties, for consideration to be given by the buyer in order to effectuate a termination of such power purchase contract;

“Class I renewable energy” means electric energy produced from solar technologies, photovoltaic technologies, wind energy, fuel cells, geothermal technologies, wave or tidal action, small scale hydropower facilities with a capacity of three megawatts or less and put into service after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and methane gas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainable manner;

“Class II renewable energy” means electric energy produced at a [resource recovery facility or] hydropower facility with a capacity of greater than three megawatts or a resource recovery facility, provided that such facility is located where retail competition is permitted and provided further that the Commissioner of Environmental Protection has determined that such facility meets the highest environmental standards and minimizes any impacts to the environment and local communities;

“Co-generation” means the sequential production of electricity and steam or other forms of useful energy used for industrial or commercial heating and cooling purposes;

“Combined cycle power facility” means a generation facility that combines two or more thermodynamic cycles, by producing electric power via the combustion of fuel and then routing the resulting waste heat by-product to a conventional boiler or to a heat recovery steam generator for use by a steam turbine to produce electric power, thereby increasing the overall efficiency of the generating facility;

“Combined heat and power facility” or “co-generation facility” means a generation facility which produces electric energy[,] and steam[,] or other forms of useful energy such as heat, which are used for industrial or commercial heating or cooling purposes. A combined heat and power facility or co-generation facility shall not be considered a public utility;

“Competitive service” means any service offered by an electric public utility or a gas public utility that the board determines to be competitive pursuant to section 8 or section 10 of P.L.1999, c.23 (C.48:3-56 or C.48:3-58) or that is not regulated by the board;

“Commercial and industrial energy pricing class customer” or “CIEP class customer” means that group of non-residential customers with high peak demand, as determined by periodic board order, which either is eligible or which would be eligible, as determined by periodic board order, to receive funds from the Retail Margin Fund established pursuant to section 9 of P.L.1999, c.23 (C.48:3-57) and for which basic generation service is hourly-priced;

“Comprehensive resource analysis” means an analysis including, but not limited to, an assessment of existing market barriers to the implementation of energy efficiency and renewable technologies that are not or cannot be delivered to customers through a competitive marketplace;

“Connected to the distribution system” means, for a solar power generation facility, (1) connected to a net metering customer’s side of a meter, regardless of the voltage at which that customer connects to the electric grid, or (2) directly connected to the electric grid at 69 kilovolts or less, regardless of how an electric public utility classifies that portion of its electric grid, except that notwithstanding that it meets the criterion set forth in paragraph (1) or in paragraph (2) hereof, a solar electric power generation facility that is greater than 10 megawatts in capacity and either not net metered or not an on-site generation facility shall not be considered “connected to the distribution system” unless it shall have been designated as such by the board pursuant to subsection r. of section 38 of P.L.1999, c.23 (C.48:3-87). Any facility, other than that of a net metering customer on the customer’s side of the meter, connected above 69 kilovolts shall not be considered connected to the distribution system;

“Customer” means any person that is an end user and is connected to any part of the transmission and distribution system within an electric public utility’s service territory or a gas public utility’s service territory within this State;

“Customer account service” means metering, billing, or such other administrative activity associated with maintaining a customer account;

“Delivery year” or “DY” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends;

“Demand side management” means the management of customer demand for energy service through the implementation of cost-effective energy efficiency technologies, including, but not limited to, installed conservation, load management and energy efficiency measures on and in the residential, commercial, industrial, institutional and governmental premises and facilities in this State;

“EE certificate” means a certificate issued by the board or its designee, representing one megawatt hour (MWh) of eligible energy efficiency and energy conservation and has value based upon, and driven by, the energy market;

“Electric generation service” means the provision of retail electric energy and capacity which is generated off-site from the location at which the consumption of such electric energy and capacity is metered for retail billing purposes, including agreements and arrangements related thereto;

“Electric power generator” means an entity that proposes to construct, own, lease or operate, or currently owns, leases or operates, an electric power production facility that will sell or does sell at least 90 percent of its output, either directly or through a marketer, to a customer or customers located at sites that are not on or contiguous to the site on which the facility will be located or is located. The designation of an entity as an electric power generator for the purposes of P.L.1999, c.23 (C.48:3-49 et al.) shall not, in and of itself, affect the entity’s status as an exempt wholesale generator under the Public Utility Holding Company Act of 1935, 15 U.S.C. s.79 et seq.;

“Electric power supplier” means a person or entity that is duly licensed pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.) to offer and to assume the contractual and legal responsibility to provide electric generation service to retail customers, and includes load serving entities, marketers and brokers that offer or provide electric generation service to retail customers. The term excludes an electric public utility that provides electric generation service only as a basic generation service pursuant to section 9 of P.L.1999, c.23 (C.48:3-57);

“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that transmits and distributes electricity to end users within this State;

“Electric related service” means a service that is directly related to the consumption of electricity by an end user, including, but not limited to, the installation of demand side management measures at the end user’s premises, the maintenance, repair or replacement of appliances, lighting, motors or other energy-consuming devices at the end user’s premises, and the provision of energy consumption measurement and billing services;

“Electronic signature” means an electronic sound, symbol or process, attached to, or logically associated with, a contract or other record, and executed or adopted by a person with the intent to sign the record;

“Eligible energy efficiency and energy conservation programs” means programs which apply measurement and verification standards adopted by the board to the board’s issuance of an EE certificate, and which utilize demand side management consisting of the management of customer consumption of electricity or of the demand for or generation of electricity through the implementation of (1) energy efficiency technologies, management practices, or other strategies in residential, commercial, industrial, institutional, or government customers that reduce electricity consumption by those customers, (2) load management or demand response technologies, management practices or other strategies in residential, commercial, industrial, institutional and government customers that shift electric load from periods of higher demand to periods of lower demand, or (3) industrial by-product technologies that use a by-product from an industrial process, including the reuse of energy from exhaust gases or other manufacturing by-products in the direct production of electricity at the facility of a customer;

“Eligible generator” means a developer of a base load or mid-merit electric power generation facility including, but not limited to, an on-site generation facility that qualifies as a capacity resource under PJM criteria and that commences construction after the effective date of P.L.2011, c.9 (C.48:3-98.2 et al.);

“Energy agent” means a person that is duly registered pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.), that arranges the sale of retail electricity or electric related services or retail gas supply or gas related services between government aggregators or private aggregators and electric power suppliers or gas suppliers, but does not take title to the electric or gas sold;

“Energy consumer” means a business or residential consumer of electric generation service or gas supply service located within the territorial jurisdiction of a government aggregator;

“Energy efficiency portfolio standard” means a requirement to procure a specified amount of energy efficiency or demand side management resources as a means of managing and reducing energy usage and demand by customers;

“Energy year” or “EY” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends;

“Federal Energy Regulatory Commission” or “FERC” means the federal agency established pursuant to 42 U.S.C. s.7171 et seq. to regulate the interstate transmission of electricity, natural gas, and oil;

“Financing entity” means an electric public utility, a special purpose entity, or any other assignee of bondable transition property, which issues transition bonds. Except as specifically provided in P.L.1999, c.23 (C.48:3-49 et al.), a financing entity which is not itself an electric public utility shall not be subject to the public utility requirements of Title 48 or any rules or regulations adopted pursuant thereto;

“Gas public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes gas to end users within this State;

“Gas related service” means a service that is directly related to the consumption of gas by an end user, including, but not limited to, the installation of demand side management measures at the end user’s premises, the maintenance, repair or replacement of appliances or other energy-consuming devices at the end user’s premises, and the provision of energy consumption measurement and billing services;

“Gas supplier” means a person that is duly licensed pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.) to offer and assume the contractual and legal obligation to provide gas supply service to retail customers, and includes, but is not limited to, marketers and brokers. A non-public utility affiliate of a public utility holding company may be a gas supplier, but a gas public utility or any subsidiary of a gas utility is not a gas supplier. In the event that a gas public utility is not part of a holding company legal structure, a related competitive business segment of that gas public utility may be a gas supplier, provided that related competitive business segment is structurally separated from the gas public utility, and provided that the interactions between the gas public utility and the related competitive business segment are subject to the affiliate relations standards adopted by the board pursuant to subsection k. of section 10 of P.L.1999, c.23 (C.48:3-58);

“Gas supply service” means the provision to customers of the retail commodity of gas, but does not include any regulated distribution service;

“Government aggregator” means any government entity subject to the requirements of the “Local Public Contracts Law,” P.L.1971, c.198 (C.40A:11-1 et seq.), the “Public School Contracts Law,” N.J.S.18A:18A-1 et seq., or the “County College Contracts Law,” P.L.1982, c.189 (C.18A:64A-25.1 et seq.), that enters into a written contract with a licensed electric power supplier or a licensed gas supplier for: (1) the provision of electric generation service, electric related service, gas supply service, or gas related service for its own use or the use of other government aggregators; or (2) if a municipal or county government, the provision of electric generation service or gas supply service on behalf of business or residential customers within its territorial jurisdiction;

“Government energy aggregation program” means a program and procedure pursuant to which a government aggregator enters into a written contract for the provision of electric generation service or gas supply service on behalf of business or residential customers within its territorial jurisdiction;

“Governmental entity” means any federal, state, municipal, local or other governmental department, commission, board, agency, court, authority or instrumentality having competent jurisdiction;

“Greenhouse gas emissions portfolio standard” means a requirement that addresses or limits the amount of carbon dioxide emissions indirectly resulting from the use of electricity as applied to any electric power suppliers and basic generation service providers of electricity;

“Incremental auction” means an auction conducted by PJM, as part of PJM’s reliability pricing model, prior to the start of the delivery year to secure electric capacity as necessary to satisfy the capacity requirements for that delivery year, that is not otherwise provided for in the base residual auction;

“Leakage” means an increase in greenhouse gas emissions related to generation sources located outside of the State that are not subject to a state, interstate or regional greenhouse gas emissions cap or standard that applies to generation sources located within the State;

“Locational deliverability area” or “LDA” means one or more of the zones within the PJM region which are used to evaluate area transmission constraints and reliability issues including electric public utility company zones, sub-zones, and combinations of zones;

“Long-term capacity agreement pilot program” or “LCAPP” means a pilot program established by the board that includes participation by eligible generators, to seek offers for financially-settled standard offer capacity agreements with eligible generators pursuant to the provisions of P.L.2011, c.9 (C.48:3-98.2 et al.);

“Market transition charge” means a charge imposed pursuant to section 13 of P.L.1999, c.23 (C.48:3-61) by an electric public utility, at a level determined by the board, on the electric public utility customers for a limited duration transition period to recover stranded costs created as a result of the introduction of electric power supply competition pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.);

“Marketer” means a duly licensed electric power supplier that takes title to electric energy and capacity, transmission and other services from electric power generators and other wholesale suppliers and then assumes the contractual and legal obligation to provide electric generation service, and may include transmission and other services, to an end-use retail customer or customers, or a duly licensed gas supplier that takes title to gas and then assumes the contractual and legal obligation to provide gas supply service to an end-use customer or customers;

“Mid-merit electric power generation facility” means a generation facility that operates at a capacity factor between baseload generation facilities and peaker generation facilities;

“Net proceeds” means proceeds less transaction and other related costs as determined by the board;

“Net revenues” means revenues less related expenses, including applicable taxes, as determined by the board;

“Offshore wind energy” means electric energy produced by a qualified offshore wind project;

“Offshore wind renewable energy certificate” or “OREC” means a certificate, issued by the board or its designee, representing the environmental attributes of one megawatt hour of electric generation from a qualified offshore wind project;

“Off-site end use thermal energy services customer” means an end use customer that purchases thermal energy services from an on-site generation facility, combined heat and power facility, or co-generation facility, and that is located on property that is separated from the property on which the on-site generation facility, combined heat and power facility, or co-generation facility is located by more than one easement, public thoroughfare, or transportation or utility-owned right-of-way;

“On-site generation facility” means a generation facility, including but not limited to, a generation facility that produces Class I or Class II renewable energy, and equipment and services appurtenant to electric sales by such facility to the end use customer located on the property or on property contiguous to the property on which the end user is located. An on-site generation facility shall not be considered a public utility. The property of the end use customer and the property on which the on-site generation facility is located shall be considered contiguous if they are geographically located next to each other, but may be otherwise separated by an easement, public thoroughfare, transportation or utility-owned right-of-way, or if the end use customer is purchasing thermal energy services produced by the on-site generation facility, for use for heating or cooling, or both, regardless of whether the customer is located on property that is separated from the property on which the on-site generation facility is located by more than one easement, public thoroughfare, or transportation or utility-owned right-of-way;

“Person” means an individual, partnership, corporation, association, trust, limited liability company, governmental entity or other legal entity;

“PJM Interconnection, L.L.C.” or “PJM” means the privately-held, limited liability corporation that is a FERC-approved Regional Transmission Organization, or its successor, that manages the regional, high-voltage electricity grid serving all or parts of 13 states including New Jersey and the District of Columbia, operates the regional competitive wholesale electric market, manages the regional transmission planning process, and establishes systems and rules to ensure that the regional and in-State energy markets operate fairly and efficiently;

“Private aggregator” means a non-government aggregator that is a duly-organized business or non-profit organization authorized to do business in this State that enters into a contract with a duly licensed electric power supplier for the purchase of electric energy and capacity, or with a duly licensed gas supplier for the purchase of gas supply service, on behalf of multiple end-use customers by combining the loads of those customers;

“Public utility holding company” means: (1) any company that, directly or indirectly, owns, controls, or holds with power to vote, ten percent or more of the outstanding voting securities of an electric public utility or a gas public utility or of a company which is a public utility holding company by virtue of this definition, unless the Securities and Exchange Commission, or its successor, by order declares such company not to be a public utility holding company under the Public Utility Holding Company Act of 1935, 15 U.S.C. s.79 et seq., or its successor; or (2) any person that the Securities and Exchange Commission, or its successor, determines, after notice and opportunity for hearing, directly or indirectly, to exercise, either alone or pursuant to an arrangement or understanding with one or more other persons, such a controlling influence over the management or policies of an electric public utility or a gas public utility or public utility holding company as to make it necessary or appropriate in the public interest or for the protection of investors or consumers that such person be subject to the obligations, duties, and liabilities imposed in the Public Utility Holding Company Act of 1935 or its successor;

“Qualified offshore wind project” means a wind turbine electricity generation facility in the Atlantic Ocean and connected to the electric transmission system in this State, and includes the associated transmission-related interconnection facilities and equipment, and approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1);

“Registration program” means an administrative process developed by the board that requires that all solar electric power generation facilities with a planned capacity of one megawatt or greater that are filing with the board for approval to generate SRECs, to file documents detailing the size, location, and other project information as required by the board;

“Regulatory asset” means an asset recorded on the books of an electric public utility or gas public utility pursuant to the Statement of Financial Accounting Standards, No. 71, entitled “Accounting for the Effects of Certain Types of Regulation,” or any successor standard and as deemed recoverable by the board;

“Related competitive business segment of an electric public utility or gas public utility” means any business venture of an electric public utility or gas public utility including, but not limited to, functionally separate business units, joint ventures, and partnerships, that offers to provide or provides competitive services;

“Related competitive business segment of a public utility holding company” means any business venture of a public utility holding company, including, but not limited to, functionally separate business units, joint ventures, and partnerships and subsidiaries, that offers to provide or provides competitive services, but does not include any related competitive business segments of an electric public utility or gas public utility;

“Reliability pricing model” or “RPM” means PJM’s capacity-market model, and its successors, that secures capacity on behalf of electric load serving entities to satisfy load obligations not satisfied through the output of electric generation facilities owned by those entities, or otherwise secured by those entities through bilateral contracts;

“Renewable energy certificate” or “REC” means a certificate representing the environmental benefits or attributes of one megawatt-hour of generation from a generating facility that produces Class I or Class II renewable energy, but shall not include a solar renewable energy certificate or an offshore wind renewable energy certificate;

“Resource clearing price” or “RCP” means the clearing price established for the applicable locational deliverability area by the base residual auction or incremental auction, as determined by the optimization algorithm for each auction, conducted by PJM as part of PJM’s reliability pricing model;

“Resource recovery facility” means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse which the Department of Environmental Protection has determined are in compliance with current environmental standards, including, but not limited to, all applicable requirements of the federal “Clean Air Act” (42 U.S.C. s.7401 et seq.);

“Restructuring related costs” means reasonably incurred costs directly related to the restructuring of the electric power industry, including the closure, sale, functional separation and divestiture of generation and other competitive utility assets by a public utility, or the provision of competitive services as such costs are determined by the board, and which are not stranded costs as defined in P.L.1999, c.23 (C.48:3-49 et al.) but may include, but not be limited to, investments in management information systems, and which shall include expenses related to employees affected by restructuring which result in efficiencies and which result in benefits to ratepayers, such as training or retraining at the level equivalent to one year’s training at a vocational or technical school or county community college, the provision of severance pay of two weeks of base pay for each year of full-time employment, and a maximum of 24 months’ continued health care coverage. Except as to expenses related to employees affected by restructuring, “restructuring related costs” shall not include going forward costs;

“Retail choice” means the ability of retail customers to shop for electric generation or gas supply service from electric power or gas suppliers, or opt to receive basic generation service or basic gas service, and the ability of an electric power or gas supplier to offer electric generation service or gas supply service to retail customers, consistent with the provisions of P.L.1999, c.23 (C.48:3-49 et al.);

“Retail margin” means an amount, reflecting differences in prices that electric power suppliers and electric public utilities may charge in providing electric generation service and basic generation service, respectively, to retail customers, excluding residential customers, which the board may authorize to be charged to categories of basic generation service customers of electric public utilities in this State, other than residential customers, under the board’s continuing regulation of basic generation service pursuant to sections 3 and 9 of P.L.1999, c.23 (C.48:3-51 and 48:3-57), for the purpose of promoting a competitive retail market for the supply of electricity;

“Shopping credit” means an amount deducted from the bill of an electric public utility customer to reflect the fact that such customer has switched to an electric power supplier and no longer takes basic generation service from the electric public utility;

“Small scale hydropower facility” means a facility located within this State and connected to the distribution system, and that meets the requirements of, and has been certified by, a nationally recognized low-impact hydropower organization that has established low-impact hydropower certification criteria applicable to: (1) river flows; (2) water quality; (3) fish passage and protection; (4) watershed protection; (5) threatened and endangered species protection; (6) cultural resource protection; (7) recreation; and (8) facilities recommended for removal;

“Social program” means a program implemented with board approval to provide assistance to a group of disadvantaged customers, to provide protection to consumers, or to accomplish a particular societal goal, and includes, but is not limited to, the winter moratorium program, utility practices concerning “bad debt” customers, low income assistance, deferred payment plans, weatherization programs, and late payment and deposit policies, but does not include any demand side management program or any environmental requirements or controls;

“Societal benefits charge” means a charge imposed by an electric public utility, at a level determined by the board, pursuant to, and in accordance with, section 12 of P.L.1999, c.23 (C.48:3-60);

“Solar alternative compliance payment” or “SACP” means a payment of a certain dollar amount per megawatt hour (MWh) which an electric power supplier or provider may submit to the board in order to comply with the solar electric generation requirements under section 38 of P.L.1999, c.23 (C.48:3-87);

“Solar renewable energy certificate” or “SREC” means a certificate issued by the board or its designee, representing one megawatt hour (MWh) of solar energy that is generated by a facility connected to the distribution system in this State and has value based upon, and driven by, the energy market;

“Standard offer capacity agreement” or “SOCA” means a financially-settled transaction agreement, approved by board order, that provides for eligible generators to receive payments from the electric public utilities for a defined amount of electric capacity for a term to be determined by the board but not to exceed 15 years, and for such payments to be a fully non-bypassable charge, with such an order, once issued, being irrevocable;

“Standard offer capacity price” or “SOCP” means the capacity price that is fixed for the term of the SOCA and which is the price to be received by eligible generators under a board-approved SOCA;

“Stranded cost” means the amount by which the net cost of an electric public utility’s electric generating assets or electric power purchase commitments, as determined by the board consistent with the provisions of P.L.1999, c.23 (C.48:3-49 et al.), exceeds the market value of those assets or contractual commitments in a competitive supply marketplace and the costs of buydowns or buyouts of power purchase contracts;

“Stranded costs recovery order” means each order issued by the board in accordance with subsection c. of section 13 of P.L.1999, c.23 (C.48:3-61) which sets forth the amount of stranded costs, if any, the board has determined an electric public utility is eligible to recover and collect in accordance with the standards set forth in section 13 of P.L.1999, c.23 (C.48:3-61) and the recovery mechanisms therefor;

“Thermal efficiency” means the useful electric energy output of a facility, plus the useful thermal energy output of the facility, expressed as a percentage of the total energy input to the facility;

“Transition bond charge” means a charge, expressed as an amount per kilowatt hour, that is authorized by and imposed on electric public utility ratepayers pursuant to a bondable stranded costs rate order, as modified at any time pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.);

“Transition bonds” means bonds, notes, certificates of participation or beneficial interest or other evidences of indebtedness or ownership issued pursuant to an indenture, contract or other agreement of an electric public utility or a financing entity, the proceeds of which are used, directly or indirectly, to recover, finance or refinance bondable stranded costs and which are, directly or indirectly, secured by or payable from bondable transition property. References in P.L.1999, c.23 (C.48:3-49 et al.) to principal, interest, and acquisition or redemption premium with respect to transition bonds which are issued in the form of certificates of participation or beneficial interest or other evidences of ownership shall refer to the comparable payments on such securities;

“Transition period” means the period from August 1, 1999 through July 31, 2003;

“Transmission and distribution system” means, with respect to an electric public utility, any facility or equipment that is used for the transmission, distribution or delivery of electricity to the customers of the electric public utility including, but not limited to, the land, structures, meters, lines, switches and all other appurtenances thereof and thereto, owned or controlled by the electric public utility within this State; and

“Universal service” means any service approved by the board with the purpose of assisting low-income residential customers in obtaining or retaining electric generation or delivery service.2

(cf: P.L.2011, c.9, s.2)

REPLACE SECTION 1 TO READ:

2[1.] 2.2 Section 38 of P.L.1999, c.23 (C.48:3-87) is amended to read as follows:

38. a. The board shall require an electric power supplier or basic generation service provider to disclose on a customer’s bill or on customer contracts or marketing materials, a uniform, common set of information about the environmental characteristics of the energy purchased by the customer, including, but not limited to:

(1) Its fuel mix, including categories for oil, gas, nuclear, coal, solar, hydroelectric, wind and biomass, or a regional average determined by the board;

(2) Its emissions, in pounds per megawatt hour, of sulfur dioxide, carbon dioxide, oxides of nitrogen, and any other pollutant that the board may determine to pose an environmental or health hazard, or an emissions default to be determined by the board; and

(3) Any discrete emission reduction retired pursuant to rules and regulations adopted pursuant to P.L.1995, c.188.

b. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment and public hearing, interim standards to implement this disclosure requirement, including, but not limited to:

(1) A methodology for disclosure of emissions based on output pounds per megawatt hour;

(2) Benchmarks for all suppliers and basic generation service providers to use in disclosing emissions that will enable consumers to perform a meaningful comparison with a supplier’s or basic generation service provider’s emission levels; and

(3) A uniform emissions disclosure format that is graphic in nature and easily understandable by consumers. The board shall periodically review the disclosure requirements to determine if revisions to the environmental disclosure system as implemented are necessary.

Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act.”

c. (1) The board may adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment, an emissions portfolio standard applicable to all electric power suppliers and basic generation service providers, upon a finding that:

(a) The standard is necessary as part of a plan to enable the State to meet federal Clean Air Act or State ambient air quality standards; and

(b) Actions at the regional or federal level cannot reasonably be expected to achieve the compliance with the federal standards.

(2) By July 1, 2009, the board shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), a greenhouse gas emissions portfolio standard to mitigate leakage or another regulatory mechanism to mitigate leakage applicable to all electric power suppliers and basic generation service providers that provide electricity to customers within the State. The greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage shall:

(a) Allow a transition period, either before or after the effective date of the regulation to mitigate leakage, for a basic generation service provider or electric power supplier to either meet the emissions portfolio standard or other regulatory mechanism to mitigate leakage, or to transfer any customer to a basic generation service provider or electric power supplier that meets the emissions portfolio standard or other regulatory mechanism to mitigate leakage. If the transition period allowed pursuant to this subparagraph occurs after the implementation of an emissions portfolio standard or other regulatory mechanism to mitigate leakage, the transition period shall be no longer than three years; and

(b) Exempt the provision of basic generation service pursuant to a basic generation service purchase and sale agreement effective prior to the date of the regulation.

Unless the Attorney General or the Attorney General’s designee determines that a greenhouse gas emissions portfolio standard would unconstitutionally burden interstate commerce or would be preempted by federal law, the adoption by the board of an electric energy efficiency portfolio standard pursuant to subsection g. of this section, a gas energy efficiency portfolio standard pursuant to subsection h. of this section, or any other enhanced energy efficiency policies to mitigate leakage shall not be considered sufficient to fulfill the requirement of this subsection for the adoption of a greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage.

d. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing, renewable energy portfolio standards that shall require:

(1) that two and one-half percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I or Class II renewable energy sources;

(2) beginning on January 1, 2001, that one-half of one percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I renewable energy sources. The board shall increase the required percentage for Class I renewable energy sources so that by January 1, 2006, one percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources and shall additionally increase the required percentage for Class I renewable energy sources by one-half of one percent each year until January 1, 2012, when four percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources.

An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection; 2and2

(3) that the board establish a multi-year schedule, applicable to each electric power supplier or basic generation service provider in this State, beginning with the one-year period commencing on June 1, 2010, and continuing for each subsequent one-year period up to and including, the one-year period commencing on 1[June 1, 2025] 2[June 1, 20241] June 1, 20302, that requires suppliers or providers to purchase at least the following number of kilowatt-hours from solar electric power generators 2connected to the distribution system2 in this State:

EY 2011 306 Gigawatthours (Gwhrs)

EY 2012 442 Gwhrs

1[EY 2013 596 Gwhrs

EY 2014 772 Gwhrs

EY 2015 965 Gwhrs

EY 2016 1,150 Gwhrs

EY 2017 1,357 Gwhrs

EY 2018 1,591 Gwhrs

EY 2019 1,858 Gwhrs

EY 2020 2,164 Gwhrs

EY 2021 2,518 Gwhrs

EY 2022 2,928 Gwhrs

EY 2023 3,433 Gwhrs

EY 2024 3,989 Gwhrs

EY 2025 4,610 Gwhrs

EY 2026 5,316 Gwhrs

EY 2027]

2[EY 2013 772 G whrs

EY 2014 965 Gwhrs

EY 2015 1,150 Gwhrs

EY 2016 1,357 Gwhrs

EY 2017 1,591 Gwhrs

EY 2018 1,858 Gwhrs

EY 2019 2,164 Gwhrs

EY 2020 2,518 Gwhrs

EY 2021 2,928 Gwhrs

EY 2022 3,433 Gwhrs

EY 2023 3,989 Gwhrs

EY 2024 4,610 Gwhrs

EY 2025 5,316 Gwhrs

EY 20261]

EY2013 1,020 Gwhrs

EY2014 1,264 Gwhrs

EY2015 1,450 Gwhrs

EY2016 1,680 Gwhrs

EY2017 1,987 Gwhrs

EY2018 2,180 Gwhrs

EY2019 2,368 Gwhrs

EY2020 2,510 Gwhrs

EY2021 2,709.658 Gwhrs

EY2022 2,929.164 Gwhrs

EY2023 3,166.451 Gwhrs

EY2024 3,422.96 Gwhrs

EY2025 3,700.249 Gwhrs

EY2026 4,000 Gwhrs

EY 2027 4,200 Gwhrs

EY 2028 4,400 Gwhrs

EY 2029 4,600 Gwhrs

EY 2030 4,800 Gwhrs

EY20312 , and for every energy year thereafter, at least 2[5,316] 5,0002 Gwhrs per energy year to reflect an increasing number of kilowatt-hours to be purchased by suppliers or providers from solar electric power generators 2connected to the distribution system2 in this State, and to establish a framework within which suppliers and providers shall purchase at least 2[2,518] 2,709.6582 Gwhrs in the energy year 1[2021] 2[20201] 20212 and 2[5,316] 5,0002 Gwhrs in the energy year 1[2026] 2[20251] 20312 from solar electric power generators 2connected to the distribution system2 in this State, provided, however, that 2:

(a) when the board establishes the multi-year schedule and framework for annual Statewide Gwhr requirements for Energy Years 2011 through 2031 required in paragraph (3) of subsection d. of this section, and any requirements for Energy Years thereafter, the board ensures that each such annual Statewide Gwhr requirement annually requires that a percentage of the kilowatt-hours sold in this State by each provider and supplier be purchased from solar electric power generators connected to the distribution system in this State, based on the percentage relationship that each annual Statewide Gwhr requirement has to the board’s weather-normalized projection of the number of kilowatt hours to be sold in this State by all providers and suppliers for each Energy Year, subject to adjustment pursuant to subparagraph (d) of paragraph (3) of this subsection;

(b)2 the number of solar kilowatt-hours required to be purchased by each supplier or provider, when expressed as a percentage of the total number of solar kilowatt-hours purchased in this State, shall be equivalent to each supplier’s or provider’s proportionate share of the total number of kilowatt-hours 2projected by the board to be2 sold in this State by all suppliers and providers 2;

(c) the board shall determine an appropriate period of no less than 120 days following the end of an Energy Year prior to which a provider or supplier must demonstrate compliance with the annual renewable portfolio standard;

(d) within 45 days following the period set forth in subparagraph (c) of paragraph (3) of this subsection, to the extent that the board determines that the solar Gwhrs purchased in an Energy Year by all providers and suppliers pursuant to the percentage established by the board were less than the annual Statewide Gwhr requirement specified in paragraph (3) of this subsection, the board shall add the Gwhrs that constitute the shortfall to the annual Gwhr requirement for the Energy Year that is three years after the Energy Year in which the shortfall occurs, and use the increased Gwhr requirement to recalculate the percentage of kilowatt-hours that each provider and supplier sells that are required to be purchased from solar electric power generators connected to the distribution system in this State for that future Energy Year; and

(e) providers and suppliers shall comply with the provisions of paragraph (3) of this subsection by complying with the board’s percentage requirements established pursuant to subparagraphs (a) through (d) of paragraph (3) of this subsection.

(f) No more than 24 months following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall complete a proceeding to investigate approaches to mitigate excessive SREC price and solar development volatility and prepare and submit a report to the Legislature, detailing its findings and recommendations pursuant to P.L.1991, c.164 (C.52:14-19.1). As part of the proceeding, the board shall evaluate other techniques used nationally and internationally2 .

The solar renewable portfolio standards requirements in paragraph (3) of this subsection shall automatically increase by 20% for the remainder of the schedule in the event that the following two conditions are met: (a) the number of SRECs generated 2or available for sale2 meets or exceeds the requirement for three consecutive reporting years, starting with energy year 2013; and (b) the average SREC price for all SRECs purchased by entities with renewable energy portfolio standards obligations has decreased in the same three consecutive reporting years. The board shall exempt providers’ existing supply contracts that are: (a) effective prior to the date of 2[P.L.2009, c.289] enactment of P.L. , c. (C. ) (pending before the Legislature as this bill)2; or (b) effective prior to any future increase in the solar renewable portfolio standard beyond the multi-year schedule established in paragraph (3) of this subsection. This exemption shall apply to the number of SRECs that exceeds the number mandated by the solar renewable portfolio standards requirements that were in effect on the date that the providers executed their existing supply contracts. This limited exemption for providers’ existing supply contracts shall not be construed to lower the Statewide solar purchase requirements set forth in paragraph (3) of this subsection. Such incremental new requirements shall be distributed over the electric power suppliers and providers not subject to the existing supply contract exemption until such time as existing supply contracts expire and all suppliers are subject to the new requirement 2in a manner that is competitively neutral between providers as a whole and suppliers, such that non-exempt providers are assigned the requirements that would have otherwise been assigned to the exempt providers2 .

An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection, or compliance with the requirements of this subsection may be demonstrated to the board by suppliers or providers through the purchase of SRECs.

The renewable energy portfolio standards adopted by the board pursuant to paragraphs (1) and (2) of this subsection shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act.”

The renewable energy portfolio standards adopted by the board pursuant to paragraph (3) of this subsection shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 30 months after such filing, and shall, thereafter, be amended, adopted or readopted by the board in accordance with the “Administrative Procedure Act”; and

(4) within 180 days after the date of enactment of P.L.2010, c.57 (C.48:3-87.1 et al.), that the board establish an offshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from offshore wind energy in order to support at least 1,100 megawatts of generation from qualified offshore wind projects.

The percentage established by the board pursuant to this paragraph shall serve as an offset to the renewable energy portfolio standard established pursuant to paragraphs (1) and (2) of this subsection and shall reduce the corresponding Class I renewable energy requirement.

The percentage established by the board pursuant to this paragraph shall reflect the projected OREC production of each qualified offshore wind project, approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), for twenty years from the commercial operation start date of the qualified offshore wind project which production projection and OREC purchase requirement, once approved by the board, shall not be subject to reduction.

An electric power supplier or basic generation service provider shall comply with the OREC program established pursuant to this paragraph through the purchase of offshore wind renewable energy certificates at a price and for the time period required by the board. In the event there are insufficient offshore wind renewable energy certificates available, the electric power supplier or basic generation service provider shall pay an offshore wind alternative compliance payment established by the board. Any offshore wind alternative compliance payments collected shall be refunded directly to the ratepayers by the electric public utilities.

The rules established by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.).

e. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing:

(1) net metering standards for electric power suppliers and basic generation service providers. The standards shall require electric power suppliers and basic generation service providers to offer net metering at non-discriminatory rates to industrial, large commercial, residential and small commercial customers, as those customers are classified or defined by the board, that generate electricity, on the customer’s side of the meter, using a Class I renewable energy source, for the net amount of electricity supplied by the electric power supplier or basic generation service provider over an annualized period. Systems of any sized capacity, as measured in watts, are eligible for net metering. If the amount of electricity generated by the customer-generator, plus any kilowatt hour credits held over from the previous billing periods, exceeds the electricity supplied by the electric power supplier or basic generation service provider, then the electric power supplier or basic generation service provider, as the case may be, shall credit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point the customer-generator will be compensated for any remaining credits or, if the customer-generator chooses, credit the customer-generator on a real-time basis, at the electric power supplier’s or basic generation service provider’s avoided cost of wholesale power or the PJM electric power pool’s real-time locational marginal pricing rate, adjusted for losses, for the respective zone in the PJM electric power pool. Alternatively, the customer-generator may execute a bilateral agreement with an electric power supplier or basic generation service provider for the sale and purchase of the customer-generator’s excess generation. The customer-generator may be credited on a real-time basis, so long as the customer-generator follows applicable rules prescribed by the PJM electric power pool for its capacity requirements for the net amount of electricity supplied by the electric power supplier or basic generation service provider 2[. The board may authorize an electric power supplier or basic generation service provider to cease offering net metering whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals 2.5 percent of the State's peak electricity demand]2;

(2) safety and power quality interconnection standards for Class I renewable energy source systems used by a customer-generator that shall be eligible for net metering.

Such standards or rules shall take into consideration the goals of the New Jersey Energy Master Plan, applicable industry standards, and the standards of other states and the Institute of Electrical and Electronic Engineers. The board shall allow electric public utilities to recover the costs of any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs through either their regulated rates or from the net metering customer-generator; and

(3) credit or other incentive rules for generators using Class I renewable energy generation systems that connect to New Jersey’s electric public utilities’ distribution system but who do not net meter.

Such rules shall require the board or its designee to issue a credit or other incentive to those generators that do not use a net meter but otherwise generate electricity derived from a Class I renewable energy source and to issue an enhanced credit or other incentive, including, but not limited to, a solar renewable energy credit, to those generators that generate electricity derived from solar technologies.

Such standards or rules shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act.”

f. The board may assess, by written order and after notice and opportunity for comment, a separate fee to cover the cost of implementing and overseeing an emission disclosure system or emission portfolio standard, which fee shall be assessed based on an electric power supplier’s or basic generation service provider’s share of the retail electricity supply market. The board shall not impose a fee for the cost of implementing and overseeing a greenhouse gas emissions portfolio standard adopted pursuant to paragraph (2) of subsection c. of this section, the electric energy efficiency portfolio standard adopted pursuant to subsection g. of this section, or the gas energy efficiency portfolio standard adopted pursuant to subsection h. of this section.

g. The board may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), an electric energy efficiency portfolio standard that may require each electric public utility to implement energy efficiency measures that reduce electricity usage in the State by 2020 to a level that is 20 percent below the usage projected by the board in the absence of such a standard. Nothing in this section shall be construed to prevent an electric public utility from meeting the requirements of this section by contracting with another entity for the performance of the requirements.

h. The board may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), a gas energy efficiency portfolio standard that may require each gas public utility to implement energy efficiency measures that reduce natural gas usage for heating in the State by 2020 to a level that is 20 percent below the usage projected by the board in the absence of such a standard. Nothing in this section shall be construed to prevent a gas public utility from meeting the requirements of this section by contracting with another entity for the performance of the requirements.

i. After the board establishes a schedule of solar kilowatt-hour sale or purchase requirements pursuant to paragraph (3) of subsection d. of this section, the board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, increased minimum solar kilowatt-hour sale or purchase requirements, provided that the board shall not reduce previously established minimum solar kilowatt-hour sale or purchase requirements, or otherwise impose constraints that reduce the requirements by any means.

j. The board shall 2[determine an appropriate level of solar alternative compliance payment, and establish a 15-year solar alternative compliance payment schedule, that permits] permit2 each supplier or provider to submit an SACP to comply with the solar electric generation requirements of paragraph (3) of subsection d. of this section. 2The value of the SACP for each fiscal year shall be at least:

EY 2013 $437

EY 2014 $422

EY 2015 $407

EY 2016 $393

EY 2017 $377

EY 2018 $362

EY 2019 $347

EY 2020 $334

EY 2021 $320

EY 2022 $307

EY 2023 $298

EY 2024 $289

EY 2025 $281

EY 2026 $272

EY 2027 $270

EY 2028 $265

EY 2029 $260

EY2030 $255

EY2031 $2502

The board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, an increase in solar alternative compliance payments2[, provided that the] . The board shall initiate a proceeding and may adopt, after appropriate notice and opportunity for public comment and public hearing, an increase in solar alternative compliance payments if the 30 percent federal business energy tax credit available pursuant to 26 U.S.C. s.48 is not extended by June 30, 2015. The2 board shall not reduce previously established levels of solar alternative compliance payments, nor shall the board provide relief from the obligation of payment of the SACP by the electric power suppliers or basic generation service providers in any form. Any SACP payments collected shall be refunded directly to the ratepayers by the electric public utilities.

k. The board [may allow] shall require electric public utilities to offer long-term contracts through a competitive process and other means of financing, including but not limited to loans, for the purchase of SRECs and the resale of SRECs to suppliers or providers or others, provided that after such contracts have been approved by the board, the board’s approvals shall not be modified by subsequent board orders. On and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the number of SRECs offered under this subsection shall include solar electric power generators of 2MW or less and shall comprise at least 30 percent of the annual Gwhrs under the solar renewable energy portfolio requirements under subsection d. of this section to assist in managing the marketplace until such time as the board determines that such requirements are no longer necessary to support development of the solar industry in this State. Of the SRECs approved by the board and offered under this subsection by electric public utilities, no more than 20 percent shall be set aside for residential and small commercial projects of 20 kilowatts or less, and such SRECs shall be offered through a similar competitive process.

l. The board shall implement its responsibilities under the provisions of this section in such a manner as to:

(1) place greater reliance on competitive markets, with the explicit goal of encouraging and ensuring the emergence of new entrants that can foster innovations and price competition;

(2) maintain adequate regulatory authority over non-competitive public utility services;

(3) consider alternative forms of regulation in order to address changes in the technology and structure of electric public utilities;

(4) promote energy efficiency and Class I renewable energy market development, taking into consideration environmental benefits and market barriers;

(5) make energy services more affordable for low and moderate income customers;

(6) attempt to transform the renewable energy market into one that can move forward without subsidies from the State or public utilities;

(7) achieve the goals put forth under the renewable energy portfolio standards;

(8) promote the lowest cost to ratepayers; and

(9) allow all market segments to participate.

m. The board shall ensure the availability of financial incentives under its jurisdiction, including, but not limited to, long-term contracts, loans, SRECs, or other financial support, to ensure market diversity, competition, and appropriate coverage across all ratepayer segments, including, but not limited to, residential, commercial, industrial, non-profit, farms, schools, and public entity customers.

n. For projects which are owned, or directly invested in, by a public utility pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.

o. The board, in consultation with the Department of Environmental Protection, electric public utilities, the Division of Rate Counsel in, but not of, the Department of the Treasury, affected members of the solar energy industry, and relevant stakeholders, shall periodically consider increasing the renewable energy portfolio standards beyond the minimum amounts set forth in subsection d. of this section, taking into account the cost impacts and public benefits of such increases including, but not limited to:

(1) reductions in air pollution, water pollution, land disturbance, and greenhouse gas emissions;

(2) reductions in peak demand for electricity and natural gas, and the overall impact on the costs to customers of electricity and natural gas;

(3) increases in renewable energy development, manufacturing, investment, and job creation opportunities in this State; and

(4) reductions in State and national dependence on the use of fossil fuels.

p. Class I RECs 2and ORECS2 shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following two energy years. SRECs 2[and ORECs]2 shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following 2[two] four2 energy years.

1[q. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall adopt, after notice, provision of the opportunity for comment, and pubic hearing, regulations that require contracts entered into by non-utility load serving entities for the purchase of SRECs after the effective date of P.L. , c. (C. ) (pending before the Legislature this bill) to be long-term contracts that extend for a term of 15 years or longer.

As used in this subsection, a "non-utility load serving entity" means any entity, other than an electric public utility, or the duly designated agent of such an entity, that serves the electric power needs of end-users within the PJM region, and that has been granted the authority or has an obligation pursuant to State or local law, regulation, or franchise to sell electric power to end-users within the PJM electric power pool region.]1

2q. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding to evaluate energy efficiency portfolio standards, and after notice, provision of the opportunity for comment, and public hearing, may adopt such competitively neutral energy efficiency portfolio standards that require each electric power supplier and each basic generation service provider to purchase a specified number of EE certificates from eligible energy efficiency and energy conservation programs. The board shall permit an electric power supplier or basic generation service provider to satisfy the requirements of this subsection by participating in an energy trading program approved by the board in consultation with the Department of Environmental Protection.

The board shall exempt suppliers and providers’ existing supply contracts that are effective prior to the date of a board decision approving a rule adoption pursuant to this subsection. Any purchases that would have otherwise been required from exempt suppliers or providers in the absence of such exemption may be distributed over suppliers and providers not subject to the existing contract exemption until such time as existing supply contracts expire and all suppliers and providers are subject to the new requirement.

r. A proposed solar facility that is greater than 10 megawatts in capacity and either not net metered or not an on-site generation facility, may be considered “connected to the distribution system” only upon designation as such by the board, after notice to the public and opportunity for public comment or hearing. A proposed solar facility seeking board designation as “connected to the distribution system” shall submit an application to the board that includes for the proposed facility: the nameplate capacity; the estimated energy and number of SRECs to be produced and sold per year; the estimated annual rate impact on ratepayers; the estimated capacity of the generator as defined by PJM for sale in the PJM capacity market; the point of interconnection; the total acreage and location; the current land use designation of the property; and the type of solar technology to be used.

The board shall approve the designation of the proposed solar facility as “connected to the distribution system” if the board determines that:

1) the SRECs forecasted to be produced by the facility do not have a detrimental impact on the SREC market or on the appropriate development of solar power in the State;

2) the loss of tillable acreage that would result from the approval of the designation of the proposed facility, together with the tillable acreage of all other facilities approved pursuant to this subsection, would be a loss of less than two percent of the total tillable acres of farmland in the State on the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), pursuant to information provided by the State Department of Agriculture; and

3) the impact of the designation on electric rates and economic development is beneficial.

The board shall act within 90 days of its receipt of a completed application for designation of a solar facility as “connected to the distribution system,” to either approve or disapprove such an application. If the board fails to either approve or disapprove such an application within 90 days, the application shall be deemed approved, and the solar facility submitting the application shall be considered “connected to the distribution system.” If the proposed solar facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility as “connected to the distribution system” shall be deemed to be null and void, and the facility shall thereafter be considered not “connected to the distribution system.”

Notwithstanding the provisions of this subsection, a solar facility for which a System Impact Study by PJM was issued prior to March 31, 2011, shall be considered “connected to the distribution system.” If such solar facility does not commence commercial operations within two years following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the designation of the facility as “connected to the distribution system” shall be deemed to be null and void, and the facility shall thereafter be considered not “connected to the distribution system.”

Notwithstanding the foregoing provisions of this subsection, a solar facility that would otherwise be subject to the provisions of this subsection, but that is located on a closed landfill or quarry, shall be considered “connected to the distribution system” and shall not require such designation by the board.

s. No more than 180 days after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall complete a proceeding to establish a registration program. The registration program shall require solar projects greater than one megawatt of nameplate capacity to make periodic milestone filings with the board in a manner and at such times as determined by the board to provide full disclosure and transparency regarding the overall level of development and construction activity of solar projects statewide. The registration program shall also include a registration program filing fee, which shall be $2,500 for each facility with a nameplate capacity below five megawatts and an additional fee of $2,500 for every megawatt in excess of five megawatts of nameplate capacity. The registration program filing fee shall be reimbursed to the registrant in full upon the proposed solar project entering commercial production.2

(cf: P.L.2010, c.57, s.2)

RENUMBER SECTION 2 AS SECTION 3

REPLACE SYNOPSIS TO READ:

Makes changes to solar renewable energy programs and requirements, concerns energy efficiency and renewable energy requirements.
 
More on 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 3,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, CT, MA, and DC and 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. 201-209-0324

TAGS:
Press ReleasesSREC

Posted on Dec. 21, 2011

TAGS:
New JerseyPress ReleasesPublic AuctionsSREC

Posted on Dec. 15, 2011

TAGS:
New JerseySREC

Posted on Dec. 12, 2011

TAGS:
New JerseySREC

Posted on Nov. 18, 2011

At its meeting on November 9, 2011, The New Jersey Board of Public Utilities (“Board” or “BPU”) approved the results of the eighth solicitation under the SREC-Based Financing Program for ACE, JCP&L, and RECO.  The eighth solicitation was held for a statewide planned quantity of 15,617.749 kW, divided as follows: 9,986.292 kW for JCP&L, 5,477.147 kW for ACE, and 154.310 kW for RECO.  Bids were due on September 2, 2011.
     The solicitation was oversubscribed with bids for 15Mw of solar with only 5.9Mw of available capacity. The prices were at an extreme discount to previous solicitations with large facilities awarded average SREC prices of $214.92 guaranteed for 10 years while smaller facilities <=50Kw awarded a fixed price of $232.98. These awards are at significant discounts to 10 year awards granted just over a year ago for the 5th solicitation. Solar projects for that solicitation were guaranteed a payment of $466.21 per SREC for ten years from the Local Distribution Companies with rate payer relief. This latest solicitation resulted in prices that are 50% less.
     The significant discount in prices to 10 year contracts can be attributed to the oversubscription to the solicitation and not to the true cost of solar. A large majority of solar in New Jersey is developed and then sold to tax equity investors. The price that the investor pays the developer is largely dependent upon the SREC price. A long term SREC price at high levels enables the solar developer to flip the project at high margins. When the EDC solicitations are undersubscribed, which is widely known, developers demand higher prices and have been successful in doing so in 7 of the 8 solicitations. High prices granted by the EDCs are backed by the ratepayer who then has to sell the SRECs in the open market for the next 10 years. If the prices are lower for the next 10 years the ratepayer has to make up the shortfall.
Absent of the solicitations, developers have been trying for years to achieve 10 year SREC contracts in the mid to high $200 range. With current low panel prices, mid $100 10 year contracts are being sought after in the bilateral market. EDC contracts should achieve lower prices due to the public backing along with low or nonexistent credit checks on the side of the ultimate solar owner and recipient of the long term contract.
The EDC financing program has just ended its 3 year life. There are deliberations going on to discuss whether the EDC program should be continued and if it does what changes should be implemented. In the mean time the Solar Alliance has submitted a petition to the Board of Public Utilities to increase the planned quantities under the programs by 47.3mw for this coming year.
 

 
More on Flett Exchange:
  
     Flett Exchange is the leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, CT, MA, and DC and 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.

TAGS:
New JerseySREC

Posted on Sept. 23, 2011

New Jersey spot Solar Renewable Energy Certificate Prices traded and settled above $200 on the Flett Exchange market yesterday. The official Settlement price was $205 for the energy year 2012 SREC. (2012 energy year is energy generated between June 1, 2011 and May 31, 2012). This is the first time the market settled above $200 since August 2, 2011. The lowest settlement price was $151 between August 16th and the 18th.

Light Selling Volume

According to daily activity on the Flett Exchange marketplace during the last two months the main contributing factor to the recent rally is a lack of selling volume. Daily volume for the energy year 2012 SRECs has dropped approximately 85% on the Exchange since the first 2012 SRECs were minted at the end of July. According to conversations with sellers the drop in volume is directly correlated to the low SREC prices, not supply and demand analysis. Our homeowner clients are just not selling at all. They are calling, getting the prices, and are in disbelief. We explain to them that the state SREC volume mandates have been recently inundated due to a surge in solar installations. Their reaction is that they will just “wait it out”. Our mid-size, independent clients (individuals who own moderate sized installations, 50 to 250 kW, on their business or realty holdings) sell a little more however, the majority of responses are “I am not selling at this low of a price… I don’t need the money today, I am not selling the low”. Our corporate and investment clients, who own large installations or a portfolio of projects, sold most of their SRECs but look for us to hold their hands and really try to squeeze every dollar out. These larger clients have been closely watching the market over the last year and have either sold some production through us on a forward basis or at least have been aware of the build up situation and declining install costs. They don’t like the current prices but want to continue to participate based on the fundamentals. Our public entities are taking a more systematic approach and employing a consistent selling approach to avoid the “Monday morning quarterback” criticism of market timing if they don’t sell and the market drops further. Energy companies with an RPS are showing solid bids to purchase in the mid to high $100s.

“90 megawatts in 90 days”

The fundamental (supply and demand) factors during the same 2 month period have gotten worse. Install rates during the past three months have been staggering. We termed it “90 mw in 90 days”. The past 3 months have seen 40 mw installed state-wide in June, 19.5 mw in July and 31 mw in August. This rate of installs is 300% higher than the average increase dictated by the State RPS (renewable portfolio standard). State law requires 596,000 SRECs purchased for energy year 2013 which is 153 mw above the 442,000 SRECs required in energy year 2012. An average monthly build-rate of 10mw would keep the market balanced. From what we have seen in the marketplace this build-rate will remain strong and add to the oversupply through the end of the year based on Federal depreciation incentives. Even if spot SREC prices continue to remain weak, projects awarded fixed rate 10 year contracts via the BPU approved JCP&L, RECO and ACE will continue to be installed well into next year. The market as a whole will continue to be over-flooded with projects holding these risk-free 10 year contracts, ALL of which were awarded more than double the prices found in the competitive non-ratepayer supported market. Investors in solar without these fixed rate contracts will have to absorb the lower SREC prices and the ratepayer will absorb the losses on the contracts as the SRECs are auctioned off into the oversupplied spot market.

Laissez Faire vs New Legislation

We see only 2 things that will bring the SREC market back (barring any significant reduction in Federal incentives). They are time and/or a change in legislation. Left alone, we expect the SREC market to remain weak for years. That leaves a legislative change from the New Jersey State legislators, with the blessing of Governor Christie, as the only hope to support the market in the next 6 to 8 months. We believe there will be some type of new bill written this fall to take advantage of the recent surge in investing in solar in NJ that has outstripped the demand set by current legislation. The mature solar market in NJ has attracted cheap capital to the Garden State in the past years which has enabled installation companies to increase employment. This build-up in infrastructure has brought significant competition and the end result is that solar installation costs have dropped significantly. When the original law was written in NJ to build out solar, the assumption was that solar install costs would decrease to the tune of 2 to 3% a year. This low decrease in the cost of solar is why the current law set the ultimate goal of 5,316 gwh in year 2026. This would bring the lowest cost over time to the ratepayer. Since installed costs have plummeted due to lower panel prices, low interest rates, healthy federal incentives, and a competitive installer base in NJ there is an argument to move the ultimate goal forward 5 years to 2021. A change in law moving the goal forward would require more solar to be installed in the next few years and take advantage of the low cost of solar now before things change. This would increase demand for SRECs and enable the positive momentum of solar build-up in the State to continue. Any proposal to increase the demand for solar will increase costs as opposed to leaving the law the way it is. We can expect the Christie Administration to require that the ratepayer be protected from runaway costs. A compromise of lowering the current fine of $653 down to $500 (SACP- solar alternative compliance payment) coupled with decreasing the ultimate goal of 5.35 gwh to 4.9 gwh may be a starting point in creating a bill that includes a “net benefits” to the ratepayer as referred to in the revised Energy Master Plan put out by the Christie Administration. There also has to be consideration given to the competitive retail electric suppliers. These suppliers have recently expanded in New Jersey in the last few years and have brought added competition and choice to electricity users in the state. If a law is passed to speed up the rate of installs in New Jersey these competitive suppliers would be saddled with most of the cost of the incremental demand over the previous laws’ SREC requirement. This is due to the fact that the BGS suppliers enter into 3 year contracts to supply power and would not have to buy the incremental SREC demand. The compromise to lessen the strain on competitive suppliers would be to ramp up the demand for SRECs gradually over the next 3 years, not all in the first year.

Players in Trenton

All eyes will be on Trenton in the next few months. The usual players will most likely be involved. They are State Senator Bob Smith, State Assemblyman Upendra Chivakula, and the Board of Public Utilities, all under the watchful eye of Governor Christie. It is my impression that there is a willingness in both the legislature and the Christie Administration to make legislative changes that will add certainty and continued growth in the solar industry and jobs in New Jersey.

Future of SREC values

What does that all mean for SREC values? If a law is passed to increase the amount of solar gradually over the next 3 years, coupled with a decline in the current SACP then energy year 2012 SRECs should rally slightly, but not as much as if an increase in the amount of SRECs is done immediately in ey 2013. A more gradual approach would lift values higher in forward years of 2014 to 2017 and potentially give investors the chance to lock into 3 to 5 year contracts in the low $200s compared to the mid $100s currently. We highly doubt that under any change in legislation there will be a return to $600+ SRECs.

Solar owners and electric companies utilize the Flett Exchange market to buy and sell SRECs in a transparent and competitive fashion on the Flett Exchange Internet trading platform. The market is available 24 hours a day on the Internet and is staffed 5 days a week by professionals here in our Jersey City offices. We also broker long term contracts for large facilities directly with energy companies who sell electricity in New Jersey.

More on 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). Over 3,300 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.

Flett Exchange 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.

Flett Exchange is the only environmental exchange to publish a daily cash settlement price for Solar Renewable Energy Certificates (SRECs). Flett Exchangeâ??s settlement price is a daily volume weighted average for SRECs traded on the proprietary Flett Exchange Internet Trading Platform. Our settlement price is a transparent, fair, and orderly price of SRECs based on free-market competition. Settlement prices are calculated every business day, transmitted to major newswires, and employed by sustainability teams to ascertain the most accurate SREC prices.

Disclaimer: Flett Exchange cannot be held liable for any of the estimates or forecasts listed in this article. All information is estimated and data errors may be significantly impact projections.

TAGS:
New JerseySREC

Posted on Sept. 8, 2011

New Jersey Solar Owners Need to Check GATS for Energy Year 2010 or 2011 SRECs and Sell Them Now!
 
     If you own solar in New Jersey you need to check your GATS account for any SRECs tagged June 2009 to May 2011. Those SRECs are energy year 2010 and 2011 SRECs and are usable for 2011 energy year RPS compliance. Renewable Portfolio Compliance filings are due October 1st by New Jersey electric providers . Prices for energy year 2010 and 2011 SRECs are trading $620 on Flett Exchange today. If you do not sell them they will be worth slightly less than the 2012 SRECs which are trading $195 today. That is a $425 difference!!
 
1. Check your GATS account for NJ SRECs produced June 2009 to May 2011
 
2. Log onto Flett Exchange and sell them at the current market price.
(this price changes, as of this writing it is $620)
 
3. Call our trading desk at 201 209 0234 and we will lock in your price and help you transfer the SRECs
 
 
(Energy year 2012 SRECs (June 2011 to May 2012 generation) are trading at $176 today on Flett Exchange. Volume is very light with over 90% of our sellers taking a wait and see attitude at this time)

TAGS:
New JerseySREC

Posted on Sept. 8, 2011

 September 8, 2011 Third Party Suppliers in New Jersey were largely caught off-guard by the final SREC requirements that were issued on August 26th, 2011. Compliance reports for the 2011 energy year are due on October 1st. At that time any company supplying electricity in New Jersey has to either retire SRECs or pay a solar alternative compliance payment SACP to the State. The SACP for energy year 2011 is $675. Any SACP payments are refunded to ratepayers. Confusion over the required amount of SRECs stems from the change from a percentage requirement to a fixed requirement that went into effect in January 2010 with passage of A3520 the Solar Energy Advancement and Fair Competition Act. Any Basic Generation Service BGS Providers with contracts entered into before passage of the Act remain on the percentage requirement until the contracts expire. This shifted more of the demand onto the Retail Electric Third Party Suppliers. Those suppliers had procured what they thought was their requirement less a few percentage points worth due to the loss in value in the roll to energy year 2012 SRECs which are only trading $195 today on the Flett Exchange electronic marketplace. Prices for energy Year 2011 and 2010 SRECs rallied $164.74 from a $457.09 Flett Settlement on August 25th to a $621.83 settlement on September 7, 2011.
 
     The following is the New Jersey Renewable Portfolio Standard Energy Year 2011 Preliminary Solar Compliance Data issued by the New Jersey Board Of Public Utilities on August 26, 2011:
 
     NJ Retail Electric Third Party Suppliers, Electric Distribution Companies and BGS Providers: From data submitted to the Office of Clean Energy in the New Jersey Board of Public Utilities (Board staff) by the state’s four Electric Distribution Companies, thirteen unique BGS providers served retail electric end users with 31,334,037 MWhs under contracts entered from the 2008 and 2009 BGS auctions. This supply of electricity is exempt from the newly developed market share basis for NJ RPS compliance per the regulations adopted pursuant to the Solar Advancement Act of 2010.
 
     The reported exempt retail sales must comply with the RPS regulations as they existed at the time of the Act’s passage in January 2010 which was 0.3050 percent of retail sales. As a result, the providers with exempt supply are required to retire SRECs or make SACP payments in the equivalent amount of 95,569 MWhs. The RPS requirements for EY2011 are 306,000 MWh equivalents, ie SRECs retired and SACP payments made by all NJ retail electric suppliers and providers must sum to 306,000 MWh. As a result, non-exempt suppliers and providers must retire 210,431 SRECs or make SACP payments.
 
     The EDCs also reported reconciled retail sales data for the BGS providers with non-exempt retail sales, ie entered under contracts from the 2010 BGS auction as well as preliminary, unreconciled retail sales data for Third Party Suppliers in their respective territories. EDCs reported 17,709,103 MWhs from non-exempt BGS providers and 32,198,209 MWhs from Third Party Suppliers who were not exempted from the Solar Advancement Act’s change to the RPS market share basis for compliance with the solar requirements. The total unreconciled non-exempt retail sales are 49,907,312 MWhs. If you represent a non-exempt supplier or provider, your preliminary solar obligation for that supply can be calculated by dividing your retail sales number as contained in the PJM GATS “My RPS Compliance” report by 49,907,312 and multiplying by 210,431.
 
     Third Party Suppliers have two weeks, by COB Monday September 12 to review their My RPS Compliance report for accuracy with their EY2011 retail sales amount and reconcile the number if required. If the amount in the My RPS Compliance report is inaccurate you must report your final retail sales amount to OCE along with a written explanation for the difference. Please submit reconciliation requests with explanation to OCE@bpu.state.nj.us.
 
     By COB Friday September 16 the OCE will issue a notice of the final retail sales amounts via the NJCleanEnergy.com website and PJM-EIS GATS system. Any questions or comments feel free to use the OCE@bpu.state.nj.us email or contact Scott Hunter at 1-609-292-1956 or Ron Jackson at 1-609-633-9868.
 
More on Flett Exchange:
 
     Flett Exchange is the leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,300 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
     Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 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.

TAGS:
New JerseySREC

Posted on Sept. 7, 2011

     September 7, 2011 – Flett Exchange is pleased to announce the results of the Stafford Township School District Solar Renewable Energy Credit SREC auction. The sale consisted of 273 credits representing solar energy generated during the 2011 energy year. The sale cleared at $645.01 per SREC. The 2011 energy year runs from June 2010 to May 2011. Flett Exchange charges no commissions to public entities and the proceeds to the District were $176,087.73.
 
     The sale was conducted on the Flett Exchange Electronic trading platform. All bids are shown in real time with absolute transparency. Market participation was strong with numerous electric providers competing to fulfill their renewable portfolio standard.
 
     Recent strength was seen in the tail end of the 2011 energy year compliance period. Competitive suppliers were given their final tru-up formula from the New Jersey Board of Public Utilities on August 29th. There was surprise in the industry from the side of the competitive electric suppliers with the release of the formula. Final SREC obligations were higher for competitive suppliers based upon a shift away from the basic generation services BGS suppliers who competitive suppliers have solicited business and homeowners to switch from in an increasing rate during the last year and a half. The BGS suppliers, who contract to supply power in 3 year intervals are exempt from increases in the solar carve out increases under the Solar Advancement and Fair Competition Act which changed SREC obligations from a percentage of power supplied to a fixed number. When the BGS supply contracts expire the SREC obligations will even out again.
 
     Market volatility has increased in the last month while the last few SRECs make their way to the market. Market sellers at this point are taking large risks since SRECs that are not sold in time for the October 1st deadline can be used for the following year however those prices are currently trading in the high $100s. SRECs for the 2011 energy year traded as high as $640 on the Flett Exchange spot platform which is used by facilities ranging from homeowners with 1 SREC to multi-megawatt facilities with thousands of SRECs.
 
     Energy year 2012 SRECs (June 2011 to May 2012 generation) are trading $170 today for immediate payment and delivery.
 
More on Flett Exchange: 
 
     Flett Exchange is the leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,300 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
     Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 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.v

TAGS:
New JerseyPublic AuctionsSREC

Posted on July 29, 2011

     Owners of Solar in New Jersey were shocked at the lower prices they are receiving for their Solar Renewable Energy Certificates SRECs. The new Energy Year started in June of 2011. Those SRECs were made available for transfer on the State website (GATS) on July 29th. The market price on the new energy year is 50% lower than the previous energy year. Prices as of 8am on Flett Exchange’s Internet trading platform are $276.
 
     The Drop in prices is directly correlated to the potential of an oversupply of SRECs for the 2012 Energy year. There has just been too much solar installed too quickly compared to the mandates put on the electric producers. Electric Producers in New Jersey are required by law under the Renewable Portfolio Standard to purchase 442,000 SRECs from solar owners during the June 2011 to May 2012 time period (energy year 2012). There is currently almost enough solar installed to produce that amount of SRECs. The oversupply is coming from the rate that solar is being installed. In June of 2011 alone there was 40 Mw of solar installed in NJ. This was more than 10% of all the solar ever installed since the inception of the program in 2004. At this rate there may be more than a 100,000 oversupply of energy year 2012 SRECs.
 
     The SREC market is designed to fluctuate with supply and demand. The lower SREC prices are designed to throttle back development and only let the cheapest installations go forward. In the end the ratepayers will receive the best value based on competitive prices.
 
     Flett Exchange customers can view prices in real time on the Flett Exchange Internet trading platform. They can sell at current prices or place an order to sell above the market if they think prices will rebound.
 
More on 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). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
     Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 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.

TAGS:
New JerseySREC

Posted on July 7, 2011

    On June 20th the New Jersey Senate Environment and Energy Committee made amendments to Senate Bill 2371. The Bill was passed in the State Senate on June 29th and now sits in the Assembly Telecommunications and Utilities Committee. Last move amendments to S2371were made on June 20th which would speed up the already aggressive solar renewable portfolio standard in New Jersey. The intention of the Bill is to prevent a multi-year collapse in Solar Renewable Energy Certificate (SREC) prices. The Bill proposes to skip the energy year (EY) 2013 SREC requirements and move right to EY 2014 requirements. Instead of requiring 596,000 SRECs to be purchased by energy providers in EY 2013, the requirement would jump to 772,000 SRECs. The rest of the schedule would remain the same, just moved ahead one year.
 

 
     At the current pace of solar development, the New Jersey Solar Renewable Energy Credit SREC market is expected to produce an oversupply of SRECs for the upcoming year. The next energy year (June 2011 to May 2012) requires load serving entities (LSEâ??s) in New Jersey to purchase 442,000 SRECs for their compliance. We estimate that 490,000 to 590,000 SRECs will be created by NJ solar installations at the current rate of solar installations. The change proposed in the Bill will mop up the expected oversupply and keep the SREC prices stable. Without such a change the extra supply of SRECs may take 2 years to filter out of the market, and prices for SRECs will be so low that investors in solar in NJ will receive prices for SRECs much lower than expected. Solar development, one of the bright spots in the New Jersey Economy, may drop over 50% from the current pace of installs. SREC prices have already dropped in anticipation of the over-supply and are trading at $375for July 29th delivery. This is a significant drop from the current price of $599.63 which was July 6, 2011 settlement price on the Flett Exchange Internet trading platform. It would take a virtual halt in the rate of solar installs over a period of a year to bring the SREC market into a balanced supply-demand scenario. In the meantime SREC prices for spot and forward terms would remain under significant pressure.
 
     During the June 20th meeting of the Senate Telecommunications and Utilities Committee in Trenton Senator Bob Smith identified that the solar industry and regulators did not expect that the rate of solar installations would be so successful so quickly and potentially exceed the strong State mandates. This Bill is the type of preventive measure that is needed periodically in a program to reach long term goals of solar installations while maintaining confidence with solar investors. With a confident class of investors the ratepayer is more likely to benefit over the long term with clean solar energy at ever decreasing costs.
 
     As this bill works its way through the process, Governor Christie and the BPU will clearly have their say. It is a well known fact that the Administration would like to see the cost of solar brought down for the ratepayer. One should not expect support for a bill from the Governor that would just push SREC prices back up to the $600 level for years. We expect there to be a compromise required from the Governor in the form of lowering the established SACP from energy year 2013 to 2017 (this was hinted to in the revised energy master plan). The current defined SACP is in the High $500 to low $600 Range. A $100 drop would save ratepayers a potential $150,000,000 in energy year 2017 in the case of a short, undersupplied SREC market. Most solar investors that we speak to would accept this compromise in return for the accelerated growth and price support that would transpire with this Bill. Regardless of the recent tensions between Democrats and Republicans in Trenton, we believe that Governor Christie, BPU President Solomom, Senator Bob Smith and Assemblyman Chivakula will work this Bill to continue NJ on the path of more solar for New Jersey residents, businessâ??s and municipalities at lower costs to ratepayers.
 
     There was not support from the competitive electric suppliers for forcing long term contracts on them for SRECs. This long term contracting and shifting of development risk to other parties, be they ratepayers or electric suppliers, is advocated by certain sectors of the solar installers and development industry in New Jersey and was included in this Bill in its original form. Long term contracts were scrapped from the Bill. Long term, 15 year contracts would have transferred all of the risk of solar developers on electric suppliers which in turn would bring electric costs up for all ratepayers. Shifting risk from future solar developers to entities that do not benefit would create a split risk market that would disenfranchise those who already invested in solar.
 
     Michael Flett, President of Flett Exchange, spoke in favor of the bill in Trenton on June 20th in front of the Senate Environment and Energy Committee. He reiterated the need to increase the RPS to prevent a prolonged collapse in SRECs, spoke out against forcing long term contracts on competitive electric suppliers, and also brought up the benefits of a $100 SREC price floor as a future mechanism.
 
     New Jersey is in the right place at the right time with an established solar industry to take advantage of Federal incentives along with plummeting panel prices. The SREC market can take most of the credit as a mechanism. With proactive measures like this Bill with support by Christie, Solomon, Smith and Chivakula the benefits to investors and ratepayers can continue in a competitive fashion.
 

 
More on 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). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
     Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 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.

TAGS:
New JerseySREC

Posted on July 6, 2011

Energy Year 2011 New Jersey Solar Renewable Energy Certificates Trade Below $600 for the first time on the Flett Exchange Internet trading platform. A few hundred SRECs traded at 10:11am on the screen and was followed by a 6 lot trade at $590.
 
     Flett Exchange customers have been locking in prices on Flett Exchange since the last minting of energy year 2011 SRECs last Thursday, June 30th. High volume has traded at even increments giving sellers ample opportunity to lock in prices. Customers of the Exchange can see all bids and offers in real time to ensure they are getting competitive pricing. Payment and delivery are all handled seamlessly by Flett Exchange. Payments to sellers are typically made the same day as the transaction.
 
More on 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). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless 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, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
     Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 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.

TAGS:
New JerseySREC

Posted on July 2, 2011

     Prices for spot New Jersey Solar Renewable Energy Certificates SREC have slid in trading on the Flett Exchange in the past 2 days as solar owners scramble to lock in prices. The Friday, July 1, 2011 settlement price was $609.93 which is a $18.15 drop on the back of a $12.87 drop the previous day.There has been record heavy volume on the exchange due to the minting of the last of the energy year 2011 SRECs on GATS on June 30th. This is the lowest price since July of 2010 and is 7% lower than the $655 settlement price which sellers achieved on Flett for the majority of the year. The current bid on the trading platform is $600 for a few hundred SRECs with buyers posting bids on the trading platform in a scale down fashion.
 
     Since the minting of the SRECs at 8am on June 30th Flett Exchange customers have sold SRECs starting at $637.50. Buyers have participated at virtually every level (every $2.50 for hundreds of SRECs) on the Flett trading platform giving sellers a chance to lock in prices, transfer SRECs and get paid. (All Flett Exchange managed SREC clients were locked in at $645! as we took precautionary measures and locked in prices early as opposed to waiting to the 3rd business day) Flett Exchange is the only company to provide the SREC markets with real time execution services and transparency. (Flett Exchange is neutral and does not make money as an aggregator does with offering lower prices to sellers)
 
     The New Jersey SREC market is experiencing a pivotal change on the back of unexpected solar development in the Garden State. In past years there has not been hardly enough solar to meet State mandates. Hence, SREC prices have been hoovering near the fine levels. Going into the close of the 2011 energy year (it ended in May 2011) there is estimated to be only a slight shortage of SRECs to meet state needs compared to large shortages in previous years. Inexperienced market analysts have predicted market prices to remain high for the balance of energy year 2011 SRECs which underestimates the risk to sellers. There are a variety of different factors that will come into play during the next 2 months as the remaining compliance buyers pick up their last SRECs. As they finish and prepare their compliance filings, the energy year 2011 SRECs will converge and trade at an expected $20 discount to the energy year 2012 SRECs. At current levels that puts the EY 2011 SRECs in the mid $300s by October 1st. This significant price difference between energy years has created a liability for buyers because if they overbuy SRECs they will loose over $200 if they need to use them for next years compliance.
 
     The specter of the possibility of failed auctions in the coming month has many flocking to the Flett Exchange market to lock in prices. There is a record volume auction of the Load Serving Entities SRECs on July 12 of over 30,000 SRECs. This is 10% of the whole years production in one sale. The auction is run by NERA consulting. A large auction into a relatively balanced market, at the end of an energy year, with most LSE’s estimated to be close to finished with compliance buying runs a high risk of clearing at low prices compared to the current spot price. (A failed auction can occure when the sellers choose too high of a reserve price or when there fails to be enough buyers to clear the total volume) There is a slight possibility that the auctions will clear at stable to high prices.
 
     Flett Exchange customers can log on 24 hours a day to sell SRECs on our transparent and competitive Internet trading platform to sell their SRECs, call our trading desk during normal business hours 201 209 0234, or email us at info@flettexchange.com.
 
(DON’T TRANSFER SRECS ON GATS AT THE PREVIOUS DAYS SETTLEMENT PRICE AND EXPECT TO GET FILLED THERE. WE CAN ONLY TRANSACT AT THE PRICES AVAILABLE IN REAL TIME)
 
More on Flett Exchange:
 
     Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
     Flett Exchange 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.

TAGS:
New JerseySREC

Posted on June 22, 2011

Once a year it happens in the NJ SREC market, the energy year switch. Sellers of SRECs are confused every year. This year can cost sellers LOTS of money if they don’t sell in time. Let’s go over the basics and why this year is different from years past:

The Energy Year Basics:
 

1. The energy year runs from June to May (example: energy year 2011 SRECs represent power produced from the beginning of June 2010 to the end of May 2011.
2. Power providers in NJ must produce a compliance report on October 1st and at that time they must retire SRECs and/or make Solar Alternative Compliance Payments (SACP).
3. The time between June and October is called the true-up period. The true-up period gives the buyers enough time to get their count of SREC needs and either buy more or dispose of extra SRECs.
4. Sellers who have accumulated SRECs and not sold them during the year have a short amount of time to sell their SRECs.

 
Why are things different this year? 
 

1. SREC markets are based on supply and demand. In all of the previous years in NJ the amount of solar installed was far short of the State mandates. The result was high and stable SREC prices. This is about to change.
2. These high prices attract investment. Last year (energy year 2011) there was potentially enough investment in NJ solar to meet mandates. The next year (energy year 2012) appears to have enough and maybe even too much solar investment.
3. Prices for SRECs for future years have dropped 38% in the last few months.

 
What should I do if I have SRECs? 
 

1. If you have SRECs in your GATS account you need to sell them now and sell them again at the end of this month when the last ones are posted in GATS. Don’t try for higher prices. In the past, sellers have been able to get a few extra dollars by holding out until the end. We don’t think the risk/reward is there this year. Trying to get $650 when the best bid is $645 is not wise. If prices start to drop just accept the bid and go on.
2. The last SRECs that can be used by the buyers for October’s compliance will be May 2011 generation. These SRECs will be available for transfer in GATS at the end of June.
3. Flett Exchange customers can log onto the Flett Exchange trading platform to lock in their prices 24 hours a day 7 days a week. You can also call our trading desk and we will lock in the price for you. Don’t just transfer SRECs to “Flett Exchange llc” on GATS without first locking in your price! Call us or trade them on our trading platform.

 
What is going to happen to prices in the future?
 
Prices for energy year 2012 SRECs are trading in the high $300s for future delivery. These prices are expected to go up and down based on the level of future solar installations. If homeowners, businesses, schools, municipalities and PPA firms continue to develop solar in excess of the State mandates then the SREC prices will continue to go down in price. If solar development throttles back the prices will stabilize. Prices can also stabilize based on Board of Public Utility rulemakings and future legislation changes.
 
More on Flett Exchange:
 
Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,800 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
Flett Exchange 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.

TAGS:
New JerseySREC

Posted on June 21, 2011

Energy Year 2012 SREC (solar renewable energy certificates) trade $400 on the Flett Exchange Electronic Trading Platform. This is a significant discount to the end of 2011 SRECs which are trading $645 each. Energy Year 2012 SRECs represent generation starting in June 2011 and ending in May 2012. The trade was for 50 SRECs representing solar power generated during June 2011. The SRECs are deliverable on July 29th, which is the first day that energy year 2012 SRECs will be minted and available for transfer on the GATS tracking system. Payment will be made to the seller 5 business days after delivery.

     This is a significant discount to SRECs generated for May 2011. The May SRECs will be posted for sale this Friday and are currently trading for $645 on the Flett Exchange Electronic Trading Platform. The price difference between the energy years is different because of supply and demand. There are differing opinions on the supply for 2011 SRECs however, it is right around balanced. Energy Year 2012 SRECs are dropping because the pace of development may far exceed New Jersey State mandates for solar energy in the short term.
 
     Owners of NJ SRECs should sell their SREC that are already generated and to be minted this Friday as soon as they are available on GATs. Sellers can log onto their Flett Exchange account to lock in their price for their remaining 2011 SRECs or they can call our trading desk at 201-209-0234.
 
More on Flett Exchange:
 
     Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
 
     Flett Exchange 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.

TAGS:
New JerseySREC

Posted on June 16, 2011

   Pennsylvania Solar Renewable Energy Certificates (SRECs) or Alternative Energy Credits (AECs) seem to have found support in the $80 range. Over the past year the Pennsylvania SREC market has experienced a precipitous decline, dropping from $300 to $80. This 73% price correction was due to an oversupply of PA SRECs and outdated legislation. If state officials are serious about solar energy development, they will need to address the legislative flaws in Pennsylvania’s Renewable Portfolio Standard (RPS) and implement restrictions that deter extreme SREC volatility. By upgrading the RPS and creating a stable SREC market, Pennsylvania can attract more investment capital, create sustainable in-state jobs, and expand renewable energy development throughout the Keystone State.

 
Oversupplied SREC Market
 
     There are various factors which have led to an oversupply of SRECs in Pennsylvania. One of these factors is the ability for out-of-state SRECs to be used for Pennsylvania compliance. The PA SREC market is unique in that it allows PJM region states to register and sell their SRECs in Pennsylvania. PJM is the Eastern Regional Transmission Interconnection. This renewable energy region consists of all or part of 13 US States and Washington DC. (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia comprise the PJM region.) Some PJM regional states do not have a RPS or a viable SREC market, but can still register and sell their SRECs into Pennsylvania. Allowing out-of-state solar installations to sell their SRECs into the PA SREC market is disenfranchising Pennsylvania solar installations. Instead of rewarding instate solar generators Pennsylvania legislation is diluting their investment by allowing out-of-state installations to flood the PA market with SRECs. For Energy Year 2011 (June 1st-May 31st) 18 MWs needed to be purchased by Load Serving Entities (LSEs) or Competitive Electricity Suppliers (CESs) who serve electricity load into Pennsylvania. This meager SREC demand was met by an overwhelming SREC supply of 72 MWs registered, thus creating an oversupply of 54 MWs or approximately 60,000 SRECs.
 
     Other PJM states like New Jersey have a closed SREC market. New Jersey does not allow other PJM region states to register and sell their SRECs into their home state. This type of legislation helps New Jersey grow its solar renewable energy markets internally, create in-state jobs, and does not force ratepayers to fund outside state solar projects. New Jersey legislators also passed a law in 2010 that deals directly with an oversupplied SREC market. If NJ SRECs decline three consecutive energy years in a row, solar requirements will automatically increase by 20% each year. This law acts as a circuit breaker to keep the market from collapsing and ensures that the NJ SREC market is a viable mechanism for years to come.
 
     Another way for Pennsylvania to control the amount of SRECs that are being registered and sold into its market is to institute a megawatt cap on solar installations. Megawatt caps inhibit large solar farms from dominating a developing market. In essence, they protect the RPS from being satisfied too quickly and flooding the state with SRECs. New Jersey was successful in implementing a 2 MW cap for net-metered systems. The New Jersey Board of Public Utilities (BPU) allowed the SREC market to develop slowly. Once the market was well established and operating efficiently, state officials lifted the 2 MW cap (January 2010) and New Jersey grew into the largest and most active SREC market in the United States. Capping the size of solar facilities creates an even playing field. It encourages distributed generation and allows various entities to participate in developing solar, instead of having the market dominated by a few utility-scale solar facilities.
 
A Stronger Renewable Portfolio Standard (RPS) is Needed
 
     Pennsylvania’s RPS needs to be updated. “When we created the Alternative Energy Portfolio Standards Legislation in 2004, the solar energy requirements were carefully constructed to start low and increase very gradually over the first 10 years.” (Representative Chris Ross, “Proposed Legislation-Solar Renewable Energy Certificates” to the House of Representatives, 5/16/2011). However it has been seven years since state officials have critically reviewed Pennsylvania’s RPS and its effect on the SREC market. Like any other developing market, the PA SREC market and RPS need to be supervised and frequently upgraded for the betterment of its participants. By taking a proactive stance on the RPS and implementing SREC market circuit breakers, Pennsylvania can reduce renewable energy boom and bust cycles.
 
     A sobering exercise is to compare New Jersey’s RPS Requirement in SRECs to that of Pennsylvania’s. The following diagrams illustrate how New Jersey’s RPS is significantly greater than Pennsylvania’s from Energy Years 2011-2016. This is backwards legislation, since Pennsylvania uses the most electricity in the PJM region. Last quarter alone Pennsylvania used 22.44% of PJM region electricity; Virginia was second at 16.62%, Illinois was third at 14.06%, and New Jersey was fourth at 10.92% (Monitoring Analytics). The obvious solution would be for Pennsylvania to increase its RPS and promote renewable energy technologies to reduce the strain on the electricity grid, deter climate change, and purify air quality.