More About the SREC Glut

Here's an article that appeared in today's Philadelphia Inquirer that supports the Fletts column I posted a day or two ago. So many systems are going online that the value of the SRECs are plummeting.

[edit: sorry, I can't seem to get blogger to link the article. I'll try again later]

http://www.philly.com/philly/business/20110524_Pennsylvania_s_solar-energy_industry_suffering_from_success.html

"We're in some ways a victim of our own success," said Maureen Mulligan, a spokeswoman for the Pennsylvania Solar Energy Industries Association, which is predicting a crash.

"Anybody who's talking about putting up a new project now is thinking, 'Wow, there's no support anymore,' " said State Rep. Chris Ross (R., Chester County).

On Tuesday, Ross plans to introduce a legislative rescue for the industry that would increase the amount of solar energy that utilities must buy through 2015, propping up the price of solar credits.

We have to remember that forcing the utility companies to by these things is a subsidy. My waffling on whether these subsidies are the right way to proceed is well documented here on the blog so I won't blab about that. The bottom line is, though, that unless the governing authorities ratchet up the number of SRECs that must be purchased, the value of these things will continue to drop.

But doesn't that mean that the subsidies worked? It's hard to feel completely bummed out or elated about this...

SREC Glut Will Mean Lower Prices Fetched

Here's an interesting article posted on Flett Exchange's web page. Looks like New Jersey has taken to solar. The downside is that there are more SRECs being generated than anticipated, making them less valuable.

http://markets.flettexchange.com/2011/05/16/nj-srec-prices-drop-in-anticipation-of-an-oversupply/

"There are two ways to prevent the SREC market from being oversupplied. First is to slow the pace of solar development and second is for New Jersey to increase the amount of solar needed."

Roughly Halfway to System Payoff

One SREC sold for April, for $ 640.00.

Then, there's this from PSE&G, the power company:

Thank you for participating in Paperless Billing. Your current PSE&G bill statement is now available for online viewing. Your current balance is a credit of $109.59 and no payment is required.

I'm just doing 'back of the envelope' calculations, but it appears that our system is halfway to paying for itself. (Disclaimer: we were lucky enough to catch the tail end of the New Jersey rebate program and also received a substantial federal tax credit.) When we installed I estimated the payback period as 4.5 years. Looks like it'll be more like 5.1 years. I can live with that...