Tuesday, July 26, 2011

SREC Glut is Happening

The SREC Glut seems to be developing fast. In the most recent auction the prices dropped below the minimum threshholds of so many sellers that my broker is setting up a special mechanism to unload these. Here's part of what they announced:

Due to the price drop in the July auction, a significant number of New Jersey SRECs went unsold. You can read about the recent volatility in the NJ SREC market in our blog. For the past 3 years, prices have held at 95% of the ceiling in the market, so for many of you, this is the first month without a paycheck for your SRECs.

As we explained in the blog, there are reasons why pricing could get better for the 2011 SRECs and reasons why they may not. We suspect that you may be less interested in the complexities of the market than you are in getting your SRECs sold. For this reason, instead of waiting until the next auction, we are offering to take your SRECs to our buyers to see if we can get them sold for you sooner than later. We will use a tiered structure that promotes choice, while allowing us to go to the market with firm numbers.

I suppose that in a way, solar is a victim of it's own success and popularity. Hopefully this won't discourage anybody from going solar in the near future. Come to think of it, maybe I shouldn't post this for that reason, but hey, you all know I'm all about full disclosure!


Michelle said...

I sold June's SREC for $276. How about the rest of ya?

Anonymous said...

Ouch! It was just reported that the August SREC price in New Jersey fell over 50% in August from $564.99 to $276.16. New Jersey is not alone - Maryland down 60%, DC down 75% and PA down 90% from SREC highs. The supply of SRECs have flooded the market. One can no longer count on a fixed SREC price when figuring returns on their solar investment.

It comes down to - States have to figure out to run these SREC programs effectively so that it encourages new setups, rewards existing ones and maintains some level of stability for buyers and sellers.

Anonymous said...

Interested in going solar, and was told that with SRECS surely coming in between 400.00 and 700.00, that it's a no brainer, and how can anyone not buy it? Also promised that my electric bill would go away.
Is it possible that the current srec pricing could go down and even disappear?

Green Mountain Realty said...

The key to selling more solar is of course lower installed costs and more state and federal tax credits. Those credits need to also be available to be sold or traded.