Thursday, June 30, 2011

Volatility Warning In NJ SREC Market

Latest news from Flett Exchange:

"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."

More from Flett Exchange:

"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."

Read more here.


Anonymous said...

Has anyone realized that the same law firm that advises the County on this project also advises other government entities on the exact same project? That law firm puts those entities in direct competition with one another?

EnterSolar said...

Yes, it is volatile for SRECs in NJ. Here is a relevent quote from our newest blog post on this subject.

"As a result, we advise our corporate solar clients to seek long-term SREC contracts that provide long-term pricing visibility and cash flow certainty."

NJ SREC prices have plummeted as a result of supply and demand - but we feel that an equilibrium will soon come in this relatively new market.

Anonymous said...

NJ SRECs are volatile because there is only one annual settlement date. This gives the market 12 full months to speculate.

Given the weather we have been having, I predict a spike in prices before the end of the 2012 year.