Archive for the ‘New Jersey’ Category

New Jersey SREC Prices Continue to Move Up

Posted July 16th, 2015 by SRECTrade.

The New Jersey 2015 SREC market is currently bid $235/SREC. Since the beginning of Q2 2015, the market has steadily moved upward from $200/SREC. On July 15, 2015, the auction manager representing the NJ Electric Distribution Companies (EDC) announced a $246.42/SREC clearing price for the NJ2015 SREC auction held on July 14, 2015. 42,470 SRECs were sold at this price. What’s interesting about this most recent EDC auction is that it cleared above the offering side of the market. Historically, as shown below, the EDC auctions have traded between the bid and offer prices quoted in the over the counter (OTC) market around the time of the EDC auction close.

Screenshot_071515_084654_PM

The supply outlook, relative to demand, for reporting year 2016, appears to point to a flat market, meaning that there will likely be enough supply available from previous energy years and from SRECs issued throughout reporting year 2016. This assumes monthly solar build rates fall between 12.9 MW and 25.7 MW per month. Our presentation, from the Environmental Markets Association meeting this spring, shows various build rates relative to the NJ Solar RPS demand requirements. As shown below, in each Case 1-3, the under and oversupply estimated is close to zero meaning SREC supply will be close to balanced with the state’s RPS demand. Through May 2015, NJ solar monthly build rates have averaged 18.8 MW per month (over the last 6 months). June 2015 build rates are expected to be announced soon.

Screenshot_071515_084058_PM

Notes:

1) NJ2015 bid / offer pricing presented in chart above includes periods in which the market was quoted on a forward basis. The EDC clearing price presented at that time are for the most current spot vintage available for immediate delivery (i.e. 2014 EDC auction prices are presented against 2015 OTC Bid / Offer pricing in instances where 2015 SRECs weren’t available for sale in the EDC auction).

2) NJ Supply Demand Scenarios chart assumes electricity sales remain at the same level as reporting year 2014.

Environmental Markets Association – PA, NJ, and MD SREC Presentation

Posted May 28th, 2015 by SRECTrade.

Last week, SRECTrade was invited to present at the Northeast Renewable Energy Credit Round Table hosted by the Environmental Markets Association (EMA).  The presentation provides a fundamental look into the PA, NJ and MD SREC markets.

The presentation covers the following topics on each state SREC program.

  • Current Installed Solar Capacity
  • Supply and Demand
  • Recent Pricing

Feel free to contact us with any questions.

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January 22, 2015 New Jersey SREC Market Update Webinar Slides and Recording Available

Posted January 26th, 2015 by SRECTrade.

On January 22, 2015, SRECTrade hosted a webinar on the NJ SREC market. For access to the slides please click here: SRECTrade 01/22/15 NJ SREC Update. For access to a video recording of the webinar, click the image below. Please note, the slides in the link above differ from the recording below. They have been updated to reflect the additional solar capacity installed in December 2014. This announcement was made by the NJ Office of Clean Energy on January 22, 2015.

This document and recording is protected by copyright laws and contains material proprietary to SRECTrade, Inc. It or any components may not be reproduced, republished, distributed, transmitted, displayed, broadcast or otherwise exploited in any manner without the express prior written permission of SRECTrade, Inc. The receipt or possession of this document does not convey any rights to reproduce, disclose, or distribute its contents, or to manufacture, use, or sell anything that it may describe, in whole or in part. If consent to use these materials is granted, a link to the current version of this document on the SRECTrade website must be included for reference.

NJ SREC Market Update Webinar Slides and Recording Posted

Posted March 12th, 2014 by SRECTrade.

The slides from SRECTrade’s March 12, 2014 New Jersey SREC market update webinar are available here. Steven Eisenberg, Alex Sheets and Sam Rust present SREC issuance and pricing numbers. Additionally, three supply vs. demand scenarios, that assume a high, low, and consistent build rates, are discussed to illustrate potential SREC market supply and demand over the next few years.

A recording of the webinar can be watched by clicking on the image below.

NJ SREC Update

New Jersey SREC Market Update Webinar: Wednesday, 3/12/14 @ 2 pm EST

Posted March 6th, 2014 by SRECTrade.

SRECTrade will host a webinar covering the latest pricing and supply numbers for the New Jersey SREC market. Like all SRECTrade market update webinars, it will be open to the public.

The webinar will be held on Wednesday, 3/12/14, at 2 pm EST.

Click here to register

March 12 NJ Webinar

New Jersey SREC Market Update: Prices Are Up

Posted January 21st, 2014 by SRECTrade.

Prices for New Jersey SRECs have increased dramatically over the last month from the $140s in early December to current pricing in the low $170s. The RY2014 vintage cleared in our December auction at $138.01 and the January auction just cleared $169 for the same product, but recent over-the-counter deals have been done in the $170s.

NJ 2014 Pricing Over Time 520

Why are  NJ RY2014 SRECs trading higher?

In recent months, the monthly build-rate for new solar projects has been relatively restricted and significantly lower than build rates seen in RY2013. The average for the last six months (LSM) is 11.7 MW per month, while the last 12 months (LTM) is 16.9 MW. Lower build rates, mean fewer SRECs than expected, which in turn causes both sellers and buyers to be more aggressive in how they price the market. However, the market remains fundamentally over-supplied in RY2014 when taking into consideration unretired eligible SRECs from previous reporting years and SRECs minted from RY2014 generation.

Workbook1 Sheet1

Impact of Basic Generation Service Procurement on SREC Prices

Another reason that may explain the run-up in prices and volumes-traded is the forthcoming Basic Generation Service (BGS) electricity procurement.

Each year, in early February, the regulated electricity utilities in New Jersey conduct an auction in which wholesale power providers compete to provide Basic Generation Service to consumers in New Jersey. In providing electricity, the wholesale power suppliers must also provide the requisite SRECs corresponding to the electricity load. In short, during the BGS auction period, there is a significant increase in market activity. This alone warrants attention from sellers. Coupled with recent run-up in prices, sellers should be especially poised to act.

With increased prices and increased market activity, now could be an ideal time to lock in your revenue for SREC sales. We’re here to help facilitate the transaction, so please feel free to contact us.

NJ Market Update recording posted

Posted September 12th, 2013 by SRECTrade.

SRECTrade recorded a NJ Market Update webinar on September 12, 2013. To watch the webinar click on the image below.


New Jersey SREC Market Webinar (Thursday, 9/12 at 2 p.m. Eastern)

Posted August 26th, 2013 by SRECTrade.

On Thursday, September 12th at 2 p.m. Eastern, SRECTrade will host a webinar covering the New Jersey SREC market. Registration for the webinar is open to anyone, but the focus will be on providing market information to commercial and institutional market participants.

Register for the webinar by clicking this link: http://bit.ly/17ZjEyn

About the speakers

Steven - mug
Steven Eisenberg is the Vice-President of Business Development. Steven has been with SRECTrade since 2010 and is responsible for starting and managing SRECTrade’s growing brokerage and institutional SREC asset management business units.
Alex mug
Alex Sheets comes to SRECTrade from SunEdison. As SRECTrade’s Director of Environmental Markets, Alex assists buyers and sellers in originating, executing, and negotiating SREC transactions in the over the counter markets.
sam's resized headshot
Sam Rust is the Director of Business Development and Channel Operations, a role he has been in since 2011. Sam focuses on working with SRECTrade’s installer partners and commercial clients.

PSE&G Announces Solar Loan Program Extension

Posted July 22nd, 2013 by SRECTrade.

PSE&G has announced that they will begin accepting applications this fall for the Extended Solar Loan Program. This program will finance 97.5MW of solar over the next three years. The program is similar to the previous Solar Loan program with some important changes. Like the previous program, the Extended Solar Loan will offer a loan to system owners which is repaid with either cash or the proceeds of the sale of SRECs generated by the system and sold by PSE&G. Also like the previous program, there will be a floor price on the amount the loan recipient is credited for those SRECs even if the actual sales price falls below that floor price. As is currently occurring in the original Solar Loan Program, ratepayers make up the difference when the market price falls below the floor price.

The major change in this program is that the floor price will not be set by PSE&G, but will be determined by a competitive solicitation. PSE&G will hold 4-6 competitive solicitations each year, offering only a portion of the total capacity of each segment each round. In addition, the loans will all be 10 years, and there is no longer a “call option” for SRECs. Finally, this solicitation will require borrowers to pay administrative costs associated with the loans (fee structure for residential/commercial). There will be a set interest rate of 11.179% for all borrowers.

This program is only available to new, un-built systems. In general the program will contribute to increased oversupply in the NJ SREC market, since it increases the SREC supply and allows systems to be built at a higher price than the current SREC market price supports, with ratepayers making up the difference.

New Jersey is a solar leader, but that’s not necessarily good for SREC pricing

Posted April 22nd, 2013 by SRECTrade.

Last month the New Jersey Office of Clean Energy (NJ OCE) and the Christie Administration released data showing that over 1 gigawatt of solar had been installed in New Jersey. As of this writing, those numbers have increased to approximately 1.03 gigawatts. In 2012 alone, New Jersey was only surpassed by California and Arizona for installed solar capacity. See GTM’s public 2012 report for details and for access to the most recent NJ OCE data visit here. Additionally, our monthly capacity report of solar generators registered in PJM GATS shows that 973.8 MW of NJ solar is registered, following the expected lag between installed capacity announced by New Jersey and GATS registrations.

At face value, more solar is a good thing, right? Yes, if all you care about is the amount of solar installed and you disregard much of the complexity of state’s various different electricity policies and the wide spectrum of impact across stakeholder groups. Luckily, SREC markets are straightforward when it comes to the relationship of installed capacity to SREC price. In simple terms, when New Jersey’s installed capacity outstrips the state’s goal for installed capacity we see an over-supplied SREC market and depressed SREC pricing. In even simpler terms this means that photovoltaic facility owners make less money overall per SREC than they would have if New Jersey wasn’t consistently exceeding its solar goals.

So how does this happen? Why is solar getting installed even though SREC prices are trading in the low $100s? One blaring factor is that the cost of installing solar has dramatically decreased. Installers are getting more efficient at building projects and pure equipment costs have plummeted. Referencing the GTM report again we see that pricing blended across all solar sectors (utility, commercial and residential) has decreased from over $5/W on average to around $3/W. That’s a 40% drop in overall cost over two years and this doesn’t even take in to account financing innovations like solar leases and easier access to renewable energy loans.

Some industry participants point to New Jersey SREC legislation (SB 1925) passed in 2012 as a saving grace for the New Jersey SREC market. The legislation increased New Jersey’s solar goals beginning in June 2013 (the start of energy year 2014) and was hailed as a bill to save the New Jersey solar market. The legislation forces a dramatic increase in SREC requirements from approximately 596,000 SRECs for EY2013 to approximately 1,633,394 SRECs for EY2014. Unfortunately this is still not enough to push the NJ market in to under-supply. Going off of numbers from our Q4 2012 SREC Market Monitor report, New Jersey would need to install approximately less than 10 MW/month to push the market into under supply by the 2015 energy year. In the first quarter of 2013, NJ installed over 70 MW of solar capacity, surpassing the less than 10 MW/month by an average of 2.5 times each month. Given this activity, it’s not irrational to calculate an over-supplied market moving into EY2015 and beyond. The build rate of solar capacity in NJ must slow down for NJ solar asset owners to experience an under supplied market.

For detailed data on the SREC markets, purchase the SREC Market Monitor report.