According to the New Jersey Clean Energy Program, 2009 Energy Year SRECs (created from June 1, 2008 until May 31, 2009) will only count towards the 2009 Energy Year and can be sold through September, 2009. We recommend selling all credits before the end of August, 2009. Moving forward, 2010 Energy Year SRECs (created from June 1, 2009 through May 31, 2010) will comply with the new 2 year life rule and can count towards either the 2010 or 2011 Energy Year. So from now on, credits created can be sold in either the current year or the following year.
What is the impact of this change?
In previous years when SRECs could only be sold in the year in which they were generated, sellers ran the risk of the market price dropping to zero if the utilities were able to meet the Renewable Portfolio Standard Solar Requirement before year end. At that point, the SRECs would have no value to the buyers. With this new rule in effect, if the Solar Requirement is fulfilled in a given year, the SRECs that are created for the remainder of that year can be counted towards the requirement for the following year. Therefore, they will continue to be of value, however, it is still unclear as to how the market will react to such an event.
As the 2009 Energy Year comes to a close over the next few months, please keep in mind that the market will shift as the 2010 Energy Year auctions begin. The SACP of $711 in 2009 will drop to $693 for 2010. This should have a negative impact on the market prices for SRECs. In 2009, the SACP jumped from $300 to $711. It took the market several months to adjust to the new SACP. Hopefully 2010 will be a much more stable year for SREC market prices. At the very least, the 2010 Energy Year will begin with something that didn’t exist a year ago: A publicly listed, transparent, fair-market price for SRECs at www.srectrade.com. We believe that nobody should be locked into a contract that gives up over 50% of the value of their SRECs. Hopefully those days are behind us all!