Media / Press Releases

COMMENTS ON NJ SREC MARKET

September 07, 2011

SolarWorksNJCustomers:

As you may have heard, there is great concern over the value of SREC’s in the state of New Jersey.  It is my obligation to our customers to end the rumors, and let you know, as I understand it, exactly what is happening.

SREC’s (Solar Renewable Energy Credits) are in states with Renewable Portfolio Standard (RPS) legislation that have specific requirements for solar energy, this is usually referred to as a "solar carve-out". The additional revenue received from selling SREC’s increases economic value of solar investments and assists with financing solar technology. Along with state and federal incentives, solar system owners can recover their investment in their system by selling their SRECs with the use of spot market sales or long-term sales.

This market was created as an incentive for consumers to buy solar energy systems. Every year the state has a goal for the number of SREC’s that utilities must purchase and consumers are paid for the generation of energy within their solar energy systems. Presently, the program goals set by the state of New Jersey have almost been achieved.  What this means, is a decrease in very high SREC values. What this DOES NOT mean is that the situation will continue for any length of time.

There is legislation (SB2371) in process with bipartisan support, that will likely limit the threat of SREC oversupply by changing years and increasing the amount of SREC’s needed.  Even with $400 (which is an extraordinarily high number), it is lower than what we're used to; it is still a good amount to pay the system off quickly and to have a great Return on Investment (ROI).  It’s been proven that even with $200 for an SREC, solar energy systems are worth the investment.  Throughout the industry, we all know there are many projects in the PJM queue that will never be built and there will be an excess of the SREC’s needed. This will also increase the SREC value. 

However this plays out, everyone should realize that solar energy systems offer a great investment. Even without SREC’s the ROI is around 10% in electricity savings alone. Compare this to other investments and you'll see that it is a much higher return. Also don't forget the increase in your property value with the installation of a solar energy system.  Please be aware that electricity savings are always there and I believe that electricity prices are not going down significantly any time soon!  So, if you're hesitating to buy your solar energy system you should think about it. There are numerous reasons to buy today. I've heard some people say that they are going to wait five months.  To that I say, you will just be five months later into the best investment you'll ever make.  You can pay yourself or you can continue to pay the utility company.