Solar installed in New Jersey prior to 2017 generate SRECs for 15 years. After that time they generate Class 1 RECs. SRECs are worth $200 or more. Class 1 RECs trade for $30 today and go only as high as $50.
It is confusing as to when your system is going to convert from SRECs to Class 1 RECs. Here is what you need to do to figure this out.
Look up your initial online date for your solar facility on GATS. This is listed under the facility and it is also on each SREC as “Vintage (Utility Interconnection Date), ex. 05/2009.
New Jersey law says that a solar array generates SRECs for 15 full energy years. This means that you get SRECs for up to 15 years and eleven months, depending on what month your array went online.
Energy years start in June and end in May.
Here is a Key:
If your array went online from June 2008 and up to and including May 2009 the last SREC you will mint is May 2024. Your first Class 1 REC will be your June 2024 generation.
If your array went online from June 2009 and up to and including May 2010 the last SREC you will mint is May 2025. Your first Class 1 REC will be your June 2025 generation.
And so on…
When you produce Class 1 RECs you sell them the same way on Flett Exchange. You can either check the price on the Flett Exchange website https://www.flettexchange.com/ and transfer them on GATS to Flett Exchange, LLC or you can list them for sale on the Flett Exchange trading platform and transfer them on GATs to Flett Exchange,LLC. when you are filled.
Since Class 1 RECs are lower priced we suggest to wait 6 months to a year to sell them in bulk. Class 1 RECs are only good for 3 energy years so do not wait too long or they will go worthless. SRECs are good for up to 5 energy years.
It is very important to enter your meter readings within 30 days after your system gets converted to a class 1 facility. If you do not put in your meter readings within 30 days all of the months that you deserve to earn SRECs will be created as Class 1 recs. You may lose thousands of dollars!!!
(As of this writing we believe GATS is fixing this issue but we cannot confirm. Best practice is to make sure the meter reading is entered in a timely fashion.)
GATS will send you an email that says the following:
“Your solar electric generation facility's NJ SREC eligibility period will reach the end of its qualification life within Energy Year ("EY") 2021 which ends on May 31, 202X. All generation should be entered prior to the last business day in June. Facility eligibility will be changed from Solar (SREC) to Class I (REC) on July 1, 202X. “
Flett Exchange is the largest exchange for New Jersey Solar Class 1 RECs. Many energy companies compete to purchase SRECs and Class 1 RECs on our exchange which ensures you get the going market price.
All RECs registered in GATS from solar and wind facilities in PJM installed after January 1, 2003 can be used for New Jersey Class 1 compliance. Also, New Jersey Solar facilities that have outlived their SREC qualification of 15 years (or 10 years if the SRP registration for the solar project was filed on or before October 29, 2018) qualify as Class 1 RECs. These can be purchased by energy companies to satisfy their class 1 compliance. The life of the Class 1 rec is three energy years. Energy years run June to May. Compliance is done in the fall of each year.
How do I sell my Class 1 RECs?
If your New Jersey solar facility no longer qualifies for SRECs you can sell them as Class 1 RECs on Flett Exchange. It is the same process as you did with your SRECs except you sell them on the Class 1 market of Flett Exchange. If you have an account with Flett Exchange you can transfer them on GATS to the Flett Exchange account. Enter the Class 1 sell-now price published on the www.flettexchange.com homepage. We will process the trade, email you a confirmation and issue payment the next day.
New Jersey Class 1 REC Value
The range for Class 1 RECs in New Jersey is $0 to $50. $50 is the Alternative Compliance Payment (ACP), or fine, that energy companies in New Jersey have to pay if they do not procure enough Class 1 RECs. The value for Class 1 RECs is $30 at the beginning of 2024 and is expected to move up to the $40 to $45 levels during the 2025 to 2030 timeframe. This rise is expected because New Jersey law requires energy companies to either produce more renewable energy or buy more Class 1 RECs in the coming years.
All new solar installed after April 30, 2020in New Jersey will qualify for a TREC instead of an SREC. If you already have solar you still generate SRECs. TRECs have no correlation to the value of your SRECs.
New Jersey electricity retailers are required to purchase a certain number of SRECs each year. The number that they buy is a preset percentage set by a schedule. It is determined by law.
If you installed solar prior to November of 2018 you get 15 years of SRECs. If you installed between November 2018 and April 2020 you qualify for 10 years of SRECS. If you install after April 30, 2020 you get TRECs. Simple.
The new TRECs ensure that new solar installations do not compete with you selling your SRECs.
You do have to worry about the decrease in electricity demand due to Covid-19 shut-downs in regard to your SREC prices. If shut-downs extend for a prolonged period of time, and if economic activity does not pick up to previous levels, energy companies will not be forced to buy as many SRECs from you. This may lead to an oversupply of SRECs and subsequent price-drop.
We suggest to always sell your SRECs on a consistent basis, especially when SREC prices are 90% of their potential which they are now.
The New Jersey Board of Public Utilities (BPU) announced on March 9, 2020 that the TREC will be a fixed $152 for 15 years. Prior it was set at $65 for the first three energy years and rising to $189 for the remaining 12 years.
The tiered SREC was a result of the cost cap implemented in the Clean Energy Act of 2018 limiting ratepayer costs to 9% in energy years 2019 to 2021 and then decreasing to 7% thereafter.
On January 21, 2020 Governor Murphy signed into law amendments to the Clean Energy Act shifting the ratepayers savings potentially saved under the 9% to make up for modeled overspending when the 7% cap goes into effect in energy year 2022. The Board of Public Utilities has approved a fixed rate $152 based on the passage of the legislation and BPU staff recommendations. The amount of the $152 that a project actually receives is based on the following types of solar installations:
Landfill, Brownfield, Historic Fill = $152
Grid supply subsection (r) rooftop = $152
Net metered rooftop and carport = $152
Community Solar= $129.20 (85% of TREC value)
Ground mount (subsection r) = $91.20 (60% of TREC value)
Residential net-metered ground mount = $91.20 (60% of TREC value)
Residential net-metered rooftop and carport = $91.20 (60% of TREC value)
Net-metered non-residential ground mount= $91.20 (60% of TREC value)
Residential solar installers are especially pleased by this development. The new TREC program greatly decreases incentives for homeowners to invest in solar in New Jersey and the tiered incentive in the TREC would have made it especially hard for residential solar sales.
DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.
This bill would allow the Board of Public Utilities (BPU) to increase the cost to customers of the State’s Class I renewable energy requirement during energy years 2022 through 2024 above the current limit of seven percent of the total paid for electricity by all customers in the State, under certain conditions.
Under the bill, the BPU could only make this increase if the cost of the Class I renewable energy requirement is less than nine percent of total energy costs during energy years 2019 through 2021 (the limit set by current law). In addition, the total amount paid by customers during energy years 2019 through 2024 could not exceed the sum of: (1) nine percent of total energy costs during energy years 2019 through 2021; and (2) seven percent of total energy costs during energy years 2022 through 2024, i.e. the maximum amount allowed by current law over that six-year period.
“Energy year” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends.
Allows BPU to increase cost to customers of Class I renewable energy requirement for energy years 2022 through 2024, under certain conditions.
CURRENT VERSION OF TEXT
As introduced.
An Actconcerning the cost to customers of Class I renewable energy and amending P.L.1999, c.23.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 38 of P.L.1999, c.23 (C.48:3-87) is amended to read as follows:
38. a. The board shall require an electric power supplier or basic generation service provider to disclose on a customer's bill or on customer contracts or marketing materials, a uniform, common set of information about the environmental characteristics of the energy purchased by the customer, including, but not limited to:
(1) Its fuel mix, including categories for oil, gas, nuclear, coal, solar, hydroelectric, wind and biomass, or a regional average determined by the board;
(2) Its emissions, in pounds per megawatt hour, of sulfur dioxide, carbon dioxide, oxides of nitrogen, and any other pollutant that the board may determine to pose an environmental or health hazard, or an emissions default to be determined by the board; and
(3) Any discrete emission reduction retired pursuant to rules and regulations adopted pursuant to P.L.1995, c.188.
b. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment and public hearing, interim standards to implement this disclosure requirement, including, but not limited to:
(1) A methodology for disclosure of emissions based on output pounds per megawatt hour;
(2) Benchmarks for all suppliers and basic generation service providers to use in disclosing emissions that will enable consumers to perform a meaningful comparison with a supplier's or basic generation service provider's emission levels; and
(3) A uniform emissions disclosure format that is graphic in nature and easily understandable by consumers. The board shall periodically review the disclosure requirements to determine if revisions to the environmental disclosure system as implemented are necessary.
Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."
c. (1) The board may adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment, an emissions portfolio standard applicable to all electric power suppliers and basic generation service providers, upon a finding that:
(a) The standard is necessary as part of a plan to enable the State to meet federal Clean Air Act or State ambient air quality standards; and
(b) Actions at the regional or federal level cannot reasonably be expected to achieve the compliance with the federal standards.
(2) By July 1, 2009, the board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a greenhouse gas emissions portfolio standard to mitigate leakage or another regulatory mechanism to mitigate leakage applicable to all electric power suppliers and basic generation service providers that provide electricity to customers within the State. The greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage shall:
(a) Allow a transition period, either before or after the effective date of the regulation to mitigate leakage, for a basic generation service provider or electric power supplier to either meet the emissions portfolio standard or other regulatory mechanism to mitigate leakage, or to transfer any customer to a basic generation service provider or electric power supplier that meets the emissions portfolio standard or other regulatory mechanism to mitigate leakage. If the transition period allowed pursuant to this subparagraph occurs after the implementation of an emissions portfolio standard or other regulatory mechanism to mitigate leakage, the transition period shall be no longer than three years; and
(b) Exempt the provision of basic generation service pursuant to a basic generation service purchase and sale agreement effective prior to the date of the regulation.
Unless the Attorney General or the Attorney General's designee determines that a greenhouse gas emissions portfolio standard would unconstitutionally burden interstate commerce or would be preempted by federal law, the adoption by the board of an electric energy efficiency portfolio standard pursuant to subsection g. of this section, a gas energy efficiency portfolio standard pursuant to subsection h. of this section, or any other enhanced energy efficiency policies to mitigate leakage shall not be considered sufficient to fulfill the requirement of this subsection for the adoption of a greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage.
d. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing, renewable energy portfolio standards that shall require:
(1) that two and one-half percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class II renewable energy sources;
(2) beginning on January 1, 2020, that 21 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I renewable energy sources. The board shall increase the required percentage for Class I renewable energy sources so that by January 1, 2025, 35 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources, and by January 1, 2030, 50 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources. Notwithstanding the requirements of this subsection, the board shall ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection shall not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively, and shall not exceed seven percent of the total paid for electricity by all customers in the State in any energy year thereafter ; provided that, if in energy years 2019 through 2021 the cost to customers of the Class I renewable energy requirement is less than nine percent of the total paid for electricity by all customers in the State, the board may increase the cost to customers of the Class I renewable energy requirement in energy years 2022 through 2024 to a rate greater than seven percent, as long as the total costs to customers for energy years 2019 through 2024 does not exceed the sum of nine percent of the total paid for electricity by all customers in the State in energy years 2019 through 2021 and seven percent of the total paid for electricity by all customers in the State in energy years 2022 through 2024 . In calculating the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection, the board shall not include the costs of the offshore wind energy certificate program established pursuant to paragraph (4) of this subsection. The board shall take any steps necessary to prevent the exceedance of the cap on the cost to customers including, but not limited to, adjusting the Class I renewable energy requirement.
An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection;
(3) that the board establish a multi-year schedule, applicable to each electric power supplier or basic generation service provider in this State, beginning with the one-year period commencing on June 1, 2010, and continuing for each subsequent one-year period up to and including, the one-year period commencing on June 1, 2033, that requires the following number or percentage, as the case may be, of kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider to be from solar electric power generators connected to the distribution system in this State:
EY 2011 306 Gigawatthours (Gwhrs)
EY 2012 442 Gwhrs
EY 2013 596 Gwhrs
EY 2014 2.050%
EY 2015 2.450%
EY 2016 2.750%
EY 2017 3.000%
EY 2018 3.200%
EY 2019 4.300%
EY 2020 4.900%
EY 2021 5.100%
EY 2022 5.100%
EY 2023 5.100%
EY 2024 4.900%
EY 2025 4.800%
EY 2026 4.500%
EY 2027 4.350%
EY 2028 3.740%
EY 2029 3.070%
EY 2030 2.210%
EY 2031 1.580%
EY 2032 1.400%
EY 2033 1.100%
No later than 180 days after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall adopt rules and regulations to close the SREC program to new applications upon the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system. The board shall continue to consider any application filed before the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.). The board shall provide for an orderly and transparent mechanism that will result in the closing of the existing SREC program on a date certain but no later than June 1, 2021.
No later than 24 months after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall complete a study that evaluates how to modify or replace the SREC program to encourage the continued efficient and orderly development of solar renewable energy generating sources throughout the State. The board shall submit the written report thereon to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The board shall consult with public utilities, industry experts, regional grid operators, solar power providers and financiers, and other State agencies to determine whether the board can modify the SREC program such that the program will:
- continually reduce, where feasible, the cost of achieving the solar energy goals set forth in this subsection;
- provide an orderly transition from the SREC program to a new or modified program;
- develop megawatt targets for grid connected and distribution systems, including residential and small commercial rooftop systems, community solar systems, and large scale behind the meter systems, as a share of the overall solar energy requirement, which targets the board may modify periodically based on the cost, feasibility, or social impacts of different types of projects;
- establish and update market-based maximum incentive payment caps periodically for each of the above categories of solar electric power generation facilities;
- encourage and facilitate market-based cost recovery through long-term contracts and energy market sales; and
- where cost recovery is needed for any portion of an efficient solar electric power generation facility when costs are not recoverable through wholesale market sales and direct payments from customers, utilize competitive processes such as competitive procurement and long-term contracts where possible to ensure such recovery, without exceeding the maximum incentive payment cap for that category of facility.
The board shall approve, conditionally approve, or disapprove any application for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), no more than 90 days after receipt by the board of a completed application. For any such application for a project greater than 25 kilowatts, the board shall require the applicant to post a notice escrow with the board in an amount of $40 per kilowatt of DC nameplate capacity of the facility, not to exceed $40,000. The notice escrow amount shall be reimbursed to the applicant in full upon either denial of the application by the board or upon commencement of commercial operation of the solar electric power generation facility. The escrow amount shall be forfeited to the State if the facility is designated as connected to the distribution system pursuant to this subsection but does not commence commercial operation within two years following the date of the designation by the board.
For all applications for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the SREC term shall be 10 years.
(a) The board shall determine an appropriate period of no less than 120 days following the end of an energy year prior to which a provider or supplier must demonstrate compliance for that energy year with the annual renewable portfolio standard;
(b) No more than 24 months following the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to investigate approaches to mitigate solar development volatility and prepare and submit, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a report to the Legislature, detailing its findings and recommendations. As part of the proceeding, the board shall evaluate other techniques used nationally and internationally;
(c) The solar renewable portfolio standards requirements in this paragraph shall exempt those existing supply contracts which are effective prior to the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.) from any increase beyond the number of SRECs mandated by the solar renewable energy portfolio standards requirements that were in effect on the date that the providers executed their existing supply contracts. This limited exemption for providers' existing supply contracts shall not be construed to lower the Statewide solar sourcing requirements set forth in this paragraph. Such incremental requirements that would have otherwise been imposed on exempt providers shall be distributed over the providers not subject to the existing supply contract exemption until such time as existing supply contracts expire and all providers are subject to the new requirement in a manner that is competitively neutral among all providers and suppliers. Notwithstanding any rule or regulation to the contrary, the board shall recognize these new solar purchase obligations as a change required by operation of law and implement the provisions of this subsection in a manner so as to prevent any subsidies between suppliers and providers and to promote competition in the electricity supply industry.
An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection, or compliance with the requirements of this subsection may be demonstrated to the board by suppliers or providers through the purchase of SRECs.
The renewable energy portfolio standards adopted by the board pursuant to paragraphs (1) and (2) of this subsection shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."
The renewable energy portfolio standards adopted by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 30 months after such filing, and shall, thereafter, be amended, adopted or readopted by the board in accordance with the "Administrative Procedure Act"; and
(4) within 180 days after the date of enactment of P.L.2010, c.57 (C.48:3-87.1 et al.), that the board establish an offshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from offshore wind energy in order to support at least 3,500 megawatts of generation from qualified offshore wind projects.
The percentage established by the board pursuant to this paragraph shall serve as an offset to the renewable energy portfolio standard established pursuant to paragraph (2) of this subsection and shall reduce the corresponding Class I renewable energy requirement.
The percentage established by the board pursuant to this paragraph shall reflect the projected OREC production of each qualified offshore wind project, approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), for 20 years from the commercial operation start date of the qualified offshore wind project which production projection and OREC purchase requirement, once approved by the board, shall not be subject to reduction.
An electric power supplier or basic generation service provider shall comply with the OREC program established pursuant to this paragraph through the purchase of offshore wind renewable energy certificates at a price and for the time period required by the board. In the event there are insufficient offshore wind renewable energy certificates available, the electric power supplier or basic generation service provider shall pay an offshore wind alternative compliance payment established by the board. Any offshore wind alternative compliance payments collected shall be refunded directly to the ratepayers by the electric public utilities.
The rules established by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
e. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing:
(1) net metering standards for electric power suppliers and basic generation service providers. The standards shall require electric power suppliers and basic generation service providers to offer net metering at non-discriminatory rates to industrial, large commercial, residential and small commercial customers, as those customers are classified or defined by the board, that generate electricity, on the customer's side of the meter, using a Class I renewable energy source, for the net amount of electricity supplied by the electric power supplier or basic generation service provider over an annualized period. Systems of any sized capacity, as measured in watts, are eligible for net metering. If the amount of electricity generated by the customer-generator, plus any kilowatt hour credits held over from the previous billing periods, exceeds the electricity supplied by the electric power supplier or basic generation service provider, then the electric power supplier or basic generation service provider, as the case may be, shall credit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point the customer-generator will be compensated for any remaining credits or, if the customer-generator chooses, credit the customer-generator on a real-time basis, at the electric power supplier's or basic generation service provider's avoided cost of wholesale power or the PJM electric power pool's real-time locational marginal pricing rate, adjusted for losses, for the respective zone in the PJM electric power pool. Alternatively, the customer-generator may execute a bilateral agreement with an electric power supplier or basic generation service provider for the sale and purchase of the customer-generator's excess generation. The customer-generator may be credited on a real-time basis, so long as the customer-generator follows applicable rules prescribed by the PJM electric power pool for its capacity requirements for the net amount of electricity supplied by the electric power supplier or basic generation service provider. The board may authorize an electric power supplier or basic generation service provider to cease offering net metering to customers that are not already net metered whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals 5.8 percent of the total annual kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider during the prior one-year period;
(2) safety and power quality interconnection standards for Class I renewable energy source systems used by a customer-generator that shall be eligible for net metering.
Such standards or rules shall take into consideration the goals of the New Jersey Energy Master Plan, applicable industry standards, and the standards of other states and the Institute of Electrical and Electronics Engineers. The board shall allow electric public utilities to recover the costs of any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs through either their regulated rates or from the net metering customer-generator;
(3) credit or other incentive rules for generators using Class I renewable energy generation systems that connect to New Jersey's electric public utilities' distribution system but who do not net meter; and
(4) net metering aggregation standards to require electric public utilities to provide net metering aggregation to single electric public utility customers that operate a solar electric power generation system installed at one of the customer's facilities or on property owned by the customer, provided that any such customer is a State entity, school district, county, county agency, county authority, municipality, municipal agency, or municipal authority. The standards shall provide that, in order to qualify for net metering aggregation, the customer must operate a solar electric power generation system using a net metering billing account, which system is located on property owned by the customer, provided that: (a) the property is not land that has been actively devoted to agricultural or horticultural use and that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, provided, however, that the municipal planning board of a municipality in which a solar electric power generation system is located may waive the requirement of this subparagraph (a), (b) the system is not an on-site generation facility, (c) all of the facilities of the single customer combined for the purpose of net metering aggregation are facilities owned or operated by the single customer and are located within its territorial jurisdiction except that all of the facilities of a State entity engaged in net metering aggregation shall be located within five miles of one another, and (d) all of those facilities are within the service territory of a single electric public utility and are all served by the same basic generation service provider or by the same electric power supplier. The standards shall provide that in order to qualify for net metering aggregation, the customer's solar electric power generation system shall be sized so that its annual generation does not exceed the combined metered annual energy usage of the qualified customer facilities, and the qualified customer facilities shall all be in the same customer rate class under the applicable electric public utility tariff. For the customer's facility or property on which the solar electric generation system is installed, the electricity generated from the customer's solar electric generation system shall be accounted for pursuant to the provisions of paragraph (1) of this subsection to provide that the electricity generated in excess of the electricity supplied by the electric power supplier or the basic generation service provider, as the case may be, for the customer's facility on which the solar electric generation system is installed, over the annualized period, is credited at the electric power supplier's or the basic generation service provider's avoided cost of wholesale power or the PJM electric power pool real-time locational marginal pricing rate. All electricity used by the customer's qualified facilities, with the exception of the facility or property on which the solar electric power generation system is installed, shall be billed at the full retail rate pursuant to the electric public utility tariff applicable to the customer class of the customer using the electricity. A customer may contract with a third party to operate a solar electric power generation system, for the purpose of net metering aggregation. Any contractual relationship entered into for operation of a solar electric power generation system related to net metering aggregation shall include contractual protections that provide for adequate performance and provision for construction and operation for the term of the contract, including any appropriate bonding or escrow requirements. Any incremental cost to an electric public utility for net metering aggregation shall be fully and timely recovered in a manner to be determined by the board. The board shall adopt net metering aggregation standards within 270 days after the effective date of P.L.2012, c.24.
Such rules shall require the board or its designee to issue a credit or other incentive to those generators that do not use a net meter but otherwise generate electricity derived from a Class I renewable energy source and to issue an enhanced credit or other incentive, including, but not limited to, a solar renewable energy credit, to those generators that generate electricity derived from solar technologies.
Such standards or rules shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."
f. The board may assess, by written order and after notice and opportunity for comment, a separate fee to cover the cost of implementing and overseeing an emission disclosure system or emission portfolio standard, which fee shall be assessed based on an electric power supplier's or basic generation service provider's share of the retail electricity supply market. The board shall not impose a fee for the cost of implementing and overseeing a greenhouse gas emissions portfolio standard adopted pursuant to paragraph (2) of subsection c. of this section.
g. The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), an electric energy efficiency program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each electric public utility to implement energy efficiency measures that reduce electricity usage in the State pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9). Nothing in this subsection shall be construed to prevent an electric public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.
h. The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a gas energy efficiency program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each gas public utility to implement energy efficiency measures that reduce natural gas usage in the State pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9). Nothing in this subsection shall be construed to prevent a gas public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.
i. After the board establishes a schedule of solar kilowatt-hour sale or purchase requirements pursuant to paragraph (3) of subsection d. of this section, the board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, increased minimum solar kilowatt-hour sale or purchase requirements, provided that the board shall not reduce previously established minimum solar kilowatt-hour sale or purchase requirements, or otherwise impose constraints that reduce the requirements by any means.
j. The board shall determine an appropriate level of solar alternative compliance payment, and permit each supplier or provider to submit an SACP to comply with the solar electric generation requirements of paragraph (3) of subsection d. of this section. The value of the SACP for each Energy Year, for Energy Years 2014 through 2033 per megawatt hour from solar electric generation required pursuant to this section, shall be:
EY 2014 $339
EY 2015 $331
EY 2016 $323
EY 2017 $315
EY 2018 $308
EY 2019 $268
EY 2020 $258
EY 2021 $248
EY 2022 $238
EY 2023 $228
EY 2024 $218
EY 2025 $208
EY 2026 $198
EY 2027 $188
EY 2028 $178
EY 2029 $168
EY 2030 $158
EY 2031 $148
EY 2032 $138
EY 2033 $128.
The board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, an increase in solar alternative compliance payments, provided that the board shall not reduce previously established levels of solar alternative compliance payments, nor shall the board provide relief from the obligation of payment of the SACP by the electric power suppliers or basic generation service providers in any form. Any SACP payments collected shall be refunded directly to the ratepayers by the electric public utilities.
k. The board may allow electric public utilities to offer long-term contracts through a competitive process, direct electric public utility investment and other means of financing, including but not limited to loans, for the purchase of SRECs and the resale of SRECs to suppliers or providers or others, provided that after such contracts have been approved by the board, the board's approvals shall not be modified by subsequent board orders. If the board allows the offering of contracts pursuant to this subsection, the board may establish a process, after hearing, and opportunity for public comment, to provide that a designated segment of the contracts approved pursuant to this subsection shall be contracts involving solar electric power generation facility projects with a capacity of up to 250 kilowatts.
l. The board shall implement its responsibilities under the provisions of this section in such a manner as to:
(1) place greater reliance on competitive markets, with the explicit goal of encouraging and ensuring the emergence of new entrants that can foster innovations and price competition;
(2) maintain adequate regulatory authority over non-competitive public utility services;
(3) consider alternative forms of regulation in order to address changes in the technology and structure of electric public utilities;
(4) promote energy efficiency and Class I renewable energy market development, taking into consideration environmental benefits and market barriers;
(5) make energy services more affordable for low and moderate income customers;
(6) attempt to transform the renewable energy market into one that can move forward without subsidies from the State or public utilities;
(7) achieve the goals put forth under the renewable energy portfolio standards;
(8) promote the lowest cost to ratepayers; and
(9) allow all market segments to participate.
m. The board shall ensure the availability of financial incentives under its jurisdiction, including, but not limited to, long-term contracts, loans, SRECs, or other financial support, to ensure market diversity, competition, and appropriate coverage across all ratepayer segments, including, but not limited to, residential, commercial, industrial, non-profit, farms, schools, and public entity customers.
n. For projects which are owned, or directly invested in, by a public utility pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.
o. The board, in consultation with the Department of Environmental Protection, electric public utilities, the Division of Rate Counsel in, but not of, the Department of the Treasury, affected members of the solar energy industry, and relevant stakeholders, shall periodically consider increasing the renewable energy portfolio standards beyond the minimum amounts set forth in subsection d. of this section, taking into account the cost impacts and public benefits of such increases including, but not limited to:
(1) reductions in air pollution, water pollution, land disturbance, and greenhouse gas emissions;
(2) reductions in peak demand for electricity and natural gas, and the overall impact on the costs to customers of electricity and natural gas;
(3) increases in renewable energy development, manufacturing, investment, and job creation opportunities in this State; and
(4) reductions in State and national dependence on the use of fossil fuels.
p. Class I RECs and ORECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following two energy years. SRECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following four energy years.
q. (1) During the energy years of 2014, 2015, and 2016, a solar electric power generation facility project that is not: (a) net metered; (b) an on-site generation facility; (c) qualified for net metering aggregation; or (d) certified as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, as provided pursuant to subsection t. of this section may file an application with the board for approval of a designation pursuant to this subsection that the facility is connected to the distribution system. An application filed pursuant to this subsection shall include a notice escrow of $40,000 per megawatt of the proposed capacity of the facility. The board shall approve the designation if: the facility has filed a notice in writing with the board applying for designation pursuant to this subsection, together with the notice escrow; and the capacity of the facility, when added to the capacity of other facilities that have been previously approved for designation prior to the facility's filing under this subsection, does not exceed 80 megawatts in the aggregate for each year. The capacity of any one solar electric power supply project approved pursuant to this subsection shall not exceed 10 megawatts. No more than 90 days after its receipt of a completed application for designation pursuant to this subsection, the board shall approve, conditionally approve, or disapprove the application. The notice escrow shall be reimbursed to the facility in full upon either rejection by the board or the facility entering commercial operation, or shall be forfeited to the State if the facility is designated pursuant to this subsection but does not enter commercial operation pursuant to paragraph (2) of this subsection.
(2) If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility shall be deemed to be null and void, and the facility shall not be considered connected to the distribution system thereafter.
(3) Notwithstanding the provisions of paragraph (2) of this subsection, a solar electric power generation facility project that as of May 31, 2017 was designated as "connected to the distribution system," but failed to commence commercial operations as of that date, shall maintain that designation if it commences commercial operations by May 31, 2018.
r. (1) For all proposed solar electric power generation facility projects except for those solar electric power generation facility projects approved pursuant to subsection q. of this section, and for all projects proposed in energy year 2019 and energy year 2020, the board may approve projects for up to 50 megawatts annually in auctioned capacity in two auctions per year as long as the board is accepting applications. If the board approves projects for less than 50 megawatts in energy year 2019 or less than 50 megawatts in energy year 2020, the difference in each year shall be carried over into the successive energy year until 100 megawatts of auctioned capacity has been approved by the board pursuant to this subsection. A proposed solar electric power generation facility that is neither net metered nor an on-site generation facility, may be considered "connected to the distribution system" only upon designation as such by the board, after notice to the public and opportunity for public comment or hearing. A proposed solar power electric generation facility seeking board designation as "connected to the distribution system" shall submit an application to the board that includes for the proposed facility: the nameplate capacity; the estimated energy and number of SRECs to be produced and sold per year; the estimated annual rate impact on ratepayers; the estimated capacity of the generator as defined by PJM for sale in the PJM capacity market; the point of interconnection; the total project acreage and location; the current land use designation of the property; the type of solar technology to be used; and such other information as the board shall require.
(2) The board shall approve the designation of the proposed solar power electric generation facility as "connected to the distribution system" if the board determines that:
(a) the SRECs forecasted to be produced by the facility do not have a detrimental impact on the SREC market or on the appropriate development of solar power in the State;
(b) the approval of the designation of the proposed facility would not significantly impact the preservation of open space in this State;
(c) the impact of the designation on electric rates and economic development is beneficial; and
(d) there will be no impingement on the ability of an electric public utility to maintain its property and equipment in such a condition as to enable it to provide safe, adequate, and proper service to each of its customers.
(3) The board shall act within 90 days of its receipt of a completed application for designation of a solar power electric generation facility as "connected to the distribution system," to either approve, conditionally approve, or disapprove the application. If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility as "connected to the distribution system" shall be deemed to be null and void, and the facility shall thereafter be considered not "connected to the distribution system."
s. In addition to any other requirements of P.L.1999, c.23 or any other law, rule, regulation or order, a solar electric power generation facility that is not net metered or an on-site generation facility and which is located on land that has been actively devoted to agricultural or horticultural use that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, shall only be considered "connected to the distribution system" if (1) the board approves the facility's designation pursuant to subsection q. of this section; or (2) (a) PJM issued a System Impact Study for the facility on or before June 30, 2011, (b) the facility files a notice with the board within 60 days of the effective date of P.L.2012, c.24, indicating its intent to qualify under this subsection, and (c) the facility has been approved as "connected to the distribution system" by the board. Nothing in this subsection shall limit the board's authority concerning the review and oversight of facilities, unless such facilities are exempt from such review as a result of having been approved pursuant to subsection q. of this section.
t. (1) No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall, in consultation with the Department of Environmental Protection and the New Jersey Economic Development Authority, and, after notice and opportunity for public comment and public hearing, complete a proceeding to establish a program to provide SRECs to owners of solar electric power generation facility projects certified by the board, in consultation with the Department of Environmental Protection, as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, including those owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1). Projects certified under this subsection shall be considered "connected to the distribution system", shall not require such designation by the board, and shall not be subject to board review required pursuant to subsections q. and r. of this section. Notwithstanding the provisions of section 3 of P.L.1999, c.23 (C.48:3-51) or any other law, rule, regulation, or order to the contrary, for projects certified under this subsection, the board shall establish a financial incentive that is designed to supplement the SRECs generated by the facility in order to cover the additional cost of constructing and operating a solar electric power generation facility on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility. Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provision of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers. The issuance of SRECs for all solar electric power generation facility projects pursuant to this subsection shall be deemed "Board of Public Utilities financial assistance" as provided under section 1 of P.L.2009, c.89 (C.48:2-29.47).
(2) Notwithstanding the provisions of the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.) or any other law, rule, regulation, or order to the contrary, the board, in consultation with the Department of Environmental Protection, may find that a person who operates a solar electric power generation facility project that has commenced operation on or after the effective date of P.L.2012, c.24, which project is certified by the board, in consultation with the Department of Environmental Protection pursuant to paragraph (1) of this subsection, as being located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility, which projects shall include, but not be limited to projects located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), or a person who owns property acquired on or after the effective date of P.L.2012, c.24 on which such a solar electric power generation facility project is constructed and operated, shall not be liable for cleanup and removal costs to the Department of Environmental Protection or to any other person for the discharge of a hazardous substance provided that:
(a) the person acquired or leased the real property after the discharge of that hazardous substance at the real property;
(b) the person did not discharge the hazardous substance, is not in any way responsible for the hazardous substance, and is not a successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g);
(c) the person, within 30 days after acquisition of the property, gave notice of the discharge to the Department of Environmental Protection in a manner the Department of Environmental Protection prescribes;
(d) the person does not disrupt or change, without prior written permission from the Department of Environmental Protection, any engineering or institutional control that is part of a remedial action for the contaminated site or any landfill closure or post-closure requirement;
(e) the person does not exacerbate the contamination at the property;
(f) the person does not interfere with any necessary remediation of the property;
(g) the person complies with any regulations and any permit the Department of Environmental Protection issues pursuant to section 19 of P.L.2009, c.60 (C.58:10C-19) or paragraph (2) of subsection a. of section 6 of P.L.1970, c.39 (C.13:1E-6);
(h) with respect to an area of historic fill, the person has demonstrated pursuant to a preliminary assessment and site investigation, that hazardous substances have not been discharged; and
(i) with respect to a properly closed sanitary landfill facility, no person who owns or controls the facility receives, has received, or will receive, with respect to such facility, any funds from any post-closure escrow account established pursuant to section 10 of P.L.1981, c.306 (C.13:1E-109) for the closure and monitoring of the facility.
Only the person who is liable to clean up and remove the contamination pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g) and who does not have a defense to liability pursuant to subsection d. of that section shall be liable for cleanup and removal costs.
u. No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to establish a registration program. The registration program shall require the owners of solar electric power generation facility projects connected to the distribution system to make periodic milestone filings with the board in a manner and at such times as determined by the board to provide full disclosure and transparency regarding the overall level of development and construction activity of those projects Statewide.
v. The issuance of SRECs for all solar electric power generation facility projects pursuant to this section, for projects connected to the distribution system with a capacity of one megawatt or greater, shall be deemed "Board of Public Utilities financial assistance" as provided pursuant to section 1 of P.L.2009, c.89 (C.48:2-29.47).
w. No more than 270 days after the date of enactment of P.L.2012, c.24, the board shall, after notice and opportunity for public comment and public hearing, complete a proceeding to consider whether to establish a program to provide, to owners of solar electric power generation facility projects certified by the board as being three megawatts or greater in capacity and being net metered, including facilities which are owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), a financial incentive that is designed to supplement the SRECs generated by the facility to further the goal of improving the economic competitiveness of commercial and industrial customers taking power from such projects. If the board determines to establish such a program pursuant to this subsection, the board may establish a financial incentive to provide that the board shall issue one SREC for no less than every 750 kilowatt-hours of solar energy generated by the certified projects. Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provisions of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers.
x. Solar electric power generation facility projects that are located on an existing or proposed commercial, retail, industrial, municipal, professional, recreational, transit, commuter, entertainment complex, multi-use, or mixed-use parking lot with a capacity to park 350 or more vehicles where the area to be utilized for the facility is paved, or an impervious surface may be owned or operated by an electric public utility and may be approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1).
(cf: P.L.2018, c.17, s.2)
2. This act shall take effect immediately.
STATEMENT
This bill would allow the Board of Public Utilities (BPU) to increase the cost to customers of the State’s Class I renewable energy requirement during energy years 2022 through 2024 above the current limit of seven percent of the total paid for electricity by all customers in the State, under certain conditions.
Under the bill, the BPU could only make this increase if the cost of the Class I renewable energy requirement is less than nine percent of total energy costs during energy years 2019 through 2021 (the limit set by current law). In addition, the total amount paid by customers during energy years 2019 through 2024 could not exceed the sum of: (1) nine percent of total energy costs during energy years 2019 through 2021; and (2) seven percent of total energy costs during energy years 2022 through 2024, i.e. the maximum amount allowed by current law over that six-year period.
“Energy year” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends.
DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.
Increases Net metering cap from 5.8% to 15% - without this new solar starting in 2021 will not be financeable.
Adjusts Ratepayer cap from current 9% moving to 7% in 2022 to a gradual step-down 9% to 8.5% to 8.0% to 5% in 2036. Solves for the "kink-years" where there is no $ for new solar in 2022,2023 and 2024. Net neutral for ratepayers. Prevents solar companies in NJ from going out of business.
Reduces class 1 rec ratepayer exposure from 5cents a kilowatt hour to 1 cent a kilowatt hour. Prevents money from being taken from solar owners SREC proceeds and being sent out-of-state.
Establishes demand for 360 Mw a year of new solar being built until 2036. Doubles the amount of solar by 2030 to 6.25 Gw. and 11% of statewide energy from solar.
SRECSACP levels reduced to match rate-caps. New demand helps ensure SREC prices remain stable to strong and that solar investors remain whole.
Keeps old and new solar owners interests aligned by keeping one SREC market.
Revises law concerning Class I and solar renewable energy portfolio standards, solar renewable energy certificates, and net metering.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning Class I and solar renewable energy and net metering, and amending P.L.1999, c.23.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 38 of P.L.1999, c.23 (C.48:3-87) is amended to read as follows:
38. a. The board shall require an electric power supplier or basic generation service provider to disclose on a customer's bill or on customer contracts or marketing materials, a uniform, common set of information about the environmental characteristics of the energy purchased by the customer, including, but not limited to:
(1) Its fuel mix, including categories for oil, gas, nuclear, coal, solar, hydroelectric, wind and biomass, or a regional average determined by the board;
(2) Its emissions, in pounds per megawatt hour, of sulfur dioxide, carbon dioxide, oxides of nitrogen, and any other pollutant that the board may determine to pose an environmental or health hazard, or an emissions default to be determined by the board; and
(3) Any discrete emission reduction retired pursuant to rules and regulations adopted pursuant to P.L.1995, c.188.
b. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment and public hearing, interim standards to implement this disclosure requirement, including, but not limited to:
(1) A methodology for disclosure of emissions based on output pounds per megawatt hour;
(2) Benchmarks for all suppliers and basic generation service providers to use in disclosing emissions that will enable consumers to perform a meaningful comparison with a supplier's or basic generation service provider's emission levels; and
(3) A uniform emissions disclosure format that is graphic in nature and easily understandable by consumers. The board shall periodically review the disclosure requirements to determine if revisions to the environmental disclosure system as implemented are necessary.
Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."
c. (1) The board may adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment, an emissions portfolio standard applicable to all electric power suppliers and basic generation service providers, upon a finding that:
(a) The standard is necessary as part of a plan to enable the State to meet federal Clean Air Act or State ambient air quality standards; and
(b) Actions at the regional or federal level cannot reasonably be expected to achieve the compliance with the federal standards.
(2) By July 1, 2009, the board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a greenhouse gas emissions portfolio standard to mitigate leakage or another regulatory mechanism to mitigate leakage applicable to all electric power suppliers and basic generation service providers that provide electricity to customers within the State. The greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage shall:
(a) Allow a transition period, either before or after the effective date of the regulation to mitigate leakage, for a basic generation service provider or electric power supplier to either meet the emissions portfolio standard or other regulatory mechanism to mitigate leakage, or to transfer any customer to a basic generation service provider or electric power supplier that meets the emissions portfolio standard or other regulatory mechanism to mitigate leakage. If the transition period allowed pursuant to this subparagraph occurs after the implementation of an emissions portfolio standard or other regulatory mechanism to mitigate leakage, the transition period shall be no longer than three years; and
(b) Exempt the provision of basic generation service pursuant to a basic generation service purchase and sale agreement effective prior to the date of the regulation.
Unless the Attorney General or the Attorney General's designee determines that a greenhouse gas emissions portfolio standard would unconstitutionally burden interstate commerce or would be preempted by federal law, the adoption by the board of an electric energy efficiency portfolio standard pursuant to subsection g. of this section, a gas energy efficiency portfolio standard pursuant to subsection h. of this section, or any other enhanced energy efficiency policies to mitigate leakage shall not be considered sufficient to fulfill the requirement of this subsection for the adoption of a greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage.
d. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing, renewable energy portfolio standards that shall require:
(1) that two and one-half percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class II renewable energy sources;
(2) beginning on January 1, 2020, that 21 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I renewable energy sources. The board shall increase the required percentage for Class I renewable energy sources so that by January 1, 2025, 35 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources, and by January 1, 2030, 50 percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources.
Notwithstanding the requirements of this subsection, the board shall ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection :
(a) shall not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively [,]; and
(b) shall not exceed [seven percent]the following percentages of the total paid for electricity by all customers in the State [in any]for energy year [thereafter]2022 through energy year 2037:
EY 20228.5%
EY 20238.5%
EY 20248%
EY 20258%
EY 20267.5%
EY 20277.5%
EY 20287%
EY 20297%
EY 20306.5%
EY 20316.5%
EY 20326%
EY 20336%
EY 20345.5%
EY 20355.5%
EY 20365%
EY 20375% .
In calculating the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection, the board shall not include the costs of the offshore wind energy certificate program established pursuant to paragraph (4) of this subsection. The board shall take any steps necessary to prevent the exceedance of the cap on the cost to customers including, but not limited to, adjusting the Class I renewable energy requirement.
An electric power supplier or basic generation service provider may satisfy the requirements of this subsection for Class I renewable energy by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection or by submitting a Class I alternative compliance payment in the amount of $10 for energy year 2021 through energy year 2037. Any Class I alternative compliance payment collected pursuant to this paragraph shall be refunded directly to the ratepayers ;
(3) that the board establish a multi-year schedule, applicable to each electric power supplier or basic generation service provider in this State, beginning with the one-year period commencing on June 1, 2010, and continuing for each subsequent one-year period up to and including, the one-year period commencing on June 1, [2033]2037 , that requires the following number or percentage, as the case may be, of kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider to be from solar electric power generators connected to the distribution system in this State:
EY 2011 306 Gigawatthours (Gwhrs)
EY 2012 442 Gwhrs
EY 2013 596 Gwhrs
EY 2014 2.050%
EY 2015 2.450%
EY 2016 2.750%
EY 2017 3.000%
EY 2018 3.200%
EY 2019 4.300%
EY 2020 4.900%
EY 2021 [5.100%]5.25%
EY 2022 [5.100%]5.88%
EY 2023 [5.100%]6.05%
EY 2024 [4.900%]6.29%
EY 2025 [4.800%]6.58%
EY 2026 [4.500%]6.39%
EY 2027 [4.350%]6.36%
EY 2028 [3.740%]6.17%
EY 2029 [3.070%]5.82%
EY 2030 [2.210%]5.49%
EY 2031 [1.580%]4.88%
EY 2032 [1.400%]4.36%
EY 2033 [1.100%]3.87%
EY 20343.87%
EY 20353.87%
EY 20363.87%
EY 20373.87%
[No later than 180 days after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall adopt rules and regulations to close the SREC program to new applications upon the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system. The board shall continue to consider any application filed before the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.). The board shall provide for an orderly and transparent mechanism that will result in the closing of the existing SREC program on a date certain but no later than June 1, 2021.]
No later than 24 months after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the board shall complete a study [that evaluates how to modify or replace the SREC program to encourage the continued efficient and orderly development of solar renewable energy generating sources throughout the State. The board shall submit the written report thereon to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The board shall consult with public utilities, industry experts, regional grid operators, solar power providers and financiers, and other State agencies to determine whether the board can modify the SREC program such that the program will:
-continually reduce, where feasible, the cost of achieving the solar energy goals set forth in this subsection;
-provide an orderly transition from the SREC program to a new or modified program;
-]to develop megawatt targets for grid connected and distribution systems, including residential and small commercial rooftop systems, community solar systems, and large scale behind the meter systems, as a share of the overall solar energy requirement, which targets the board may modify periodically based on the cost, feasibility, or social impacts of different types of projects [;
-establish and update market-based maximum incentive payment caps periodically for each of the above categories of solar electric power generation facilities;
-encourage and facilitate market-based cost recovery through long-term contracts and energy market sales; and
-where cost recovery is needed for any portion of an efficient solar electric power generation facility when costs are not recoverable through wholesale market sales and direct payments from customers, utilize competitive processes such as competitive procurement and long-term contracts where possible to ensure such recovery, without exceeding the maximum incentive payment cap for that category of facility]. The board shall submit a written report thereon to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature .
The board shall approve, conditionally approve, or disapprove any application for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), no more than 90 days after receipt by the board of a completed application. For any such application for a project greater than 25 kilowatts, the board shall require the applicant to post a notice escrow with the board in an amount of $40 per kilowatt of DC nameplate capacity of the facility, not to exceed $40,000. The notice escrow amount shall be reimbursed to the applicant in full upon either denial of the application by the board or upon commencement of commercial operation of the solar electric power generation facility. The escrow amount shall be forfeited to the State if the facility is designated as connected to the distribution system pursuant to this subsection but does not commence commercial operation within two years following the date of the designation by the board.
For all applications for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the SREC term shall be 10 years.
(a) The board shall determine an appropriate period of no less than 120 days following the end of an energy year prior to which a provider or supplier must demonstrate compliance for that energy year with the annual renewable portfolio standard;
(b) No more than 24 months following the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to investigate approaches to mitigate solar development volatility and prepare and submit, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a report to the Legislature, detailing its findings and recommendations. As part of the proceeding, the board shall evaluate other techniques used nationally and internationally;
(c) The solar renewable portfolio standards requirements in this paragraph shall exempt those existing supply contracts which are effective prior to the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.) from any increase beyond the number of SRECs mandated by the solar renewable energy portfolio standards requirements that were in effect on the date that the providers executed their existing supply contracts. This limited exemption for providers' existing supply contracts shall not be construed to lower the Statewide solar sourcing requirements set forth in this paragraph. Such incremental requirements that would have otherwise been imposed on exempt providers shall be distributed over the providers not subject to the existing supply contract exemption until such time as existing supply contracts expire and all providers are subject to the new requirement in a manner that is competitively neutral among all providers and suppliers. Notwithstanding any rule or regulation to the contrary, the board shall recognize these new solar purchase obligations as a change required by operation of law and implement the provisions of this subsection in a manner so as to prevent any subsidies between suppliers and providers and to promote competition in the electricity supply industry.
An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection, or compliance with the requirements of this subsection may be demonstrated to the board by suppliers or providers through the purchase of SRECs.
The renewable energy portfolio standards adopted by the board pursuant to paragraphs (1) and (2) of this subsection shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."
The renewable energy portfolio standards adopted by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 30 months after such filing, and shall, thereafter, be amended, adopted or readopted by the board in accordance with the "Administrative Procedure Act"; and
(4) within 180 days after the date of enactment of P.L.2010, c.57 (C.48:3-87.1 et al.), that the board establish an offshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from offshore wind energy in order to support at least 3,500 megawatts of generation from qualified offshore wind projects.
The percentage established by the board pursuant to this paragraph shall serve as an offset to the renewable energy portfolio standard established pursuant to paragraph (2) of this subsection and shall reduce the corresponding Class I renewable energy requirement.
The percentage established by the board pursuant to this paragraph shall reflect the projected OREC production of each qualified offshore wind project, approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), for 20 years from the commercial operation start date of the qualified offshore wind project which production projection and OREC purchase requirement, once approved by the board, shall not be subject to reduction.
An electric power supplier or basic generation service provider shall comply with the OREC program established pursuant to this paragraph through the purchase of offshore wind renewable energy certificates at a price and for the time period required by the board. In the event there are insufficient offshore wind renewable energy certificates available, the electric power supplier or basic generation service provider shall pay an offshore wind alternative compliance payment established by the board. Any offshore wind alternative compliance payments collected shall be refunded directly to the ratepayers by the electric public utilities.
The rules established by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
e. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing:
(1) net metering standards for electric power suppliers and basic generation service providers. The standards shall require electric power suppliers and basic generation service providers to offer net metering at non-discriminatory rates to industrial, large commercial, residential and small commercial customers, as those customers are classified or defined by the board, that generate electricity, on the customer's side of the meter, using a Class I renewable energy source, for the net amount of electricity supplied by the electric power supplier or basic generation service provider over an annualized period. Systems of any sized capacity, as measured in watts, are eligible for net metering. If the amount of electricity generated by the customer-generator, plus any kilowatt hour credits held over from the previous billing periods, exceeds the electricity supplied by the electric power supplier or basic generation service provider, then the electric power supplier or basic generation service provider, as the case may be, shall credit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point the customer-generator will be compensated for any remaining credits or, if the customer-generator chooses, credit the customer-generator on a real-time basis, at the electric power supplier's or basic generation service provider's avoided cost of wholesale power or the PJM electric power pool's real-time locational marginal pricing rate, adjusted for losses, for the respective zone in the PJM electric power pool. Alternatively, the customer-generator may execute a bilateral agreement with an electric power supplier or basic generation service provider for the sale and purchase of the customer-generator's excess generation. The customer-generator may be credited on a real-time basis, so long as the customer-generator follows applicable rules prescribed by the PJM electric power pool for its capacity requirements for the net amount of electricity supplied by the electric power supplier or basic generation service provider. The board may authorize an electric power supplier or basic generation service provider to cease offering net metering to customers that are not already net metered whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals [5.8]15 percent of the total annual kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider during the prior one-year period;
(2) safety and power quality interconnection standards for Class I renewable energy source systems used by a customer-generator that shall be eligible for net metering.
Such standards or rules shall take into consideration the goals of the New Jersey Energy Master Plan, applicable industry standards, and the standards of other states and the Institute of Electrical and Electronics Engineers. The board shall allow electric public utilities to recover the costs of any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs through either their regulated rates or from the net metering customer-generator;
(3) credit or other incentive rules for generators using Class I renewable energy generation systems that connect to New Jersey's electric public utilities' distribution system but who do not net meter; and
(4) net metering aggregation standards to require electric public utilities to provide net metering aggregation to single electric public utility customers that operate a solar electric power generation system installed at one of the customer's facilities or on property owned by the customer, provided that any such customer is a State entity, school district, county, county agency, county authority, municipality, municipal agency, or municipal authority. The standards shall provide that, in order to qualify for net metering aggregation, the customer must operate a solar electric power generation system using a net metering billing account, which system is located on property owned by the customer, provided that: (a) the property is not land that has been actively devoted to agricultural or horticultural use and that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, provided, however, that the municipal planning board of a municipality in which a solar electric power generation system is located may waive the requirement of this subparagraph (a), (b) the system is not an on-site generation facility, (c) all of the facilities of the single customer combined for the purpose of net metering aggregation are facilities owned or operated by the single customer and are located within its territorial jurisdiction except that all of the facilities of a State entity engaged in net metering aggregation shall be located within five miles of one another, and (d) all of those facilities are within the service territory of a single electric public utility and are all served by the same basic generation service provider or by the same electric power supplier. The standards shall provide that in order to qualify for net metering aggregation, the customer's solar electric power generation system shall be sized so that its annual generation does not exceed the combined metered annual energy usage of the qualified customer facilities, and the qualified customer facilities shall all be in the same customer rate class under the applicable electric public utility tariff. For the customer's facility or property on which the solar electric generation system is installed, the electricity generated from the customer's solar electric generation system shall be accounted for pursuant to the provisions of paragraph (1) of this subsection to provide that the electricity generated in excess of the electricity supplied by the electric power supplier or the basic generation service provider, as the case may be, for the customer's facility on which the solar electric generation system is installed, over the annualized period, is credited at the electric power supplier's or the basic generation service provider's avoided cost of wholesale power or the PJM electric power pool real-time locational marginal pricing rate. All electricity used by the customer's qualified facilities, with the exception of the facility or property on which the solar electric power generation system is installed, shall be billed at the full retail rate pursuant to the electric public utility tariff applicable to the customer class of the customer using the electricity. A customer may contract with a third party to operate a solar electric power generation system, for the purpose of net metering aggregation. Any contractual relationship entered into for operation of a solar electric power generation system related to net metering aggregation shall include contractual protections that provide for adequate performance and provision for construction and operation for the term of the contract, including any appropriate bonding or escrow requirements. Any incremental cost to an electric public utility for net metering aggregation shall be fully and timely recovered in a manner to be determined by the board. The board shall adopt net metering aggregation standards within 270 days after the effective date of P.L.2012, c.24.
Such rules shall require the board or its designee to issue a credit or other incentive to those generators that do not use a net meter but otherwise generate electricity derived from a Class I renewable energy source and to issue an enhanced credit or other incentive, including, but not limited to, a solar renewable energy credit, to those generators that generate electricity derived from solar technologies.
Such standards or rules shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the "Administrative Procedure Act."
f. The board may assess, by written order and after notice and opportunity for comment, a separate fee to cover the cost of implementing and overseeing an emission disclosure system or emission portfolio standard, which fee shall be assessed based on an electric power supplier's or basic generation service provider's share of the retail electricity supply market. The board shall not impose a fee for the cost of implementing and overseeing a greenhouse gas emissions portfolio standard adopted pursuant to paragraph (2) of subsection c. of this section.
g. The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), an electric energy efficiency program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each electric public utility to implement energy efficiency measures that reduce electricity usage in the State pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9). Nothing in this subsection shall be construed to prevent an electric public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.
h. The board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a gas energy efficiency program in order to ensure investment in cost-effective energy efficiency measures, ensure universal access to energy efficiency measures, and serve the needs of low-income communities that shall require each gas public utility to implement energy efficiency measures that reduce natural gas usage in the State pursuant to section 3 of P.L.2018, c.17 (C.48:3-87.9). Nothing in this subsection shall be construed to prevent a gas public utility from meeting the requirements of this subsection by contracting with another entity for the performance of the requirements.
i. After the board establishes a schedule of solar kilowatt-hour sale or purchase requirements pursuant to paragraph (3) of subsection d. of this section, the board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, increased minimum solar kilowatt-hour sale or purchase requirements, provided that the board shall not reduce previously established minimum solar kilowatt-hour sale or purchase requirements, or otherwise impose constraints that reduce the requirements by any means.
j. The board shall determine an appropriate level of solar alternative compliance payment, and permit each supplier or provider to submit an SACP to comply with the solar electric generation requirements of paragraph (3) of subsection d. of this section. The value of the SACP for each Energy Year, for Energy Years 2014 through [2033]2037 per megawatt hour from solar electric generation required pursuant to this section, shall be:
EY 2014 $339
EY 2015 $331
EY 2016 $323
EY 2017 $315
EY 2018 $308
EY 2019 $268
EY 2020 $258
EY 2021 [$248]$220.51
EY 2022 [$238]$188.49
EY 2023 [$228]$186.71
EY 2024 [$218]$170.77
EY 2025 [$208]$144.28
EY 2026 [$198]$138.82
EY 2027 [$188]$142.12
EY 2028 [$178]$135.96
EY 2029 [$168]$146.34
EY 2030 [$158]$113.68
EY 2031 [$148]$129.99
EY 2032 [$138]$128.28
EY 2033 [$128]$120
EY 2034$120
EY 2035$120
EY 2036$120
EY 2037$120 .
The board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, an increase in solar alternative compliance payments, provided that the board shall not reduce previously established levels of solar alternative compliance payments, nor shall the board provide relief from the obligation of payment of the SACP by the electric power suppliers or basic generation service providers in any form. Any SACP payments collected shall first be made available once a year in an auction format approved by the board to owners of solar electric generation facilities possessing unsold SRECs, and following the annual auction any remaining SACP payments shall be refunded directly to the ratepayers by the electric public utilities.
k. The board may allow electric public utilities to offer long-term contracts through a competitive process, direct electric public utility investment and other means of financing, including but not limited to loans, for the purchase of SRECs and the resale of SRECs to suppliers or providers or others, provided that after such contracts have been approved by the board, the board's approvals shall not be modified by subsequent board orders. If the board allows the offering of contracts pursuant to this subsection, the board may establish a process, after hearing, and opportunity for public comment, to provide that a designated segment of the contracts approved pursuant to this subsection shall be contracts involving solar electric power generation facility projects with a capacity of up to 250 kilowatts.
l. The board shall implement its responsibilities under the provisions of this section in such a manner as to:
(1) place greater reliance on competitive markets, with the explicit goal of encouraging and ensuring the emergence of new entrants that can foster innovations and price competition;
(2) maintain adequate regulatory authority over non-competitive public utility services;
(3) consider alternative forms of regulation in order to address changes in the technology and structure of electric public utilities;
(4) promote energy efficiency and Class I renewable energy market development, taking into consideration environmental benefits and market barriers;
(5) make energy services more affordable for low and moderate income customers;
(6) attempt to transform the renewable energy market into one that can move forward without subsidies from the State or public utilities;
(7) achieve the goals put forth under the renewable energy portfolio standards;
(8) promote the lowest cost to ratepayers; and
(9) allow all market segments to participate.
m. The board shall ensure the availability of financial incentives under its jurisdiction, including, but not limited to, long-term contracts, loans, SRECs, or other financial support, to ensure market diversity, competition, and appropriate coverage across all ratepayer segments, including, but not limited to, residential, commercial, industrial, non-profit, farms, schools, and public entity customers.
n. For projects which are owned, or directly invested in, by a public utility pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.
o. The board, in consultation with the Department of Environmental Protection, electric public utilities, the Division of Rate Counsel in, but not of, the Department of the Treasury, affected members of the solar energy industry, and relevant stakeholders, shall periodically consider increasing the renewable energy portfolio standards beyond the minimum amounts set forth in subsection d. of this section, taking into account the cost impacts and public benefits of such increases including, but not limited to:
(1) reductions in air pollution, water pollution, land disturbance, and greenhouse gas emissions;
(2) reductions in peak demand for electricity and natural gas, and the overall impact on the costs to customers of electricity and natural gas;
(3) increases in renewable energy development, manufacturing, investment, and job creation opportunities in this State; and
(4) reductions in State and national dependence on the use of fossil fuels.
p. Class I RECs and ORECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following two energy years. SRECs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following four energy years.
q. (1) During the energy years of 2014, 2015, and 2016, a solar electric power generation facility project that is not: (a) net metered; (b) an on-site generation facility; (c) qualified for net metering aggregation; or (d) certified as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, as provided pursuant to subsection t. of this section may file an application with the board for approval of a designation pursuant to this subsection that the facility is connected to the distribution system. An application filed pursuant to this subsection shall include a notice escrow of $40,000 per megawatt of the proposed capacity of the facility. The board shall approve the designation if: the facility has filed a notice in writing with the board applying for designation pursuant to this subsection, together with the notice escrow; and the capacity of the facility, when added to the capacity of other facilities that have been previously approved for designation prior to the facility's filing under this subsection, does not exceed 80 megawatts in the aggregate for each year. The capacity of any one solar electric power supply project approved pursuant to this subsection shall not exceed 10 megawatts. No more than 90 days after its receipt of a completed application for designation pursuant to this subsection, the board shall approve, conditionally approve, or disapprove the application. The notice escrow shall be reimbursed to the facility in full upon either rejection by the board or the facility entering commercial operation, or shall be forfeited to the State if the facility is designated pursuant to this subsection but does not enter commercial operation pursuant to paragraph (2) of this subsection.
(2) If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility shall be deemed to be null and void, and the facility shall not be considered connected to the distribution system thereafter.
(3) Notwithstanding the provisions of paragraph (2) of this subsection, a solar electric power generation facility project that as of May 31, 2017 was designated as "connected to the distribution system," but failed to commence commercial operations as of that date, shall maintain that designation if it commences commercial operations by May 31, 2018.
r. (1) For all proposed solar electric power generation facility projects except for those solar electric power generation facility projects approved pursuant to subsection q. of this section, and for all projects proposed in energy year 2019 and energy year 2020, the board may approve projects for up to 50 megawatts annually in auctioned capacity in two auctions per year as long as the board is accepting applications. If the board approves projects for less than 50 megawatts in energy year 2019 or less than 50 megawatts in energy year 2020, the difference in each year shall be carried over into the successive energy year until 100 megawatts of auctioned capacity has been approved by the board pursuant to this subsection. A proposed solar electric power generation facility that is neither net metered nor an on-site generation facility, may be considered "connected to the distribution system" only upon designation as such by the board, after notice to the public and opportunity for public comment or hearing. A proposed solar power electric generation facility seeking board designation as "connected to the distribution system" shall submit an application to the board that includes for the proposed facility: the nameplate capacity; the estimated energy and number of SRECs to be produced and sold per year; the estimated annual rate impact on ratepayers; the estimated capacity of the generator as defined by PJM for sale in the PJM capacity market; the point of interconnection; the total project acreage and location; the current land use designation of the property; the type of solar technology to be used; and such other information as the board shall require.
(2) The board shall approve the designation of the proposed solar power electric generation facility as "connected to the distribution system" if the board determines that:
(a) the SRECs forecasted to be produced by the facility do not have a detrimental impact on the SREC market or on the appropriate development of solar power in the State;
(b) the approval of the designation of the proposed facility would not significantly impact the preservation of open space in this State;
(c) the impact of the designation on electric rates and economic development is beneficial; and
(d) there will be no impingement on the ability of an electric public utility to maintain its property and equipment in such a condition as to enable it to provide safe, adequate, and proper service to each of its customers.
(3) The board shall act within 90 days of its receipt of a completed application for designation of a solar power electric generation facility as "connected to the distribution system," to either approve, conditionally approve, or disapprove the application. If the proposed solar electric power generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility as "connected to the distribution system" shall be deemed to be null and void, and the facility shall thereafter be considered not "connected to the distribution system."
s. In addition to any other requirements of P.L.1999, c.23 or any other law, rule, regulation or order, a solar electric power generation facility that is not net metered or an on-site generation facility and which is located on land that has been actively devoted to agricultural or horticultural use that is valued, assessed, and taxed pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at any time within the 10-year period prior to the effective date of P.L.2012, c.24, shall only be considered "connected to the distribution system" if (1) the board approves the facility's designation pursuant to subsection q. of this section; or (2) (a) PJM issued a System Impact Study for the facility on or before June 30, 2011, (b) the facility files a notice with the board within 60 days of the effective date of P.L.2012, c.24, indicating its intent to qualify under this subsection, and (c) the facility has been approved as "connected to the distribution system" by the board. Nothing in this subsection shall limit the board's authority concerning the review and oversight of facilities, unless such facilities are exempt from such review as a result of having been approved pursuant to subsection q. of this section.
t. (1) No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall, in consultation with the Department of Environmental Protection and the New Jersey Economic Development Authority, and, after notice and opportunity for public comment and public hearing, complete a proceeding to establish a program to provide SRECs to owners of solar electric power generation facility projects certified by the board, in consultation with the Department of Environmental Protection, as being located on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility, including those owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1). Projects certified under this subsection shall be considered "connected to the distribution system", shall not require such designation by the board, and shall not be subject to board review required pursuant to subsections q. and r. of this section. Notwithstanding the provisions of section 3 of P.L.1999, c.23 (C.48:3-51) or any other law, rule, regulation, or order to the contrary, for projects certified under this subsection, the board shall establish a financial incentive that is designed to supplement the SRECs generated by the facility in order to cover the additional cost of constructing and operating a solar electric power generation facility on a brownfield, on an area of historic fill or on a properly closed sanitary landfill facility. Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provision of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers. The issuance of SRECs for all solar electric power generation facility projects pursuant to this subsection shall be deemed "Board of Public Utilities financial assistance" as provided under section 1 of P.L.2009, c.89 (C.48:2-29.47).
(2) Notwithstanding the provisions of the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.) or any other law, rule, regulation, or order to the contrary, the board, in consultation with the Department of Environmental Protection, may find that a person who operates a solar electric power generation facility project that has commenced operation on or after the effective date of P.L.2012, c.24, which project is certified by the board, in consultation with the Department of Environmental Protection pursuant to paragraph (1) of this subsection, as being located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility, which projects shall include, but not be limited to projects located on a brownfield for which a final remediation document has been issued, on an area of historic fill or on a properly closed sanitary landfill facility owned or operated by an electric public utility and approved pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), or a person who owns property acquired on or after the effective date of P.L.2012, c.24 on which such a solar electric power generation facility project is constructed and operated, shall not be liable for cleanup and removal costs to the Department of Environmental Protection or to any other person for the discharge of a hazardous substance provided that:
(a) the person acquired or leased the real property after the discharge of that hazardous substance at the real property;
(b) the person did not discharge the hazardous substance, is not in any way responsible for the hazardous substance, and is not a successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g);
(c) the person, within 30 days after acquisition of the property, gave notice of the discharge to the Department of Environmental Protection in a manner the Department of Environmental Protection prescribes;
(d) the person does not disrupt or change, without prior written permission from the Department of Environmental Protection, any engineering or institutional control that is part of a remedial action for the contaminated site or any landfill closure or post-closure requirement;
(e) the person does not exacerbate the contamination at the property;
(f) the person does not interfere with any necessary remediation of the property;
(g) the person complies with any regulations and any permit the Department of Environmental Protection issues pursuant to section 19 of P.L.2009, c.60 (C.58:10C-19) or paragraph (2) of subsection a. of section 6 of P.L.1970, c.39 (C.13:1E-6);
(h) with respect to an area of historic fill, the person has demonstrated pursuant to a preliminary assessment and site investigation, that hazardous substances have not been discharged; and
(i) with respect to a properly closed sanitary landfill facility, no person who owns or controls the facility receives, has received, or will receive, with respect to such facility, any funds from any post-closure escrow account established pursuant to section 10 of P.L.1981, c.306 (C.13:1E-109) for the closure and monitoring of the facility.
Only the person who is liable to clean up and remove the contamination pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g) and who does not have a defense to liability pursuant to subsection d. of that section shall be liable for cleanup and removal costs.
u. No more than 180 days after the date of enactment of P.L.2012, c.24, the board shall complete a proceeding to establish a registration program. The registration program shall require the owners of solar electric power generation facility projects connected to the distribution system to make periodic milestone filings with the board in a manner and at such times as determined by the board to provide full disclosure and transparency regarding the overall level of development and construction activity of those projects Statewide.
v. The issuance of SRECs for all solar electric power generation facility projects pursuant to this section, for projects connected to the distribution system with a capacity of one megawatt or greater, shall be deemed "Board of Public Utilities financial assistance" as provided pursuant to section 1 of P.L.2009, c.89 (C.48:2-29.47).
w. No more than 270 days after the date of enactment of P.L.2012, c.24, the board shall, after notice and opportunity for public comment and public hearing, complete a proceeding to consider whether to establish a program to provide, to owners of solar electric power generation facility projects certified by the board as being three megawatts or greater in capacity and being net metered, including facilities which are owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), a financial incentive that is designed to supplement the SRECs generated by the facility to further the goal of improving the economic competitiveness of commercial and industrial customers taking power from such projects. If the board determines to establish such a program pursuant to this subsection, the board may establish a financial incentive to provide that the board shall issue one SREC for no less than every 750 kilowatt-hours of solar energy generated by the certified projects. Any financial benefit realized in relation to a project owned or operated by an electric public utility and approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), as a result of the provisions of a financial incentive established by the board pursuant to this subsection, shall be credited to ratepayers.
x. Solar electric power generation facility projects that are located on an existing or proposed commercial, retail, industrial, municipal, professional, recreational, transit, commuter, entertainment complex, multi-use, or mixed-use parking lot with a capacity to park 350 or more vehicles where the area to be utilized for the facility is paved, or an impervious surface may be owned or operated by an electric public utility and may be approved by the board pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1).
(cf: P.L.2018, c.17, s.2)
2. This act shall take effect immediately.
STATEMENT
This bill would amend provisions in current law concerning limits on costs to customers of the Class I renewable energy requirements, solar renewable energy portfolio standards, solar renewable energy certificates (SRECs), solar alternative compliance payments (SACPs), and net metering.
Under current law, the Board of Public Utilities (“board”) is required to ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to law does not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively, and seven percent of the total paid for electricity by all customers in the State in any energy year thereafter. This bill would revise this cap on the cost to customers by establishing a schedule for energy year 2022 through energy year 2037. Under the schedule set forth in the bill, the cost to customers of the Class I renewable energy requirement imposed pursuant to law would not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2021, and would decrease until energy year 2036 when it would not exceed five percent of the total paid for electricity by all customers in the State.
Current law provides that an electric power supplier or basic generation service provider may satisfy the Class I renewable energy requirements set forth in law by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection. Under this bill, an electric power supplier or basic generation service provider would also be able to satisfy the Class I renewable energy requirements by submitting a Class I alternative compliance payment in the amount of $10 for energy year 2021 through energy year 2037. Any Class I alternative compliance payment collected would be refunded directly to the ratepayers.
Under current law, electric power suppliers and basic generation service providers must provide a certain percentage of their electricity from solar electric power generators. The bill would revise the schedule set forth in P.L.2018, c.17. Beginning in energy year 2021, under this bill, electric power suppliers and basic generation service providers would be required to provide 5.25 percent, rather than 5.1 percent. In addition, instead of culminating in 5.1 percent in energy year 2021 and gradually decreasing thereafter until energy year 2023 as set forth in current law, this bill would establish the requirement through energy year 2037 when the required percentage would be 3.87 percent.
Under current law, the board is required to adopt rules and regulations no later than 180 days after the effective date of P.L.2018, c.17 to close the SREC program to new applications upon the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation service provider from solar electric power generators connected to the distribution system. The law further provides for the closing of the SREC program no later than June 1, 2021. This bill would delete these provisions requiring the closing of the SREC program.
In addition, current law requires the board to complete a study to evaluate how to modify or replace the SREC program in order to encourage the continued efficient and orderly development of solar renewable generating sources. This bill would delete these study requirements, except that under this bill, the board would still be required to complete a study to develop megawatt targets for grid connected and distribution systems, including residential and small commercial rooftop systems, community solar systems, and large scale behind the meter systems, as a share of the overall solar energy requirement.
Under current law, the board may authorize an electric power supplier or basic generation service provider to cease offering net metering to customers that are not already net metered whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals 5.8 percent of the total annual kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider during the prior one-year period. This bill would increase this threshold from 5.8 percent to 15 percent.
Lastly, the bill would revise provisions in current law regarding SACPS. Under this bill, for energy year 2021, the SACP would be reduced from $258 to $220.51. The bill would establish a revised schedule for SACP payments from energy year 2021 until energy year 2037 when the SACP would be $120. The bill also would provide that any SACP payments collected would first be made available once a year in an auction format approved by the board to owners of solar electric generation facilities possessing unsold SRECs, and following the annual auction any remaining SACP payments would be refunded directly to the ratepayers by the electric public utilities. Under current law, all SACP payments are refunded directly to the ratepayers by the electric public utilities.
DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.
The New Jersey Board of Public Utilities (NJBPU) today proposed a rule to amend the Solar Renewable Energy Certificate (SREC) program. The rule proposal amends the SREC Registration Program (SRP) to include a process for the Board determining that 5.1 percent of the electricity sold in New Jersey has been attained from solar electric generation facilities. The Clean Energy Act of 2018 requires the closure of the current SREC program to new applications either when the state meets the 5.1 percent milestone or by June 2021, whichever comes first. The proposed rule will be published in the New Jersey Register with a 60-day public comment period.
“New Jersey’s solar program has been incredibly successful, recently surpassing 110,000 solar installations, creating an estimated 7,000 jobs, and rapidly approaching the 3 Gigawatt milestone. The state has a strong interest in seeing an effective solar program continue,” said NJBPU President Joseph L. Fiordaliso. “As we transition to a new solar program central to our goal of achieving 100 percent clean energy by 2050, we remain committed to ensuring a healthy solar market which continues to play a critical role for the benefit of all New Jersey residents.”
Under the rule proposed today, NJBPU staff would provide the Board with quarterly status reports on the progress toward the 5.1 percent threshold until it appears that this milestone will be reached within six months. Subsequently, staff will provide monthly forecasts. As soon as the 5.1 percent milestone is reached, staff will recommend the Board terminate the SRP. At that point, projects conditionally registered after October 29, 2018 which have not commenced commercial operations will not be certified as eligible to create SRECs.
The Board will publicly announce that the 5.1 percent milestone has been reached when the state’s installed solar capacity is estimated to have produced 5.1 percent of the retail sales estimated to have been sold over the previous twelve months. The Board is committed to providing an open and transparent public dialogue prior to the termination of the SREC registration program on whether Board action is necessary to ensure that the solar market in New Jersey continues to remain healthy.
About the New Jersey Board of Public Utilities (NJBPU)
The NJBPU is a state agency and regulatory authority mandated to ensure safe, adequate and proper utility services at reasonable rates for New Jersey customers. Critical services regulated by the NJBPU include natural gas, electricity, water, wastewater, telecommunications and cable television. The Board has general oversight and responsibility for monitoring utility service, responding to consumer complaints, and investigating utility accidents. To find out more about the NJBPU, visit our web site at www.nj.gov/bpu.
About the New Jersey Clean Energy Program (NJCEP)
The NJCEP, established on January 22, 2003, in accordance with the Electric Discount and Energy Competition Act (EDECA), provides financial and other incentives to the State's residential customers, businesses and schools that install high-efficiency or renewable energy technologies, thereby reducing energy usage, lowering customers' energy bills and reducing environmental impacts. The program is authorized and overseen by the New Jersey Board of Public Utilities (NJBPU), and its website is www.NJCleanEnergy.com.
DISCLAIMER: Maryland SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.
The Staff of the New Jersey Board of Public Utilities (“BPU”) invites all interested parties and members of the public to participate in the continued public stakeholder process to fully inform the design of the New Jersey solar transition required by P.L. 2018, c.17 (the “Clean Energy Act”). This process will include the comments and input received previously, and will build upon the experience of the State and of other jurisdictions. Likewise, this approach is intended to be completed by the statutory deadline, and to provide stakeholders the certainty necessary for continued success for the solar industry.
On May 23, 2018, Governor Phil Murphy signed the Clean Energy Act, which directs the BPU to:
adopt rules and regulations to close the [Solar Renewable Energy Certificate] SREC program to new applications upon the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system. The board shall continue to consider any application filed before the date of enactment of P.L.2018, c.17. The board shall provide for an orderly and transparent mechanism that will result in the closing of the existing SREC program on a date certain but no later than June 1,2021.
Additionally, the Clean Energy Act directs the Board of Public Utilities to:
1Not a Paid Legal Advertisement
complete a study that evaluates how to modify or replace the SREC program to encourage the continued efficient and orderly development of solar renewable energy generating sources throughout theState.
Furthermore, the Clean Energy Act mandates that:
the board shall ensure that the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection shall not exceed nine percent of the total paid for electricity by all customers in the State for energy year 2019, energy year 2020, and energy year 2021, respectively, and shall not exceed seven percent of the total paid for electricity by all customers in the State in any energy year thereafter. In calculating the cost to customers of the Class I renewable energy requirement imposed pursuant to this subsection, the board shall not include the costs of the offshore wind energy certificate program established pursuant to paragraph (4) of this subsection. The board shall take any steps necessary to prevent the exceedance of the cap on the cost to customers including, but not limited to, adjusting the Class I renewable energyrequirement.
SREC Transition Principles
Staff will be guided by the following “SREC Transition Principles”:
1.Provide maximum benefit to ratepayers at the lowestcost;
2.Support the continued growth of the solarindustry;
3.Ensure that prior investments retainvalue;
4.Meet the Governor’s commitment of 50% Class I Renewable Energy Certificates (“RECs”) by 2030 and 100% clean energy by2050;
5.Provide insight and information to stakeholders through a transparent process for developing the Solar Transition and SuccessorProgram;
6.Comply fully with the statute, including the implications of the cost cap;and
7.Provide disclosure and notification to developers that certain projects may not be guaranteed participation in the current SREC program, and continue updates on market conditions via the New Jersey Clean Energy Program (“NJCEP”) SREC Registration Program (“SRP”) Solar ActivityReports.
Program Assumptions and Overview
The Clean Energy Act defines the transition point as “the attainment of 5.1 percent of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system.” For purposes of this proposal, “attainment” means that 5.1% of the actual kilowatt-hours sold in the state are being generated by solar electric power generators. This will result in the following categorization ofSRECs:
·Legacy SRECs: SRECs created by projects that filed an SRP Registration and entered into operation prior to the attainment of the 5.1% transitionpoint.
·Pipeline SRECs: SRECs created by projects that filed an SRP Registration but which have not entered into commercial operation prior to the attainment of the 5.1% transition point.
·Successor SRECs: SRECs created by projects that filed an SRP Registration (or replacement mechanism) after the attainment of the 5.1% transitionpoint.
o The SREC Successor Program is the program for the allocation and valuation of Successor SRECs. The current SREC program is designated as “current SREC program”.
In this proposal, SREC Transition (or Solar Transition) is defined as those steps necessary for the definition of the 5.1% transition point; the treatment of Legacy SRECs; the treatment of Pipeline SRECs; and the treatment of Successor SRECs.
Stakeholder Process
Working within these principles and assumptions, Board Staff wishes to bring together all interested stakeholders, beginning in January, for a full discussion of the benefits and liabilities of the different approaches to developing and implementing a SREC Transition in compliance with statutory requirements.
Staff would like to set forth the following proposed schedule for the process of developing the SREC Transition process:
Dec 2018: Staff releases Solar Transition Straw Proposal Jan – Feb2019: Stakeholder meetings on the StrawProposal
April –July2019: Working groups & workshops conducted onspecific
elements of the Transition
Aug – Sept2019: Rule proposal presented toBoard
Sept – Nov2019: Public comment period on rule proposal Dec 2019: Amendments to ruleproposal
Jan – Feb2020: Public comment period on rule proposal March 2020: Rule adopted byBoard
The first Solar Transition Stakeholder Meeting will be held:
Date: Friday, January 18,2019
Location: Rutgers University College Avenue Student Center 126 College Ave, New Brunswick, NJ 08901 Multipurpose Room, 2nd Floor.
Time: 10a.m.
Stakeholders wishing to speak are asked to register in advance to solar.transitions@bpu.nj.gov no later than 5:00 p.m. on Wednesday, January 16, 2019. Stakeholders wishing to speak without prior registration will be allowed to sign up to do so upon arrival to the Stakeholder Meeting, and will be called to speak following the preregisteredspeakers.
Additional stakeholder meetings will be announced subsequently.
Written comments are also encouraged and must be submitted to Aida Camacho-Welch, Secretary, New Jersey Board of Public Utilities, Post Office Box 350, Trenton, New Jersey,
08625. Written comments may also be submitted electronically to solar.transitions@bpu.nj.gov in PDF or Microsoft Word format. All comments must be received on or before 5:00 p.m. on Friday, February 22, 2019. Please note that these comments may be considered “public documents” for purposes of the State’s Open Public Records Act. Stakeholders may identify information that they wish to keep confidential by submitting them in accordance with the confidentiality procedures set forth in N.J.A.C.14:1-12.3.
Request for Comments
In light of the statutory directives and the SREC Transition Principles, Staff invites stakeholders to submit comments on the SREC Transition and SREC Successor Program. Additionally, Staff seeks detailed comments on the following issues and questions.
Board Staff strongly requests that stakeholders submit quantitative information to support any assertions pertaining to numerical aspects of the SREC Transition and the SREC Successor Program. Stakeholders are therefore highly encouraged to include, as part of any comments, any calculations, graphs, and tables that are relevant and illustrative to the content of the comments. The calculations, graphs or tables must include an attachment which clearly explains all assumptions used and a copy of any data employed (in a Microsoft Excel file or other easily shared data tool). Stakeholders may identify information that they wish to keep confidentialbysubmittingtheminaccordancewiththeconfidentialityproceduressetforthin
N.J.A.C. 14:1-12.3.
In addition to the below question, Staff also wishes to set forth the following proposal for discussion and consideration:
·Defining attainment as being met when 5.1% of the actual kilowatt-hours sold in the state come from solar electric powergenerators.
·Recognizing that, based on the definitions proposed above, Pipeline SRECs are those projects that have filed an SRP Registration but have not entered into commercial operation prior to the attainment of the 5.1% trigger. Recognizing that those Pipeline SRECs will not be used for satisfaction of the RPS of the Legacy SRECs, in order to ensure that the current market does not becomeover-supplied.
·Developing a process whereby the Pipeline SRECs are eligible for either a transitional program or able to roll into the SREC Successor Program, as developed. As part of the design process, the Board would consider how to ensure that Pipeline SRECs are considered and provided value (including whether to develop a separate program for Pipeline SRECs, or roll those Pipeline SRECs into the SREC Successor Program, as developed).
·Over an 18-month period, closely monitor the price cap to ensure that it is not exceeded, with the recognition that the Board could exercise its authority to reduce the Class I RECs in the event of the cap beingexceeded.
With that in mind, Staff presents the following questions for consideration and discussion:
1)In your direct experience, how has the current SREC program functioned over the past 5 years?
2)How should any proposed SREC Successor Program be organized in conformance with the Clean Energy Act and Staff’s SREC Transition Principles? Please provide detailed quantitative and qualitative responses as to the perceived pros and cons of each of the followingoptions:
a.a fixed priceSREC;
b.a market-determined SREC;and
c.any otheroption(s).
3)Based on your response to question 2 above, provide precise quantitative and qualitative recommendations as to how your preferred SREC Successor Program model would be implemented, keeping in mind the necessity of satisfying the “SREC Transition Principles” set forthabove.
4)How should Legacy SRECs be valued? Should these Legacy SRECs be valued under the SREC Successor Program or valuedseparately?
5)How should Pipeline SRECs be valued? Should these Pipeline SRECs be valued under the SREC Successor Program or valuedseparately?
a.Should the Board continue the current SREC program as a separate program? If so,how?
b.Should the Board include the current SREC program within the SREC Successor Program? If so,how?
6)For any solar transition, should the Board set a megawatt (“MW”) target for annual new solar construction? If so, should those targets be defined as percentage of retail sales or a set MW cap? Under what circumstances and/or assumptions is this targetachievable?
7)In any SREC Successor Program, should the Board seek to set annual MW capacity caps for new solar construction or percentages of retail sales? Why or why not? If yes, what should be the value through 2030 and why? If yes, should the Board seek to set differentiated capacity caps under the solar RPS based on projecttype?
8)In the SREC Successor Program, should the Board provide differentiated SREC or solar value incentives to different types of projects? Should such differentiated SREC compensation be created through SREC multipliers, through an add-on valuation, or through some other method? Based on what factor(s) should any SREC compensation bedifferentiated?
9)How should the cost cap be measured? Should any “head space” under the cost cap in the first years be “banked”? Why or whynot?
10)Can and should the cost cap be determined based on net costs that include some type of valuation of associated benefits? If so, what should those qualitative and quantitative benefitsbeandhowshouldtheybeassignedavalue?IftheBoardcanandshould
consider a net benefits test, should other cost impacts be included? Which ones? Why? If other cost impacts should not be included, whynot?
11)What steps should the Board take to implement the cost cap? In particular, please discuss the pros and cons of decreasing the Class I REC Renewable Portfolio Standards. Should any measures implemented differentiate among the different type of Class I renewable energy technologies? Should these measures differentiate among the different market sectors (e.g. utility-scale grid supply versus small residential systems)? Should these measures be technology neutral? Why or whynot?
12)Should the solar industry transition into a true, incentive-free market as the costs of solar begin to approach “grid parity be a goal, or even a consideration, of the SREC Successor Program? If so, how can a SREC Successor Program assist that transition? Should a transition also encompass changes to the net metering program (cf. ongoing FERC/PJM review of DERaggregation)?
13)Please provide comments on any significant issues not specifically addressed in the questions above, making specific reference to their applicability in the New Jersey context. Please do not reiterate previously madecomments.
DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.
The Clean Energy Act, signed by Governor Murphy on May 23, 2018, included the following provision:
“For all applications for designation as connected to the distribution system of a solar electric power generation facility filed with the board after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.) the SREC term shall be 10 years.” L. 2018, c. 17, §2(d)(3).
At its agenda meeting earlier today, the New Jersey Board of Public Utilities clarified the language above as follows:
• SRP REGISTRATIONS SUBMITTED IN THE ONLINE PORTAL ON OR BEFORE TODAY’S DEADLINE1 AND DEEMED COMPLETE WILL RECEIVE A 15-YEAR SREC QUALIFICATION LIFE.
• SRP REGISTRATIONS SUBMITTED IN THE ONLINE PORTAL AFTER TODAY’S DEADLINE WILL RECEIVE A 10-YEAR SREC QUALIFICATION LIFE.
• APPLICATIONS RECEIVED BY THE BOARD FOR CONDITIONAL CERTIFICATION PURSUANT TO SUBSECTION T PRIOR TO TODAY’S DEADLINE THAT FULFILL ALL CONDITIONS ESTABLISHED BY THE BOARD SHALL RECEIVE A 15-YEAR SREC QUALIFICATION LIFE.
1 The “Deadline” is defined as 11:59:59 PM EST on October 29, 2018
Additional details are as follows:
SRP Eligibility Process
To qualify for a 15-year SREC qualification life, a registration must be submitted in the online portal (http://njcepsolar.programprocessing.com/) under the status Application Received on or before 11:59:59 PM EST on October 29, 2018 (Deadline), and:
1. Contain all the items and information identified on the SRP Checklist required to be deemed complete, or
2. Within two weeks of an email from the Program Manager/Administrator to the registrant identifying one or more minor deficiencies with the registration, successfully resolve those minor deficiencies. a. If the minor deficiencies are not successfully resolved within two weeks from the date of the email, the registration will be rejected and the registrant would be required to resubmit a new registration packet.
For the avoidance of doubt:
A. Any registrations submitted after today’s Deadline will only be eligible for a 10-year SREC qualification life.
B. Any registration submitted in the online portal under the status Application Received on or before the Deadline, but that is determined to be incomplete due to a major deficiency, will be rejected and if resubmitted after the deadline will only be eligible for a 10-year SREC qualification life.
C. Any registration submitted in the online portal under the status Application Received on or before the Deadline, but that is determined to be incomplete due to a minor deficiency, will have two weeks to successfully resolve the minor deficiencies to remain eligible for a 15-year SREC qualification life.
D. Registrations having the status Pending Uploads as of the Deadline will not be considered submitted in the online portal and therefore will not be eligible for a 15-year SREC qualification life.
For information regarding the definition of Major/Minor Deficiencies, please see:
In May 2018 New Jersey AB 3723 was passed which instituted major changes to the New Jersey solar incentive market revolving around SRECs.
History:
New Jersey was one of the early leaders in providing ratepayer incentives through SRECs to solar owners. Flett Exchange launched its’ New Jersey SREC market in June of 2007 to help facilitate an open and competitive market. The SREC program was created to provide a long-term 15 year pay-back as opposed to the large up-front incentive program that existed in New Jersey. Solar installation costs dropped quicker than expected during the last decade. As of the fall of 2018 New Jersey has close to 100,000 solar installations and produces over 3% of its electricity from solar. A major market reform was instituted in 2012 which increased demand for solar. This increase in demand averted a collapse in in SREC prices which kept solar investors whole and provided demand for a few more years of new solar development which satisfied solar developers. This same change slashed the cost cap by more than 50% to protect ratepayers. By 2016 it was apparent that once again costs to install new solar dropped quicker than expected. AB 3723 was passed in May 2018.
AB 3723 major changes:
Closes the current SREC program to new applicants by June 2021
Mathematically attempts to close the SREC program by timing the curtailment of supply of new solar while increasing demand at the same time thus “pinning” high SREC prices for the next 10 – 15 years.
Adds a 7% cost cap by 2022 that is complicated/impossible to model and relies on BPU action and will most likely not kick in for years. The cost cap favors the wind development portion of the RPS by protecting it from this cap. The solar portion will be most likely be ratcheted down through reduced solar compliance costs.
(Plain English: Bail-out legislation for current solar owners (Attempts to keep SREC prices above $200 for years) that at the same time gives solar developers 2 to 3 years to cash in on projects before a new incentive program is created. Ratepayers who pay for it will never understand it which limits/reduces political risk for passing it. Provides for costs shifting 5+ years out from solar compliance to wind compliance thus potentially reducing SREC prices at that time)
Price Projection and Risks for Sellers of New Jersey SRECs:
AB 3723 prevented the New Jersey SREC market from a collapse which was inevitable by 2019-2021 due to the pace of solar development in New Jersey which was significantly more than what the legislation called for. In all SREC markets that experienced similar events – PA, MD, OH, SREC prices dropped to $10 or less for years. It appears that SREC prices will remain at the $180 to $250 range for the next 3 to 5 years (2018 to 2020/22) Analysis for prices and hedging strategies going out 3+ years are available to our registered and active customers.
DISCLAIMER: New Jersey SREC prices are volatile. Buyers and sellers of SRECs must do their own research. The above projections are subject to change as market dynamics change.
The following is a write-up by Michael Flett – President of Flett Exchange, LLC in response to the passage of A-3723 in the New Jersey legislature and now on the desk of Governor Murphy to sign into law.
Renewable energy in America affects everyone today. The societal benefits are obvious - less pollution and infinite energy. In New Jersey, solar energy production is subsidized by the public either as a taxpayer through federal or state incentives or as a regular electricity consumer. They need to be part of the conversation.
Where is the support for this bill?
Due to the widespread benefits and costs one would assume that when crafting solar legislation it would include any and all stakeholders. That was not the case here in New Jersey where a renewable energy bill was quietly folded into a three bill package that included a nuclear subsidy bill and a health care insurance bill! The environmental community, who you would think, strongly supports renewable energy called for the process to slow down for a more deliberative process in order to create a long term program that would include community solar, not just a “pilot” program. That was certainly not the case with this bill. A small group of solar owners along with financial solar dealers spearheaded the quick passage of this bill in Trenton. If enacted, this law would close the successful free-market SREC program for all future solar development after 2021. As written, it will come at a multibillion dollar cost to ratepayers and divert future payments away from new solar development. All coming about without the widespread support and dialogue with environmentalists, ratepayers, business owners or even the majority of the homeowners or businesses that invested on solar on their homes and businesses. Flett Exchange has thousands of customers who own solar in New Jersey. These investments were made because of the SREC program and this bill extinguishes that program and causes uncertainty.
SREC = Competition = Fairness
New Jersey has been a nationwide leader for 15 years in solar development. The reason for this success is the open and competitive nature of our incentive program based on the SREC. New Jersey, in its wisdom over a decade ago, made the decision to let the market decide the most economical price for solar to bring in investment and at the same time protect the ratepayer. Due to the rapid reduction in cost of solar, an adjustment in the states’ law around solar was made in 2012. It worked beautifully. Solar was built. State renewable goals were met. The price to the ratepayer dropped as well. There was absolute freedom for homeowners and business to compete and install solar and earn SRECs.
Due to the success of the SREC program, New Jersey achieved all of its solar build-out goals and under budget. Now, like in 2012, the laws need to be adjusted to bring in the next phase of investment in New Jersey. Consistency needs to be maintained to maintain investor confidence, protect the ratepayer, protect past investments in solar infrastructure and bring more solar to everyone. The open and free SREC market is that tool. It allows for the freedom to compete and allow homeowners and business to install solar. It ensures that if prices drop for solar energy technology in the future, the public who pays for it with their electricity bill, will not be stuck for decades with long term contracts. The proponents of this bill are only interested in maximizing their rate of return when it comes time to selling their solar projects. They do not have the public’s interest at heart. We can do better.
Now, like in 2012, the cost to install solar has again plummeted. The state law can be adjusted to bring in the next phase of investment in NJ based on a free and open market called the SREC. The current bill phases out the tools that made New Jersey a solar leader.
Why Remove Fairness from a Successful Program?
Why? Because by closing the SREC program large solar owners will land a multi-billion dollar payday.
Here’s how:
There are over 2,000 Mw of solar installed statewide. There are a few owners with control of 100 Mw each. Based on current free market SREC prices, the typical owner of 100 Mw of solar will earn $50 to $70 million dollars over the next 10 years in SREC payments. (This revenue is based on the forward 10 year curve of SREC prices in a freely traded SREC market prior to the run-up in prices due to this bill)
A-3723, as written, abolishes the SREC market and maximize payments. Those same large owners will earn $250 million in the next 10 years – a $180 to $200 million windfall – each. (The back-end of the SREC curve moves up due to the artificial demand created by this bill) If you add up the total amount for all 2000 Mw installed in New Jersey the cost to the ratepayer over 10 years is $8.5 billion – up from $1.4 to $2.8 billion based on the freely traded SREC. This bill as written will cost the ratepayers of New Jersey $5.7 to $7.1 billion more over 10 years! The majority of this money builds NO new solar! These projects will be sold quickly and when the real costs materialize the public will demand action. To put this in perspective, $6 billion would build an additional 3,000 Mw of new solar at an install cost of $2 a watt. $2 a watt is a fair install price for new solar for medium sized distributed systems that would benefit typical small business’ and homeowners in New Jersey.
The proponents of the legislation have provided one sided cost analysis. All the press releases and articles actually mention that it will save money which is only attainable in economic models in which the inputs are misleading and statistically near impossible.
How do we Maintain Fairness?
The New Jersey legislature and governor need to address solar development today as it was addressed in 2012. All stakeholders have to be heard. The cost analysis needs to be vetted. A clear path forward for the cost of solar development in the future needs to be planned. Plain and simple the path is:
Maintain open and free access to solar for all investors - SRECs
Maintain the competitive nature of the SREC market to protect ratepayers
Increase solar requirements – increase RPS
Decrease costs- (solar is cheaper now) – decrease the SACP
Introduce community solar
Maintain and grow the solar labor market
A-3723 demands closure of the SREC market and re-direction of ratepayer funds away from long term new solar build-out that we have today. A clear reversal of past success.
The passage of A-3723 deviates from all of the success of the market based program that is responsible for the financing of over 80,000 solar installations in New Jersey. If enacted the bill will result in a quick short-term boost in SREC payments to investors of solar in New Jersey. This has happened already in the run-up in prices from $170 to $240 in the past 6 months because of the prospect of the legislation being passed. In reality, owners of solar are being duped into supporting this legislation because of the short-term run-up in prices. In the long term it puts all solar investment in New Jersey at risk by replacing free-market mechanisms by a law that is vague in its long-term support of solar. It de-links past investment in solar from future long-term solar build out. This is a dangerous proposition for those who own solar and rely on SRECs to pay back their investment in the clean energy future of New Jersey.
Short-Term Flips – No Long-Term Path – Sorry, New Jersey
Not one segment wins in the passage of this law except for a few select solar financers. In the next few years they will be able to flip projects for huge profits to unsuspecting investors who will get caught holding the bag in the long term. New Jersey homeowners and businesses who invested in solar and relying on SRECs will be in limbo without the continuation of the SREC program. Finally, and most importantly, the environment loses, the ratepayer loses, labor loses, and the new Investor in solar loses. When the costs are calculated in the next few years it will be apparent at the magnitude of ratepayer funds that were squandered and could have been used in an efficient manner to build out our renewable energy future. The right choice is to continue with a competitive and free incentive SREC market for the benefit of everyone in New Jersey as outlined above.
This bill is not law until Governor Murphy signs it. He can also significantly change it so it retains SRECs, maintains competition, and protects current solar investors and ratepayers or veto it and start over. Most importantly, the bill needs to be changed so that ratepayer funds are used in the most efficient manner to achieve our renewable energy goals.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
As expected, the prices of the 2017 vintage New Jersey SRECs are starting to converge with the prices of the 2018 vintages. Prices for 2017 were trading in the $220 to $230 range in recent weeks and have moved down to the $170 level today. After some up and down movement in the next few months they will be trading at a $5 discount to the 2018s which are now at $175.
The sudden move happened because there was an orderly expiration of the July delivery of the 2017 vintage SREC futures contract on Intercontinental Exchange. There was over 230,000 contracts in open interest in the July 2017 contract which is close to 10% of the whole years SREC obligation by all energy suppliers. Futures contracts can exhibit volatility in the last few trading days going into expiration if there is an imbalance of physical to deliver against the futures contract. For this reason the prices were held up for a longer period of time until the contract expired. The lack of volatility in this expiration means that all sellers had procured enough SRECs to satisfy delivery in the GATs by Monday, July, 31st.
The 2017 energy year is expected to be oversupplied by 7%. In the 2018 energy year it is expected that the installed solar in the whole state will oversupply the energy companies mandated compliance by about 14%. This is the reason why the 2018 vintage is trading at a discount to the 2017 prices last year. Of course the prices will move during the year as we see how much new solar is installed.
As always, we stress to our solar owners to sell consistently during the year to get an average price and not hold.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
After rallying to $250 in the beginning of January the SRECs moved down to $210 and are now steady in the $225 to $230 range.
SREC Supply / Demand for This Year
SREC supply for RY 2017 is expected to be sufficient. According to our estimates, SRECs produced this year ending in May along with supply left over from previous years will be about 4% more than what is needed by electricity suppliers. This justifies the prices that have been trading in the $200 to $250 range during the past few months.
SREC prices for Future Years – (Actual)
The following are current prices for SRECs trading between large commercial solar owners and electricity suppliers in the over-the-counter market. You will notice that prices decrease in coming years.
Ry 2018: $200 (June 2017 to May 2018) Ry 2019: $160 (June 2018 to May 2019) Ry 2020: $130 (June 2019 to May 2020) Ry 2021: $85 (June 2020 to May 2021)
3 year strip: $163
4 year strip: $143
SREC oversupply estimates for Future Years – (Flett Exchange Estimates)
Based on our supply / demand models we expect the supply of SRECs to continue to outpace the requirements in an accelerated fashion. This oversupply will put pressure on SREC prices. An oversupply of SRECs is a result of investors and developers installing more solar than is required by law. The only two ways to avoid an oversupply is for:
1. Investors and developers to not overbuild 2. The legislature in New Jersey pass a law to increase the solar requirements. (This happened in 2012)
Multiple years of overdevelopment of solar creates an overabundance of SRECs that never go away.
Ry 2017: 4% oversupply Ry 2018: 10% oversupply Ry 2019: 20% oversupply Ry 2020: 34% oversupply Ry 2021: 50% oversupply
SREC Price Projections for Future years – (Flett Exchange Estimates)
If the oversupply estimates in our models are correct our price estimates are as follows. We expect a drastic drop-off to occur between 2019 and 2020. Our low price may seem extreme but we base it on price action in other states that have become oversupplied – PA – $5, MD $8 and OH – $6.
Ry 2018: $140-$220 (this starts this summer) Ry 2019: $90 to $180 Ry 2020: $40 to $130 RY 2021 on $5 to $85
3 year strip estimate: (ry 18 – ry 20): $90 to $176
4 year strip estimate (ry 18 to ry21): $55 to $123
Summary:
The goals for solar installations set out by New Jersey law under the SREC program have worked perfectly. The free market price of SRECs has saved the ratepayers of New Jersey hundreds of millions of dollars while it encouraged new investors to install new solar at ever cheaper prices. Outside of a minority of failed (overpriced) fixed price SREC contracts encouraged by solar developers with the blessing of the Board of Public Utilities the ratepayers of New Jersey have benefited from the freely traded SREC market and will continue to benefit for decades to come. Based on SREC market prices the solar development industry in New Jersey passed its inflection point last year and is now starting to turn. This is caused by the decrease in the rate of new solar development under current legislation. For years the legislation encouraged significant new solar development during a time when solar costs have decreased significantly. That law now calls for a lower amount of solar growth. Developers and investors must re-calibrate and develop at a slower pace equal to the mandates by this law. If not, solar development in New Jersey will halt and all investors will suffer. Ratepayers will have to pay more in the future in solar subsidies to jump-start new solar development if confidence by investors in New Jersey solar is lost.
If you already own solar in New Jersey and rely on SREC payments to make your investment whole you are at the mercy of new solar investors. If the new investors in solar install at a cheaper price or are willing to accept a lower return on capital then they will continue to push SREC prices lower. That is only fair since it is an open market and anyone is allowed to invest in solar on their property.
Outside of a purely competitive, slight oversupply of SRECs caused by market efficiency there are two (2) controllable factors that can cause an overinvestment above legislated goals. If they are not addressed the result will be a protracted oversupply of SRECs ($10 SRECs): (Prices in NJ dropped to $60 in 2012 when the developers overbuilt.)
1. A lack of knowledge by new solar investors about the amount of solar required under the law. Let’s get down to it. Solar is sold by salesmen. If they want to make the sale they will not give the customer the full story about the risk of SREC oversupply and their ability to repay with SRECs. (To most solar sales people credit they probably don’t know the risk themselves) By the time most people who are signing contracts this spring get the array installed they will get a year or less of $200 SRECs. Their systems will just add to the oversupply of SRECs.
2. Fixed, long term, above market priced contracts for SREC granted by the BPU are being awarded and will continue to be awarded as the market gets oversupplied. The New Jersey Board of Public Utilities actually awarded 10 year fixed contracts just recently at $165 for 10 years fixed. Above market pricing similar to this also happened in 2011 exacerbating the oversupply of solar at that time. The overpayment of SRECs above the free market is absorbed by ratepayers which they will never know. Equally damaged by these contracts are solar investors like yourself that are not lucky enough to have an installation available at the time of the BPU solicitation. This will add uncompetitive solar installations to an oversupplied market and force SREC prices lower for all other solar investors outside of those whose losses are absorbed by the ratepayers.
Call to Action:
As for solar owners we suggest to sell your SRECs on a monthly basis and not bank any SRECs. The sale of your SRECs at prices in this $200+ area will be needed to average out your sales over the years. Future years need to be discounted based on the high probability of significantly lower prices 3+ years out. In the beginning of August your first 2018 SRECs will be minted. Those prices will be $20 to $30 less than the ones you will be selling in July. We suggest to not hold those and continuously sell them even if they are under $200. Remember, our price estimate for ry 18 (June 2017 to May 2018) is $140 to $220. With that estimate a $190 SREC is still in the middle of the range.
As we have since 2007, we will continue to monitor the New Jersey SREC market for you, provide transparent and actionable pricing via our exchange and offer information to help you make the best of your solar investment. In 2012 members of our team testified numerous times at the New Jersey Statehouse during the last update to solar legislation. Hopefully, through transparency of information the market will not get oversupplied as it was last time and solar investment can proceed at the legislated pace. We will update you with SREC supply and price projections as they develop.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
NEW JERSEY SREC PRICES END A FOUR YEAR RALLY The four year uptrend in spot New Jersey SREC prices between 2012 and early 2016 has officially ended. The market is now in a downtrend. It is making new lows and subsequently lower highs on any rallies. We should expect to see the market find new lows and trade off of varying levels of support as it digests and interprets how new investors react to lower SREC values. Will they throttle back and keep in line with State requirements or will they overbuild like they have in the past? Prices trended higher from a low of $60 in the fall of 2012 to a high of $290.09 on June 13th of 2016. This can be attributed to the adjustment in the law governing solar development which was passed in 2012. The law achieved its goals up to this point as the amount of solar installed has almost exactly matched solar growth rates in the past few years. Prices are now under $220. Short-term support is at $200 and $180. If the market holds $200 now we may not see the $180 level until next spring after the BGS auction. The end of the rally occurred as there were enough SRECs to satisfy all of the energy companies’ compliance needs for the RY 2016 deadline on November 1st. After hitting a low of $235 in August, RY 2016 SRECs led the way and rallied up to $265 briefly on September 27th. At that time the buying for the RY 2016 compliance dried up and energy companies could relax and take their time procuring SRECs for next years’ compliance. Requirements for SRECs increase next year however, new solar installations have been running higher than the State requirement which will produce enough of a cushion so that buyers do not have to worry about a shortfall. Many sellers are still selling their SRECs on the spot market however, buyers and sellers of large blocks of SRECs have been actively negotiating 3 year deals at the $180 level for RY 17, 18 and 19 SRECs. The prices implied for each of these individual years shows where the market prices SRECs in the future: NJ2017=$220 NJ2018=$200 NJ2019=$120 Due to the steep discount that the market is placing on SRECs three years out there is less incentive to bank and hold SRECs as sellers have in the past. Year after year there has been significant SREC buying in February as winners of the statewide BGS auction hedge out a portion of their 3 year obligations. The question each year is if prices will rally because of the BGS auction. When the market was in a bull trend there was always a rally on each BGS auction. Now that the clear uptrend has stalled that rally may not repeat itself. At least possibly not to the same degree. Between now and the end of this calendar year we can expect SREC prices to find a support level in anticipation of the BGS buying. Support levels are $200 and $180. A BGS rally off those levels will run into resistance at $220 and $235. Based on current market conditions we recommend to our sellers to sell spot SRECs on a continual basis, especially if the market rallies.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
After reaching a four year high price of $290.09 on June 13th New Jersey SREC prices have dropped $50 to the $240 level.
There are two major reasons why the uptrend has stalled and prices have corrected slightly:
Most New Jersey electricity compliance buyers have finished procuring their RY 2016 SRECs. Buyers needed to purchase and retire approximately 2,090,000 SRECs (They could use any SRECs generated between August of 2012 and May of 2016). In GATS there are 2,167,382 SRECs available which leaves about a 77,000 oversupply. There will be less than that available because some sellers hold their SRECs and some have been purchased for hedging purposes by other buyers. This leaves the RY 16 market almost “balanced”. This justifies last year’s uptrend and previous $290.09 high price. Now that they have finished buying for this year the buyers seem to be stepping back and taking their time. They now have over a year to buy for their next compliance.
The New Jersey BPU reported an increase in the amount of solar being installed. In July they released a report showing upward adjustments to the amount of solar installed last year along with a few completions of large scale grid connect projects. Since February the BPU has reported an additional 186 Mw installed which has also led to the price correction.
It is not expected that the market will drop quickly to levels seen in 2012 in the next year. The 2012 law throttled back the amount of large scale solar farms that can quickly oversupply an SREC market. Also, there has been a shift to more very small residential installations in the last few years and less medium size commercial installations. A surprise oversupply is unlikely however, we need to be on the lookout for a steady increase in supply. The BPU reports new solar installations monthly.
As for prices, sellers should not rely on steady uptrends like they saw in the 2013 – 2016 timeframe. Prices will more than likely swing like we have seen recently. We suggest to our sellers to sell if there is any short-term appreciation and if not, make sure that a periodic selling approach is taken to mitigate holding too many SRECs on a protracted down-trend.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
New Jersey SREC Prices Slip But Remain Close to Highs The New Jersey SREC market reached a four year high on February 5th with a settlement of $289.78 on the Flett Exchange trading platform. Prices retraced $14 back down to $275 and are now trading close to $280 today. Why have SREC prices risen? SREC prices have remained stable and risen during the past few years because the majority of new solar installed in New Jersey are small lease systems on single family homes as opposed to large scale solar farms which can at times take up 50 or more acres of farmland. Legislation passed in 2012 limited the amount of cheaper large scale grid connect projects in favor for net metered projects (solar on or next to buildings that offset that buildings electricity). Smaller systems cost more than large systems to build so they need a higher SREC price. However, with spot SREC prices at $280 to $290 and 3 year SREC contracts at $245 we should see an increase in new solar construction in the next year. What are solar owners doing with their SRECS? Solar owners in New Jersey are taking advantage of the rising SREC prices and are selling any banked SRECs that they have accumulated along with any that they produce on a month to month basis. We suggest to our solar owners to sell on a consistent basis, especially as prices rise. How do I sell? If you are a Flett Exchange customer and would like to sell your SRECs for immediate payment and delivery you can always log into your Flett Exchange account or give us a call on the trading desk at 201-209-0234. If you are a new customer you can register for an account here. If you have a large amount of SRECs call and we will try to sell your SRECs at higher block prices. The Quickest and Easiest way to sell: Customers can also check out our “sell now price” on our website and transfer your SRECs to “Flett Exchange, LLC” at that price on GATS. We will take care of the rest for you and mail your check or send your proceeds via ACH. Thank you for your continued business over the years! Mike, Shean, Kevin, Brian and Mike
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
New Jersey SRECs Rally to Highest Levels in 4 Years! The New Jersey SREC market rallied to the highest levels in four years yesterday. The previous high was $282.58 on December 29, 2011 on the 2012 vintage. Yesterdays’ settlement on Flett Exchange surpassed it by just 23 cents at $282.81 for the spot 2016 vintage. The 2016 vintage SREC has rallied a whopping 30% on the spot market since it started trading in July at $220 on Flett Exchange. Where have SREC prices traded in previous years? You can check out daily historical pricing and charts for New Jersey SRECs on Flett Exchange by clicking here. Our pricing goes back almost 9 years to June of 2007. All our pricing is based on the volume weighted average price of actual spot sales of SRECs by solar owners. Why have SREC prices gone up? Flett Exchange sellers, who are all solar owners, have been actively selling into this rally to take advantage of the high prices. Power companies, who are required to provide a portion of their electricity sales from solar, have been competitively procuring SRECs thus pushing prices higher. The fundamental rise in prices is partially attributable to the low rate of solar installations in New Jersey during the last year. Also, prices have risen in past years in the winter due to the hedging for a large electricity auction which is conducted each year. This may have been the case again this year giving solar owners an opportunity to capitalize on high prices once again. What should I do if I have SRECs? We suggest to our sellers to continue to sell at these high prices. High SREC prices encourage new solar to be installed at a higher rate because those investors will achieve higher returns on their investment. There is generally a lag of over a year in new investment in solar in response to high SREC prices. We should expect an increase in new solar installations this year which should have a dampening effect on New Jersey SREC prices. What is the highest price New Jersey SRECs can go to? The SACP – or the price level that energy companies will be fined for not buying enough SRECs this year – is $323. In prior years, when there were not enough SRECs produced to satisfy the amount required, (which is not the case this year) the market did not trade at the SACP. Most buyers only paid 95% of that value. 95% of this years’ cap is $306.85 for those of you who are looking for an upside objective. How do I sell? If you are a Flett Exchange customer and would like to sell your SRECs for immediate payment and delivery you can always log into your Flett Exchange account or give us a call on the trading desk at 201-209-0234. If you are a new customer you can register for an account here. If you have a large amount of SRECs call and we will try to sell your SRECs at higher block prices. The Quickest and Easiest way to sell: Customers can also check out our “sell now price” on our website and transfer your SRECs to “Flett Exchange, LLC” at that price on GATS. We will take care of the rest for you and mail your check or send your proceeds via ACH. Thank you for your continued business over the years! Mike, Shean, Kevin, Brian and Mike
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
New Jersey SREC prices rallied over $240 early this week to reach the highest levels since 2012! Prices are up over 30% from this time last year.
Prices are strong because the amount of solar installed in New Jersey on a monthly basis as reported by the Office of Clean Energy this year has been low. During the last 6 months there were only 13 Mw installed on an average basis on the reports. Monthly builds near 20Mw over a longer period of time is what is estimated to be needed to supply the energy companies with their mandated SREC requirement.
The overall supply for SRECs is less this year because most of the oversupply has been retired as a result of the legislation enacted in 2012. It requires a significant increase in SREC obligations in the short term. Also, that same legislation limited the installation of new large scale solar farms that led to the majority of the SREC crash in 2012.
We do expect to see a backlog of new larger solar farms hit the monthly installation numbers in the next few months along with other new projects that are vying for EDC fixed rate contracts. In the past solar developers have waited to install new solar in order to be eligible for the BPU mandated 10 year SREC contracts that shift risk from solar owner to the ratepayer.
Depending upon when this backlog of projects hits the market will determine a potential top of the market. If it does not happen for a few months the market may continue to rally. If it happens this month we may be nearing a potential top of the market.
We suggest to our solar owners to sell SRECs on a consistent basis to better achieve an average SREC price over the year. This also limits the risk of not selling your SRECs and the prices dropping as they did 3 years ago.
Flett Exchange - New Jersey SREC Price / Supply November 2015
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
New Jersey SREC update August 2015: The first of the energy year 2016 SRECs were minted on July 31st. Prices continue to remain strong in the mid $220s. It appears that there is still active buying by electric companies for their 2015 compliance which is due this fall. Sellers continue to sell at these high prices and volume has been robust. Most sellers that have accumulated SRECs are selling which is why the exchange has seen selling activity in all energy years – 2013, 2014, 2015 and now 2016. SREC Prices Remain High on Lower New Solar Installations On July 23rd the NJ Office of Clean Energy released their NJ_Solar_Market_Update_06_30_2015-3 of how much solar was installed in June. There were 14.4 Mw installed bringing the statewide total capacity to 1,500.7 Mw. This is another relatively light month of new solar installations. The average amount of new solar installed during the last six months was only 11.5/Mw. These low monthly installation reports continue to have a bullish effect on the SREC prices. (We feel there is some type of disconnect and that a large amount of projects will hit at any month.) BPU Auction Clears at $246.42 The BPU conducted an auction for 42,000 SRECs on July 14th and the clearing price was $246.42. This was more than $10 over the price traded in the market which may indicate that there were a few buyers that were being forced to pay up to make compliance for energy year 2015. Prices have been $15 to $20 below that level since the auction. Where are prices going from here? As long as buyers need SRECs for their ry 15 compliance due this fall the prices will remain strong. Once they are done we expect the market to pull back to $200 or less this fall. We also expect a very large new solar installation number to hit in the next few months. It just does not make sense that solar installations are so low on a monthly basis while the economics (low installation costs and high SREC prices) are so favorable. If new installations are being withheld they will have to hit the states reports at some time. In the meantime the current numbers from the state indicate a continually strong SREC market.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
SREC prices have risen 29% to $214.72 average in February 2015 compared to $166.30 in February 2014. Prices are currently trading $200 for new SRECs for immediate payment and delivery on the Flett Exchange trading platform. This is off from 3 year highs of $220 reached last month.
Prices rose in January and February due to the active hedging leading up to and after the BGS auction in which energy providers contract to sell electricity to New Jersey customers who do not choose a 3rd party supplier. The auction winners competitively manage their SREC obligations by buying spot and long term contracts from solar owners and shovel-ready solar projects. In another closely watched auction Electric Distribution companies of New Jersey sold 32,766 SRECs yesterday at a clearing price of $211.01. (Larger volumes tend to get a premium on the auctions)
The New Jersey Office of Clean Energy reported that 17.8 Mw of solar was installed in February bringing the total up to 1,456 Mw of operating solar. This amount of solar almost exactly matches the average amount of solar installed during the past 6, 12 and 24 months. It appears that the solar development in New Jersey is under control and is developing in line with state growth goals set out by legislation.
Prices for SRECs may drop in the future if the development exceeds the state mandates which is why we monitor the monthly build rates. We suggest to sell your SRECs on a consistent basis when prices are high like they are now.
The following is a chart showing SREC prices compared to monthly install rates.
New Jersey Solar - SREC Prices and Mw Installation Rates - February 2015
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
New Jersey SREC Prices Reach 3 Year Highs! New Jersey SREC prices have rallied to the highest level seen since January 2012! SRECs are trading above $200 for both 2014 and 2015 energy years. Prices have rallied for a few reasons: 1. Legislation passed by the Democrats and signed into law by Governor Christie in the summer of 2012 to save the solar market is working. 2. The new solar installations have been very light on a monthly basis as reported by the New Jersey Board of Public Utilities. Only 7.7 Mw were installed in November. 3. Prices have rallied in prior years at this time of the year due to energy companies buying SRECs for hedging purposes. 4. There are not as many SRECs available for sale on the spot market the first half of the energy year because many of the large installations use their first SRECs to deliver against long term contracts. We expect the rate of solar installations to pick up in the coming months due to the favorable economics of solar investing in New Jersey – low panel prices coupled with higher SRECs and historically high electricity prices in New Jersey. If there are high installation rates on a continual basis it will lead to lower SREC prices in the future. In the meantime prices seem to be on an up-trend. If you would like to take advantage of the higher prices and sell any of your SRECs you have a few options at Flett Exchange: 1. Log into your account on the Flett Exchange Trading Platform to list your SRECs for sale at any price you like. 2. Check our ” Sell Now Price” on our Website and transfer your SRECs to Flett Exchange LLC on GATs. 3. Call our trading desk at 201-209-0234 and speak to one of our brokers who can help you with GATs transfers. 4. Large volume sellers can call our brokerage desk (201-209-0234) for direct OTC spot and forward bilateral contracts. As always, we remit payment within 24 hours for spot transactions.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The first of the new 2015 Energy Year SRECs were minted in GATS last Friday. Prices for spot SREC sales during the last year rallied in all of the major SREC markets covered by Flett Exchange. This was mostly due to new solar development being under control along with successful legislative action taking effect in New Jersey. Solar owners were able to sell their SRECs at higher prices in all markets compared to the previous year.
Here are some pricing highlights:
RY 2013 RY 2014
New Jersey: $100.70 $155.65
Pennsylvania: $14.05 $35.66
Maryland: $126.15 $131.56
DC: $433.22 $466.60
(These prices are the average daily Flett Exchange settlement prices for both energy years. A listing of settlement prices back to 2007 can be found at
The market price for SRECs for the next 12 months will be determined by 3 major factors:
1. The rate and cost of new solar installed
2. The buying/hedging activity of the electric companies
3. Legislative changes or new government incentives/policies
We suggest to our customers to sell on a consistent basis – especially if prices are at the higher end of the range. The current prices in New Jersey, which are in the $155 to $165 range, represent a subsidy of 15 to 16 cents per kilowatt hour which is almost what you would pay without solar! Remember, the idea of an SREC market is to encourage new solar development while financing previous development. It is a delicate balance subject to open competition. If solar becomes less expensive, and it has, SREC prices over the long term will continue to drop. The open and competitive aspect of SRECs allows new entrants to invest and install new solar. If the cost of installing new solar becomes less expensive (this is the reason why SREC prices have dropped over the years) new solar investors will be willing to accept a lower SREC price – even if you do not.
Flett Exchange customers can log into their personal account to sell and see the following information:
• Historic SREC charts back to 2006 • Personal SREC sales and revenue charts for all Flett Exchange transactions (you can export to PDF or excel for your accountant or your own records) • Live SREC prices • Sell your SRECs like you would sell a stock on our market with over 6,500 other solar owners and dozens of electric company buyers
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
New Jersey SREC prices have been strong this year and are currently at the $180 level for the 2014 vintage SRECs. Prices have been strong due to compliance buying by energy providers. After the buying for this years’ compliance is done we expect SREC prices to drop back down. Prices could drop to $120 or lower by this fall/winter. We suggest to our sellers that you sell any accumulated SRECs into this price rally. There is a chance that prices could continue to move up a little more this summer however, we suggest to take advantage of these high prices in case they drop. In the past we have found that sellers that miss selling at the high prices tend to hold SRECs for over a year and resort to hoping and praying for prices to recover. If trends continue as they have during the past few years solar will continue to become cheaper and a lower SREC value will be needed to convince new investors to build more solar. CHECK YOUR GATS ACCOUNT FOR OLDER SRECS BEFORE THEY EXPIRE! Some solar generators hold SRECs for many years. If you have old Energy Year 2012 (generated from June 2011 to May 2012) solar credits sitting in your GATs account you must sell them because if you do not they will lose significant value soon! Energy companies cannot use these SRECs for solar compliance after this fall. Prices for these older SRECs trade at a slight discount at this time. Prices are listed in real time on our Flett Exchange trading platform and also on our website. If you have any of these older SRECs sell them on our platform or call us and we can walk you through the sales process. We have found energy companies willing to purchase these SRECs at this time. Flett Exchange customers can sell their SRECs in a variety of ways. 1. You can call us in the office at 201-209-0234 2. Check the Sell Now Price (for the correct SREC year) on our website and send the SRECs to us on GATS 3. Do it all on-line by accessing our trading platform. We will process your payment the same day. Customers can also place orders to sell SRECs at higher prices by either calling our trading desk at 201 209 0234 or by logging on to their Flett Exchange account and placing their orders themselves. Checks go out the same day. Established customers can request EFT.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
It has been 3 months since our last New Jersey SREC market update. During that time SREC prices moved up from the $145 area in December 2013 to a high of $185 in February 2014 and have moved back down to the mid to high $150s. $185 was the highest price for New Jersey SRECs since May 2012. Many of our customers who have been holding off for higher pricing participated on this move and sold many banked SRECs. Upward price movement and market firmness can be attributed to the compliance requirement of close to 1,600,000 SRECs due this fall. This requirement is significantly higher than last year’s requirement of 596,000. It is the first compliance year covered under the solar legislation passed in 2012. There will be more than enough SRECs minted and available in GATS to satisfy this fall’s requirement. Here are the existing and expected SRECs: 2012 in GATS= 45,860 2013 in GATS = 763,487 2014 in GATS = 790,029 (June 2013 to Jan 2014 production) Balance of 2014= 450,000 (estimate of Feb to May 2014 production with Feb light due to snow) SREC supply for 2014 compliance= 2,049,376 (Estimated available) Estimated ry 2014 SREC demand= 1,600,000 (based on 78 Gigawatt hours of NJ electric consumption) Estimated ry 2014 oversupply= 449,376 Based solely on the estimated available SRECs above, it would appear that the market should remain stable to weak as the spring and summer arrive and buyers finish their SREC purchases. However, there are a host of other factors that can have market-moving effects. The following is a list of bullish and bearish factors that may have an impact on pricing in the next 6 to 7 months as we approach compliance: BULLISH FACTORS: 1. It is hard to buy SRECs in bulk in a short amount of time. If some buyers wait until the end of the year to finish buying for their 2014 compliance they may push the market higher in search of SRECs. 2. Buyers hedging for future years purchase SRECs in the spot market and hold them for future compliance years. This reduces the pool of available SRECs for buyers that need them for the October 2014 deadline. 3. 100% of the SRECs are never sold each year. There are a variety of reasons why. Some buyers feel they are worth more so they don’t sell, some don’t enter meter readings in time and some altogether forget about them (it is hard to believe but some people or businesses don’t need the money right away- must be nice!) 4. Speculative buyers may purchase SRECs from solar owners and force compliance buyers to pay higher prices as the compliance deadline approaches. BEARISH FACTORS: 1. If prices go up too much compliance buyers who have bought spot SRECs for future compliance years may choose to use those SRECs for this compliance year or sell them to other compliance buyers to do the same. 2. SREC markets are based on law and confidence in the law. If there is any potential change in law that may possibly reduce the need to purchase SRECs in future years then buyers will not buy any more SRECs from solar owners other than what they need immediately. 3. If it appears that a dramatic increase in solar installations may happen like it has in the past, (due to overdevelopment) then buyers will back off of the spot market once they have procured their 2014 compliance needs. (no risk EDC contracts, large grid connect permissions from the BPU and a steady increase in lease installations have a good chance of oversupplying the market) As you can see, there are many factors that can come into play in the pricing of SRECs going into compliance. We try to give our customers, both buyers and sellers, as much information as possible. You can always see our live pricing on our website along with historical pricing going back to 2007. If you log into your Flett Exchange account you can transact SRECs 24 hours a day, see all of your sales history along with historical graphs. Also, feel free to call us directly with any questions or if you need help transferring SRECs on GATS. As always our sellers are paid the same day via check or EFT – your choice!
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The rate of new solar installations in New Jersey has been dropping for over a year. This low build rate coupled with the increasing SREC demand put in place by legislation over a year ago is why SREC prices are up 100% from a year ago. Prices for new SRECs are currently in the $140s.
There were only 13 Mw of new solar installed in New Jersey for the month of November. This marks 6 months in a row of low installations. As we have mentioned before, a monthly build rate of 15 to 17Mw a month over the next few years will keep the New Jersey SREC market “balanced”. The average build rate for the last 6 months was only 11.6 Mw.
Why is there less new solar being built in NJ now?
The low build rates today can be attributed to the low SREC prices last year. The projects being turned on now were in the planning phases about a year ago. Since SREC prices were under $100 very few projects were financeable. We can expect the build rate to increase in the next 6 to 12 months because of the higher SREC prices that we are seeing now.
The amount of new solar is likely to increase next year.
There will be an increase of installations due to another round of EDC (Electric Distribution Company) fixed rate SREC solicitations next year. These solicitations shift SREC risk away from solar developers and onto the ratepayers. Since there is no financial risk these programs are guaranteed to be oversubscribed.
Over the next 3 years there will also be a number of large grid connect projects installed. These projects are typically 7Mw each and will produce thousands of SRECs a year. The solar legislation that passed in the summer of 2012 allowed for a limited amount of grid connect solar to be installed. A limit was passed on new grid connect solar to help prevent a quick oversupply like the one that led to a collapse 2 years ago.
Where are Prices going?
New Jersey SREC prices should stay stable going into the New Year. Many sellers have been attempting to sell at $150 and it appears that it may happen again soon. The trend is slightly higher; however, it will be limited as buyers are offered multi-year contracts by new solar installations. Most new solar can be installed with a 3 to 5 years price in the $140 range. This shift from spot markets to multi-year contracts should limit the ultimate upside of the spot SREC market.
The SREC market is still oversupplied for the current year; however, the new SREC requirements put into place by legislation are just starting to kick in. Electricity companies in New Jersey will need to procure over 1,400,000 SRECs going forward each year compared to only 770,000 last year. We recommend to sell SRECs on a continual basis, especially as prices move up. If you have a large facility (250kw or larger) we recommend that you lock into a long term contract as the prices rise. Flett Exchange brokers long term contracts for its customers directly with energy companies.
If you would like to sell any SRECs before the end of the year feel free to log on and sell or give us a call.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
Prices for New Jersey solar renewable energy certificates (SRECs) have risen in the past few months. On October 4th the 2014 energy year SRECs settled at $149.63 on the Flett Exchange Trading Platform. This is the highest price yet for the 2014 SRECs on the spot market, 30% higher than the low price of $115 on July 16th and significantly higher than the $60 all-time low SREC price last October. The Electric Distribution Companies (PSE&G, Atlantic City Electric, Jersey Central Power & Light and Rockland Electric) conducted a large SREC auction on October 17th for 76,417 energy year 2014 SRECs. It cleared at $147.00 per SREC. Prices as of this publication are slightly lower.
SREC prices are steady now because of 2 factors:
1. Legislation passed in July of 2012 dramatically increased the amount of SRECs that the energy companies need to procure on a yearly basis. Demand for SRECs this energy year will be close to 1.5 million SRECs which is up from the previous legislation which required 772,000.
2. The pace of solar development was slow in the past year due to the lower SREC prices. There were only 8 Mw of new solar activated per month in August and September. The average amount of solar in the last 6 months was only 14.9 Mw per month compared to 28.5 Mw a month at this time last year. It is estimated that 15-17 Mw is needed per month to achieve a perfectly “balanced” market.
The stable and upward pricing should be tempered eventually by the following:
1. It is expected that the monthly install rate should increase next year due to the rising SREC prices.
2. The New Jersey Board of Public Utilities approved another round of Solar Loans and fixed rate Electric Distribution Company SREC contracts for the next year. These contracts shift all risk away from solar developers and onto the rate-payers so it is virtually guaranteed that the build-rate will increase during the next year.
We don’t expect spot SREC prices to experience a new downtrend much at all during the next 8 to 10 months. SREC demand should remain strong due to hedging activity on the part of the energy companies.
We expect there to be periodic, short-lived rallies during the year. With that in mind, we suggest that SREC producers sell every time the market moves up. In the past, rallies in the SREC market only last a few days because it is usually a result of a buyer procuring large volumes. We suggest that if you have a price that you would like to sell your SRECs you should list them for sale on the Flett Exchange trading platform or call us 201-209-0234 to list them for you. This will ensure that you do not miss the selling opportunities.
The stable SREC prices right now will invoke developers to install solar at an increasing rate so it is highly unlikely for the SREC market to stay at high prices for a prolonged period of time. If the spot SREC prices get too high energy companies will contract directly with new solar developers for their next few years of SRECs. The cost to install solar is very low and new solar can be installed with SREC prices in the mid $100s on reasonably priced projects if the developer can get a 3-5 year contract. If prices move too high in the spot market buyers will hedge in the 3- 5 year market as they have in the past. We highly doubt we will see another 80 mw installed in one month like we did in February of 2012 due to the constraints put on large solar farms but it is relatively easy to maintain 20 to 25 Mw per month. That level of new solar installations on a monthly basis should appear again in about eight months to a year and may reverse this stable SREC market.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The New Jersey Office of Clean Energy released the July solar installations last week. There are now 23,076 solar installations in the state with a total capacity of 1,106 Mw. There were only 11.5 Mw installed in July. This is the lowest amount of solar installed in one month since May of 2011. A continued trend of low installation months such as this should support the SREC market.
The amount of solar installed on a monthly basis is one of the most important tools used by market observers to determine if the New Jersey solar market will be overdeveloped compared to goals set by solar legislation. In previous years development outpaced sate goals. It is estimated that an average of 15 to 17 Mw a month is the pace of development needed. If more solar is installed than needed the SREC market can crash as it has in the past. If the pace of installation declines the SREC market will increase to encourage more solar development.
As shown by the chart above, the monthly rate of installations has been steadily decreasing. The 6 and 12 month moving averages are close at 21.5 mw per month. In early 2012 the 6 month average was as high as 47Mw per month!
SREC pricing has been steady this year. We attribute this to 2 main factors. The first is the controlled pace of development and the second is electric suppliers hedging activities in preparation for the increase of SRECs required for energy year 2014. SREC demand increases over 140% from 596,000 in energy year 2013 to approximately 1,440,000 in energy year 2014. Energy year 2014 just started in June.
Legislation signed into law last year rescued the New Jersey solar market from collapse in both solar jobs and values of SRECs used by investors in solar projects. Those investors are homeowners, businesses and schools in New Jersey with solar. Ratepayers without solar who are obligated to buy SRECs due to previous commitments set forth by the BPU also benefitted from the legislation.
In previous years the fall has been a time of light SREC volume due to weak SREC prices. We do not expect the market to drop this fall anywhere close to the $60 level that it had last year due to the above factors. Electric suppliers have been active in the spot market hedging forward production due to the fact that SRECs now have a 5 year life. They will most likely continue to procure SRECs at a steady pace in the spot market. We expect there to be an increased interest in buyers procuring 2 and 3 year contracts from large solar facility owners. (Flett Exchange is active in brokering both spot and forward contracts directly between electric companies and solar owners)
As always, we encourage solar owners to sell consistently during the year. If prices increase you should sell your production forward for 2 to 3 years.
If you have a large volume (100, 500, 1,000) of spot SRECs to sell call us directly on the trading desk. For large volume the prices are typically a few dollars over our spot price on the screen, we do not charge you commission, you get paid the same day and you do not have to execute pages of contracts.
We would like to thank all of our customers for your business. Use of our exchange helps us bring market transparency to the New Jersey SREC market. This helps both buyers and sellers make the market more efficient thus bringing more solar to New Jersey!
The New Jersey Office of Clean Energy reported that 18 Mw of solar was installed during the month of March. This brings the installed capacity of solar in New Jersey to 1,026Mw. There are now 20,887 solar arrays in operation statewide.
NJ Solar - Mw Installed - March 2013
The installation of 18 Mw in March reinforces the downward trend of solar installations in New Jersey. The average rate of installations need to be in the 15 to 17Mw per month range to match goals set out by the state. If the installation rate stays at this level it is expected that the SREC market will continue to stabilize.
Upon the release of this news by the New Jersey Office of Clean Energy the SREC market moved up $5. Prices for immediate delivery of SRECs are now $110 on the Flett Exchange marketplace. More about Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 5,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The New Jersey Office of Clean Energy reported that 35 Mw of solar was installed during the month of February. This brings the installed capacity of solar in New Jersey to over 1 Gigawatt! There are now 20,340 solar arrays in operation statewide.
The 35 Mw for February was higher than expected and almost double what the state needs to install on a monthly basis in order to stay in line with the Renewable Portfolio Standard requirements. The monthly install rates are watched closely because they determine the value of the Solar Renewable Energy Credits (SRECs). It is estimated that monthly install rates need to be 15 to 17 Mw a month average to keep the market balanced.
Even though the installation rate in February was quite high, the average rate per month has been decreasing steadily. If this solar development trend continues for the next six months it will send a signal that the market is under control. One needs to keep in mind the timeframe of solar development. The 35 Mw of capacity that came on line this month represents decision making from a year to a year and a half ago. Also, some of the projects that are coming on line now are projects with fixed rate SREC contracts. Once this development pipeline runs its course the true rate of installations based on SRECs at the $100 level will be seen for the next year in the future. We should expect the average build rates to continue to decrease as the development pipeline starts to represent projects built with the current SREC prices.
As far as prices are concerned for this spring and summer we don’t expect the market to drop below $85. Every time the market has dropped below $100 the volume of selling decreases significantly. Since there is a large oversupply of SRECs compared to this year’s requirement we don’t expect prices to move much over the recent highs of $125. However, if compliance entities wait until this summer to procure their energy year 2013 SRECs that are due in the fall then there could be a short lived squeeze above $150. We only put a 10% chance of this happening.
After trading briefly over $120 the NJ 2013 vintage SREC prices are trading $105 to $110 right now. The electric distribution companies auctioned off a large block of SRECs on March 19,2013. The volumes and clearing prices are as follows:
538 NJ 2012 vintage SRECs sold for $110.15 each 57,287 NJ 2013 vintage SRECs sold for $112.01 each
As we have suggested in the past, sell your SRECs consistently during the year, especially during times of rising prices. More about Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The New Jersey SREC market rallied up in the last week. Prices for energy year 2013 SRECs broke above $120 briefly on Monday, February 4th on the Flett Exchange SREC marketplace. This is up significantly from the low of $60 in October. As of this writing bids were $110 for energy year 2013 SRECs and $100 for the older 2012 vintage SRECs.
The market has trended higher as the rate of new solar installations in New Jersey have ratcheted back down during the last six months. Also, the first effects of the new legislation that was passed in July are also being felt. This past week there was a very large electricity auction (the BGS or the Basic Generation Services Auction) in which the winners win the ability to supply electricity for a period of 3 years in New Jersey. These 3 years correspond with the increase in SREC demand that was included in that new law. Electric companies have to procure a larger amount of SRECs and as a result this has supported SREC prices recently. This accounted for the quick jump in prices during the past week.
Increased demand should keep a floor under the market however; a prolonged rally will most likely be muted because of the very low price of new solar installations. New solar installations are only half of the cost that they were as recently as 2 years ago. Some installations in New Jersey are reportedly being built for $2 to $2.50/watt. The low cost of installation means that SREC prices do not have to be much higher than $120 to $150. If SREC prices go much higher than that a large amount of new solar will be built which will in turn depress SREC prices again.
It is also expected that the next round of selling from the Electricity Distribution Companies (EDC’s) will be announced soon. The last auction was in October. This auction may have as many as 70,000 to 90,000 SRECs. It is likely that buyers will temper their bids in the spot market until after the large auction.
As we have suggested in the past, we recommend selling your SRECs on a consistent basis to average out the prices during the year.
Flett Exchange customers can sell their SRECs in a variety of ways.
3. Do it all on-line by accessing our trading platform.
We will process your payment the same day. Customers can also place orders to sell SRECs at higher prices by either calling our trading desk at 201 209 0234 or by logging on to their Flett Exchange account and placing their orders themselves.
You can always ask us a question at:
info@flettexchange.com
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The New Jersey Office of Clean Energy reported a build of 9Mw for the month of December. (This is a preliminary number as of January 7th). If this is actually close to the final number, it indicates that the solar industry in New Jersey is finally starting to develop within the goals of the Renewable Portfolio Standard RPS set out by law.
In the previous two years solar development has been in excess of the RPS goal and caused a glut of solar credits. The ratepayers in New Jersey are protected from over-development by a competitive solar credit market based on supply and demand.
The following is a chart which shows the monthly build rates of solar compared to the RPS goals set out by law. We ran a 6 and 12 month moving average as well. There is an overlay of the SREC pricing (a monthly average of Flett Exchange daily SREC settlement prices) which demonstrates the supply-
demand relationship.
More about Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
New Jersey SREC prices have rallied from an all-time low price of $60 in October to $80 most recently on the Flett Exchange trading platform. We think the market has found its bottom at this time. We think that a bottom is put in place for three main reasons: 1. selling volume decreased dramatically at the $60 level 2. solar installation rates have started to decrease 3. most new solar investment cannot be supported by SREC levels below $90. On Flett Exchange we have witnessed decreasing volume of selling at these low price levels. Many solar owners have opted to “sit it out” this fall and wait and see what prices will do. Our trading screen indicates that selling interest will pick up again at $95 and there should be resistance at that level and higher. The amount of new solar installed on a monthly basis is the largest factor determining future SREC prices in New Jersey. Remember, the whole reason SREC prices crashed is because too much solar was put in too quickly. A build rate of only 10mw per month would have satisfied the power companies’ requirements. At one point earlier this year the 12 month average was 37 Mw installed per month. October 2012 solar installations were only 16Mw which is the lowest monthly install figure since May of 2011. With the new legislation that was passed in July an average of 15 to 17Mw per month is needed. Any more than this will put the market oversupplied once again. The next two months of installations are expected to be double this number however, the overall trend is decreasing. The price of new solar installed has plummeted in the past year and it is expected to continue to decrease for the next 12 months. The decreasing cost of new solar installations means that the added revenue stream from SRECs does not have to be as high. However, a $60 SREC is not high enough to encourage most new solar development at these install prices. We suggest to our sellers to sell consistently to average out your SREC sales for the year. Don’t get overzealous! Last year some people did not sell when the market rallied and are still holding all of their SRECs. It is next to impossible to sell the high so an averaging approach reduces your risk of holding large volumes of SRECs at low prices. Flett Exchange customers can sell their SRECs in a variety of ways: 1. You can call us in the office at 201-209-0234 2. Check the price on our website www.flettexchange.com and send the SRECs to us on GATs 3. Do it all on-line by accessing our trading platform. www.flettexchange.com/portal/ You can always ask us a question at info@flettexchange.com More about Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
Jersey City, NJ:The electric distribution companies (EDC’s) sold 60,600 New Jersey SRECs at $70.50 each today in an auction. This was the price for energy year 2013 SRECs. They sold over 5,000 energy year 2012 SRECs yesterday at $70.02 each. The EDC’s sell SRECs every quarter. Based on an estimated average price of the long term contracts of $350 each, this auction produced approximately an $18 million loss for the quarter. The loss is spread out among the ratepayers. These SREC prices match what customers have been selling on the Flett Exchange trading platform during the last few weeks. Why are prices so low? Prices for New Jersey SRECs have been very weak in the past few months because of the significant oversupply due to overbuilding versus the requirement set out by the State. The oversupply is going to persist until the requirements put forth by new legislation kick in for energy year 2014. At that time SREC buying obligations increase by almost 300%. Surplus SRECs from current years will be needed in those years. The amount of solar installed dictates how many SRECs are produced. If too much solar is installed compared to New Jerseys requirements then the surplus will continue and prices will stay low. We estimate that if more than 15mw a month are installed on average then the market will be oversupplied. The average install rate in the last 4 months has been about 24 mw. This is still too much but it is down significantly from an average of over 37 mw for a one year period ending this past spring. The trend is going in the right direction to balance the market. What will make prices rise again? Install rates are expected to drop in the first quarter of next year as the project pipeline gets built out. New installs are expected to drop due to the low SREC price. If all goes to plan the market will self correct. Based on low installed costs we hear that if SRECs were to rally to $120 new installs would pick up. $70 SRECs only support the very cheapest projects. Projects at this level seem speculative based on the low rate of return at current electricity prices and SRECs. Those investors may justify their actions if they have a bullish view on solar install prices, electricity prices and SRECs. Two major events that could make solar more expensive is a heavy tariff on Chinese solar panels and a elimination of Federal tax incentives for new solar. More about Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
Solar renewable energy certificates settled at $97.75 today on the Flett Exchange SREC marketplace. This price is for immediate delivery and payment for the 2012 reporting year SRECs. The new 2013 reporting year SRECs settled at $100. This is the first time that prompt year New Jersey SRECs have settled under $100 for since May 1, 2012. The energy year 2012 SRECs traded as low as $95 during the session.
Prices have dropped because developers installed more solar than the aggressive solar mandates in New Jersey. Reporting year 2012 compliance called for 442,000 SRECs to be purchased by electric providers. Solar installations generated 689,550 SRECs, or 56% more than needed.
Buyers are still buying for their energy year 2012 compliance which ends in a few weeks. Prices do have a chance of spiking up if they have not yet purchased all they need. Flett Exchange customers can place orders above the market to take advantage of upward price spikes.
The requirements were increased significantly with the passage of the new bill last month. However, the excess SRECs do not need to be turned in until the Fall of 2014. Electric companies who need to buy SRECs are most likely waiting to see if installations over the next year stay in line with the State requirements. Developers installed 21 mw in July. This is a decrease from previous months. Installation totals will need to stay at this level or lower to decrease the likelihood of another oversupply.
Flett Exchange customers have access to the SREC market 24 hours a day via its trading platform and also broker assisted trades Monday to Friday 8am to 5pm. Sellers on Flett Exchange have sold SRECs as high as $160 since the beginning of July.
More about Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
Trenton, NJ: Governor Chris Christie signed S1925 / A2966 into law today. This law makes adjustments to the solar incentive program in New Jersey.
As most of our customers know by now, solar development in NJ during the past 2 years has exceeded State mandates for solar. Since the payments for solar production are based on a market structure called the Solar Renewable Energy Certificate (SREC), the overbuilding of solar in relation to State mandates has resulted in lower SREC prices. This had a negative effect on investors who have already installed solar and those who would like to install solar now. On the other hand, ratepayers have benefited from the low SREC payments.
Since the passage of the last solar legislation over two years ago, there were two major changes in solar that required this new legislation. First, the cost of solar panels has dropped significantly and second, the solar industry in New Jersey has increased in size and has become a job creator.
These events created a unique opportunity for lawmakers to adjust the program for the benefit of both ratepayers and solar investors. Simply put, reduce cost exposure for ratepayers over the long term while increasing solar development in the short term.
It is encouraging to see that the Christie administration and the Democratic Controlled State Senate and Assembly came to agreement on a bill that takes advantage of external changes in the solar industry (declining solar costs coupled with an increasing willingness of investors to invest in NJ solar) and brings those advantages to ratepayers and solar investors alike. With an estimated 3 billion dollars invested so far in New Jersey solar infrastructure, political stability is the most important factor in attracting cheap capital to build out the remainder of the solar capacity mandated by State Law.
Here are some of the changes implemented by the new legislation:
Increase RPS: (Renewable Portfolio Standard) Increase the amount of SRECs that need to be purchased in the short term to absorb the oversupply and maintain a higher build rate
Decrease the SACP: (Solar Alternative Compliance Payment) Lower the fine level from $600+ to $339 and lower to protect ratepayers.
Limit solar farm development
Incentivize solar development on landfills, brownfields and large net metered projects.
Aggregated net metering for electricity consumption by certain governmental bodies and school districts.
Investors new and old in New Jersey solar still have to keep in mind the risk of overbuilding in the future still exists. Many solar developers lobbied for throttle mechanisms to help guarantee profits to solar owners by crowding out future development of solar in case of an overbuild situation again. This approach was rejected. Instead, land use and consideration for net benefits for net metered projects took precedent. These were all alluded to in the Energy Master Plan put out by the Christie Administration late last year. Many people in New Jersey have started to complain about solar farms and the legislature and Governors office has heard them.
The following have had instrumental input in either creating this legislation or influencing its outcome:
Governor Chris Christies’ office Stephen M. Sweeney – Senate President Senator Bob Smith – Environment and Energy Committee Assemblyman Upendra Chivukula – Telecommunications and Utilities Committee Stefanie A. Brand, Esq – Director, Division of Rate Council – State of New Jersey
New Jersey Renewable Energy Coalition – a coalition of industry investors, headed by Tony Pizzutillo, was able to marry the objectives of both the Governor’s Energy Master Plan with Legislative leadership. Also, the Coalition successfully identified statewide labor organizations as proponents of the industry.
There are many other renewable energy coalitions, environmental groups, electricity companies, large electricity consumer advocates, labor organizations along with New Jersey business owners and individuals who worked tirelessly over the past year to advance this legislation. I don’t feel that any one group got exactly everything they wanted but in the end it is a good piece of legislation.
The only guarantee is that inputs will change as the years go on. If they are as extreme as they have been in the past two years future “tweaks” will be needed. I look forward to adding whatever information I can about SREC market structure, investors in solar and electric company interaction with RPS requirements.
The following are two articles recapping the NJ solar bill that was passed by the New Jersey Legislature. It is awaiting Governor Christies’ signature. The legislation is geared to support the Solar Renewable Energy Credit SREC market, sustain solar development in the Garden State and protect ratepayers.
SREC prices have firmed up in recent weeks in anticipation of passage of the bill. Prices rallied from $130 two weeks ago to $150 today for spot sales of energy year 2012 SRECs.
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The New Jersey Legislature passed a bill A2966 on June 25, 2012 aimed at supporting solar development in New Jersey. It is now up to Governor Christie to sign the bill into law. He has 45 days to do so.
Solar development in New Jersey during the past year exceeded the State mandates by over 300%. The result was a collapse of the prices of Solar Renewable Energy Certificates. Without a fix, solar installations would have stopped and people who invested in solar would have experienced a few years of SREC prices in the $40 to $60 range until state mandates caught up.
SREC prices for spot delivery were trading $146.56 before the bill passage and experienced a small move up after passage. Forward pricing for energy years 2013 to 2015 were trading $150 to $160 before bill passage and were “talked” up to $180 – $190 in the morning after passage. We will see if actual trading in the forwards transpires at these levels and holds.
Solar development during the next 6 – 9 months will dictate what energy providers are willing to pay for spot and forward contracts. The new State mandates are geared for a 25mw a month build compared to the old mandates which allowed for 10mw a month to be built before the market became oversupplied. The past 12 months experienced a 37mw a month build.
Electric companies are buying their last SRECs for this Septembers’ compliance period right now. If the new bill is signed into law the electric companies will need to turn in over approximately 1,600,000 SRECs in September of 2014 compared to the current requirement for the same period of 772,000. The higher mandate decreases the likelihood that SRECs will be oversupplied as they are now and allows for a quicker adoption of solar in New Jersey.
Pricing for energy year 2012 SREC are expected to stay under $200 unless solar development in the state decreases substantially over the next few months.
Ratepayers are protected in this bill by the lowering of the fine levels levied against power suppliers in the case of a shortage of SRECs. Fine levels are being reduced from $600+ to $339 starting in energy year 2014. For the most part solar development risk will still rest on developers with ratepayers reaping the benefit of decreasing solar costs and increased competition in the solar industry as they have in the past in New Jersey.
More about Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
During a town hall meeting in Haddonfield on Tuesday, June 12, Governor Christie commented on the Senate and Assembly bills aimed at stabilizing the solar industry in New Jersey.
As for the Solar bills he said: “If they pass I will sign them”. He commented that the bills “will help to continue to support the solar industry which is a big job creator in this State”.
The spot SREC market has been trading between $130 and $140 during the past week. Without the potential passage of this bill, the SREC market would have most likely been trading below the $85 low experienced a month ago. The bill calls for significant increases in SREC purchases from energy providers, but not until the fall of 2014. Long-term SREC prices will be less volatile with upper limits reduced. SREC price caps are being reduced from the $600+ range to $339 and less starting in energy year 2014. The short term upward price movement due to bill passage should be limited due to the oversupply of SRECs this year and the next year. The oversupply will presumably be used for compliance in the fall of 2014.
Power producers, who are required by law to buy SRECs, will watch the pace of solar development over the next 6 months to determine if the market will be oversupplied once again. If developers throttle back to 20 mw /month or less the SREC market should stabilize and forward 3 year pricing should be in the upper $100s to low $200 range.
During Governor Chris Christies’ speech he commented on the expected closure of the Oyster Creek Nuclear plant, which is the countries oldest, in eight years. The expansion of solar along with the addition of “3 new natural gas fired power plants will be built in New Jersey in the next 5 years” should help keep power in New Jersey “cleaner and more affordable”.
Mark Incolllingo, a volunteer member of Haddonfield’s Sustainable NJ Green Team, asked the question in the following link to a video of a town hall meeting.
Here is a link to the video posted on the Star Ledger website on NJ.com:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,400 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
Solar owners in New Jersey who rely on estimates to earn Solar Renewable Energy Certificates (SRECs) will be required to have a production meter by November 30, 2012 or they WILL NOT earn SRECs starting with December 2012 generation.
Solar owners in New Jersey with arrays that are 10kw and less were given the option to rely on estimates or they could read the actual electric generation off of a meter. The electric production of a solar array is needed to generate SRECs.
Many solar owners that have relied on estimates do not have the required production meter (ANSI) Standard C12.1-2008 compliant productions meter) and will need to have one installed by a licensed electrician. Most meters on the inverters are not acceptable. Also, the net meter provided by the electric distribution companies are not capable of providing gross data for the purposes of generating SRECs.
We recommend that you call your solar installer first to find out if you have a production meter already. In some instances solar owners may void the installer warranty if they have another entity work on the array.
Solar owners who rely on estimates can still sell their SRECs on Flett Exchange or they can subscribe for Flett REC Manager Services. With Flett REC Manager Services our customers send their meter reading to Flett Exchange and we sell the SRECs automatically. It is easy!
Click on Services on the top of this page and select “managed SREC services” or fill out the forms below and email or fax them back to flett exchange.
Within the NJ Renewable Portfolio Standard (RPS) regulatory amendments, at N.J.A.C. 14:8-2.4 Energy that qualifies for an SREC; registration requirement – under subsection (c) “June 4, 2012” was inserted for the placeholder language in the rule proposal; “effective date for this new rule”. Likewise, under subsection (c) 1. ii “June 4, 2012” was inserted replacing the “effective date for this new rule” placeholder language and the deadline for submittal of an initial registration package was updated to “July 4, 2012” replacing the placeholder language; “30 days after the effective date of this new rule”.
2. Production Meter Requirements for Solar Electricity to be eligible for SRECs in NJ’s RPS
Within the NJ Renewable Portfolio Standard (RPS) regulatory amendments, at N.J.A.C. 14:8-2.9 Issuance of RECs and SRECs - subsection (c) the date “ December 4, 2012” was inserted replacing placeholder language in the rule proposal which previously stated; “six months after the effective date of this amendment”. The effect of this new rule will be that beginning December 4, 2012 all solar facilities connected to the distribution system in New Jersey seeking eligibility to create SRECs eligible for use in NJ’s RPS must have a production meter capable of measuring generation.
The NJ RPS has historically required solar systems greater than 10 kW to submit metered production data from meters compliant with the American National Standards Institute (ANSI) Standard C12.1-2008. And NJ’s SREC Registration Program and its predecessor SREC Only-Pilot Program required all solar systems to have an ANSI compliant production meter installed regardless of system size. However, the RPS regulations had allowed solar systems less than 10 kW to create SRECs from engineering estimates and the NJCEP rebate programs did not require ANSI compliant production meters to be installed. The net meter installed by the Electric Distribution Companies are NOT capable of providing gross generation data useful for purposes of SREC creation.
As a result of the regulatory change and a lack of production metering, some solar systems less than 10 kW may require the installation ofANSIStandard C12.1-2008 compliant productions meter. The practical implications from the new regulation’s effective date of June 4 which triggers the December 4, 2012 commencement of the requirement and the processes for SREC creation at the PJM-EIS GATS tracking system require that solar electric systems lacking production meters must have them installed by November 30, 2012 to ensure that solar electric generation in December 2012 be eligible for SRECs. Board staff is working with our RE Market Managers and the staff at PJM-EIS GATS to further inform stakeholders of these changes, to provide links to lists of eligibleANSI-compliant SREC production meters, and solar installers or licensed electricians able to install them.
The long awaited legislation to fix the solar market in New Jersey has been introduced! Senator Bob Smith and Senate President Stephen Sweeney introduced Senate bill S-1925 on May 14, 2012. Here are the main points:
Increase the RPS starting in Energy Year 2014. (this is the amount of SRECs that the power companies are required to purchase)
Lower the SACP (this is the fine that power companies must pay if they cannot purchase SRECs.)
Switch the RPS to a percentage from a fixed number. (this makes it easier for power companies to plan SREC purchases and also protects ratepayers in case overall power consumption drops statewide in the future)
Limit solar farm (grid connected solar) development to 100mw per year for 3 years.
Requirement for solar farms to obtain BPU approval to receive SRECs in the future. (this will help prevent large solar farms from overbuilding and give latitude to the BPU to approve projects that meet certain criteria)
Introduction of net-metering for schools and municipalities. (this allows for these public entities to site solar in a 3 square mile radius from buildings and net-meter)
Establishes a Solar Registration Program for new projects. (this will provide a much needed insight into the pipeline of solar projects in development)
The bill addresses the recent overbuilding in solar in New Jersey and attempts to bring the SREC market back into equilibrium. It also increases the amount of solar development for the next few years to provide a robust labor market for the solar installation community. The fine levels that power companies used to have to pay have been ratcheted down to $350 from the previous $600+ range. The reduced cost of solar in the past few years has enabled the NJ program to reduce SACP levels AND increase the amount of solar installed in the short term. Depending upon the final numbers, ratepayers will realize over 3.5 billion dollars in savings, or over 1 billion dollars in NPV.(8.37%) during the course of the program out to year 2028.
The bill is a result of continuous negotiations between the Democratic legislature who sponsored the bill, union leaders, and the Governors Office with technical guidance by the BPU staff. Various segments of the solar installation community along with solar investors have been lobbying hard as well. The State of New Jersey Division of the Rate Counsel set a high bar early on in negotiations creating an “anchor” savings number of 1 billion dollars in NPV for ratepayers.
We should expect some minor revisions to the bill, especially the SACP and RPS numbers (both of which need to increase slightly), as it works its way through the legislative process. The bill will have vulnerability if any special interests try to insert last minute additions.
Needed adjustments to this bill:
SACP numbers should be moved closer to the $400 level from the proposed $350. Low SACP numbers inhibit the medium term SREC market of 2-3 years. Solar investors will be looking to sell 3 year strips in the low to mid $200 range. If the SACP is $350 or lower then electric companies will not enter into these contracts because there is no upside since a low SACP acts as their hedge. A $400 SACP gives buyers an incentive to enter into 3 year contracts in the low $200 range. Since the NJ SREC market will be working off a 600,000 oversupply of SRECs that will not need to be turned in until September of 2014 it is imperative that a 2-3 year SREC market is vibrant. There is also an increasing probability that solar panels may rise in price in the next year due to Anti-dumping tariffs against Chinese solar panels by the US Department of Commerce DOC. There is talk of a proposal that may require 70% US made parts in Chinese solar panels to qualify for the Federal investment tax credit ITC. New York State Senator Charles Schumer mentioned “China’s unfair trading practices” recently when speaking about Solar. New York State is gearing up for a solar market that will compete with New Jersey in the next few years. Too low of an SACP may drive investment dollars from NJ to NY. These are strong arguments for a $400 SACP.
The proposed increase in the amount of SRECs required to be purchased by electric companies RPS should also be increased slightly. The proposed schedule is a start but slight increases in energy years 2014 -2018 may be enough to balance the market and sustain growth.
Here is the bill:
(go to the bottom for a summary of the bill)
SENATE, No. 1925
STATE OF NEW JERSEY
215th LEGISLATURE
INTRODUCED MAY 14, 2012
Sponsored by:
Senator BOB SMITH
District 17 (Middlesex and Somerset)
Senator STEPHEN M. SWEENEY
District 3 (Cumberland, Gloucester and Salem)
SYNOPSIS
Revises certain solar renewable energy programs and requirements; provides for aggregating net metering of Class I renewable energy production on certain contiguous and non-contiguous properties owned by local government units and school districts.
CURRENT VERSION OF TEXT
As introduced.
AN ACT concerning net metering and solar renewable portfolio standards requirements and amending P.L.1999, c.23.
BE IT ENACTED by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1999, c.23 (C.48:3-51) is amended to read as follows:
3. As used in P.L.1999, c.23 (C.48:3-49 et al.):
“Assignee” means a person to which an electric public utility or another assignee assigns, sells or transfers, other than as security, all or a portion of its right to or interest in bondable transition property. Except as specifically provided in P.L.1999, c.23 (C.48:3-49 et al.), an assignee shall not be subject to the public utility requirements of Title 48 or any rules or regulations adopted pursuant thereto;
“Base load electric power generation facility” means an electric power generation facility intended to be operated at a greater than 50 percent capacity factor including, but not limited to, a combined cycle power facility and a combined heat and power facility;
“Base residual auction” means the auction conducted by PJM, as part of PJM’s reliability pricing model, three years prior to the start of the delivery year to secure electrical capacity as necessary to satisfy the capacity requirements for that delivery year;
“Basic gas supply service” means gas supply service that is provided to any customer that has not chosen an alternative gas supplier, whether or not the customer has received offers as to competitive supply options, including, but not limited to, any customer that cannot obtain such service for any reason, including non-payment for services. Basic gas supply service is not a competitive service and shall be fully regulated by the board;
“Basic generation service” or “BGS” means electric generation service that is provided, to any customer that has not chosen an alternative electric power supplier, whether or not the customer has received offers for competitive supply options, including, but not limited to, any customer that cannot obtain such service from an electric power supplier for any reason, including non-payment for services. Basic generation service is not a competitive service and shall be fully regulated by the board;
“Basic generation service provider” or “provider” means a provider of basic generation service;
“Basic generation service transition costs” means the amount by which the payments by an electric public utility for the procurement of power for basic generation service and related ancillary and administrative costs exceeds the net revenues from the basic generation service charge established by the board pursuant to section 9 of P.L.1999, c.23 (C.48:3-57) during the transition period, together with interest on the balance at the board-approved rate, that is reflected in a deferred balance account approved by the board in an order addressing the electric public utility’s unbundled rates, stranded costs, and restructuring filings pursuant to P.L.1999, c.23 (C.48:3-49 et al.). Basic generation service transition costs shall include, but are not limited to, costs of purchases from the spot market, bilateral contracts, contracts with non-utility generators, parting contracts with the purchaser of the electric public utility’s divested generation assets, short-term advance purchases, and financial instruments such as hedging, forward contracts, and options. Basic generation service transition costs shall also include the payments by an electric public utility pursuant to a competitive procurement process for basic generation service supply during the transition period, and costs of any such process used to procure the basic generation service supply;
“Board” means the New Jersey Board of Public Utilities or any successor agency;
“Bondable stranded costs” means any stranded costs or basic generation service transition costs of an electric public utility approved by the board for recovery pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.), together with, as approved by the board: (1) the cost of retiring existing debt or equity capital of the electric public utility, including accrued interest, premium and other fees, costs and charges relating thereto, with the proceeds of the financing of bondable transition property; (2) if requested by an electric public utility in its application for a bondable stranded costs rate order, federal, State and local tax liabilities associated with stranded costs recovery or basic generation service transition cost recovery or the transfer or financing of such property or both, including taxes, whose recovery period is modified by the effect of a stranded costs recovery order, a bondable stranded costs rate order or both; and (3) the costs incurred to issue, service or refinance transition bonds, including interest, acquisition or redemption premium, and other financing costs, whether paid upon issuance or over the life of the transition bonds, including, but not limited to, credit enhancements, service charges, overcollateralization, interest rate cap, swap or collar, yield maintenance, maturity guarantee or other hedging agreements, equity investments, operating costs and other related fees, costs and charges, or to assign, sell or otherwise transfer bondable transition property;
“Bondable stranded costs rate order” means one or more irrevocable written orders issued by the board pursuant to P.L.1999, c.23 (C.48:3-49 et al.) which determines the amount of bondable stranded costs and the initial amount of transition bond charges authorized to be imposed to recover such bondable stranded costs, including the costs to be financed from the proceeds of the transition bonds, as well as on-going costs associated with servicing and credit enhancing the transition bonds, and provides the electric public utility specific authority to issue or cause to be issued, directly or indirectly, transition bonds through a financing entity and related matters as provided in P.L.1999, c.23 (C.48:3-49 et al.), which order shall become effective immediately upon the written consent of the related electric public utility to such order as provided in P.L.1999, c.23 (C.48:3-49 et al.);
“Bondable transition property” means the property consisting of the irrevocable right to charge, collect and receive, and be paid from collections of, transition bond charges in the amount necessary to provide for the full recovery of bondable stranded costs which are determined to be recoverable in a bondable stranded costs rate order, all rights of the related electric public utility under such bondable stranded costs rate order including, without limitation, all rights to obtain periodic adjustments of the related transition bond charges pursuant to subsection b. of section 15 of P.L.1999, c.23 (C.48:3-64), and all revenues, collections, payments, money and proceeds arising under, or with respect to, all of the foregoing;
“British thermal unit” or “Btu” means the amount of heat required to increase the temperature of one pound of water by one degree Fahrenheit;
“Broker” means a duly licensed electric power supplier that assumes the contractual and legal responsibility for the sale of electric generation service, transmission or other services to end-use retail customers, but does not take title to any of the power sold, or a duly licensed gas supplier that assumes the contractual and legal obligation to provide gas supply service to end-use retail customers, but does not take title to the gas;
“Brownfield” means any former or current commercial or industrial site that is currently vacant or underutilized and on which there has been, or there is suspected to have been, a discharge of contaminant, as included in the “Brownfields Redevelopment Task Force” inventory, developed pursuant to section 5 of P.L.1997, c.278 (C.58:10B-23);
“Buydown” means an arrangement or arrangements involving the buyer and seller in a given power purchase contract and, in some cases third parties, for consideration to be given by the buyer in order to effectuate a reduction in the pricing, or the restructuring of other terms to reduce the overall cost of the power contract, for the remaining succeeding period of the purchased power arrangement or arrangements;
“Buyout” means an arrangement or arrangements involving the buyer and seller in a given power purchase contract and, in some cases third parties, for consideration to be given by the buyer in order to effectuate a termination of such power purchase contract;
“Class I renewable energy” means electric energy produced from solar technologies, photovoltaic technologies, wind energy, fuel cells, geothermal technologies, wave or tidal action, small scale hydropower facilities with a capacity of three megawatts or less and put into service after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and methane gas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainable manner;
“Class II renewable energy” means electric energy produced at a [resource recovery facility or] hydropower facility with a capacity of greater than three megawatts or a resource recovery facility, provided that such facility is located where retail competition is permitted and provided further that the Commissioner of Environmental Protection has determined that such facility meets the highest environmental standards and minimizes any impacts to the environment and local communities;
“Co-generation” means the sequential production of electricity and steam or other forms of useful energy used for industrial or commercial heating and cooling purposes;
“Combined cycle power facility” means a generation facility that combines two or more thermodynamic cycles, by producing electric power via the combustion of fuel and then routing the resulting waste heat by-product to a conventional boiler or to a heat recovery steam generator for use by a steam turbine to produce electric power, thereby increasing the overall efficiency of the generating facility;
“Combined heat and power facility” or “co-generation facility” means a generation facility which produces electric energy[,]and steam[,] or other forms of useful energy such as heat, which are used for industrial or commercial heating or cooling purposes. A combined heat and power facility or co-generation facility shall not be considered a public utility;
“Competitive service” means any service offered by an electric public utility or a gas public utility that the board determines to be competitive pursuant to section 8 or section 10 of P.L.1999, c.23 (C.48:3-56 or C.48:3-58) or that is not regulated by the board;
“Commercial and industrial energy pricing class customer” or “CIEP class customer” means that group of non-residential customers with high peak demand, as determined by periodic board order, which either is eligible or which would be eligible, as determined by periodic board order, to receive funds from the Retail Margin Fund established pursuant to section 9 of P.L.1999, c.23 (C.48:3-57) and for which basic generation service is hourly-priced;
“Comprehensive resource analysis” means an analysis including, but not limited to, an assessment of existing market barriers to the implementation of energy efficiency and renewable technologies that are not or cannot be delivered to customers through a competitive marketplace;
“Connected to the distribution system” means, for a solar electric power generation facility, (1) connected to a net metering customer’s side of a meter, regardless of the voltage at which that customer connects to the electric grid, or (2) directly connected to the electric grid at 69kilovolts or less, regardless of how an electric public utility classifies that portion of its electric grid, except that notwithstanding that it meets the criterion set forth in paragraph (1) or (2) hereof, a solar electric power generation facility that is neither net metered nor an on-site generation facility shall not be considered “connected to the distribution system” unless it shall have been designated as such by the board pursuant to subsections q. through s. of section 38 of P.L.1999, c.23 (C.48:3-87). Any solar electric power generation facility, other than that of a net metering customer on the customer’s side of the meter, connected above 69 kilovolts, shall not be considered connected to the distribution system;
“Customer” means any person that is an end user and is connected to any part of the transmission and distribution system within an electric public utility’s service territory or a gas public utility’s service territory within this State;
“Customer account service” means metering, billing, or such other administrative activity associated with maintaining a customer account;
“Delivery year” or “DY” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends;
“Demand side management” means the management of customer demand for energy service through the implementation of cost-effective energy efficiency technologies, including, but not limited to, installed conservation, load management and energy efficiency measures on and in the residential, commercial, industrial, institutional and governmental premises and facilities in this State;
“Electric generation service” means the provision of retail electric energy and capacity which is generated off-site from the location at which the consumption of such electric energy and capacity is metered for retail billing purposes, including agreements and arrangements related thereto;
“Electric power generator” means an entity that proposes to construct, own, lease or operate, or currently owns, leases or operates, an electric power production facility that will sell or does sell at least 90 percent of its output, either directly or through a marketer, to a customer or customers located at sites that are not on or contiguous to the site on which the facility will be located or is located. The designation of an entity as an electric power generator for the purposes of P.L.1999, c.23 (C.48:3-49 et al.) shall not, in and of itself, affect the entity’s status as an exempt wholesale generator under the Public Utility Holding Company Act of 1935, 15 U.S.C. s.79 et seq., or its successor;
“Electric power supplier” means a person or entity that is duly licensed pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.) to offer and to assume the contractual and legal responsibility to provide electric generation service to retail customers, and includes load serving entities, marketers and brokers that offer or provide electric generation service to retail customers. The term excludes an electric public utility that provides electric generation service only as a basic generation service pursuant to section 9 of P.L.1999, c.23 (C.48:3-57);
“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that transmits and distributes electricity to end users within this State;
“Electric related service” means a service that is directly related to the consumption of electricity by an end user, including, but not limited to, the installation of demand side management measures at the end user’s premises, the maintenance, repair or replacement of appliances, lighting, motors or other energy-consuming devices at the end user’s premises, and the provision of energy consumption measurement and billing services;
“Electronic signature” means an electronic sound, symbol or process, attached to, or logically associated with, a contract or other record, and executed or adopted by a person with the intent to sign the record;
“Eligible generator” means a developer of a base load or mid-merit electric power generation facility including, but not limited to, an on-site generation facility that qualifies as a capacity resource under PJM criteria and that commences construction after the effective date of P.L.2011, c.9 (C.48:3-98.2 et al.);
“Energy agent” means a person that is duly registered pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.), that arranges the sale of retail electricity or electric related services or retail gas supply or gas related services between government aggregators or private aggregators and electric power suppliers or gas suppliers, but does not take title to the electric or gas sold;
“Energy consumer” means a business or residential consumer of electric generation service or gas supply service located within the territorial jurisdiction of a government aggregator;
“Energy efficiency portfolio standard” means a requirement to procure a specified amount of energy efficiency or demand side management resources as a means of managing and reducing energy usage and demand by customers;
“Energy year” or “EY” means the 12-month period from June 1st through May 31st, numbered according to the calendar year in which it ends;
“Farmland” means land actively devoted to agricultural or horticultural use that is valued, assessed, and taxed pursuant to the “Farmland Assessment Act of 1964,” P.L.1964, c.48 (C.54:4-23.1 et seq.);
“Federal Energy Regulatory Commission” or “FERC” means the federal agency established pursuant to 42 U.S.C. s.7171 et seq. to regulate the interstate transmission of electricity, natural gas, and oil;
“Financing entity” means an electric public utility, a special purpose entity, or any other assignee of bondable transition property, which issues transition bonds. Except as specifically provided in P.L.1999, c.23 (C.48:3-49 et al.), a financing entity which is not itself an electric public utility shall not be subject to the public utility requirements of Title 48 or any rules or regulations adopted pursuant thereto;
“Gas public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes gas to end users within this State;
“Gas related service” means a service that is directly related to the consumption of gas by an end user, including, but not limited to, the installation of demand side management measures at the end user’s premises, the maintenance, repair or replacement of appliances or other energy-consuming devices at the end user’s premises, and the provision of energy consumption measurement and billing services;
“Gas supplier” means a person that is duly licensed pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.) to offer and assume the contractual and legal obligation to provide gas supply service to retail customers, and includes, but is not limited to, marketers and brokers. A non-public utility affiliate of a public utility holding company may be a gas supplier, but a gas public utility or any subsidiary of a gas utility is not a gas supplier. In the event that a gas public utility is not part of a holding company legal structure, a related competitive business segment of that gas public utility may be a gas supplier, provided that related competitive business segment is structurally separated from the gas public utility, and provided that the interactions between the gas public utility and the related competitive business segment are subject to the affiliate relations standards adopted by the board pursuant to subsection k. of section 10 of P.L.1999, c.23 (C.48:3-58);
“Gas supply service” means the provision to customers of the retail commodity of gas, but does not include any regulated distribution service;
“Government aggregator” means any government entity subject to the requirements of the “Local Public Contracts Law,” P.L.1971, c.198 (C.40A:11-1 et seq.), the “Public School Contracts Law,” N.J.S.18A:18A-1 et seq., or the “County College Contracts Law,” P.L.1982, c.189 (C.18A:64A-25.1 et seq.), that enters into a written contract with a licensed electric power supplier or a licensed gas supplier for: (1) the provision of electric generation service, electric related service, gas supply service, or gas related service for its own use or the use of other government aggregators; or (2) if a municipal or county government, the provision of electric generation service or gas supply service on behalf of business or residential customers within its territorial jurisdiction;
“Government energy aggregation program” means a program and procedure pursuant to which a government aggregator enters into a written contract for the provision of electric generation service or gas supply service on behalf of business or residential customers within its territorial jurisdiction;
“Governmental entity” means any federal, state, municipal, local or other governmental department, commission, board, agency, court, authority or instrumentality having competent jurisdiction;
“Greenhouse gas emissions portfolio standard” means a requirement that addresses or limits the amount of carbon dioxide emissions indirectly resulting from the use of electricity as applied to any electric power suppliers and basic generation service providers of electricity;
“Incremental auction” means an auction conducted by PJM, as part of PJM’s reliability pricing model, prior to the start of the delivery year to secure electric capacity as necessary to satisfy the capacity requirements for that delivery year, that is not otherwise provided for in the base residual auction;
“Leakage” means an increase in greenhouse gas emissions related to generation sources located outside of the State that are not subject to a state, interstate or regional greenhouse gas emissions cap or standard that applies to generation sources located within the State;
“Locational deliverability area” or “LDA” means one or more of the zones within the PJM region which are used to evaluate area transmission constraints and reliability issues including electric public utility company zones, sub-zones, and combinations of zones;
“Long-term capacity agreement pilot program” or “LCAPP” means a pilot program established by the board that includes participation by eligible generators, to seek offers for financially-settled standard offer capacity agreements with eligible generators pursuant to the provisions of P.L.2011, c.9 (C.48:3-98.2 et al.);
“Market transition charge” means a charge imposed pursuant to section 13 of P.L.1999, c.23 (C.48:3-61) by an electric public utility, at a level determined by the board, on the electric public utility customers for a limited duration transition period to recover stranded costs created as a result of the introduction of electric power supply competition pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.);
“Marketer” means a duly licensed electric power supplier that takes title to electric energy and capacity, transmission and other services from electric power generators and other wholesale suppliers and then assumes the contractual and legal obligation to provide electric generation service, and may include transmission and other services, to an end-use retail customer or customers, or a duly licensed gas supplier that takes title to gas and then assumes the contractual and legal obligation to provide gas supply service to an end-use customer or customers;
“Mid-merit electric power generation facility” means a generation facility that operates at a capacity factor between baseload generation facilities and peaker generation facilities;
“Net metering” means the process of measuring the difference between (1) the quantity of electric power supplied by a basic generation service provider or an electric power supplier to a customer owning or leasing a generating facility that produces Class I renewable energy, and (2) the quantity of electric power generated by that facility which is used to offset part or all of the customer-generator’s requirements for electric power;
“Net metering aggregation” means the combination of readings from, and billing for, all net metering of the electric power consumption of a customer, provided that such customer is a school district, a county or any agency, authority, or other entity thereof, or a municipality, or any agency, authority, or other entity thereof, which owns or leases properties and which operates a Class I renewable energy generation system or systems on one or more of those properties, provided that such properties are located within the service territory of a single electric public utility. Net metering aggregation may be completed through physical or virtual net metering aggregation;
“Net proceeds” means proceeds less transaction and other related costs as determined by the board;
“Net revenues” means revenues less related expenses, including applicable taxes, as determined by the board;
“Offshore wind energy” means electric energy produced by a qualified offshore wind project;
“Offshore wind renewable energy certificate” or “OREC” means a certificate, issued by the board or its designee, representing the environmental attributes of one megawatt hour of electric generation from a qualified offshore wind project;
“Off-site end use thermal energy services customer” means an end use customer that purchases thermal energy services from an on-site generation facility, combined heat and power facility, or co-generation facility, and that is located on property that is separated from the property on which the on-site generation facility, combined heat and power facility, or co-generation facility is located by more than one easement, public thoroughfare, or transportation or utility-owned right-of-way;
“On-site generation facility” means a generation facility, including, but not limited to, a generation facility that produces Class I or Class II renewable energy, and equipment and services appurtenant to electric sales by such facility to the end use customer located on the property or on property contiguous to the property on which the end user is located. An on-site generation facility shall not be considered a public utility. The property of the end use customer and the property on which the on-site generation facility is located shall be considered contiguous if they are geographically located next to each other, but may be otherwise separated by an easement, public thoroughfare, transportation or utility-owned right-of-way, or if the end use customer is purchasing thermal energy services produced by the on-site generation facility, for use for heating or cooling, or both, regardless of whether the customer is located on property that is separated from the property on which the on-site generation facility is located by more than one easement, public thoroughfare, or transportation or utility-owned right-of-way;
“Person” means an individual, partnership, corporation, association, trust, limited liability company, governmental entity or other legal entity;
“Physical net metering aggregation” means the physical rewiring of all instruments for net metering of the electric power consumption of a single customer that is a school district, a county or any agency, authority, or other entity thereof, or a municipality, or any agency, authority, or other entity thereof, to provide a single point of contact for net metering of that customer’s consumption;
“PJM Interconnection, L.L.C.” or “PJM” means the privately-held, limited liability corporation that is a FERC-approved Regional Transmission Organization, or its successor, that manages the regional, high-voltage electricity grid serving all or parts of 13 states including New Jersey and the District of Columbia, operates the regional competitive wholesale electric market, manages the regional transmission planning process, and establishes systems and rules to ensure that the regional and in-State energy markets operate fairly and efficiently;
“Private aggregator” means a non-government aggregator that is a duly-organized business or non-profit organization authorized to do business in this State that enters into a contract with a duly licensed electric power supplier for the purchase of electric energy and capacity, or with a duly licensed gas supplier for the purchase of gas supply service, on behalf of multiple end-use customers by combining the loads of those customers;
“Properly closed sanitary landfill facility” means a sanitary landfill facility at which all activities associated with the design, purchase, or construction of all measures required by the Department of Environmental Protection, pursuant to law, in order to prevent, minimize, or monitor pollution or health hazards resulting from a sanitary landfill facility subsequent to the termination of operations at any portion thereof, including, but not necessarily limited to, the costs of placement of earthen or vegetative cover, and the installation of methane gas vents or monitors and leachate monitoring wells or collection systems at the site of any sanitary landfill facility;
“Public utility holding company” means: (1) any company that, directly or indirectly, owns, controls, or holds with power to vote, ten percent or more of the outstanding voting securities of an electric public utility or a gas public utility or of a company which is a public utility holding company by virtue of this definition, unless the Securities and Exchange Commission, or its successor, by order declares such company not to be a public utility holding company under the Public Utility Holding Company Act of 1935, 15 U.S.C. s.79 et seq., or its successor; or (2) any person that the Securities and Exchange Commission, or its successor, determines, after notice and opportunity for hearing, directly or indirectly, to exercise, either alone or pursuant to an arrangement or understanding with one or more other persons, such a controlling influence over the management or policies of an electric public utility or a gas public utility or public utility holding company as to make it necessary or appropriate in the public interest or for the protection of investors or consumers that such person be subject to the obligations, duties, and liabilities imposed in the Public Utility Holding Company Act of 1935 or its successor;
“Qualified offshore wind project” means a wind turbine electricity generation facility in the Atlantic Ocean and connected to the electric transmission system in this State, and includes the associated transmission-related interconnection facilities and equipment, and approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1);
“Registration program” means an administrative process developed by the board that requires all owners of solar electric power generation facilities connected to the distribution system that intend to generate SRECs, to file with the board documents detailing the size, location, interconnection plan, land use, and other project information as required by the board;
“Regulatory asset” means an asset recorded on the books of an electric public utility or gas public utility pursuant to the Statement of Financial Accounting Standards, No. 71, entitled “Accounting for the Effects of Certain Types of Regulation,” or any successor standard and as deemed recoverable by the board;
“Related competitive business segment of an electric public utility or gas public utility” means any business venture of an electric public utility or gas public utility including, but not limited to, functionally separate business units, joint ventures, and partnerships, that offers to provide or provides competitive services;
“Related competitive business segment of a public utility holding company” means any business venture of a public utility holding company, including, but not limited to, functionally separate business units, joint ventures, and partnerships and subsidiaries, that offers to provide or provides competitive services, but does not include any related competitive business segments of an electric public utility or gas public utility;
“Reliability pricing model” or “RPM” means PJM’s capacity-market model, and its successors, that secures capacity on behalf of electric load serving entities to satisfy load obligations not satisfied through the output of electric generation facilities owned by those entities, or otherwise secured by those entities through bilateral contracts;
“Renewable energy certificate” or “REC” means a certificate representing the environmental benefits or attributes of one megawatt-hour of generation from a generating facility that produces Class I or Class II renewable energy, but shall not include a solar renewable energy certificate or an offshore wind renewable energy certificate;
“Resource clearing price” or “RCP” means the clearing price established for the applicable locational deliverability area by the base residual auction or incremental auction, as determined by the optimization algorithm for each auction, conducted by PJM as part of PJM’s reliability pricing model;
“Resource recovery facility” means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse, which the Department of Environmental Protection has determined to be in compliance with current environmental standards, including, but not limited to, all applicable requirements of the federal “Clean Air Act” (42 U.S.C. s.7401 et seq.);
“Restructuring related costs” means reasonably incurred costs directly related to the restructuring of the electric power industry, including the closure, sale, functional separation and divestiture of generation and other competitive utility assets by a public utility, or the provision of competitive services as such costs are determined by the board, and which are not stranded costs as defined in P.L.1999, c.23 (C.48:3-49 et al.) but may include, but not be limited to, investments in management information systems, and which shall include expenses related to employees affected by restructuring which result in efficiencies and which result in benefits to ratepayers, such as training or retraining at the level equivalent to one year’s training at a vocational or technical school or county community college, the provision of severance pay of two weeks of base pay for each year of full-time employment, and a maximum of 24 months’ continued health care coverage. Except as to expenses related to employees affected by restructuring, “restructuring related costs” shall not include going forward costs;
“Retail choice” means the ability of retail customers to shop for electric generation or gas supply service from electric power or gas suppliers, or opt to receive basic generation service or basic gas service, and the ability of an electric power or gas supplier to offer electric generation service or gas supply service to retail customers, consistent with the provisions of P.L.1999, c.23 (C.48:3-49 et al.);
“Retail margin” means an amount, reflecting differences in prices that electric power suppliers and electric public utilities may charge in providing electric generation service and basic generation service, respectively, to retail customers, excluding residential customers, which the board may authorize to be charged to categories of basic generation service customers of electric public utilities in this State, other than residential customers, under the board’s continuing regulation of basic generation service pursuant to sections 3 and 9 of P.L.1999, c.23 (C.48:3-51 and 48:3-57), for the purpose of promoting a competitive retail market for the supply of electricity;
“Sanitary landfill facility” shall have the same meaning as provided in section 3 of P.L.1970, c.39 (C.13:1E-3);
“School district” means a local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes, a county special services school district established pursuant to article 8 of chapter 46 of Title 18A of the New Jersey Statutes, a county vocational school district established pursuant to article 3 of chapter 54 of Title 18A of the New Jersey Statutes, and a district under full State intervention pursuant to P.L.1987, c.399 (C.18A:7A-34 et al.);
“Shopping credit” means an amount deducted from the bill of an electric public utility customer to reflect the fact that such customer has switched to an electric power supplier and no longer takes basic generation service from the electric public utility;
“Small scale hydropower facility” means a facility located within this State that is connected to the distribution system, and that meets the requirements of, and has been certified by, a nationally recognized low-impact hydropower organization that has established low-impact hydropower certification criteria applicable to: (1) river flows; (2) water quality; (3) fish passage and protection; (4) watershed protection; (5) threatened and endangered species protection; (6) cultural resource protection; (7) recreation; and (8) facilities recommended for removal;
“Social program” means a program implemented with board approval to provide assistance to a group of disadvantaged customers, to provide protection to consumers, or to accomplish a particular societal goal, and includes, but is not limited to, the winter moratorium program, utility practices concerning “bad debt” customers, low income assistance, deferred payment plans, weatherization programs, and late payment and deposit policies, but does not include any demand side management program or any environmental requirements or controls;
“Societal benefits charge” means a charge imposed by an electric public utility, at a level determined by the board, pursuant to, and in accordance with, section 12 of P.L.1999, c.23 (C.48:3-60);
“Solar alternative compliance payment” or “SACP” means a payment of a certain dollar amount per megawatt hour (MWh) which an electric power supplier or provider may submit to the board in order to comply with the solar electric generation requirements under section 38 of P.L.1999, c.23 (C.48:3-87);
“Solar renewable energy certificate” or “SREC” means a certificate issued by the board or its designee, representing one megawatt hour (MWh) of solar energy that is generated by a facility connected to the distribution system in this State and has value based upon, and driven by, the energy market;
“Standard offer capacity agreement” or “SOCA” means a financially-settled transaction agreement, approved by board order, that provides for eligible generators to receive payments from the electric public utilities for a defined amount of electric capacity for a term to be determined by the board but not to exceed 15 years, and for such payments to be a fully non-bypassable charge, with such an order, once issued, being irrevocable;
“Standard offer capacity price” or “SOCP” means the capacity price that is fixed for the term of the SOCA and which is the price to be received by eligible generators under a board-approved SOCA;
“Stranded cost” means the amount by which the net cost of an electric public utility’s electric generating assets or electric power purchase commitments, as determined by the board consistent with the provisions of P.L.1999, c.23 (C.48:3-49 et al.), exceeds the market value of those assets or contractual commitments in a competitive supply marketplace and the costs of buydowns or buyouts of power purchase contracts;
“Stranded costs recovery order” means each order issued by the board in accordance with subsection c. of section 13 of P.L.1999, c.23 (C.48:3-61) which sets forth the amount of stranded costs, if any, the board has determined an electric public utility is eligible to recover and collect in accordance with the standards set forth in section 13 of P.L.1999, c.23 (C.48:3-61) and the recovery mechanisms therefor;
“Thermal efficiency” means the useful electric energy output of a facility, plus the useful thermal energy output of the facility, expressed as a percentage of the total energy input to the facility;
“Transition bond charge” means a charge, expressed as an amount per kilowatt hour, that is authorized by and imposed on electric public utility ratepayers pursuant to a bondable stranded costs rate order, as modified at any time pursuant to the provisions of P.L.1999, c.23 (C.48:3-49 et al.);
“Transition bonds” means bonds, notes, certificates of participation or beneficial interest or other evidences of indebtedness or ownership issued pursuant to an indenture, contract or other agreement of an electric public utility or a financing entity, the proceeds of which are used, directly or indirectly, to recover, finance or refinance bondable stranded costs and which are, directly or indirectly, secured by or payable from bondable transition property. References in P.L.1999, c.23 (C.48:3-49 et al.) to principal, interest, and acquisition or redemption premium with respect to transition bonds which are issued in the form of certificates of participation or beneficial interest or other evidences of ownership shall refer to the comparable payments on such securities;
“Transition period” means the period from August 1, 1999 through July 31, 2003;
“Transmission and distribution system” means, with respect to an electric public utility, any facility or equipment that is used for the transmission, distribution or delivery of electricity to the customers of the electric public utility including, but not limited to, the land, structures, meters, lines, switches and all other appurtenances thereof and thereto, owned or controlled by the electric public utility within this State; [and]
“Universal service” means any service approved by the board with the purpose of assisting low-income residential customers in obtaining or retaining electric generation or delivery service; and
“Virtual net metering aggregation” means the combination of readings from instruments for, and billing for, all net metering of the electric power consumption of a single customer which is a school district, a county or any agency, authority, or other entity thereof, or a municipality, or any agency, authority, or other entity thereof, which owns or leases properties and which operates a generating facility on those properties that produces Class I renewable energy by means of the electric public utility’s billing process, rather than through physical rewiring of the customer’s property to provide a single point of contact, provided that such properties are located three miles within the boundaries of each other and within the service territory of a single electric public utility. A customer engaged in virtual net metering shall not be considered a public utility.
(cf: P.L.2011, c.9, s.2)
2. Section 38 of P.L.1999, c.23 (C.48:3-87) is amended to read as follows:
38. a. The board shall require an electric power supplier or basic generation service provider to disclose on a customer’s bill or on customer contracts or marketing materials, a uniform, common set of information about the environmental characteristics of the energy purchased by the customer, including, but not limited to:
(1) Its fuel mix, including categories for oil, gas, nuclear, coal, solar, hydroelectric, wind and biomass, or a regional average determined by the board;
(2) Its emissions, in pounds per megawatt hour, of sulfur dioxide, carbon dioxide, oxides of nitrogen, and any other pollutant that the board may determine to pose an environmental or health hazard, or an emissions default to be determined by the board; and
(3) Any discrete emission reduction retired pursuant to rules and regulations adopted pursuant to P.L.1995, c.188.
b. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment and public hearing, interim standards to implement this disclosure requirement, including, but not limited to:
(1) A methodology for disclosure of emissions based on output pounds per megawatt hour;
(2) Benchmarks for all suppliers and basic generation service providers to use in disclosing emissions that will enable consumers to perform a meaningful comparison with a supplier’s or basic generation service provider’s emission levels; and
(3) A uniform emissions disclosure format that is graphic in nature and easily understandable by consumers. The board shall periodically review the disclosure requirements to determine if revisions to the environmental disclosure system as implemented are necessary.
Such standards shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act.”
c. (1) The board may adopt, in consultation with the Department of Environmental Protection, after notice and opportunity for public comment, an emissions portfolio standard applicable to all electric power suppliers and basic generation service providers, upon a finding that:
(a) The standard is necessary as part of a plan to enable the State to meet federal Clean Air Act or State ambient air quality standards; and
(b) Actions at the regional or federal level cannot reasonably be expected to achieve the compliance with the federal standards.
(2) By July 1, 2009, the board shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), a greenhouse gas emissions portfolio standard to mitigate leakage or another regulatory mechanism to mitigate leakage applicable to all electric power suppliers and basic generation service providers that provide electricity to customers within the State. The greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage shall:
(a) Allow a transition period, either before or after the effective date of the regulation to mitigate leakage, for a basic generation service provider or electric power supplier to either meet the emissions portfolio standard or other regulatory mechanism to mitigate leakage, or to transfer any customer to a basic generation service provider or electric power supplier that meets the emissions portfolio standard or other regulatory mechanism to mitigate leakage. If the transition period allowed pursuant to this subparagraph occurs after the implementation of an emissions portfolio standard or other regulatory mechanism to mitigate leakage, the transition period shall be no longer than three years; and
(b) Exempt the provision of basic generation service pursuant to a basic generation service purchase and sale agreement effective prior to the date of the regulation.
Unless the Attorney General or the Attorney General’s designee determines that a greenhouse gas emissions portfolio standard would unconstitutionally burden interstate commerce or would be preempted by federal law, the adoption by the board of an electric energy efficiency portfolio standard pursuant to subsection g. of this section, a gas energy efficiency portfolio standard pursuant to subsection h. of this section, or any other enhanced energy efficiency policies to mitigate leakage shall not be considered sufficient to fulfill the requirement of this subsection for the adoption of a greenhouse gas emissions portfolio standard or any other regulatory mechanism to mitigate leakage.
d. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing, renewable energy portfolio standards that shall require:
(1) that two and one-half percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I or Class II renewable energy sources;
(2) beginning on January 1, 2001, that one-half of one percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from Class I renewable energy sources. The board shall increase the required percentage for Class I renewable energy sources so that by January 1, 2006, one percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources and shall additionally increase the required percentage for Class I renewable energy sources by one-half of one percent each year until January 1, 2012, when four percent of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider shall be from Class I renewable energy sources.
An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection;
(3) that the board establish a multi-year schedule, applicable to each electric power supplier or basic generation service provider in this State, beginning with the one-year period commencing on June 1, 2010, and continuing for each subsequent one-year period up to and including, the one-year period commencing on [June 1, 2025]June 1, 2028, that requires [suppliers or providers to purchase at least] the following number or percentage, as the case may be, of kilowatt-hours sold in this State by each electric power supplier and each basic generation service provider to be from solar electric power generators connected to the distribution system in this State:
EY 2011 306 Gigawatthours (Gwhrs)
EY 2012 442 Gwhrs
EY 2013 596 Gwhrs
EY 2014 [772 Gwhrs] 1.832%
EY 2015 [965 Gwhrs] 2.145%
EY 2016 [1,150 Gwhrs] 2.446%
EY 2017 [1,357 Gwhrs] 2.519%
EY 2018 [1,591 Gwhrs] 2.851%
EY 2019 [1,858 Gwhrs] 3.111%
EY 2020 [2,164 Gwhrs] 3.233%
EY 2021 [2,518 Gwhrs] 3.320%
EY 2022 [2,928 Gwhrs] 3.383%
EY 2023 [3,433 Gwhrs] 3.434%
EY 2024 [3,989 Gwhrs] 3.483%
EY 2025 [4,610 Gwhrs] 3.532%
EY 2026 [5,316 Gwhrs]3.579%
EY 2027 3.625%
EY 2028, 3.730%, and for every energy year thereafter, at least [5,316 Gwhrs]3.730% per energy year to reflect an increasing number of kilowatt-hours to be purchased by suppliers or providers from solar electric power generators connected to the distribution system in this State, and to establish a framework within which, of the electricity that the generators sell in this State, suppliers and providers shall [purchase]each obtain at least [2,518 Gwhrs]3.320% in the energy year 2021 and [5,316 Gwhrs]3.730% in the energy year [2026]2028 from solar electric power generators connected to the distribution system in this State, provided, however, that
[the number of solar kilowatt-hours required to be purchased by each supplier or provider, when expressed as a percentage of the total number of solar kilowatt-hours purchased in this State, shall be equivalent to each supplier's or provider's proportionate share of the total number of kilowatt-hours sold in this State by all suppliers and providers.]:
(a) The board shall determine an appropriate period of no less than 120 days following the end of an energy year prior to which a provider or supplier must demonstrate compliance for that energy year with the annual renewable portfolio standard;
(b) No more than 24 months following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall complete a proceeding to investigate approaches to mitigate solar development volatility and prepare and submit, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a report to the Legislature, detailing its findings and recommendations. As part of the proceeding, the board shall evaluate other techniques used nationally and internationally;
(c) The solar renewable portfolio standards requirements in this paragraph shall exempt those existing supply contracts which are effective prior to the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) from any increase beyond the number of SRECs that exceeds the number mandated by the solar renewable portfolio standards requirements that were in effect on the date that the providers executed their existing supply contracts. This limited exemption for providers’ existing supply contracts shall not be construed to lower the Statewide solar sourcing requirements set forth in this paragraph. Such incremental new requirements shall be distributed over the electric power suppliers and providers not subject to the existing supply contract exemption until such time as existing supply contracts expire and all suppliers are subject to the new requirement in a manner that is competitively neutral among all providers and suppliers, such that non-exempt providers are assigned the requirements that would have otherwise been assigned to the exempt providers.
(d) The solar renewable portfolio standards requirements in this paragraph [(3) of this subsection] shall automatically increase by 20% for the remainder of the schedule in the event that the following two conditions are met: [(a)](i) the number of SRECs generated meets or exceeds the requirement for three consecutive reporting years, starting with energy year [2013]2014; and [(b)](ii) the [average]SREC price for [all] SRECs purchased by entities with renewable energy portfolio standards obligations [has decreased] in each of the same three consecutive reporting years is less than the current SREC price in the year prior to the three consecutive reporting years; and
(e) The board shall exempt providers’ [existing] supply contracts that are [: (a)] effective prior to the date of [P.L.2009, c.289; or (b) effective prior to any future increase in the solar renewable portfolio standard beyond the multi-year schedule established in paragraph (3) of this subsection] any such increase. This exemption shall apply to the number of SRECs that exceeds the number mandated by the solar renewable portfolio standards requirements that were in effect on the date that the suppliers or providers executed their existing supply contracts. This limited exemption for providers’ existing supply contracts shall not be construed to lower the Statewide solar [purchase]sourcing requirements set forth in this paragraph [(3) of this subsection]. Such incremental new requirements shall be distributed over the electric power suppliers and providers not subject to the existing supply contract exemption until such time as existing supply contracts expire and all suppliers are subject to the new requirement in a manner that is competitively neutral among all suppliers and providers, such that non-exempt providers are assigned the requirements that would have otherwise been assigned to the exempt providers.
An electric power supplier or basic generation service provider may satisfy the requirements of this subsection by participating in a renewable energy trading program approved by the board in consultation with the Department of Environmental Protection, or compliance with the requirements of this subsection may be demonstrated to the board by suppliers or providers through the purchase of SRECs.
The renewable energy portfolio standards adopted by the board pursuant to paragraphs (1) and (2) of this subsection shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act.”
The renewable energy portfolio standards adopted by the board pursuant to this paragraph [(3) of this subsection] shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 30 months after such filing, and shall, thereafter, be amended, adopted or readopted by the board in accordance with the “Administrative Procedure Act”; and
(4) within 180 days after the date of enactment of P.L.2010, c.57 (C.48:3-87.1 et al.), that the board establish an offshore wind renewable energy certificate program to require that a percentage of the kilowatt hours sold in this State by each electric power supplier and each basic generation service provider be from offshore wind energy in order to support at least 1,100 megawatts of generation from qualified offshore wind projects.
The percentage established by the board pursuant to this paragraph shall serve as an offset to the renewable energy portfolio standard established pursuant to paragraphs (1) and (2) of this subsection and shall reduce the corresponding Class I renewable energy requirement.
The percentage established by the board pursuant to this paragraph shall reflect the projected OREC production of each qualified offshore wind project, approved by the board pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), for twenty years from the commercial operation start date of the qualified offshore wind project which production projection and OREC purchase requirement, once approved by the board, shall not be subject to reduction.
An electric power supplier or basic generation service provider shall comply with the OREC program established pursuant to this paragraph through the purchase of offshore wind renewable energy certificates at a price and for the time period required by the board. In the event there are insufficient offshore wind renewable energy certificates available, the electric power supplier or basic generation service provider shall pay an offshore wind alternative compliance payment established by the board. Any offshore wind alternative compliance payments collected shall be refunded directly to the ratepayers by the electric public utilities.
The rules established by the board pursuant to this paragraph shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.).
e. Notwithstanding any provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the board shall initiate a proceeding and shall adopt, after notice, provision of the opportunity for comment, and public hearing:
(1) net metering standards for electric power suppliers and basic generation service providers. The standards shall require electric power suppliers and basic generation service providers to offer net metering at non-discriminatory rates to industrial, large commercial, residential and small commercial customers, as those customers are classified or defined by the board, that generate electricity, on the customer’s side of the meter, using a Class I renewable energy source, for the net amount of electricity supplied by the electric power supplier or basic generation service provider over an annualized period. Systems of any sized capacity, as measured in watts, are eligible for net metering [. If], provided, however, that the system shall not be sized in excess of the generation capacity necessary to serve the annualized energy needs of (a) on-site load, inclusive of load associated with a customer-generator receiving physical net metering aggregation service, or (b) load associated with a customer-generator receiving virtual net metering aggregation service. For a customer-generator eligible for virtual net metering aggregation service, the customer-generator may designate other of its net metering instruments to be credited with the kilowatt-hour production from any physical net metering aggregation service, including net annual excess, if any. For physical net metering aggregation and virtual net metering aggregation, if the amount of electricity generated by the customer-generator, plus any kilowatt hour credits held over from the previous billing periods, exceeds the electricity supplied by the electric power supplier or basic generation service provider, then the electric power supplier or basic generation service provider, as the case may be, shall credit the customer-generator for the excess kilowatt hours until the end of the annualized period at which point the customer-generator will be compensated for any remaining credits or, if the customer-generator chooses, credit the customer-generator on a real-time basis, at the electric power supplier’s or basic generation service provider’s avoided cost of wholesale power or the PJM electric power pool’s real-time locational marginal pricing rate, adjusted for losses, for the respective zone in the PJM electric power pool. Alternatively, the customer-generator may execute a bilateral agreement with an electric power supplier or basic generation service provider for the sale and purchase of the customer-generator’s excess generation. The customer-generator may be credited on a real-time basis, so long as the customer-generator follows applicable rules prescribed by the PJM electric power pool for its capacity requirements for the net amount of electricity supplied by the electric power supplier or basic generation service provider. The board may authorize an electric power supplier or basic generation service provider to cease offering net metering whenever the total rated generating capacity owned and operated by net metering customer-generators Statewide equals 2.5 percent of the State’s peak electricity demand;
(2) safety and power quality interconnection standards for Class I renewable energy source systems used by a customer-generator that shall be eligible for net metering.
Such standards or rules shall take into consideration the goals of the New Jersey Energy Master Plan, applicable industry standards, and the standards of other states and the Institute of Electrical and Electronic Engineers. The board shall allow electric public utilities to recover the costs of any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs through either their regulated rates or from the net metering customer-generator; and
(3) credit or other incentive rules for generators using Class I renewable energy generation systems that connect to New Jersey’s electric public utilities’ distribution system but who do not net meter.
Such rules shall require the board or its designee to issue a credit or other incentive to those generators that do not use a net meter but otherwise generate electricity derived from a Class I renewable energy source and to issue an enhanced credit or other incentive, including, but not limited to, a solar renewable energy credit, to those generators that generate electricity derived from solar technologies.
Such standards or rules shall be effective as regulations immediately upon filing with the Office of Administrative Law and shall be effective for a period not to exceed 18 months, and may, thereafter, be amended, adopted or readopted by the board in accordance with the provisions of the “Administrative Procedure Act.”
f. The board may assess, by written order and after notice and opportunity for comment, a separate fee to cover the cost of implementing and overseeing an emission disclosure system or emission portfolio standard, which fee shall be assessed based on an electric power supplier’s or basic generation service provider’s share of the retail electricity supply market. The board shall not impose a fee for the cost of implementing and overseeing a greenhouse gas emissions portfolio standard adopted pursuant to paragraph (2) of subsection c. of this section, the electric energy efficiency portfolio standard adopted pursuant to subsection g. of this section, or the gas energy efficiency portfolio standard adopted pursuant to subsection h. of this section.
g. The board may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), an electric energy efficiency portfolio standard that may require each electric public utility to implement energy efficiency measures that reduce electricity usage in the State by 2020 to a level that is 20 percent below the usage projected by the board in the absence of such a standard. Nothing in this section shall be construed to prevent an electric public utility from meeting the requirements of this section by contracting with another entity for the performance of the requirements.
h. The board may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), a gas energy efficiency portfolio standard that may require each gas public utility to implement energy efficiency measures that reduce natural gas usage for heating in the State by 2020 to a level that is 20 percent below the usage projected by the board in the absence of such a standard. Nothing in this section shall be construed to prevent a gas public utility from meeting the requirements of this section by contracting with another entity for the performance of the requirements.
i. After the board establishes a schedule of solar kilowatt-hour sale or purchase requirements pursuant to paragraph (3) of subsection d. of this section, the board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, increased minimum solar kilowatt-hour sale or purchase requirements, provided that the board shall not reduce previously established minimum solar kilowatt-hour sale or purchase requirements, or otherwise impose constraints that reduce the requirements by any means.
j. The board shall determine an appropriate level of solar alternative compliance payment, and [establish a 15-year solar alternative compliance payment schedule, that permits]permit each supplier or provider to submit an SACP to comply with the solar electric generation requirements of paragraph (3) of subsection d. of this section. The value of the SACP for each Energy Year, for Energy Years 2014 through 2028 per megawatt hour from solar electric generation required pursuant to this section, shall be:
EY 2014 $350
EY 2015 $343
EY 2016 $336
EY 2017 $329
EY 2018 $322
EY 2019 $315
EY 2020 $308
EY 2021 $301
EY 2022 $294
EY 2023 $287
EY 2024 $280
EY 2025 $273
EY 2026 $266
EY 2027 $259
EY 2028 $252
The [board may initiate subsequent proceedings and adopt, after appropriate notice and opportunity for public comment and public hearing, an increase in solar alternative compliance payments, provided that the] board shall not reduce previously established levels of solar alternative compliance payments, nor shall the board provide relief from the obligation of payment of the SACP by the electric power suppliers or basic generation service providers in any form. Any SACP payments collected shall be refunded directly to the ratepayers by the electric public utilities.
k. The board may allow electric public utilities to offer long-term contracts through a competitive process, direct electric public utility investment and other means of financing, including but not limited to loans, for the purchase of SRECs and the resale of SRECs to suppliers or providers or others, provided that after such contracts have been approved by the board, the board’s approvals shall not be modified by subsequent board orders.
l. The board shall implement its responsibilities under the provisions of this section in such a manner as to:
(1) place greater reliance on competitive markets, with the explicit goal of encouraging and ensuring the emergence of new entrants that can foster innovations and price competition;
(2) maintain adequate regulatory authority over non-competitive public utility services;
(3) consider alternative forms of regulation in order to address changes in the technology and structure of electric public utilities;
(4) promote energy efficiency and Class I renewable energy market development, taking into consideration environmental benefits and market barriers;
(5) make energy services more affordable for low and moderate income customers;
(6) attempt to transform the renewable energy market into one that can move forward without subsidies from the State or public utilities;
(7) achieve the goals put forth under the renewable energy portfolio standards;
(8) promote the lowest cost to ratepayers; and
(9) allow all market segments to participate.
m. The board shall ensure the availability of financial incentives under its jurisdiction, including, but not limited to, long-term contracts, loans, SRECs, or other financial support, to ensure market diversity, competition, and appropriate coverage across all ratepayer segments, including, but not limited to, residential, commercial, industrial, non-profit, farms, schools, and public entity customers.
n. For projects which are owned, or directly invested in, by a public utility pursuant to section 13 of P.L.2007, c.340 (C.48:3-98.1), the board shall determine the number of SRECs with which such projects shall be credited; and in determining such number the board shall ensure that the market for SRECs does not detrimentally affect the development of non-utility solar projects and shall consider how its determination may impact the ratepayers.
o. The board, in consultation with the Department of Environmental Protection, electric public utilities, the Division of Rate Counsel in, but not of, the Department of the Treasury, affected members of the solar energy industry, and relevant stakeholders, shall periodically consider increasing the renewable energy portfolio standards beyond the minimum amounts set forth in subsection d. of this section, taking into account the cost impacts and public benefits of such increases including, but not limited to:
(1) reductions in air pollution, water pollution, land disturbance, and greenhouse gas emissions;
(2) reductions in peak demand for electricity and natural gas, and the overall impact on the costs to customers of electricity and natural gas;
(3) increases in renewable energy development, manufacturing, investment, and job creation opportunities in this State; and
(4) reductions in State and national dependence on the use of fossil fuels.
p. Class I RECs and ORECS shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following two energy years. SRECs [and ORECs] shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following [two]four energy years.
q. (1) During the energy years of 2014, 2015, and 2016, a solar electric generation facility project which is not net metered, not an on-site generation facility, or not certified as being located on a brownfield or a properly closed sanitary landfill facility, as provided pursuant to subsection t. of this section, shall be considered “connected to the distribution system” if (a) the facility files a notice with the board indicating its intent to qualify under this subsection; and (b) the capacity of the facility, when added to the capacity of other facilities that have been approved for connection prior to the facility’s filing under this subsection, does not exceed 100 megawatts in the aggregate for each year. The board shall act within 180 days of its receipt of a completed application for designation of a solar power electric generation facility as “connected to the distribution system,” to either approve, conditionally approve, or disapprove the application. Filings made pursuant to this subsection shall include a notice escrow of $40,000 per megawatt of the proposed capacity of the facility. The notice escrow shall be reimbursed to the facility in full upon the facility entering commercial operation, or shall be forfeited to the State if the facility is determined to be “connected to the distribution system” pursuant to this paragraph but does not enter commercial operation pursuant to paragraph (2) of this subsection.
(2) If the proposed solar power electric generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility as “connected to the distribution system” shall be deemed to be null and void, and the facility shall thereafter be considered not “connected to the distribution system.”
r. (1) For solar power electric generation facility projects proposed in addition to those approved pursuant to subsection q. of this section and for all projects proposed in each energy year following energy year 2016, a proposed solar power electric generation facility that is neither net metered nor an on-site generation facility, may be considered “connected to the distribution system” only upon designation as such by the board, after notice to the public and opportunity for public comment or hearing. A proposed solar power electric generation facility seeking board designation as “connected to the distribution system” shall submit an application to the board that includes for the proposed facility: the nameplate capacity; the estimated energy and number of SRECs to be produced and sold per year; the estimated annual rate impact on ratepayers; the estimated capacity of the generator as defined by PJM for sale in the PJM capacity market; the point of interconnection; the total acreage and location; the current land use designation of the property; the type of solar technology to be used; and other such information as the board shall require.
(2) The board shall approve the designation of the proposed solar power electric generation facility as “connected to the distribution system” if the board determines that:
(a) the SRECs forecasted to be produced by the facility do not have a detrimental impact on the SREC market or on the appropriate development of solar power in the State;
(b) the loss of tillable acreage that would result from the approval of the designation of the proposed facility, together with the tillable acreage of all other facilities approved pursuant to this subsection, would cumulatively constitute a loss of less than one percent of the total tillable acres of farmland in the State on the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), pursuant to information provided by the New Jersey Department of Agriculture; and
(c) the impact of the designation on electric rates and economic development is beneficial.
(3) The board shall act within 180 days of its receipt of a completed application for designation of a solar power electric generation facility as “connected to the distribution system,” to either approve, conditionally approve, or disapprove the application. If the proposed solar power electric generation facility does not commence commercial operations within two years following the date of the designation by the board pursuant to this subsection, the designation of the facility as “connected to the distribution system” shall be deemed to be null and void, and the facility shall thereafter be considered not “connected to the distribution system.”
s. Notwithstanding the foregoing provisions of this section, a solar power electric generation facility located on farmland, and not heretofore approved pursuant to subsection q. of this section, shall not be considered “connected to the distribution system” unless the facility has been approved as such by the board and (a) PJM issued a System Impact Study for the facility prior to March 31, 2011; (b) the facility files a notice with the board within 60 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), indicating its intent to qualify under this subsection.
t. No more than 180 days after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall, in consultation with the Department of Environmental Protection and the New Jersey Economic Development Authority, and, after notice and opportunity for public comment and public hearing, complete a proceeding to establish a program to provide SRECs to owners of solar power electric generation facility projects certified by the board as being located on a brownfield or a properly closed sanitary landfill facility. Projects certified under this subsection shall (1) be considered “connected to the distribution system” and shall not require such designation by the board and (2) shall not be subject to board review required pursuant to subsections q. and r. of this section. For projects certified under this subsection, the board shall credit additional incentives to be determined by the board for each megawatt hour (MWh) of solar energy that is generated by the project. The issuance of SRECs for all solar electric generation facility projects pursuant to this subsection shall be deemed “Board of Public Utilities financial assistance” as provided under section 1 of P.L.2009, c.89 (C.48:2-29.47).
u. No more than 180 days after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall complete a proceeding to establish a registration program. The registration program shall require the owners of solar power electric generation facility projects connected to the distribution system to make periodic milestone filings with the board in a manner and at such times as determined by the board to provide full disclosure and transparency regarding the overall level of development and construction activity of those projects Statewide.
v. The issuance of SRECs for all solar power electric generation facility projects pursuant to this section, for projects connected to the distribution system with a capacity of one megawatt or greater, shall be deemed “Board of Public Utilities financial assistance” as provided pursuant to under section 1 of P.L.2009, c.89 (C.48:2-29.47).
(cf: P.L.2010, c.57, s.2)
3. This act shall take effect immediately.
STATEMENT
The bill amends sections 3 and 38 of P.L.1999, c.23 (C.48:3-49 et al.) (“EDECA”) concerning solar renewable energy programs, purchase requirements, and net metering standards. The bill would provide that a solar power electric generation facility shall be deemed by the Board of Public Utilities (“BPU”) as “connected to the distribution system” (“connected”) if it is: (1) connected to a net metering customer’s side of a meter, regardless of the voltage at which that customer connects to the electric grid, or (2) directly connected to the electric grid at 69kilovolts or less, regardless of how an electric public utility classifies that portion of its electric grid, except that a solar facility that is neither net metered nor an on-site generation facility would not be considered “connected” unless it was designated as such by the BPU as provided pursuant to the bill’s provisions except that, during the energy years of 2014 through 2016, a solar electric generation facility project which is not net metered, not an on-site generation facility, and not certified as being located on a brownfield or a properly closed sanitary landfill facility shall be considered “connected” if the capacity of the facility, when added to the capacity of other facilities that have been approved for connection prior to the facility’s filing, does not exceed 100 megawatts in the aggregate for each energy year. Such facilities would not be subject to BPU review. Failure to commence commercial operations within two years following the date of the “connected” designation would void the designation.
Notwithstanding the foregoing criteria, the BPU must approve the designation of the proposed facility as “connected” if it determines that: (1) the solar renewable energy certificates (“SREC”s) forecasted to be produced by the facility do not have a detrimental impact on the SREC market or on the appropriate development of solar power in the State; (2) the loss of tillable acreage that would result from the approval of the designation of the proposed facility, together with the tillable acreage of all other similar facilities, would cumulatively constitute a loss of less than one percent of the total tillable acres of farmland in the State on the date of the bill’s enactment, pursuant to information provided by the New Jersey Department of Agriculture; and (3) the impact of the designation on electric rates and economic development is beneficial provided, however, that a solar facility constructed on farmland would not be considered “connected” unless it is approved by the BPU as such and (a) it is approved as a facility not subject to BPU review for energy years 2014, 2015, or 2016, or (b) PJM issued a System Impact Study for the facility prior to March 31, 2011 and the facility files a notice with the board within 60 days of the bill’s effective date indicating its intent to qualify as connected under the bill.
The bill directs the BPU, to within 180 days of the bill’s enactment, in consultation with the Department of Environmental Protection and the New Jersey Economic Development Authority, establish a program to provide SRECs to owners of solar power electric generation facility projects certified as being located on a brownfield or a properly closed sanitary landfill facility and provide that such projects shall (1) be considered “connected to the distribution system,” (2) not be subject to board review, and (3) be credited additional incentives for each megawatt hour of solar energy that is generated by the project.
The bill provides that the issuance of SRECs for projects located on brownfields and landfills, and for projects greater than one megawatt are to be deemed “Board of Public Utilities financial assistance” as provided under section 1 of P.L.2009, c.89 (C.48:2-29.47), to provide that prevailing wage rates would apply to such projects.
The bill requires the BPU to establish a solar registration program, which would require that all owners of solar electric power generation facilities that are filing with the BPU for approval to generate SRECs, to file documents detailing the size, location, interconnection plan, land use, and other project information as required by the BPU.
The bill would extend the scope of “Class I renewable energy” producers to include small scale hydropower facilities with a capacity of three megawatts or less that are put into service after the effective date of the bill. “Small scale hydropower facility” is defined to mean a facility located within New Jersey that is connected to the distribution system, and that meets the requirements of, and has been certified by, a nationally recognized low-impact hydropower organization. Electricity from any hydropower facility with a capacity greater than three megawatts would be included in the category of “Class II renewable energy.”
The bill would provide that for a resource recovery facility to be considered as generating Class II renewable energy, the facility must be in compliance with current environmental standards, including, but not limited to, all applicable requirements of the federal “Clean Air Act.” The bill clarifies that a “combined heat and power facility” or “co-generation facility” means a generation facility which produces electric energy and steam. The bill also provides that an on-site generation facility shall include an on-site facility that produces Class I or Class II renewable energy.
The bill would change the solar alternative compliance payment (“SACP”) schedule from a 15-year schedule with obligations set by the board to a statutorily established schedule with specifically prescribed SACP values for each energy year.
The bill revises the multi-year schedule of Statewide solar gigawatt hour requirements applicable to electric power suppliers and basic generation providers for Energy Years 2014 to 2028. The requirements are stated in percentages, instead of being enumerated in gigawatt hours, from 1.832% in 2014 to 3.730% in 2028 and every energy year thereafter. The bill also provides for the BPU to determine whether a provider or supplier is in compliance with annual renewable portfolio standards within a period of no less than 120 days following the end of an energy year, and to provide for a future adjustment in annual Statewide gigawatt hour requirements based upon any shortfall that is determined by the BPU.
The bill requires the BPU to, within 24 months following enactment, complete a proceeding to investigate approaches to mitigate solar development volatility and prepare and submit a report to the Governor and the Legislature, detailing its findings and recommendations. As part of the proceeding, the BPU must evaluate other techniques used nationally and internationally.
The bill would provide that the additional solar purchase requirements distributed over the electric power providers not subject to the existing supply contract exemption provided under section 38 of EDECA, shall be distributed in a manner that is competitively neutral among all providers, such that non-exempt providers are assigned the requirements that would have otherwise been assigned to the exempt providers.
The bill provides that long-term SREC purchase contracts offered by the BPU, shall be offered through a competitive process, including direct investment by electric utilities.
Finally, the bill revises the BPU’s mandate concerning the prescribing of standards under which basic generation service providers and electric power suppliers must offer net metering to their customers that generate electricity, on the customer side of the meter, using a Class I renewable energy source, for a customer that is a school district, county or municipality, including any agency, authority, or other entity thereof (“customer-generators”). Specifically, the bill expands the eligibility requirements for the provision of net metering to customer-generators when the generation is occurring on two or more properties owned or leased and operated by customer-generators where those properties are either: (1) contiguous to each other within the service territory of one electric utility (“physical net metering aggregation”); or (2) non-contiguous but within three miles of each other property of the customer-generator within the service territory of one electric utility (“virtual net metering aggregation”). Further, the bill allows customer-generators receiving virtual net metering aggregation service to designate other of its net metering instruments to be credited with the kilowatt-hour production from its physical net metering aggregation service, including net annual excess, if any.
Solar installers and investors in New Jersey have been expecting a legislative fix to the SREC market. The market prices have collapsed to the $100 level this past year due to overbuilding of solar compared to the state requirements. Changes in legislation could correct the market to take into account the lower cost of solar. Potential changes to legislation are an increase in the renewable portfolio standard RPS and a decrease in the solar alternative compliance payment SACP.
Activity was brisk on the spot market on Flett Exchange today with the market rallying $7.50 for a settlement of $110.00 for energy year 2012 SRECs. As of 3pm the market was showing buyers willing to pay $110 per SREC with sellers willing to accept $120 to sell.
Selling volume continues to be light with many sellers still holding out for higher prices. Large blocks of SRECs are commanding higher prices once again. Flett Exchange brokers large blocks for single sellers directly or through aggregation, thus achieving premiums for its sellers. Large sellers are encouraged to call the trading desk directly at 201-209-0234.
More about Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,200 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
All New Jersey solar owners that rely on estimated meter readings for solar arrays of 10Kw or less may soon be required to have a revenue grade meter installed. If the meter is not installed the owner will not be able to earn SRECs. As of now, there is no exact date for when the meter needs to be installed. The rule amendment still needs to be adopted by the NJ BPU Board as proposed. The rule will go into effect 6 months after the date of the adoption by the board.
A revenue grade meter that meets the ANSI C12.1-2008 will be required. Solar owners who are on estimates now can call their installer to see if they need to have a new meter installed. We have heard of some instances where a solar owners’ warranty with their installer will be voided if they do not use the same installer to install the meter! Check with your installer first.
From our experience over the years, most of our customers who are on actual meter readings say that they earn more SRECs then they would have if they were on estimates!
Flett Exchange customers that are on estimates will need to enter meter readings on GATS themselves or if you are a managed client you can email us the meter readings each month.
Feel free to call us if you need any help entering meter readings in GATs for the first time. If you would like to join our REC Manager Service here at Flett Exchange send us an email at info@flettexchange.com and we will set you up. To learn more about our easy hands-free Rec Manager program click: http://www.flettexchange.com/index.php?page=recman>
The New Jersey SREC market traded below $100 for energy year 2012 SRECs on Thursday, April 19, 2012. The settlement price on the Flett Exchange was $88.94. The New Jersey 2012 SREC market has been plummeting since a peak of $282.50 on December 29, 2011. Last year at this time, the 2011 SRECs were trading $655.
The SREC prices in New Jersey have collapsed because investors installed too much solar compared to this years’ NJ State mandates. Month after month new solar arrays are being turned on adding more of a surplus. The New Jersey Office of Clean Energy announced this week that there were 41 Mw installed state-wide in March. This brings the installed capacity to 729Mw. There will be enough solar to produce at least 900,000 SRECs for energy year 2013. The current State law mandates the purchase of only 596,000 for energy year 2013. This year there will most likely be a surplus of 200,000 SRECs.
The NJ SREC market will most likely be oversupplied for years to come UNLESS there is new legislation requiring the energy companies to purchase more SRECs. There is a high possibility that this may happen in the next few months. The reason is because current State law mandating solar is outdated based upon the significantly lower cost to install solar today. When the law was put into place in January of 2010 it assumed that the cost to install solar would drop by 2.5% per year. Install costs have dropped 30% to 40% in the last 2 years. There is now an opportunity to adjust the law to take advantage of these positive developments. The adjustments that can be made would soak up the oversupply created in the last year, reduce ratepayer exposure by lowering the fine or SACP level, and accelerate the rate of solar installations. The States’ Renewable Portfolio Standard goals would be achieved sooner and cheaper then previously anticipated.
One reason why the market is continually adding capacity when it is so grossly oversupplied is because solar facilities that were given fixed long term contracts at higher prices under the EDC financing continue to be built. The owners of those projects have no SREC price risk. The ratepayer makes up any losses for those fixed rate contracts, which last 10 years. Once those projects finish, the monthly build rates are expected to drop. This should happen this summer.
More About Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,200 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
In past years, waiting until the end of the energy year to sell spot SRECs has always brought higher prices for sellers. This year things may not be that straightforward because it is the first year that there are more SRECs produced than electric producers are required to purchase. The energy year in New Jersey runs from June until May. Traditionally the prices have been highest in the summer month’s right after the end of the energy year and before compliance payments are due. Energy Producers are required to purchase SRECs or make compliance payments to the State of New Jersey for any shortage of SREC purchases. Buyers have stopped buying SRECs in late August in past years to give enough time to complete filing paperwork. This year buyers will stop buying when they have fulfilled their requirement. It is difficult for sellers to determine when, and at what price the buyers will finish.
This energy year (2012) the SREC market is estimated by some to be oversupplied by over 200,000 SRECs. The purchase requirement is for 442,000 SRECs but the Statewide installed solar capacity may produce somewhere around 650,000 SRECs. The only hope to support and possibly push prices higher for a few years is for the State of New Jersey to pass some type of legislation to increase the RPS (renewable portfolio standard). The RPS dictates the amount of SRECs that need to be purchased. Because of this oversupply, waiting until the summer months to sell all your SRECs could be a mistake. Buyers may have already met their compliance by then and not need to buy any more SRECs for this energy year.
Banking SRECs is a topic that has come up quite often. NJ SRECs can be used for compliance in the energy year that they are produced and two subsequent energy years. Since the SRECs are usable for three energy years compliance buyers have the option to purchase SRECs for future compliance. They will only do this if the price of the SRECs is low enough to justify purchasing and holding SRECs for the next few years. Anyone who banks SRECs should keep in mind that if the installation of new solar continues at current rates, prices may never go back up significantly without some type of legislative intervention. Holding your SRECs may leave you exposed to the decay of time. SRECs that have less of a life have a tendency to be discounted. Energy year 2012 SRECs held over for next year may be worth about $20 to $30 less than the spot market 2013 SRECs. Regardless, without a change is legislation, approximately 200,000 SRECs will have to be held by a combination of sellers holding and buyers banking.
Selling at the highest price is generally the luck of timing. Selling SRECs on a monthly or quarterly basis will reduce the likelihood of selling all of your SRECs at the market lows.
Even if you sell SRECs at low prices now, and prices increase in the future, at least you get to participate at the higher prices for future SRECs that you generate. If you hold all of your SRECs and the prices continue to drop you will have all your SRECs to sell at low prices. Your system produces SRECs for 15 years in NJ.
We may see some type of legislation introduced this spring/summer similar to the bill that failed to be posted in the last State Legislature. That legislation called for an increase in the RPS. If that bill was introduced and passed by the Legislature we understand that the Governors office was willing to negotiate and pass a bill supporting the SREC market and those residents, business, schools and municipalities that invested in solar. The prices were expected to be supported and trade between $300 and $400 if that bill was passed. The future legislation is not expected to increase the RPS until 2014 because the BGS auction was just conducted. The details of this potential legislation will dictate the level of support. It may be expected to support the spot SREC market in the $200 to $300 range due to the delay until 2014. If no legislation is passed, it is expected that the SREC market will remain weak and stay that way for years.
There is an outside chance that SREC prices could rally if a large segment of the marketplace holds out to sell for higher prices. This year energy companies have already secured SREC supply from long term contracts, spot purchases during the last seven months and SRECs sold through the EDC auctions. (Two weeks ago the EDC’s sold over 26,000 SRECs at $171.63) The rest of their purchases will have to come from the spot marketplace. We estimate that there are approximately 250,000 SRECs that need to be purchased on the spot market this year. If the oversupply is 200,000 SRECs then the market will only become short if the spot sellers collectively hold back 45% of their production. Based on conversations with many of the sellers we feel that the market as a whole is unconsciously collectively doing just that. Our trading screen is loaded with sellers who have placed orders going back to last August at higher prices. As prices go lower the volume of selling on Flett Exchange has decreased. There will be a price point in which buyers will not be able to procure enough SREC for this year’s compliance. We are not sure if that price is $150 or $100 but we are approaching it soon. The answer to that will lie in what price level are sellers willing to hold onto 200,000 SRECs for one more additional year. We don’t place a high probability on a significant rally. We decided to write about it here only to hedge against the possibility of it happening and being criticized by sellers if a significant rally scenario materializes.
Since solar install costs have decreased substantially SREC expectations should be recalibrated to the $150 to $350 range for the long term. There may be a possibility of prolonged periods of lower prices if the capacity remains overbuilt compared to State goals.
We will keep our customers up to date on any legislation as it becomes available. Flett Exchange representatives will also stay engaged on the legislative front to communicate the supply/demand dynamics of the SREC market to the State Legislature and Governors Office. We are committed to protecting our customers who have installed solar so that they are not disenfranchised by future policy decisions. We also support legislation and policy that rewards those who took risk to install renewable energy but not legislation that shifts risk to ratepayers or energy providers and guarantees fixed subsidies.
I know this is complicated for many of the sellers. Feel free to call us here on the trading desk if you have any questions. If you would like to sell SRECs you can log onto the trading platform with your user name and password or call one of us on the trading desk and we can execute the sale for you. You can also transfer SRECs to us on GATS and we will execute the trade for you if you have an account. Check our homepage for our “sell now” price. We will issue the check the following day. Our number is 201-209-0234. Live prices are available on our trading platform 24 hours a day. We provide daily settlement prices for SRECs on our website as well at www.flettexchange.com.
More About Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, and DC supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. (201) 209-0234.
DISCLAIMER: This article contains forward looking statements. Actual market action could differ materially from those anticipated. Sellers of SRECs should do their own research. Actual SREC production may differ significantly from those estimates. The company assumes no obligation to update any forward-looking statement.
The Electric Distribution Companies (EDCs) sold 26,480 New Jersey Solar Renewable Energy Certificates (SRECs) yesterday. The clearing price for the auction was $171.63. The SRECs were auctioned off by NERA Economic Consulting, a consultant to the Board of Public Utilities. This was the lowest price for a spot sale of SRECs since the $180.00 settlement price on September 7, 2011 on the Flett Exchange.
The auctions are conducted quarterly. Due to the large volume of SRECs in these auctions, the clearing price is significant to the marketplace. Prior to the auction the settlement prices on Flett Exchange have been consistently trading at $195 for the past 30 days.
The SRECs in this auction are from solar installations that were given 10 year fixed price contracts by the local distribution companies JCP&L, Atlantic City Electric, Rockland Electric Company. Some of the SRECs are from the facilities that borrowed under the PSE&G Solar Loan Program and PSE&G investment under Solar for All. The Board of Public Utilities ordered the EDC’s to enter into long term fixed rate contracts 3 years ago to spur solar development in New Jersey. The majority of the SRECs from the JCP&L, ACE and RECO long term contracts were in excess of $400 per SREC. The ratepayer will have to make up the difference of the long term purchase price and the auction sales price achieved yesterday. Most ratepayer losses will be in excess of $230 per SREC. Solar developers are paid their contract price of $400 or more for most of the SRECs. The PSE&G loan program had a sliding fixed price scale that has lower SREC prices and the 11% interest paid by solar developers is credited back to ratepayers, less costs incurred by PSE&G.
The prices for New Jersey SRECs have been under pressure during the last year due to overbuilding by solar developers. Developers have continued to install solar even though the installed capacity is in excess of the mandated SREC purchase requirements set forth in law. At the current time there is 649 mw of installed solar capacity installed in the State of New Jersey. This installed capacity, along with future installs, (estimating that installations will drop off significantly) will produce in excess of 200,000 SRECs in addition to next years 596,000 purchase requirements for electric providers. This year there is also expected to be over 200,000 extra SRECs compared to the purchase requirement of 442,000 SRECs. Even though the requirement increases significantly every year, the SREC market in New Jersey is expected to be oversupplied possibly to 2017. There has been a political push in the last 8 months to increase the amount of SRECs the electric companies have to purchase.
The majority of investors in solar in New Jersey did not get the long term ratepayer fixed price SREC contracts. Those investors rate of return have dropped significantly due to the overbuilding of solar and subsequent SREC price drop. The ratepayers in New Jersey are benefitting directly by the lower SREC prices (except for those facilities that were covered by EDC long term contracts). Some homeowners, businesses, and municipalities who installed solar in the last year at high install rates and expected to sell SRECs at $600 or more are having a hard time making loan payments. New solar facilites are much cheaper today compared to previous years. This is due to the low prices of solar panels along with the mature installation infrastructure in New Jersey that has increased competition. These new facilites will only need an SREC value of $200 to $300 to reach the same rate of return more expensive facilities needed.
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 4,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs through our brokers or on our online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. 201-209-0234
The much anticipated solar legislation (s-2371) failed to be posted during the last day of the New Jersey Legislature. The main intention of this legislation was to increase the amount of SRECs that the power companies in New Jersey have to purchase. This is needed to soak up the excess amount of SRECs because developers installed 3 times more than the amount of solar required in the present year due to dropping installed costs of solar and large solar installations. If the legislation is not passed it is expected that the SREC market will continue its crash and the amount of installations will have to virtually cease for the next few years before the State mandates catch up. Investors in solar will suffer from low SREC prices and solar business in New Jersey may have to close down.
The bill would have also lowered fine levels levied against power companies if they did not produce a certain amount of solar power each year. The potential savings to homeowners, municipalities and business’ would have been close to 1 billion dollars over the course of the legislation if it was passed.
The bill was introduced by the Democratic controlled legislature, sponsored by Senator Bob Smith. The Republican Governors office submitted responses on Sunday for the legislature to consider. The Governors office supported an increase in the RPS to stabilize the market. The deal fell apart because of a disagreement of how to handle grid connected projects. The Christie administration suggested having all non-net metered projects seek Board of Public Utility BPU approval. These projects would not be approved if they would have a detrimental effect on the SREC market. The issue was too complicated to be resolved in the short amount of time left in the last day of the legislative session.
The bill will have to be introduced in the next legislative session.
The SREC market has dropped instantly to $200.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 3,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. 201-209-0234
Flett Exchange is pleased to announce the results of today’s public auction. The clearing price was $296.00for 752 New Jersey Solar Renewable Energy Certificates SREC. This clearing price is the highest price achieved for the Sale of energy year 2012 SRECs since last July. The sale was conducted for The Mount Laural MUA, Bordentown Regional School District, Town of Morristown, Borough of Waldwick and Sparta Township.
Prices for New Jersey SRECs have appreciated in the last month in anticipation of potential changes in legislation. The legislation may require electric companies to procure more SRECs. The State of New Jersey has experienced a tremendous influx of investment in solar in the last twelve months. This investment has outstripped the requirements for electric companies to purchase SRECs for the next 2 years by an estimated 40%. The SREC market is designed to protect the ratepayer from an overinvestment of solar and has dropped accordingly.
The sale was conducted on the Flett Exchange trading platform. Public officials choose to utilize the Flett Exchange auctions to ensure that the price they receive for SRECs is competitive and transparent. The sales are all conducted on the Flett Exchange Internet Platform and is viewable to the public in real-time during the sale. Flett Exchange advertises the sales to all of the electric companies that are required by law to procure SRECs for renewable portfolio standards.
Town Managers can schedule to sell their SRECs in an easy and transparent fashion by filling out the Public Auction Request form or calling us at our Jersey City office.
Not only is it transparent, it is FREE for sellers! Flett Exchange charges a nominal $5 per SREC fee to the buyers.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 3,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. 201-209-0324
The New Jersey SREC market has just reached a five month high of $275.00! The market has moved up because of the release of the final version of the New Jersey Energy Master Plan and the anticipation of introduction and possible passing of solar legislation. We think there is a very high chance for market volatility in the next few weeks. I just wish I could tell you which way it will go!
The energy master plan, released last week, suggested increasing the amount of SRECs purchased by electricity providers to correct the recent overbuild and subsequent dropping SREC values. The solar legislation that is expected to be introduced this month will most likely mandate an increase in SRECs purchased.The state legislature and Governor will have to approve it first. It is expected that if the legislation increases costs too much it will not be signed by the Governor.
We see three potential scenarios:
No Legislation: The SREC market will most likely drop under $150 and stay low for years unless there are new laws in the future.
Legislation with slight increase in RPS: SREC prices may stabilize between $250 and $350 with potential spikes higher
Legislation with large increase in RPS: SREC prices will most likely rise to $400+ for current year
What you may want to do if you have SRECs to sell:
If you don’t want to take the risk of the market dropping, sell now and take advantage of the $125 rise over August lows.
Place orders above the market to sell at levels $20 to $70 above the market to take advantage of a “pop” in the market that does not maintain momentum and later drop off.
If you think the legislation is going to be strong, wait for it to come out and try to maximize your profits if the market continues to rally.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 3,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. 201-209-0324
The final version of the New Jersey Energy Master Plan was released yesterday. It recommends solutions to stabilize the solar industry in NJ while at the same time reduce ratepayer impacts. It contains language that recognizes the unexpected influx of solar investing in the last year which has led to a collapse in SREC prices. It states that an increase in the RPS (Renewable Portfolio Standard: amount of SRECs required to be purchased by power companies) would provide an opportunity for the solar industry to adjust. At the same time it suggests to reduce the SACP (Solar Alternative Compliance Payment: fine that power companies pay for not producing solar or purchasing SRECs from others who invested in solar infrastructure) in order to minimize the rate impact of an RPS acceleration. It is widely recognized in the solar industry that the SACP needs to be adjusted to account for the reduced cost of installing solar. Here are the most significant segments of the Energy Master Plan and how it relates to SREC prices:
Accelerate the RPS
A temporary acceleration of the RPS would provide some interim relief for the current market in SRECs and an opportunity for the industry to adjust. This acceleration would require increasing the RPS over the next three years and reducing the outlier years of the RPS schedule to minimize the impact to ratepayers129. This should provide the foundation for the solar industry to continue to develop and receive SREC payments trading within a reasonable range and would facilitate a reduced SACP schedule.
Reduce the SACP
In order to minimize the rate impact of RPS acceleration and reduce the cost burden borne by non-participants in New Jersey’s solar market, the State has initiated action to materially reduce the SACP. The efficacy of lower cost C&I programs coupled with the anticipated continued cost decline in installing solar PV support a step-down in the SACP levels through 2025.According to the CEEEP analysis, with SREC prices starting at $500/MWh and declining 2.5%every year, the cost of a new solar installation can be recouped in about five years for a C&Iproject of 10-1,000 kW, and in ten years for a residential or small commercial project of less than 10 kW.130There have been a number of proposals to modify the SACP schedule; within the industry, there’s general agreement that a reduction in the overall schedule is warranted to reflect the Continuing downward trend in installed costs. The BPU will propose a new schedule following the release of the EMP.”
Keep in mind that the EMP is JUST A PLAN! It takes legislation to implement the increase in the RPS and decrease the SACP. If, and when, a bill is passed in the New Jersey Legislature it still has to be signed into law by Governor Christie. This bill will have to be sensitive to ratepayer impact and if it overreaches there is a high probability that it will not be singed into law.
Beware of the Fine Print
Solar industry insiders will most likely try to insert special perks in a bill like requirements for ratepayers to enter into long term SREC contracts. Long term SREC contracts have shifted all risk on ratepayers in the past while locking in profits for developers. ($475 10 year fixed rate contracts were prevalent). Mandated long term contracts will create risk free investing for new solar investors while the ratepayer and most current solar owners will suffer any future losses in an oversupply and if solar becomes cheaper during the next 10 years. Long term contracting decisions should be flexible and the decision as to how much of the market should benefit should rest with the Board of Public Utilities like it has in the past. This BPU decision making is best and can be used to promote land use issues and satisfy net benefits tests when siting solar.
Job Retention and Stable SREC Prices
Adjustments like these advocated by the Christie Administration will sustain the investment in solar in New Jersey thus retain thousands of jobs associated with the installation of solar. In the absence of an adjustment it is estimated that the solar industry in New Jersey will have to contract for years (Job losses) before the current state mandates catch up. It makes sense to speed up development due to the significant drop in the installed cost of solar. This drop was not modeled to happen for at least another decade when the current solar legislation was passed in January of 2010. Business’s, homeowners, schools and municipalities that invested in solar in the last few years can expect supported SREC prices if a bill is introduced and signed by the Governor. Hopefully this will happen within the next month!
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Our knowledgeable staff is also available to assist you in selling your SRECs for you. Over 3,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. 201-209-0324
At its meeting on November 9, 2011, The New Jersey Board of Public Utilities (“Board” or “BPU”) approved the results of the eighth solicitation under the SREC-Based Financing Program for ACE, JCP&L, and RECO. The eighth solicitation was held for a statewide planned quantity of 15,617.749 kW, divided as follows: 9,986.292 kW for JCP&L, 5,477.147 kW for ACE, and 154.310 kW for RECO. Bids were due on September 2, 2011. The solicitation was oversubscribed with bids for 15Mw of solar with only 5.9Mw of available capacity. The prices were at an extreme discount to previous solicitations with large facilities awarded average SREC prices of $214.92 guaranteed for 10 years while smaller facilities <=50Kw awarded a fixed price of $232.98. These awards are at significant discounts to 10 year awards granted just over a year ago for the 5th solicitation. Solar projects for that solicitation were guaranteed a payment of $466.21 per SREC for ten years from the Local Distribution Companies with rate payer relief. This latest solicitation resulted in prices that are 50% less. The significant discount in prices to 10 year contracts can be attributed to the oversubscription to the solicitation and not to the true cost of solar. A large majority of solar in New Jersey is developed and then sold to tax equity investors. The price that the investor pays the developer is largely dependent upon the SREC price. A long term SREC price at high levels enables the solar developer to flip the project at high margins. When the EDC solicitations are undersubscribed, which is widely known, developers demand higher prices and have been successful in doing so in 7 of the 8 solicitations. High prices granted by the EDCs are backed by the ratepayer who then has to sell the SRECs in the open market for the next 10 years. If the prices are lower for the next 10 years the ratepayer has to make up the shortfall. Absent of the solicitations, developers have been trying for years to achieve 10 year SREC contracts in the mid to high $200 range. With current low panel prices, mid $100 10 year contracts are being sought after in the bilateral market. EDC contracts should achieve lower prices due to the public backing along with low or nonexistent credit checks on the side of the ultimate solar owner and recipient of the long term contract. The EDC financing program has just ended its 3 year life. There are deliberations going on to discuss whether the EDC program should be continued and if it does what changes should be implemented. In the mean time the Solar Alliance has submitted a petition to the Board of Public Utilities to increase the planned quantities under the programs by 47.3mw for this coming year.
More on Flett Exchange:
Flett Exchange is the leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
New Jersey spot Solar Renewable Energy Certificate Prices traded and settled above $200 on the Flett Exchange market yesterday. The official Settlement price was $205 for the energy year 2012 SREC. (2012 energy year is energy generated between June 1, 2011 and May 31, 2012). This is the first time the market settled above $200 since August 2, 2011. The lowest settlement price was $151 between August 16th and the 18th.
Light Selling Volume
According to daily activity on the Flett Exchange marketplace during the last two months the main contributing factor to the recent rally is a lack of selling volume. Daily volume for the energy year 2012 SRECs has dropped approximately 85% on the Exchange since the first 2012 SRECs were minted at the end of July. According to conversations with sellers the drop in volume is directly correlated to the low SREC prices, not supply and demand analysis. Our homeowner clients are just not selling at all. They are calling, getting the prices, and are in disbelief. We explain to them that the state SREC volume mandates have been recently inundated due to a surge in solar installations. Their reaction is that they will just “wait it out”. Our mid-size, independent clients (individuals who own moderate sized installations, 50 to 250 kW, on their business or realty holdings) sell a little more however, the majority of responses are “I am not selling at this low of a price… I don’t need the money today, I am not selling the low”. Our corporate and investment clients, who own large installations or a portfolio of projects, sold most of their SRECs but look for us to hold their hands and really try to squeeze every dollar out. These larger clients have been closely watching the market over the last year and have either sold some production through us on a forward basis or at least have been aware of the build up situation and declining install costs. They don’t like the current prices but want to continue to participate based on the fundamentals. Our public entities are taking a more systematic approach and employing a consistent selling approach to avoid the “Monday morning quarterback” criticism of market timing if they don’t sell and the market drops further. Energy companies with an RPS are showing solid bids to purchase in the mid to high $100s.
“90 megawatts in 90 days”
The fundamental (supply and demand) factors during the same 2 month period have gotten worse. Install rates during the past three months have been staggering. We termed it “90 mw in 90 days”. The past 3 months have seen 40 mw installed state-wide in June, 19.5 mw in July and 31 mw in August. This rate of installs is 300% higher than the average increase dictated by the State RPS (renewable portfolio standard). State law requires 596,000 SRECs purchased for energy year 2013 which is 153 mw above the 442,000 SRECs required in energy year 2012. An average monthly build-rate of 10mw would keep the market balanced. From what we have seen in the marketplace this build-rate will remain strong and add to the oversupply through the end of the year based on Federal depreciation incentives. Even if spot SREC prices continue to remain weak, projects awarded fixed rate 10 year contracts via the BPU approved JCP&L, RECO and ACE will continue to be installed well into next year. The market as a whole will continue to be over-flooded with projects holding these risk-free 10 year contracts, ALL of which were awarded more than double the prices found in the competitive non-ratepayer supported market. Investors in solar without these fixed rate contracts will have to absorb the lower SREC prices and the ratepayer will absorb the losses on the contracts as the SRECs are auctioned off into the oversupplied spot market.
Laissez Faire vs New Legislation
We see only 2 things that will bring the SREC market back (barring any significant reduction in Federal incentives). They are time and/or a change in legislation. Left alone, we expect the SREC market to remain weak for years. That leaves a legislative change from the New Jersey State legislators, with the blessing of Governor Christie, as the only hope to support the market in the next 6 to 8 months. We believe there will be some type of new bill written this fall to take advantage of the recent surge in investing in solar in NJ that has outstripped the demand set by current legislation. The mature solar market in NJ has attracted cheap capital to the Garden State in the past years which has enabled installation companies to increase employment. This build-up in infrastructure has brought significant competition and the end result is that solar installation costs have dropped significantly. When the original law was written in NJ to build out solar, the assumption was that solar install costs would decrease to the tune of 2 to 3% a year. This low decrease in the cost of solar is why the current law set the ultimate goal of 5,316 gwh in year 2026. This would bring the lowest cost over time to the ratepayer. Since installed costs have plummeted due to lower panel prices, low interest rates, healthy federal incentives, and a competitive installer base in NJ there is an argument to move the ultimate goal forward 5 years to 2021. A change in law moving the goal forward would require more solar to be installed in the next few years and take advantage of the low cost of solar now before things change. This would increase demand for SRECs and enable the positive momentum of solar build-up in the State to continue. Any proposal to increase the demand for solar will increase costs as opposed to leaving the law the way it is. We can expect the Christie Administration to require that the ratepayer be protected from runaway costs. A compromise of lowering the current fine of $653 down to $500 (SACP- solar alternative compliance payment) coupled with decreasing the ultimate goal of 5.35 gwh to 4.9 gwh may be a starting point in creating a bill that includes a “net benefits” to the ratepayer as referred to in the revised Energy Master Plan put out by the Christie Administration. There also has to be consideration given to the competitive retail electric suppliers. These suppliers have recently expanded in New Jersey in the last few years and have brought added competition and choice to electricity users in the state. If a law is passed to speed up the rate of installs in New Jersey these competitive suppliers would be saddled with most of the cost of the incremental demand over the previous laws’ SREC requirement. This is due to the fact that the BGS suppliers enter into 3 year contracts to supply power and would not have to buy the incremental SREC demand. The compromise to lessen the strain on competitive suppliers would be to ramp up the demand for SRECs gradually over the next 3 years, not all in the first year.
Players in Trenton
All eyes will be on Trenton in the next few months. The usual players will most likely be involved. They are State Senator Bob Smith, State Assemblyman Upendra Chivakula, and the Board of Public Utilities, all under the watchful eye of Governor Christie. It is my impression that there is a willingness in both the legislature and the Christie Administration to make legislative changes that will add certainty and continued growth in the solar industry and jobs in New Jersey.
Future of SREC values
What does that all mean for SREC values? If a law is passed to increase the amount of solar gradually over the next 3 years, coupled with a decline in the current SACP then energy year 2012 SRECs should rally slightly, but not as much as if an increase in the amount of SRECs is done immediately in ey 2013. A more gradual approach would lift values higher in forward years of 2014 to 2017 and potentially give investors the chance to lock into 3 to 5 year contracts in the low $200s compared to the mid $100s currently. We highly doubt that under any change in legislation there will be a return to $600+ SRECs.
Solar owners and electric companies utilize the Flett Exchange market to buy and sell SRECs in a transparent and competitive fashion on the Flett Exchange Internet trading platform. The market is available 24 hours a day on the Internet and is staffed 5 days a week by professionals here in our Jersey City offices. We also broker long term contracts for large facilities directly with energy companies who sell electricity in New Jersey.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,300 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
Flett Exchange is the only environmental exchange to publish a daily cash settlement price for Solar Renewable Energy Certificates (SRECs). Flett Exchangeâ??s settlement price is a daily volume weighted average for SRECs traded on the proprietary Flett Exchange Internet Trading Platform. Our settlement price is a transparent, fair, and orderly price of SRECs based on free-market competition. Settlement prices are calculated every business day, transmitted to major newswires, and employed by sustainability teams to ascertain the most accurate SREC prices.
Disclaimer: Flett Exchange cannot be held liable for any of the estimates or forecasts listed in this article. All information is estimated and data errors may be significantly impact projections.
New Jersey Solar Owners Need to Check GATS for Energy Year 2010 or 2011 SRECs and Sell Them Now! If you own solar in New Jersey you need to check your GATS account for any SRECs tagged June 2009 to May 2011. Those SRECs are energy year 2010 and 2011 SRECs and are usable for 2011 energy year RPS compliance. Renewable Portfolio Compliance filings are due October 1st by New Jersey electric providers . Prices for energy year 2010 and 2011 SRECs are trading $620 on Flett Exchange today. If you do not sell them they will be worth slightly less than the 2012 SRECs which are trading $195 today. That is a $425 difference!! 1. Check your GATS account for NJ SRECs produced June 2009 to May 2011 2. Log onto Flett Exchange and sell them at the current market price. (this price changes, as of this writing it is $620) 3. Call our trading desk at 201 209 0234 and we will lock in your price and help you transfer the SRECs (Energy year 2012 SRECs (June 2011 to May 2012 generation) are trading at $176 today on Flett Exchange. Volume is very light with over 90% of our sellers taking a wait and see attitude at this time)
September 8, 2011 Third Party Suppliers in New Jersey were largely caught off-guard by the final SREC requirements that were issued on August 26th, 2011. Compliance reports for the 2011 energy year are due on October 1st. At that time any company supplying electricity in New Jersey has to either retire SRECs or pay a solar alternative compliance payment SACP to the State. The SACP for energy year 2011 is $675. Any SACP payments are refunded to ratepayers. Confusion over the required amount of SRECs stems from the change from a percentage requirement to a fixed requirement that went into effect in January 2010 with passage of A3520 the Solar Energy Advancement and Fair Competition Act. Any Basic Generation Service BGS Providers with contracts entered into before passage of the Act remain on the percentage requirement until the contracts expire. This shifted more of the demand onto the Retail Electric Third Party Suppliers. Those suppliers had procured what they thought was their requirement less a few percentage points worth due to the loss in value in the roll to energy year 2012 SRECs which are only trading $195 today on the Flett Exchange electronic marketplace. Prices for energy Year 2011 and 2010 SRECs rallied $164.74 from a $457.09 Flett Settlement on August 25th to a $621.83 settlement on September 7, 2011. The following is the New Jersey Renewable Portfolio Standard Energy Year 2011 Preliminary Solar Compliance Data issued by the New Jersey Board Of Public Utilities on August 26, 2011: NJ Retail Electric Third Party Suppliers, Electric Distribution Companies and BGS Providers: From data submitted to the Office of Clean Energy in the New Jersey Board of Public Utilities (Board staff) by the state’s four Electric Distribution Companies, thirteen unique BGS providers served retail electric end users with 31,334,037 MWhs under contracts entered from the 2008 and 2009 BGS auctions. This supply of electricity is exempt from the newly developed market share basis for NJ RPS compliance per the regulations adopted pursuant to the Solar Advancement Act of 2010.
The reported exempt retail sales must comply with the RPS regulations as they existed at the time of the Act’s passage in January 2010 which was 0.3050 percent of retail sales. As a result, the providers with exempt supply are required to retire SRECs or make SACP payments in the equivalent amount of 95,569 MWhs. The RPS requirements for EY2011 are 306,000 MWh equivalents, ie SRECs retired and SACP payments made by all NJ retail electric suppliers and providers must sum to 306,000 MWh. As a result, non-exempt suppliers and providers must retire 210,431 SRECs or make SACP payments.
The EDCs also reported reconciled retail sales data for the BGS providers with non-exempt retail sales, ie entered under contracts from the 2010 BGS auction as well as preliminary, unreconciled retail sales data for Third Party Suppliers in their respective territories. EDCs reported 17,709,103 MWhs from non-exempt BGS providers and 32,198,209 MWhs from Third Party Suppliers who were not exempted from the Solar Advancement Act’s change to the RPS market share basis for compliance with the solar requirements. The total unreconciled non-exempt retail sales are 49,907,312 MWhs. If you represent a non-exempt supplier or provider, your preliminary solar obligation for that supply can be calculated by dividing your retail sales number as contained in the PJM GATS “My RPS Compliance” report by 49,907,312 and multiplying by 210,431.
Third Party Suppliers have two weeks, by COB Monday September 12 to review their My RPS Compliance report for accuracy with their EY2011 retail sales amount and reconcile the number if required. If the amount in the My RPS Compliance report is inaccurate you must report your final retail sales amount to OCE along with a written explanation for the difference. Please submit reconciliation requests with explanation to OCE@bpu.state.nj.us.
By COB Friday September 16 the OCE will issue a notice of the final retail sales amounts via the NJCleanEnergy.com website and PJM-EIS GATS system. Any questions or comments feel free to use the OCE@bpu.state.nj.us email or contact Scott Hunter at 1-609-292-1956 or Ron Jackson at 1-609-633-9868. More on Flett Exchange: Flett Exchange is the leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,300 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
September 7, 2011 – Flett Exchange is pleased to announce the results of the Stafford Township School District Solar Renewable Energy Credit SREC auction. The sale consisted of 273 credits representing solar energy generated during the 2011 energy year. The sale cleared at $645.01 per SREC. The 2011 energy year runs from June 2010 to May 2011. Flett Exchange charges no commissions to public entities and the proceeds to the District were $176,087.73. The sale was conducted on the Flett Exchange Electronic trading platform. All bids are shown in real time with absolute transparency. Market participation was strong with numerous electric providers competing to fulfill their renewable portfolio standard. Recent strength was seen in the tail end of the 2011 energy year compliance period. Competitive suppliers were given their final tru-up formula from the New Jersey Board of Public Utilities on August 29th. There was surprise in the industry from the side of the competitive electric suppliers with the release of the formula. Final SREC obligations were higher for competitive suppliers based upon a shift away from the basic generation services BGS suppliers who competitive suppliers have solicited business and homeowners to switch from in an increasing rate during the last year and a half. The BGS suppliers, who contract to supply power in 3 year intervals are exempt from increases in the solar carve out increases under the Solar Advancement and Fair Competition Act which changed SREC obligations from a percentage of power supplied to a fixed number. When the BGS supply contracts expire the SREC obligations will even out again. Market volatility has increased in the last month while the last few SRECs make their way to the market. Market sellers at this point are taking large risks since SRECs that are not sold in time for the October 1st deadline can be used for the following year however those prices are currently trading in the high $100s. SRECs for the 2011 energy year traded as high as $640 on the Flett Exchange spot platform which is used by facilities ranging from homeowners with 1 SREC to multi-megawatt facilities with thousands of SRECs. Energy year 2012 SRECs (June 2011 to May 2012 generation) are trading $170 today for immediate payment and delivery. More on Flett Exchange: Flett Exchange is the leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,300 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.v
Owners of Solar in New Jersey were shocked at the lower prices they are receiving for their Solar Renewable Energy Certificates SRECs. The new Energy Year started in June of 2011. Those SRECs were made available for transfer on the State website (GATS) on July 29th. The market price on the new energy year is 50% lower than the previous energy year. Prices as of 8am on Flett Exchange’s Internet trading platform are $276. The Drop in prices is directly correlated to the potential of an oversupply of SRECs for the 2012 Energy year. There has just been too much solar installed too quickly compared to the mandates put on the electric producers. Electric Producers in New Jersey are required by law under the Renewable Portfolio Standard to purchase 442,000 SRECs from solar owners during the June 2011 to May 2012 time period (energy year 2012). There is currently almost enough solar installed to produce that amount of SRECs. The oversupply is coming from the rate that solar is being installed. In June of 2011 alone there was 40 Mw of solar installed in NJ. This was more than 10% of all the solar ever installed since the inception of the program in 2004. At this rate there may be more than a 100,000 oversupply of energy year 2012 SRECs. The SREC market is designed to fluctuate with supply and demand. The lower SREC prices are designed to throttle back development and only let the cheapest installations go forward. In the end the ratepayers will receive the best value based on competitive prices. Flett Exchange customers can view prices in real time on the Flett Exchange Internet trading platform. They can sell at current prices or place an order to sell above the market if they think prices will rebound. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
On June 20th the New Jersey Senate Environment and Energy Committee made amendments to Senate Bill 2371. The Bill was passed in the State Senate on June 29th and now sits in the Assembly Telecommunications and Utilities Committee. Last move amendments to S2371were made on June 20th which would speed up the already aggressive solar renewable portfolio standard in New Jersey. The intention of the Bill is to prevent a multi-year collapse in Solar Renewable Energy Certificate (SREC) prices. The Bill proposes to skip the energy year (EY) 2013 SREC requirements and move right to EY 2014 requirements. Instead of requiring 596,000 SRECs to be purchased by energy providers in EY 2013, the requirement would jump to 772,000 SRECs. The rest of the schedule would remain the same, just moved ahead one year.
Energy Year
Current SREC Requirements
Proposed SREC Requirements
EY 2011
306,000
306,000
EY 2012
442,000
442,000
EY 2013
596,000 (REMOVE)
772,000 (REPLACE)
EY 2014
772,000
965,000
EY 2015
965,000
1,150,000
EY 2016
1,150,000
1,357,000
EY 2017
1,357,000
1,591,000
EY 2018
1,591,000
1,858,000
EY 2019
1,858,000
2,164,000
EY 2020
2,164,000
2,518,000
EY 2021
2,518,000
2,928,000
EY 2022
2,928,000
3,433,000
EY 2023
3,433,000
3,989,000
EY 2024
3,989,000
4,610,000
EY 2025
4,610,000
5,316,000
EY 2026
5,316,000
At the current pace of solar development, the New Jersey Solar Renewable Energy Credit SREC market is expected to produce an oversupply of SRECs for the upcoming year. The next energy year (June 2011 to May 2012) requires load serving entities (LSEâ??s) in New Jersey to purchase 442,000 SRECs for their compliance. We estimate that 490,000 to 590,000 SRECs will be created by NJ solar installations at the current rate of solar installations. The change proposed in the Bill will mop up the expected oversupply and keep the SREC prices stable. Without such a change the extra supply of SRECs may take 2 years to filter out of the market, and prices for SRECs will be so low that investors in solar in NJ will receive prices for SRECs much lower than expected. Solar development, one of the bright spots in the New Jersey Economy, may drop over 50% from the current pace of installs. SREC prices have already dropped in anticipation of the over-supply and are trading at $375for July 29th delivery. This is a significant drop from the current price of $599.63 which was July 6, 2011 settlement price on the Flett Exchange Internet trading platform. It would take a virtual halt in the rate of solar installs over a period of a year to bring the SREC market into a balanced supply-demand scenario. In the meantime SREC prices for spot and forward terms would remain under significant pressure.
During the June 20th meeting of the Senate Telecommunications and Utilities Committee in Trenton Senator Bob Smith identified that the solar industry and regulators did not expect that the rate of solar installations would be so successful so quickly and potentially exceed the strong State mandates. This Bill is the type of preventive measure that is needed periodically in a program to reach long term goals of solar installations while maintaining confidence with solar investors. With a confident class of investors the ratepayer is more likely to benefit over the long term with clean solar energy at ever decreasing costs.
As this bill works its way through the process, Governor Christie and the BPU will clearly have their say. It is a well known fact that the Administration would like to see the cost of solar brought down for the ratepayer. One should not expect support for a bill from the Governor that would just push SREC prices back up to the $600 level for years. We expect there to be a compromise required from the Governor in the form of lowering the established SACP from energy year 2013 to 2017 (this was hinted to in the revised energy master plan). The current defined SACP is in the High $500 to low $600 Range. A $100 drop would save ratepayers a potential $150,000,000 in energy year 2017 in the case of a short, undersupplied SREC market. Most solar investors that we speak to would accept this compromise in return for the accelerated growth and price support that would transpire with this Bill. Regardless of the recent tensions between Democrats and Republicans in Trenton, we believe that Governor Christie, BPU President Solomom, Senator Bob Smith and Assemblyman Chivakula will work this Bill to continue NJ on the path of more solar for New Jersey residents, businessâ??s and municipalities at lower costs to ratepayers.
There was not support from the competitive electric suppliers for forcing long term contracts on them for SRECs. This long term contracting and shifting of development risk to other parties, be they ratepayers or electric suppliers, is advocated by certain sectors of the solar installers and development industry in New Jersey and was included in this Bill in its original form. Long term contracts were scrapped from the Bill. Long term, 15 year contracts would have transferred all of the risk of solar developers on electric suppliers which in turn would bring electric costs up for all ratepayers. Shifting risk from future solar developers to entities that do not benefit would create a split risk market that would disenfranchise those who already invested in solar.
Michael Flett, President of Flett Exchange, spoke in favor of the bill in Trenton on June 20th in front of the Senate Environment and Energy Committee. He reiterated the need to increase the RPS to prevent a prolonged collapse in SRECs, spoke out against forcing long term contracts on competitive electric suppliers, and also brought up the benefits of a $100 SREC price floor as a future mechanism.
New Jersey is in the right place at the right time with an established solar industry to take advantage of Federal incentives along with plummeting panel prices. The SREC market can take most of the credit as a mechanism. With proactive measures like this Bill with support by Christie, Solomon, Smith and Chivakula the benefits to investors and ratepayers can continue in a competitive fashion.
More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
Energy Year 2011 New Jersey Solar Renewable Energy Certificates Trade Below $600 for the first time on the Flett Exchange Internet trading platform. A few hundred SRECs traded at 10:11am on the screen and was followed by a 6 lot trade at $590. Flett Exchange customers have been locking in prices on Flett Exchange since the last minting of energy year 2011 SRECs last Thursday, June 30th. High volume has traded at even increments giving sellers ample opportunity to lock in prices. Customers of the Exchange can see all bids and offers in real time to ensure they are getting competitive pricing. Payment and delivery are all handled seamlessly by Flett Exchange. Payments to sellers are typically made the same day as the transaction. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
Prices for spot New Jersey Solar Renewable Energy Certificates SREC have slid in trading on the Flett Exchange in the past 2 days as solar owners scramble to lock in prices. The Friday, July 1, 2011 settlement price was $609.93 which is a $18.15 drop on the back of a $12.87 drop the previous day.There has been record heavy volume on the exchange due to the minting of the last of the energy year 2011 SRECs on GATS on June 30th. This is the lowest price since July of 2010 and is 7% lower than the $655 settlement price which sellers achieved on Flett for the majority of the year. The current bid on the trading platform is $600 for a few hundred SRECs with buyers posting bids on the trading platform in a scale down fashion. Since the minting of the SRECs at 8am on June 30th Flett Exchange customers have sold SRECs starting at $637.50. Buyers have participated at virtually every level (every $2.50 for hundreds of SRECs) on the Flett trading platform giving sellers a chance to lock in prices, transfer SRECs and get paid. (All Flett Exchange managed SREC clients were locked in at $645! as we took precautionary measures and locked in prices early as opposed to waiting to the 3rd business day) Flett Exchange is the only company to provide the SREC markets with real time execution services and transparency. (Flett Exchange is neutral and does not make money as an aggregator does with offering lower prices to sellers) The New Jersey SREC market is experiencing a pivotal change on the back of unexpected solar development in the Garden State. In past years there has not been hardly enough solar to meet State mandates. Hence, SREC prices have been hoovering near the fine levels. Going into the close of the 2011 energy year (it ended in May 2011) there is estimated to be only a slight shortage of SRECs to meet state needs compared to large shortages in previous years. Inexperienced market analysts have predicted market prices to remain high for the balance of energy year 2011 SRECs which underestimates the risk to sellers. There are a variety of different factors that will come into play during the next 2 months as the remaining compliance buyers pick up their last SRECs. As they finish and prepare their compliance filings, the energy year 2011 SRECs will converge and trade at an expected $20 discount to the energy year 2012 SRECs. At current levels that puts the EY 2011 SRECs in the mid $300s by October 1st. This significant price difference between energy years has created a liability for buyers because if they overbuy SRECs they will loose over $200 if they need to use them for next years compliance. The specter of the possibility of failed auctions in the coming month has many flocking to the Flett Exchange market to lock in prices. There is a record volume auction of the Load Serving Entities SRECs on July 12 of over 30,000 SRECs. This is 10% of the whole years production in one sale. The auction is run by NERA consulting. A large auction into a relatively balanced market, at the end of an energy year, with most LSE’s estimated to be close to finished with compliance buying runs a high risk of clearing at low prices compared to the current spot price. (A failed auction can occure when the sellers choose too high of a reserve price or when there fails to be enough buyers to clear the total volume) There is a slight possibility that the auctions will clear at stable to high prices. Flett Exchange customers can log on 24 hours a day to sell SRECs on our transparent and competitive Internet trading platform to sell their SRECs, call our trading desk during normal business hours 201 209 0234, or email us at info@flettexchange.com. (DON’T TRANSFER SRECS ON GATS AT THE PREVIOUS DAYS SETTLEMENT PRICE AND EXPECT TO GET FILLED THERE. WE CAN ONLY TRANSACT AT THE PRICES AVAILABLE IN REAL TIME) More on Flett Exchange: Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
Once a year it happens in the NJ SREC market, the energy year switch. Sellers of SRECs are confused every year. This year can cost sellers LOTS of money if they don’t sell in time. Let’s go over the basics and why this year is different from years past:
The Energy Year Basics:
The energy year runs from June to May (example: energy year 2011 SRECs represent power produced from the beginning of June 2010 to the end of May 2011.
Power providers in NJ must produce a compliance report on October 1st and at that time they must retire SRECs and/or make Solar Alternative Compliance Payments (SACP).
The time between June and October is called the true-up period. The true-up period gives the buyers enough time to get their count of SREC needs and either buy more or dispose of extra SRECs.
Sellers who have accumulated SRECs and not sold them during the year have a short amount of time to sell their SRECs.
Why are things different this year?
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.
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.
Prices for SRECs for future years have dropped 38% in the last few months.
What should I do if I have SRECs?
If you have SRECs in your GATS account you need to sell them now and sell them again at the end of this month when the last ones are posted in GATS. Don’t try for higher prices. In the past, sellers have been able to get a few extra dollars by holding out until the end. We don’t think the risk/reward is there this year. Trying to get $650 when the best bid is $645 is not wise. If prices start to drop just accept the bid and go on.
The last SRECs that can be used by the buyers for October’s compliance will be May 2011 generation. These SRECs will be available for transfer in GATS at the end of June.
Flett Exchange customers can log onto the Flett Exchange trading platform to lock in their prices 24 hours a day 7 days a week. You can also call our trading desk and we will lock in the price for you. Don’t just transfer SRECs to “Flett Exchange llc” on GATS without first locking in your price! Call us or trade them on our trading platform.
What is going to happen to prices in the future?
Prices for energy year 2012 SRECs are trading in the high $300s for future delivery. These prices are expected to go up and down based on the level of future solar installations. If homeowners, businesses, schools, municipalities and PPA firms continue to develop solar in excess of the State mandates then the SREC prices will continue to go down in price. If solar development throttles back the prices will stabilize. Prices can also stabilize based on Board of Public Utility rulemakings and future legislation changes.
More on Flett Exchange:
Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,800 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
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. Energy Year 2012 SRECs represent generation starting in June 2011 and ending in May 2012. The trade was for 50 SRECs representing solar power generated during June 2011. The SRECs are deliverable on July 29th, which is the first day that energy year 2012 SRECs will be minted and available for transfer on the GATS tracking system. Payment will be made to the seller 5 business days after delivery.
This is a significant discount to SRECs generated for May 2011. The May SRECs will be posted for sale this Friday and are currently trading for $645 on the Flett Exchange Electronic Trading Platform. The price difference between the energy years is different because of supply and demand. There are differing opinions on the supply for 2011 SRECs however, it is right around balanced. Energy Year 2012 SRECs are dropping because the pace of development may far exceed New Jersey State mandates for solar energy in the short term. Owners of NJ SRECs should sell their SREC that are already generated and to be minted this Friday as soon as they are available on GATs. Sellers can log onto their Flett Exchange account to lock in their price for their remaining 2011 SRECs or they can call our trading desk at 201-209-0234. More on Flett Exchange: Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 3,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
The New Jersey Energy Year 2012 (June 1st 2011 – May 31st 2012) SREC prices have experienced a sharp decline. The precipitous drop in price is due to an expectation of an oversupply of SRECs for New Jersey in the next 12 months. Solar development has quickly outpaced state mandates. New Jersey is second only to California for installed solar capacity and now has over 9,000 statewide solar installations, which equates to 330 Megawatts (MW) of distributed generation. The Board of Public Utilities (BPU) recently announced that 29 MW of solar was installed in April 2011. This monthly record build will assist New Jersey in meeting and exceeding its Renewable Portfolio Standard (RPS). The prior record build was 25 MW which was set in December 2010 and installed solar capacity has averaged 15MW per month since September 2010. In order to quantify the oversupplied scenario let’s review the NJ SREC supply and demand situation. As of April 2011, 330 MW of solar was installed in NJ which equates to approximately 396,000 annual SRECs. If the NJ solar industry stopped installing solar right now, the market would remain short compared to the required demand. However solar installations are gaining momentum and continue to be installed at a robust pace which could quickly oversupply demand. The build-out rate will dictate the severity of the oversupplied situation. This leaves the most important question: will the market continue to build at the current rate or will the market participants assess the oversupply risk and throttle back on installs? Our conservative estimate of an annual monthly build out rate of 7 MW per month starting in July would produce approximately 501,000 SRECs for EY 2012. Another estimate of a 17MW per month build out rate would produce 564,000 SRECs for EY 2012. Load Serving Entities (LSEs) need to purchase 442,000 SRECs for Energy Year 2012. If LSEs do not purchase enough SRECs in the spot market to satisfy their state mandated obligation, they are subject to pay a Solar Alternative Compliance Payment (SACP) of $658.00. In past NJ Energy Years SREC demand has outstripped supply, creating a tight market and allowing the SRECs to trade between 92%-97% of the SACP. However this should not be the case for Energy Year 2012. The above estimates create an oversupply situation of 59,000-122,000 SRECs for Energy Year 2012. The Pennsylvania SREC market is an example of what can happen to an SREC market when it goes oversupplied. In EY 2010 PA SRECs were trading in the $300s, when the market went oversupplied and prices declined swiftly and lost 70% of their value in a year. This is a good lesson for NJ solar generators and demonstrates that SREC markets can be volatile and illiquid by nature and that the best way to sell SRECs is on a regular basis or “hit bids” as the market moves lower. Some PA solar generators failed to sell their SRECs as prices moved lower, only to capitulate at lower prices. Waiting until the end of the Energy Year to transact your NJ SRECs at a premium price is now a thing of the past. NJ solar generators should be pro-active with their NJ SRECs and should sell as prices move lower to achieve a healthy dollar cost average to ensure a steady revenue stream. It is also important for participants realize that SREC markets were established to self correct. When too much solar is developed there is an oversupply of SRECs and prices go down. When not enough solar is developed SREC demand increases and prices go up. When a SREC market corrects to the downside, only the most cost-effective installations will be brought to market, since they have the ability to install solar at a lower SREC price and receive a lesser return. Going forward, installations who accept a lesser return-on-investment and embrace more SREC risk will be the ones being developed in New Jersey. There are two ways to prevent the SREC market from being oversupplied. First is to slow the pace of solar development and second is for New Jersey to increase the amount of solar needed. State RPS goals for 5 Giga Watt Hours of solar by 2026 should be moved forward. New Jersey is a clear leader in solar energy and hopefully the revised Energy Master Plan will recommend an increase in solar in a shorter amount of time. New Jersey SREC prices for Energy Year 2012 are currently being quoted on the Flett Exchange. Our customers can utilize Flett Exchange’s online trading platform to price their first delivery of 2012 SRECs, which occurs in late July 2011. The current EY 2012 NJ SREC market is $400 bid and offered at $500. Please go to www.flettexchange.com to review daily SREC settlement prices. More on Flett Exchange: Flett Exchange is largest volume SREC exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,800 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (its simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-5 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services. Disclaimer: Flett Exchange cannot be held liable for any of the estimates or forecasts listed in this article. All information is estimated and data errors may be significantly impact projections.
Prices for Solar Renewable Energy Credits SRECs in New Jersey starting this summer (energy year 2012 – June 2011 to May 2012) drop below $500. This is a sharp contrast to the $658.99 settlement for SRECs being traded on the Flett Exchange spot market. This is due to the perception that solar is being built at too quick of a pace and will oversupply the utilities needs for the next energy year. The drop in SREC prices will filter out all of the high priced solar projects in the State. Flett Exchange brokers long term SREC contracts for solar customers. Our customers have been locking in forward prices for SRECs to protect against an oversupply situation like this. The active market to lock in forward prices is currently 1, 2 and 3 year contracts. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
New Jersey Solar Renewable Energy Certificate (SREC) prices are declining. With the robust pace of installations there will most likely be an oversupply of SRECs in the New Jersey market in Energy Year 2012. This includes production from June 2011 to May 2012. Prices for this period are approximately trading around $550 per SREC, which is 15% lower than the current trading price of $655 for Energy Year 2011 SRECs. If the rate of solar installations continues at this rate, prices can be expected to drop into the $400s and even into the $300s for the Energy Year 2012 SRECs. Most solar investors only look at the spot price of SRECs. They are unaware of the recent drop in forward prices until the end of July when the new Energy Year rolls over and SRECs are minted. Development will most likely continue at the rapid clip until the lower prices are widely known within the industry. Most installers will increase sales while the prices are high and look to lock in contracts. The high spot prices of New Jersey SRECs has brought in increased competition and has lowered install costs significantly. The competitive nature of higher SREC prices created lowered margins and brought to a mature solar industry to NJ in a short period of time. Long-Term 10 year SREC contracts recently awarded to installations in JCP&L, ACE, and RECO SREC solicitations will have to be absorbed by ratepayers for years to come. Most of these contracts were awarded at prices as high as $450 for periods as long as 10 to 15 years and have not even been built yet. Lower SREC prices are designed to eliminate higher cost projects and only low cost projects will develop. Solar developers can lock into 3 to 5 year bilateral contracts directly with Load Serving Entities (LSEs). Flett Exchange actively brokers these contracts. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
April 19, 2011 – Flett Exchange is pleased to announce the results of the Mt. Laurel MUA, New Jersey Solar Renewable Energy Certificate (SREC) public-auction. 191 New Jersey 2011 SRECs were sold at a clearing price of $655.00. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $125,105.00. Qualified buyers and the public could participate and/or observe the bidding in real time by logging in to Flett Exchange. The $655.00 clearing price is 97% of the $675 Solar Alternative Compliance Payment (SACP). The SACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
April 20, 2011 – Flett Exchange is pleased to announce the results of the Atlantic County Utilities Authority (ACUA), New Jersey Solar Renewable Energy Certificate (SREC) public-auction. 101 New Jersey 2011 SRECs were sold at a clearing price of $655.00. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $66,155.00. Qualified buyers and the public could participate and/or observe the bidding in real time by logging in to Flett Exchange. The $655.00 clearing price is 97% of the $675 Solar Alternative Compliance Payment (SACP). The SACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
As of March 2011 there is 305 Mw of installed solar capacity. At the current pace of installs the New Jersey SREC market will be oversupplied in energy year 2012. Here is a press release from the New Jersey Board of Public Utilities:
April 12, 2011 -New Jersey Excels in the Solar Market – New Jersey surpasses 300 MW of installed solar capacity and is on target to exceed Renewable Portfolio Standard goals this coming Energy Year – TRENTON, N.J. – The New Jersey Board of Public Utilities (BPU) announced today that New Jersey’s installed solar capacity has surpassed 300 MW, and that there are more than 8,000 projects statewide. Solar installations in New Jersey are coming online at an unprecedented rate. Newly installed capacity has averaged 15 MW per month since September 2010. This has increased the supply of Solar Renewable Energy Certificates (SREC) eligible for use in meeting New Jersey’s Renewable Portfolio Standards (RPS).
Through March 2011, New Jersey has a total of 305 MW of solar renewable energy capacity installed as a result of incentives available through New Jersey’s Clean Energy Program, net metering and interconnection regulations, RPS regulations, and the SREC financing model. The amount of solar capacity installed in 2010 exceeded the cumulative amount of solar installed since the beginning of the clean energy incentive programs in 2001.
”New Jersey continues to be at the forefront of the solar industry,” said BPU President Lee A. Solomon. “As the SREC market continues to grow, New Jersey will ensure that there is transparency and certainty for businesses in the renewable energy market.”
New Jersey’s RPS program continues to attract varied participants, including facility owners of all sizes, renewable energy generation facility developers, renewable energy system installers, energy brokers, aggregators and auction hosts. Stakeholders stated, again and again, that reporting accurate REC and SREC price data is essential to advance the renewable energy market. When RECs or SRECs are transferred or retired, correct price data must be entered in the PJM-EIS Generation Attribute Tracking System (GATS) so that all market participants can get an accurate picture of market trends. The BPU approved recently new rules governing the registration process to make certain that necessary data is available for market analysis. Prior to the recent changes, the developer of a solar array would register the project when the array was about to be operational. To improve transparency, the new rule requires registration of the intent to seek SRECs prior breaking ground on the project.
The draft 2010 Annual Report on New Jersey’s Renewable Portfolio Standard Rules was released today for public comment. Stakeholders have until May 30, 2011, to provide comments to the Office of Clean Energy. Comments should be submitted to, OCE@bpu.state.nj.us
The solar RPS goal is 442,000 MWh, or 368.33 MW of capacity for energy year 2012, which runs from June 1, 2011, through May 31, 2012. According to the draft report, if the recent growth in the SREC market continues, New Jersey will be on track to exceed its RPS goal in Energy Year 2012.
Electricity suppliers can meet their RPS requirements by purchasing SRECs. If they do not meet the requirements of New Jersey’s solar RPS, they must pay a Solar Alternative Compliance Payment (SACP). The price of SRECs, which are traded in a competitive market, may vary significantly due to fluctuations in supply and demand.
For more information about the NJBPU or New Jersey’s Clean Energy Program visit NJCleanEnergy.com or call 866-NJSMART.
About the New Jersey Board of Public Utilities (NJBPU):
The NJBPU is a state agency and regulatory authority mandated to ensure safe, adequate and proper utility services at reasonable rates for New Jersey customers. Critical services regulated by the NJBPU include natural gas, electricity, water, wastewater,telecommunications and cable television. The Board has general oversight responsibility for monitoring utility service, responding toconsumer complaints, and investigating utility accidents. To find out more about the NJBPU, visit our web site at www.nj.gov/bpu.
About the New Jersey Clean Energy Program (NJCEP):
NJCEP, established on January 22, 2003, in accordance with the Electric Discount and Energy Competition Act (EDECA), provides financial and other incentives to the State’s residential customers, businesses and schools that install high-efficiency or renewable energy technologies, thereby reducing energy usage, lowering customers’ energy bills and reducing environmental impacts. The program is authorized and overseen by the New Jersey Board of Public Utilities (NJBPU), and its website is www.NJCleanEnergy.com.
More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
The New Jersey Board of Public Utilities Approved the Results of Round 6 of the Local Distribution Company Long Term Solar Renewable Energy Certificate SREC contracting. This solicitation was for a total of 20Mw. 5.8 Mw was for JCP&L, 11.9 Mw for Atlantic City Electric ACE, and 2.3Mw for Rockland Electric. The competitive solicitation was performed by NERA.
The results for larger projects (above 50 kW) were as follows:
One hundred and five (105) bids were received, totaling 39,082.716 kW;
Forty-seven (47) awards were made, totaling 15,788.237 kW;
Fifty-eight (58) bids totaling 21,797.641 kW were rejected because pricing was found not to be competitive;
The average NPV for the recommended awards is $2,926.34 (corresponding to an average SREC price of $413.83/SREC for a ten-year contract);
The lowest NPV for the recommended awards is $2,423.64 (corresponding to an average SREC price of $342.74/SREC for a ten-year contract).
Offers by solar developers were twice the available capacity in the solicitation. This was due to a rush by developers in hopes to cash in on the above market prices achieved during the previous 5 solicitations. The solicitation is competitive in the sense that the projects are selected from lowest price to highest until the quantity is filled or when the prices become “uncompetitive”. There is no transparency in any part of the solicitation. All offers are blind and all individual contract results are kept confidential. Award pricing varies widely based on the distribution areas of the individual projects.
The long term prices awarded during these solicitations continue be approximately 30% higher than comparable prices in the free market. This premium can be estimated to be a 50% premium if consideration is taken as to the quality of the contract. It is widely understood in the industry that a long term contract with a local distribution company with the blessing of the BPU is stronger than a bilateral contract with an independent power company. Ratepayers make up for the losses in these contracts if the prices of SRECs decline in the next 10 years. In the short run the ratepayer will profit if the LDC companies can sell the SRECs at a higher price in the spot market.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers. Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange also brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
March 29th, 2011 – Flett Exchange is pleased to announce the results of the Jersey City, NJ Public Schools Solar Renewable Energy Certificate (SREC) public-auction. 277 New Jersey 2010 SRECs were sold at a clearing price of $643.50 and 285 New Jersey 2011 SRECs were sold at a clearing price of $655.00 The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $364,924.50. Qualified buyers and the public could participate and/or observe the bidding in real time by logging in to Flett Exchange. The $655.00 clearing price is 97% of the $675 Solar Alternative Compliance Payment (SACP). The SACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services
The New Jersey Renewable Energy Manufacturing Incentive REMI program provides cash incentives for new solar installations that purchase solar panels, inverters and racking systems manufactured in New Jersey. You must purchase the products from a manufacturer that has been approved to participate in the NJREMI program. The program budget is $1.0 million so just like other solar incentives in New Jersey you may want to act fast before the money runs out. Projects in both the Renewable Energy Incentive Program REIP and the SREC Registration Program SRP are eligible. The incentive will be capped at 500kW per project.
Renewable Energy Manufacturing Incentives:
Incentive ($/ Watt)
Maximum System Size
Maximum Incentive
Solar Panels
Residential: 0 – 10 kW
$0.25
10 kW
$2,500
Non-Residential: 0 – 50 kW
$0.14
50 kW
$7,500
Non-Residential: 51 – 100 kW
$0.12
100 kW
$12,000
Non-Residential: 101 – 500 kW
$0.08
500 kW
$40,000
Inverters and Racking Systems
Residential: 0 – 10 kW
$0.15
10 kW
$1,500
Non-Residential: 0 – 50 kW
$0.09
50 kW
$4,500
Non-Residential: 51 – 100 kW
$0.07
100 kW
$7,000
Non-Residential: 101 – 500 kW
$0.05
500 kW
$25,000
As of March 15, 2011 the approved companies and products are:
There is also a bill in the New Jersey Legislature that will give a Solar Renewable Energy Certificate SREC for every 850 kw of power instead of 1000kw for facilities that utilize solar products manufactured in New Jersey. The bill is in its infancy and has yet to define what qualifies a “made in NJ” solar array in terms of panels, racking or inverters.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and get a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
A bill passed by the New Jersey State Legislature allowing wind and solar facilities to be built on closed landfills and quarries is awaiting Governor Christies signature. This legislation continues the trend towards larger solar arrays. In the end this will better enable solar developers in the State to achieve the amount of solar installs to satisfy renewable portfolio standard RPS requirements. The amount of solar installed in NJ has consistently not been enough to generate enough Solar Renewable Energy Certificates SRECs needed by electricity producers in New Jersey. This has resulted in SREC prices trading at 97% of the solar alternative compliance payment SACP for years. It is likely that financing for solar at these landfills will be attained through bond issues at the county levels. Repayment of the bonds will rely on revenue from SRECs along with the sale of electricity. Public – private structures that are designed correctly can bring the best value to ratepayers and counties alike.
The following is a copy of the bill:
[Second Reprint]
SENATE, No. 2126
STATE OF NEW JERSEY
214th LEGISLATURE
INTRODUCED JUNE 24, 2010
Sponsored by:
Senator JIM WHELAN
District 2 (Atlantic)
Senator PHILIP E. HAINES
District 8 (Burlington)
Assemblywoman ANNETTE QUIJANO
District 20 (Union)
Assemblyman WAYNE P. DEANGELO
District 14 (Mercer and Middlesex)
Assemblyman RUBEN J. RAMOS, JR.
District 33 (Hudson)
Assemblywoman CONNIE WAGNER
District 38 (Bergen)
Co-Sponsored by: Senators Beach, Madden, Greenstein, Assemblywoman Casagrande, Assemblymen Rudder and Delany SYNOPSIS Permits development of solar and wind facilities and structures on landfills and resource extraction operations under certain circumstances.
CURRENT VERSION OF TEXT As reported by the Assembly Telecommunications and Utilities Committee on December 13, 2010, with amendments. AN ACT concerning solar energy and wind energy and supplementing P.L.1979, c.111 (C.13:18A-1 et seq.) and P.L.1975, c.291 (C.40:55D-1 et seq.). BE IT ENACTED by the Senate and General Assembly of the State of New Jersey:
1. 1a.1 2[The] Within 120 days after the date of enactment of this act, the2 Pinelands Commission 2[, in reviewing any application for] shall adopt rules and regulations providing for the approval of2 the development of a solar or photovoltaic energy facility or structure 2in the pinelands area2 on the site of a 2[closed]2 landfill or 2[quarry, or an existing or]2 closed resource extraction operation 2[, within the pinelands area, shall determine] which operated pursuant to a resource extraction permit on or after December 31, 1985, provided2 that the development is 2[in conformance with the applicable standards of]consistent with2 the comprehensive management plan, adopted pursuant to section 7 of P.L.1979, c.111 (C.13:18A-8), 1[and] 2[provided that1] and2: 1[a.]1 (1) if located on a 2closed2 resource extraction site, the facility or structure shall be on previously disturbed lands that have not subsequently been restored 2, become reforested, or become habitat critical to the survival of a threatened or endangered species of animal or plant,2 and which are not subject to any restoration obligation pursuant to the comprehensive management plan; (2) if located on a closed landfill, the facility or structure shall be on previously disturbed lands 2[or] , and may be on2 adjacent lands 2[,] thereto but only2 if required to ensure the viability of the proposed facility or structure 2and as necessary solely for access to the facility or structure and transmission ingress and egress2 ; or (3) if located on a landfill that has not been closed in accordance with a plan approved by the Pinelands Commission in consultation with the Department of Environmental Protection, the development of the facility or structure shall facilitate closure of the landfill in accordance with such a plan. The landfill shall be closed in accordance with a plan approved by the commission, in consultation with the department, under the requirements of the comprehensive management plan prior to, or concurrent with, the installation of the solar or photovoltaic energy facility or structure1[;] .1 b. 1[Development] In addition to the conditions set forth in subsection a. of this section, development1 of the facility or structure shall not permanently or adversely impact: (1) any existing engineering devices or other environmental controls located on a site, except as may be approved by the Pinelands Commission in consultation with the Department of Environmental Protection; and (2) ecologically sensitive areas located on, adjacent to, or within the same sub-watershed as the site proposed for development, except as may be approved by the commission in consultation with the department. c. Within one year after the termination of use of the solar or photovoltaic energy facility or structure, the facility, and all structures associated therewith, shall be removed and restoration of the site shall be completed in accordance with the comprehensive management plan, or within another time period as approved by the Pinelands Commission, in consultation with the Department of Environmental Protection and under the requirements of the comprehensive management plan.
2. 1a.1 Notwithstanding any law, ordinance, rule or regulation to the contrary, a solar or photovoltaic energy facility or structure constructed and operated on the site of any 2[closed]2 landfill 2[or quarry, or a legally existing]2 or closed resource extraction operation, shall be a permitted use within every municipality. 1b. Notwithstanding any law, ordinance, rule or regulation to the contrary, a wind energy generation facility or structure constructed and operated on the site of any 2[closed]2 landfill 2[or quarry, or a legally existing]2 or closed resource extraction operation, shall be a permitted use within every municipality outside the pinelands area as defined pursuant to section 3 of P.L.1979, c.111 (C.13:18A-3).1 2The Department of Environmental Protection may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as necessary to effectuate the purposes of this subsection.2
3. This act shall take effect immediately.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,000 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and get a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
Flett Exchange is pleased to announce the results of the Atlantic County Utilities Authority (ACUA) Solar Renewable Energy Certificate (SREC) public-auction. 145 New Jersey 2011 SRECs were sold at a clearing price of $660.00. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $95,700.00 Qualified buyers and the public could participate and/or observe the bidding in real time by logging in to Flett Exchange.
The $660.00 clearing price is 98% of the $675 Solar Alternative Compliance Payment (SACP). The SACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
More on Flett Exchange:
Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 2,200 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and receive a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
Flett Exchange is pleased to announce the results of the Lawrence Township Public Schools Solar Renewable Energy Certificate (SREC) public-auction. 119 New Jersey 2010 SRECs were sold at a clearing price of $649.00 and 415 New Jersey 2011 SRECs were sold at $655.00. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $349,056.00. Qualified buyers and the public could observe the bidding in real time by logging in to Flett Exchange. The $655.00 clearing price is 97% of the $675 Solar Alternative Compliance Payment (SACP). The SACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities. More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 1,800 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and get a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience. Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
As Reported by Reuters News Service it may be expected that the Grant in-Lieu-of the Federal Tax Credit may be extended in the lame duck session of Congress. The ability to obtain a grant expires on Dec 31, 2010. When Congress begins in January the ability to extend the Grant diminishes due to the increase in Republicans.
If the Grant expires solar developers will have to find tax equity partners for solar projects instead of just filing paperwork and receiving a cash grant within 60 days. In general, the Investment Tax Credit (ITC) has been worth more than the grant, however solar developers prefer not having to obtain a tax equity partner. Many solar developers are not sophisticated enough to obtain tax equity partners and the inclusion of a tax equity partner generally requires forward hedging to mitigate downward price risk in SREC based markets. Forward hedging and inclusion of another partner generally diminishes returns and forces installers to be more competitive. This will squeeze developers and integrators margins.
An extension of the Grant is bad news for present solar investors in states like New Jersey where increased development is trending towards an oversupply of solar in the next year. Grant expiration is the best way to throttle back new installations in the next year. This may allow the shortage of SRECs to continue thus potentially delaying a drop in SREC values. SREC values in New Jersey have been trading close to the Solar Alternative Compliance Payment (SACP) due to a shortage of solar installations compared to State requirements. If the rapid rate of installs continues, the market can become oversupplied sooner rather then later. The extension of the Grant has an increased likelihood of passing due to the fact that is will be included in legislation extending the Bush tax cuts. This will force Republicans to vote yes.
More on Flett Exchange: Flett Exchange is a leading environmental exchange and brokerage firm. Our online trading platform brings transparency, price discovery, and liquidity to Solar Renewable Energy Certificates (SRECs). Over 1,500 active clients utilize Flett Exchange to negotiate the price, quantity, and details of SRECs in a secure and seamless online trading platform. Upon each SREC transaction Flett Exchange remits immediate payment to our sellers (it’s simple sell a SREC and get a check!) Flett Exchange operates SREC markets in NJ, PA, DE, MD, OH, CT, MA, and DC and supported by trained solar professionals with specialized knowledge and proven experience.
Flett Exchange brokers bilateral long-term SREC contracts between qualified counterparties. Flett Exchange buyers and sellers can secure price, quantity, and terms of SREC contracts 1-7 years in duration. Our stringent vetting process ensures that quality solar projects are presented to the market in a skillful manner. Buyers and sellers utilize Flett Exchange for long-term SREC contracts gain direct access to large pools of SRECs, while mitigating risk and locking-in profits. Please visit www.flettexchange.com to learn more about our services.
The Atlantic City Electric Company (ACE) is requesting a declaratory order with respect to the definition of Solar Renewable Energy Certificates (SRECs). ACE is a regulated electric distribution company (EDC) who is engaged in the transmission and distribution electric energy to residential, commercial, and industrial customers. ACE services 13% of New Jersey’s electric distribution load, has approximately 547,000 customers, and its territory spans eight southern New Jersey territories. ACE has submitted a verified petition to the New Jersey Board of Public Utilities (NJBPU) asking them to decide if solar renewable energy projects that interconnect with the Company’s 69 Kilovolt (“kV”) system or lower voltage lines are eligible for SRECs as defined in N.J.S.A. 48:3-51. “Without the ability for ACE to attach larger solar projects to the Company 69 kV and lower voltage lines, ACE’s distribution system will be unable to accommodate all the requests for interconnection, especially those from Net Energy Metering (NEM) customers seeking to participate in State-sponsored generation projects.” (Petition of Atlantic City Electric Company Pages 3-4).
The ACE territory has been targeted for large solar projects because of its rural nature and the high payment of Solar Renewable Energy Certificates (SRECs). Southern New Jersey has access to large parcels of open land and available farms that are ideal for developing large solar projects. ACE currently has 64 grid-connect solar projects requesting interconnection, that totals 950 MW and is nearly double the total number of solar generated MWs installed in the United States in 2009. ACE’s transmission lines cannot accommodate the influx of current solar projects, their“12kV distribution system, which it employs throughout most of its service territory, cannot accommodate larger solar projects as can the higher voltage distribution lines utilized by other EDCs in the State. It should be noted that ACE’s 69kV lines—no matter how they might be classified before any State or Federal agency—do not directly interconnect with facilities of any out-of-State electric distribution or transmission lines.” (Petition of Atlantic City Electric Company, Page 4). This eliminates any issues regarding the Commerce Clause of the United States Constitution by virtue of ACE’s physical inability to connect to ACE’s 69kV or lower voltage lines.
SRECs are the driving financial component that makes developing solar in New Jersey attractive. Power purchase agreement (PPA) providers, engineer, procurement, and construction (EPC) contractors, solar installers, and various other entities are flocking to New Jersey to develop solar, due to the favorable price of SRECs. The price of NJ SRECs has risen from $150 in 2007 to $683 in 2010 and energy year 2011 SRECs are currently trading $655 or 97% of the Solar Alternative Compliance Payment (SACP) on Flett Exchange. SRECs provide a revenue stream that can be monetized on a monthly, quarterly, or yearly basis for solar participants. For the past few years the NJ SREC market has only experienced upward price action. This was due to increased buying demand and less supply, a defined SACP schedule ($711 in 2009 to $594 in 2016), and favorable solar legislation. However the supply and demand equation for NJ SRECs could change with the introduction of larger solar projects. Grid-connect solar projects can bring more supply to New Jersey’s SREC market. Large blocks of SRECs could now be generated from grid-connect projects and cool red-hot SREC prices. In order for New Jersey to fulfill its lofty RPS goal (5,316 GWh by Energy Year 2026) large solar projects will need to be implemented and go online sooner rather than later.
ACE believes the State of New Jersey should encourage the development of renewable energy generation through regulatory policy. SREC eligibility needs to be clearly defined for State-sponsored programs and the PJM interconnection process: “ACE respectfully submits that the definitional language of the N.J.S.A. 48:3-51 was not intended to be limiting as it is currently being interpreted, such that only solar generators interconnecting with the distribution lines of an electric utility qualify for SREC payments. The Company believes the legislative intent and practical purpose of the law should be more broadly interpreted to (i) provide SREC payments to all solar generators who develop their solar facilities in the State and can directly interconnect to the electric delivery network operating within the State, and (ii) preclude solar generated MWs from the outside New Jersey, which are not directly connected to the State’s internal electric delivery network, from qualifying for SREC payments.” (Petition of Atlantic City Electric Company, Page 5). If this SREC issue gets resolved the bottleneck for large solar projects will begin to open up in New Jersey.
Michael Flett, President and CEO, of Flett Exchange recently spoke at the “Solar Energy for New Jersey Business-Developing and Financing Your Own On-Site Solar Facility“ conference on Thursday, August 19th, 2010. The solar forum was hosted by the law firm Gibbons P.C. and CPA firm Eisner Amper LLP. More than 500 business owners, senior executives, and industry representatives attended the conference, which provided a comprehensive overview of solar development, regulatory compliance, and innovative financial structures. The clean energy economy is growing and thriving in the Garden State. New Jersey is the second most active state for solar power installations and the seventh for venture capital investments in clean energy projects. With millions of dollars available from private equity, venture capital funds, and Federal and State agencies, corporations have the incentive to enter this growing marketplace.
Some of the state’s leading authorities on solar energy discussed:
The business case for solar projects
Federal and State incentives
Choosing between rooftop, ground mount, or carport structures
Analyzing the risks, costs and benefits of solar energy projects
Project development from financing and assembling a team through design, operation, and maintenance
Keynote Speaker:
Upendra Chivukula, New Jersey State Assemblyman
Executive Panelists:
Michael Flett, President and CEO, Flett Exchange LLC
Steve Morgan, President and CEO, American Clean Energy, LLC, and past senior executive of First Energy Corporation including CEO and Chairman of Jersey Central Power & Light
Anthony DiGiacinto, Amper, Politziner & Mattia
Paula Durand, Senior Venture Officer, Clean Technology, New Jersey Economic Development Authority
Kurt Fuoti, TD bank
Ronald Reisman, Manager of Business Outreach, New Jersey Board of Public Utilities
James Rice, CEO, Nautilus Solar Energy, LLC
Govi Rao, President and Chief Executive Officer, Noveda Technologies, Inc.
Gibbons P.C. and Eisner Amper LLP look forward to identifying solar opportunities and working together with qualified corporations to enhance the evolution of the New Jersey solar marketplace.
Flett Exchange is pleased to announce the results of the Sparta Township Solar Renewable Energy Certificate (SREC) sale. 40 energy year 2010 New Jersey SRECs were sold at a clearing price of $679.00 on Flett Exchange Friday, August 13th 2010. The sale was conducted on Flett Exchange’s electronic marketplace under its Public SREC Auction and total market proceeds equaled $27,160.00 Registered buyers and the public could observe the bidding in real time by logging in to Flett Exchange. The $679.00 clearing price is 98% of the $693 Solar Alternative Compliance Payment (SACP). The SACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. The auction was oversubscribed and there was strong participation by Load Serving Entities (LSE’s) trying to procure SRECs. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
The first New Jersey SRECs for the 2011 Energy Year (vintage) will be created by PJM-GATS on Friday, July 30, 2010. New Jersey SRECs are generated on an energy year basis which runs from June 1 to May 31. Values for 2010 vintage SRECs differ from the values of 2011 SRECs. Valuation differentials between specific vintage SRECs are attributable to two factors: 1) the penalty or Solar Alternative Compliance Payment (SACP) decreases 3% per year. 2) SRECs are now valid for RPS compliance for the year generated and the following 2 years. 2010 SRECs are currently good for 2 years and may be good for 3 if the New Jersey Board of Public Utilities (BPU) approves it. This will most likely make newer energy years worth slightly more due to the longer “bank ability”. Sellers will have to check which energy year SRECs they have before they sell them on Flett Exchange. Prices for the next 30 to 45 days for 2010 EY SRECs will remain $30 to $50 higher than the new 2011 SRECs created. After qualified buyers have finished buying 2010 vintage SRECs and start their compliance filing which is due at the end of September, the prices for 2010 SRECs will trend closer to the 2011 vintage value. It is estimated that the EY 2011 SRECs will start trading in the $620 to $640 range. The Flett Exchange trading platform allows for the simultaneous listing of multiple SREC vintages. Our transparent and competitive trading platform ensures that our buyers and sellers achieve the market value for their SRECs at the most competitive rate in the industry. Our brokers are available to answer any questions that you have at 201-209-0234.
Flett Exchange is pleased to announce the results of the Atlantic County Utilities Authority (ACUA) Solar Renewable Energy Certificate (SREC) sale. 244 energy year 2010 New Jersey SRECs were sold at a clearing price of $683.00, which is a Flett Exchange contract high! The sale was conducted on Flett Exchange’s electronic marketplace under its Public-Auction SREC Market and total market proceeds equaled $166,652.00. Registered buyers and the public could observe the bidding in real time by logging in to Flett Exchange.
The $683 clearing price is 98.5% of the $693 Solar Alternative Compliance Payment (SACP). The SACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. The auction was oversubscribed and there was strong participation by Load Serving Entities (LSE’s) trying to procure SRECs. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
More about the ACUA: “The Atlantic County Utilities Authority is responsible for enhancing the quality of life through the protection of waters and lands from pollution by providing responsible waste management services. The Authority is an environmental leader and will continue to use new technologies, innovations and employee ideas to provide the highest quality and most cost effective environmental services.”
The ACUA generated these Solar RECs from a solar facility located on their waste water treatment plant.
Flett Exchange is pleased to announce the results of the Township of Verona Solar Renewable Energy Certificate (SREC) public-auction. 79 Energy Year 2010 New Jersey SRECs were sold at a clearing price of $675.00. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $53,325.00. Qualified buyers and the public could observe the bidding in real time by logging in to Flett Exchange. The $675.00 clearing price is 97.4% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
Flett Exchange is pleased to announce the results of the Lawrence Township Public Schools Solar Renewable Energy Certificate (SREC) public-auction. 238 Energy Year 2010 New Jersey SRECs were sold at a clearing price of $678.10. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $191,902.30. Qualified buyers and the public could observe the bidding in real time by logging in to Flett Exchange. The $678.10 clearing price is 98.7% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
U.S. Environmental Protection Agency Honors N.J. Board of Public Utilities
SREC Financing Model Receives Clean Air Excellence Award in Regulatory and Policy Innovations Category
NEWARK, N.J. – The New Jersey Board of Public Utilities (NJBPU) and New Jersey’s Clean Energy ProgramTM (NJCEP) have been recognized for New Jersey’s innovative solar financing model by the U.S. Environmental Protection Agency (EPA) through the Clean Air Excellence Awards Program. Established in 2000 at the recommendation of the Clean Air Act Advisory Committee, the Clean Air Excellence Awards Program annually honors outstanding innovative efforts that advance progress in achieving cleaner air. Award-winning organizations directly or indirectly reduce pollutant emissions, demonstrate innovation, offer sustainable outcomes, and provide a model for others to follow.
Recognized in the Regulatory and Policy Innovations category, New Jersey’s solar financing model is based on the use of Solar Renewable Energy Certificates or SRECs. Representing all of the clean energy benefits of a solar energy system, SRECs can be sold or traded separately from the power, providing solar system owners a recurring source of revenue to help offset the cost of installation.
“We are honored to receive this award from the EPA,” said Lee Solomon, President, NJBPU. “New Jersey’s SREC program is the first in the nation to successfully begin the transition from up-front incentives to a market-based system for project finance. By avoiding upfront incentives, the SREC program lowers the financial impact on ratepayers while continuing to motivate solar electricity installations.”
New Jersey is one of the fastest growing solar markets in the nation and one of the largest in terms of both installations and installed capacity. As of April 2010, more than 5,800 solar energy systems totaling 157 MW of solar capacity have been installed across the state. In addition to the use of SRECs, NJBPU’s integrated approach to solar development includes a strong Renewable Portfolio Standard with a solar set-aside that has helped to create sustainable demand and investor confidence. Interconnection and net metering standards have also made it easier for systems to connect to the distribution system.
“Innovation and commitment are the keys to environmental progress, and our Clean Air Excellence Award winners are tremendous examples,” said Gina McCarthy, EPA Assistant Administrator for Air and Radiation. “As we look to the future, these winners will help lead the way toward cleaner air and a healthier environment.”
For more information about the NJBPU or New Jersey’s Clean Energy Program visit NJCleanEnergy.com or call 866-NJSMART.
About the New Jersey Board of Public Utilities (NJBPU) The NJBPU is a state agency and regulatory authority mandated to ensure safe, adequate and proper utility services at reasonable rates for New Jersey customers. Critical services regulated by the NJBPU include natural gas, electricity, water, wastewater, telecommunications and cable television. The Board has general oversight responsibility for monitoring utility service, responding to consumer complaints, and investigating utility accidents. To find out more about the NJBPU, visit our web site at www.nj.gov/bpu.
About the New Jersey Clean Energy Program (NJCEP)
NJCEP, established on January 22, 2003, in accordance with the Electric Discount and Energy Competition Act (EDECA), provides financial and other incentives to the State’s residential customers, businesses and schools that install high-efficiency or renewable energy technologies, thereby reducing energy usage, lowering customers’ energy bills and reducing environmental impacts. The program is authorized and overseen by the New Jersey Board of Public Utilities (NJBPU), and its website is www.njcleanenergy.com.
The New Jersey Board of Public Utilities (NJBPU) stopped accepting applications for rebates under the Renewable Energy Incentive Program (REIP) for solar installations this month. The surge in April applications has outstripped all allocated funds. The REIP provides rebate checks for solar installations in New Jersey. These grants are available for home systems and small commercial systems that are 50kW and less.
The flood of applications can be attributed to the reduction of state incentives and growing interest for installing solar. The reduction rumor began with the change of administrations as Republican Governor Chris Christie replaced former Democrat Governor John Corzine. Governor Christie inherited a budget deficit and is proactively cutting state spending in all segments of New Jersey Government. Shortly after his election the incentives for the REIP program were reduced from $1.75 per watt to $1.35 for residential installations and $1.00 per watt to $.80 cents for commercial installations. Installers across the Garden State quickly accelerated sales and were seen lining up at state offices to submit their applications for the second funding cycle.
At the last Renewable Energy Committee meeting in Trenton, New Jersey, the Office of Clean Energy asked for stakeholder suggestions on how to administer the third round of applications in September. Suggestions like entity caps are now being considered. The prospect of increasing funding was abruptly dismissed by NJBPU staff citing that adequate funds are currently not available at this time.
According to an article published by Associated Press/1010 WINS on May 12, 2010, BPU spokesman Greg Reinert said, “the BPU decided not to take any more applications until the next funding cycle begins Sept. 1.But all the eligible projects that were submitted will still get the rebates, he said, even if the amount surpasses the $6 million set aside for them. Money could be transferred from another fund, he said.” This information was not available at the Renewable Energy Committee meeting that day since many participants were complaining about waiting on line and missing the deadline. However, it appears this topic could be addressed in more detail at the next BPU board meeting on June 7, 2010 and there is approximately $8 million in CORE projects that could alleviate funding draw downs.
The discontinuing of REIP rebate checks could potentially hurt the future of residential and small business solar installations. In the past, the NJBPU has been vigilant for making solar democratic process; homeowners and small business were given incentives to keep them competitive with larger utility, government, and large corporate projects. This has created a more diverse and distributed mix of solar thus generating a macro benefit to all electricity users through less impact on the grid. Residents and small business in New Jersey were given a fair chance to participate in renewable energy projects through the REIP rebates.
Solar Renewable Energy Certificates (SRECs) are now coming to the aid of the New Jersey solar market. Over the past five New Jersey has weaned itself off of an incentive based program and SRECs have evolved into reliable income stream. If this transition had not been achieved, solar investors would be at the mercy of rebates and the market would virtually shut down. Instead, the market is busier than ever. Mid scale projects in the 200kW-500kW range are leading the way for NJ solar development. Solar investors use the SREC revenue to pay down the cost of the system. In a market in which regulatory risk is just as high as supply/demand risk, investors feel more confident in a market based SREC program instead of relying on politicians who could discontinue a program at any time.
The buoyant price of New Jersey SRECs is an attractive incentive to solar investors. Daily settlement prices on the Flett Exchange spot SREC exchange have been consistently 95% to 97% of the Solar Alternative Compliance Payment (SACP) for the second half of 2010.
Flett Exchange is pleased to announce the results of the Town of Morristown Solar Renewable Energy Certificate (SREC) sale. 190 energy year 2010 New Jersey SRECs were sold at a clearing price of $676.25. The sale was conducted Flett Exchange’s electronic marketplace under its Public-Auction SREC Market and total market proceeds equaled $128,487.50. Registered buyers and the public could observe the bidding in real time by logging in to Flett Exchange. The $676.25 clearing price is 97.5% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities. The Town of Morristown generated these Solar RECs from a solar facility located on their waste water treatment plant.
Flett Exchange is pleased to announce the results of the Atlantic County Utilities Authority (ACUA) Solar Renewable Energy Certificate (SREC) sale. 100 energy year 2010 New Jersey SRECs were sold at a clearing price of $676.25. The sale was conducted on Flett Exchange’s electronic marketplace under its Public-Auction SREC Market and total market proceeds equaled $67,625. Registered buyers and the public could observe the bidding in real time by logging in to Flett Exchange.
The $676.25 clearing price is 97.5% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. The auction was oversubscribed and there was strong participation by Load Serving Entities (LSE’s) trying to procure SRECs. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
More about the ACUA: “The Atlantic County Utilities Authority is responsible for enhancing the quality of life through the protection of waters and lands from pollution by providing responsible waste management services. The Authority is an environmental leader and will continue to use new technologies, innovations and employee ideas to provide the highest quality and most cost effective environmental services.”
The ACUA generated these Solar RECs from a solar facility located on their waste water treatment plant.
Governor Chris Christie spoke on April 21, 2010 at the State Theater in New Brunswick New Jersey. He preceded a panel discussion led by the newly appointed Board of Public Utilities BPU President Lee Solomon. The panel was made up of energy experts in New Jersey.
The Governor’s speech was not surprisingly focused on the budget crisis in the Garden State. His approach Statewide is to cut funding to all facets of government and the Office of Clean Energy will not escape the knife. At the same time, his commitment to making New Jersey a good place to bring up families and keep it economically strong is aligned strongly with renewable energy. He recognizes the benefits of renewable energy in New Jersey, especially the economic growth it has produced. We can expect Governor Christie to take a common sense review of the Energy Master Plan in New Jersey during the next 90 days and after that time there will most likely be an increased focus in the following areas according to his speech:
1. Solar farms built on old landfills. 2. Solar farms sensibly cited on preserved farmland for which “the public has been paying for.” 3. Offshore wind (much was stressed on NJ as a resource for producing energy). 4. Manufacturing of renewable energy components in our industrial centers (this will be done through the EDA). 5. Energy efficiency.
Lee Solomon led the discussion with the following panelists: Bob Martin, Commissioner Department of Environmental Protection, Stefanie A. Brand, Director Department of Public Advocate Division of Rate Council, Caren S. Franzini, CEO Economic Development Authority, Murray Bevan, Bevan, Mosca, Giuditta & Zarillo New Jersey Council, Retail Energy Supply Association (RESA), Dennis Canavan, Senior Director of Global Energy, Johnson & Johnson, Greg Coleman, VP TRC Solutions, Ed Graham, President and CEO South Jersey Gas, Ralph LaRossa, President and COO PSE&G, Drew Murphy, President NE Regional Operations, NRG Energy, Dave Pringle, Campaign Director NJ Environmental Federation, James Torpey Director Market Development SunPower Corporation.
The overwhelming outcome was ENERGY EFFICIENCY (EE).All panelists agreed that the most cost effective and timely way for NJ to achieve its environmental and economic goals is through energy efficiency. The overwhelming barrier to implementing energy efficiency is education. Panelists, who have had decades of experience in EE, agreed that it takes time for the decision makers in a business to “get it”.
We can expect some changes in the solar front, some of which have already started. The BPU has up until this point “democratized” solar through rebates to residential and small business. This has resulted in a healthy mix of solar across the State instead of large utility owned solar farms which is the norm when utility companies have their way at the planning stages. Recent cuts by Christie resulted in a 20% cut in small business and 23% for residential. We can only hope that the new BPU leadership will understand the benefits that small business and residential investors in solar have experienced and not just look at the rebates themselves.
This presentation and panel discussion give us a feel for where the Christie Administration will lead NJ on energy. New Jersey has become a leader in the US on its renewables and it will need to show consistency in times like this where the outgoing Governor was a Democrat and the New Governor is a Republican. Coupling this with the budget crisis poses even more of a challenge. For NJ to achieve its goals it needs private investment. On the solar side alone close to $20 billion in private investment will be needed to achieve current RPS goals. Inconsistency on the part of the new BPU and Governor will jeopardize all of this. Overall, so far it appears that the system will be tweaked but the legislative support will remain to achieve these goals.
LOS ANGELES, APRIL 15, 2010 — (Reuters) — Installed solar capacity jumped an astonishing 37% in 2009 following an onslaught of state and federal incentives offered during the recent economic crisis to help prop-up demand for new solar equipment. Grants, subsidies, tax-credits and cash incentives helped push revenue past $4 Billion in 2009, a 36% increase from the previous year.
According to a report released last Thursday by solar advocates it was the fourth straight year of unprecedented growth for the solar photo-voltaic industry here in the United States. This contrasts with the long-standing European solar power industry, which has seen a decrease as it’s mainstay nations ramp-down their incentive programs.
New U.S. solar capacity reached 481 Megawatts (MW) last year, an increase of 130 MW from 351 in 2008. Solar thermal for water heating also rose, but at a more modest 10% on the year. The only decline was seen in solar-pool heating, which saw a 10% decline blamed mostly on the slowdown in the housing sector.
Analysts say that the spike in U.S. growth is also attributed to lower prices of solar hardware, which the Solar Energy Industries Association (SEIA) reported fell an estimated 40% in recent years. “Despite the Great Recession of 2009, the U.S. solar industry had a winning year and posted strong growth numbers… Consumers took notice that now is the best time to go solar,” says SEIA CEO Rhone Resch. The increase in solar was led by California, with New Jersey coming in second place, followed by Florida, then Arizona.
According to the SEIA, six solar utility projects also came on line in 2009, including both solar PV and solar concentration plants. Despite the increase, solar still remains under 1% of utilities generation within the United States. The SEIA is optimistic for the future however and predicts 17 Gigawatts of solar power down the line, enough to power over 3 million homes.
“Now we’re talking gigawatts of solar, not megawatts,” said Resch.
View the SEIA’s 2009 Industry Year in Review Here:
Solar energy is gaining momentum in the renewable energy world. It is being heralded as a smart investment due to growth prospects, favorable market conditions, federal and state incentives, and more stringent Renewable Portfolio Standards (RPS). Individual and institutional investors are committing capital and taking risk because of potential profits and tax benefits that are associated with developing solar. Existing and newfound factors are driving solar energy to become a more mainstream investment. This article will examine these factors and demonstrate how they are contributing to solar energy’s success.
Growth- Over the past decade, technological advancements have made solar energy more affordable, more reliable and less obtrusive. Lower barriers of entry have allowed solar installers, integrators, and developers to offer competitive pricing on residential and commercial facilities and reduce their installed cost per watt.
Value- Solar energy is a potential hedge against higher electricity prices. It is estimated that electricity prices could conservatively increase by 3.0% a year. Solar energy is a wise alternative to higher electricity bills and can provide clean, green, and cheaper power. Self-Financing, Solar Lease Financing, and Power Purchase Agreement (PPA) Financing are all financial structures that can accomplish reduced electricity costs.
Tradable SREC Markets- Solar Renewable Energy Certificates (SRECs) are environmental attributes that can be transacted and monetized. SRECs are the driving financial component that makes solar economically feasible. SRECs are generated from the production of solar energy and can be monetized on Flett Exchange’s live SREC markets. SRECs are market based. Unlike feed-in tariffs SRECs pass savings on to ratepayers over time, if overdevelopment occurs or if solar becomes less expensive.
State Mandated Markets- SREC markets are state mandated. State governments are establishing stringent Renewable Portfolio Standards (RPS) and increasing their solar carve-outs. Electric suppliers need to procure SRECs to meet their RPS. If electric suppliers cannot procure enough SRECs in the open marketplace to satisfy their RPS they are subject to a Solar Alternative Compliance Payment (SACP) which is a penalty payment and can be considerably higher then the spot SREC market.
Tax Benefits- Many solar projects are candidates for federal tax incentives and state rebates. The Investment Tax Credit (ITC) returns over 30% of a solar project’s capital cost to investors in the form of a tax credit. Section 1603 of The American Recovery and Reinvestment Act of 2009 (Stimulus Bill) also allows investors to receive a grant in lieu of tax credit when the “specified energy property” is submitted to the “grant program.” State rebates may also be available for residential and commercial solar installations. Rebate programs can differ from state to state and exist on a sliding scale depending on the size of the proposed solar facility.
Escalating Fossil Fuel Demand- Global demand for fossil fuels is increasing while supplies are diminishing. Developed and emerging nations are competing for fossil fuels and all petroleum products come with political and environmental risk. Solar energy, on the other hand, is limitless, does not emit harmful emissions, and can be achieved without any political risks. Also if the US Dollar continues to depreciate the price of foreign fuel could continue to rise.
Climate Change- Private and public corporations, organizations, agencies, and municipalities are implementing clean energy programs. Climate change is a growing social and political issue, both domestically and internationally. Insightful entities understand the benefits of renewable energy and the risks associated with not staying ahead of the climate curve. These players are implementing clean energy programs and are well positioned if climate legislation gets passed. The recent US healthcare decision demonstrates that political winds can shift momentarily and legislation can be passed swiftly. Renewable energy strategies and sustainability teams are becoming more conventional, as private and public entities recognize their social responsibilities to the environment and potential legislative risk.
Solar energy is a favored renewable energy source. Solar is easy to install, is a hedge against higher electricity prices, generates a SREC revenue stream, and is beneficial to the environment. So far advantageous market conditions have attracted investors to solar.
However the future of the solar market also comes with challenges and risks. Increased competition could create an overpopulated market. Inexperienced players who are attracted by favorable market conditions could sacrifice engineering and construction quality for short term monetary gains. The reduction of federal and state incentives could make solar less appealing. As the solar market evolves it will be interesting to see if it could sustain itself and emerge as an established renewable energy source.
olar energy is attracting investment dollars. Competitive returns, lower barriers of entry, state and federal incentives, SREC revenue streams, and progressive Renewable Energy Portfolio Standards (RPS) are advancing solar to the forefront of renewable energy world. As the solar market evolves, so are the financial structures that are assisting investors in financing and completing projects. This article will examine various financing strategies, the risks and rewards associated with them, and the incentives involved with solar investing.
Self Financed (Most Risk/Most Reward)– Self financed solar facilities are for residents and entities who want control of their solar destiny. These parties absorb the upfront costs for developing solar and the challenges of operating and maintaining their solar facility. This is the most capital intensive structure and poses the most risk and reward. The risk lies in the development of the project, the failure in properly monitoring and maintaining the facility, and the price associated with the Solar Renewable Energy Certificates (SRECs). The rewards are a reduced rate of electricity for as long as the facility can generate solar energy, declining installation costs, and a revenue stream generated by SREC monetization. Self-financiers take the risk of developing solar because there is the potential for them to payoff the facility in a shortened period of time and realize increased upside profit potential.
Solar Lease Financing (Moderate Risk/Moderate Reward)– Solar lease financing structures are being executed in both the residential and commercial markets. The concept is simple, straightforward, and similar to an equipment or automobile lease. Instead of self financing your solar facility, parties can enter into a leasing contract and agree to make monthly lease payments on their solar installation. Similar to a PPA contract the client does not incur the expensive upfront installation costs or the responsibility of operating and maintaining the solar facility. In a best case scenario the lessee can take advantage of higher SREC values and an option to buy out the system in six years, while the lessor obtains the ITC and accelerated depreciation of the system. A solar lease structure is also an alternative to a PPA contract for non-profit organizations who want to take on SREC risk for potential reward, while the lessor passes on the ITC and accelerated depreciation indirectly through a lower lease payment. Solar leasing firms have a set of criteria that clients need to meet in order to participate in their solar leasing program: commercial clients may need to submit audited financial statements and residents may need to have a FICO score of 700 or greater to be considered. However there are also risks associated with solar leases. One risk is that a lessee could go upside down on their contract. This happens when the solar lease is more expensive than the SRECs being monetized. Another risk is the future price of electricity. Lessees could potentially pay more for solar electricity than basic generated electricity if demand diminishes. The financial crisis of 2008-2009 was a reminder that electricity prices do not always go up and that electricity demand could decline during lean economic times. Solar lease financing is becoming more popular because it is affordable, convenient, environmentally responsible, and lowers your electricity bills. However, interested parties should weigh the risks and rewards associated with solar leases and learn more about the leasing company before signing an extended contract.
PPA Financed (Less Risk/Less Reward)– A Power Purchase Agreement (PPA) is a contract between a solar electricity generator and a client seeking solar energy. This financial structure is designed to provide the client with a reduced rate of electricity for an extended period of time (10-20 years), no upfront installation cost, and the option to purchase the solar facility at the end of the contract. The PPA Provider designs, develops, operates, maintains, and owns the solar facility located on the client’s property. In turn the client pays the PPA Provider for the electricity generated from the solar facility. PPA Providers enter into these agreements because there is a profitable margin between where solar can be developed and what electricity can be sold for. The PPA Provider can also take advantage of the Investment Tax Credit (ITC) and accelerated depreciation. PPA Providers gain ownership of the SRECs which are generated from the solar facility and can monetize them on the Flett Exchange live markets. This solar structure is popular with non-profit organizations that cannot take advantage of the ITC and realize the accelerated depreciation of their solar facility.
Many solar projects are contingent on tax benefits, rebates, and long-term SREC contracts. Without these incentives and risk mitigation strategies solar projects can be difficult to finance and pose significant risk to investors. Let’s examine some of the incentives and strategies that are allowing the solar market to flourish.
Tax Benefits- At this juncture, tax incentives are an integral part of solar financing. The Investment Tax Credit (ITC) returns over 30% of a solar project’s capital cost to investors in the form of a tax credit. Sophisticated investors are utilizing solar as a tax-equity investment vehicle because tax credits can offset tax liability. Section 1603 of The American Recovery and Reinvestment Act of 2009 (Stimulus Bill) also allows investors to receive a grant in lieu of tax credit when the “specified energy property” is submitted to the “grant program.” This program runs out at the end of 2010, and the SEIA www.seia.org is lobbying to have it extended. Both the credit and grant programs promote renewable energy on the institutional level and help incentivize solar development.
Accelerated Depreciation- Developers of commercial projects can realize additional tax benefits from the depreciating cost of their solar facility. An entity “can depreciate the installed cost of the system minus 50% of the business Investment Tax Credit (ITC) over the first five years of ownership (SEIA 2008) using the modified accelerated cost recovery system (MACRS) (DSIRE 2008). According to a report by Lawrence Berkley National Laboratory, the tax benefit of this depreciation is equivalent to 26% of the installed cost of the system, 12% of which comes from the ability to accelerate it over a five year period (Bolinger 2009).” –National Renewable Energy Laboratory, “Solar Leasing for Residential Photovoltaic Systems.”
Long-Term SREC Contracts- are helpful in financing proposed solar projects. Flett Exchange brokers long-term SREC contracts between qualified institutional counterparties. Our ability to facilitate and streamline long-term SREC contracts is value-added to both buyers and sellers. Buyers gain direct access to large pools of SRECs at a discounted price to satisfy their RPS, while sellers have the ability to mitigate risk and lock-in profits. Counterparty credit risk is paramount in this market. Buyers and sellers enter into bilateral contracts to secure price, quantity, and term of the SREC contract. Counterparties agree to pay or delivery SRECs at a specified future date. Flett Exchange augments this process by employing a stringent vetting process and presenting quality and creditworthy solar projects to the market. Flett Exchange is currently brokering 1-7 year SREC contracts in the open market and growing our ability to facilitate longer term deals for eligible commercial entities.
As the solar markets continue to evolve new and innovative thinking will be the most prized commodity. The emergence of banks, lenders, financial institutions, and new financial structures will be welcomed and as solar makes the transition form a subsidized market to a self-sustaining market.
Flett Exchange is pleased to announce the results of the Lawrence Township Public Schools Solar Renewable Energy Certificate (SREC) public-auction. 533 Energy Year 2010 New Jersey SRECs were sold at a clearing price of $674.40. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $359,455.20. Qualified buyers and the public could observe the bidding in real time by logging in to Flett Exchange.
The $674.40 clearing price is 97.3% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
The “Solar Energy Advancement and Fair Competition Act” (A3520) was signed into law on January 18, 2010, by former New Jersey Governor, John Corzine. This new law strengthens the development of solar energy and reinforces the Solar Renewable Energy Certificate (SREC) program.
Highlights of the Act which strengthen solar energy are:
New Jersey’s Renewable Portfolio Standard (RPS) for solar is extended to 2026. The SREC fulfillment has be changed from a percentage to a fixed requirement.
The Act requires electric suppliers to procure a minimum of 195 Gigawatt (GWh) hours of electrical power from solar generators in 2010 and increases to 5,316 Gigawatt (GWhs) by 2026. Previous requirements were based upon a percentage of electricity produced.
The BPU has established a 15 year Solar Compliance Alternative Payment (SCAP) schedule. This schedule encompasses energy years 2011-2026. Prior to this revision, the SACP only extended out 7 years.
If the average SREC price decreases for 3 years or if the supply of SRECs meets or exceeds demand for 3 years the requirement increases by 20%.
The 2 Megawatt (MWh) cap was lifted on net metering systems. This amendment provides the opportunity to develop larger solar facilities and meet an increasing demand.
New Jersey Solar Renewable Energy Certificates (SRECs) now have a three year shelf life. NJ SRECs can be monetized for the current energy year and the following 2 energy years.
The “Solar Energy Advancement and Fair Competition Act” (A3520) is a clear demonstration of New Jersey’s commitment to solar energy. Such actions attract renewable energy development and increase investor confidence through the expansion of a reliable SREC program.
The “Solar Energy Advancement and Fair Competition Act” (A3520) was sponsored by Assemblyman Upendra J. Chivukula of District 17 (Middlesex and Somerset), Assemblyman Wayne P. Deangelo of District 14 (Mercer and Middlesex), Assemblyman Peter J. Biondi of District 16 (Morris and Somerset), Assemblywoman Linda R. Greenstein, District 14 (Mercer and Middlesex) and Co-Sponsored by Senators B. Smith, Baroni, and Bateman.
To review the “Solar Energy Advancement and Fair Competition Act” (A3520), click here.
Flett Exchange is pleased to announce the results of the Town of Morristown Solar Renewable Energy Certificate (SREC) sale. 293 energy year 2010 New Jersey SRECs were sold at a clearing price of $672.00. The sale was conducted Flett Exchange’s electronic marketplace under its Public-Auction SREC Market and total market proceeds equaled $196,896. Registered buyers and the public could observe the bidding in real time by logging in to Flett Exchange. The $672 clearing price is 97% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. The auction was oversubscribed by over 300% and there was strong participation by Load Serving Entities (LSE’s) trying to purchase SRECS. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities. The Town of Morristown generated these Solar RECs from a solar facility located on their waste water treatment plant.
Flett Exchange is pleased to announce the results of the Atlantic County Utilities Authority (ACUA) Solar Renewable Energy Certificate (SREC) sale. 197 energy year 2010 New Jersey SRECs were sold at a clearing price of $667.00. The sale was conducted on Flett Exchange’s electronic marketplace under its Public-Auction SREC Market and total market proceeds equaled $131,399. Registered buyers and the public could observe the bidding in real time by logging in to Flett Exchange.
The $667 clearing price is 96.2% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. The auction was oversubscribed by over 400% and there was strong participation by Load Serving Entities (LSE’s) trying to procure SRECs. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.
More about the ACUA: “The Atlantic County Utilities Authority is responsible for enhancing the quality of life through the protection of waters and lands from pollution by providing responsible waste management services. The Authority is an environmental leader and will continue to use new technologies, innovations and employee ideas to provide the highest quality and most cost effective environmental services.”
The ACUA generated these Solar RECs from a solar facility located on their waste water treatment plant.
New Jersey, the second largest state behind California for solar installations, has reached the 100 Megawatt level. There are over 3,400 solar installations. The main financial incentive is the Solar Renewable Energy Certificate SREC. Flett Exchange settlement price for spot SRECs was $652 today.
Flett Exchange runs the only spot and long term market for SRECs in New Jersey. Customers can sell SRECs directly to power producers on our electronic platform 24 hours a day. The NJ SREC market has been operational on Flett Exchange for over 2 1/2 years and there are over 850 active participants on the marketplace. Flett Exchange offers daily settlement prices which are derived from the trading on its transparent trading platform.
Interested parties can call the Flett Exchange team of experienced SREC brokers for market insight and long term contracts. Flett Exchange is located in Jersey City, NJ and can be reached at 201 209 0234 or SREC@flettexchange.com
Jersey City, NJ (August 11, 2009): Flett Exchange is pleased to announce the successful completion of the PSE&G public auction. PSE&G sold 1,352 energy year 2009 New Jersey Solar Renewable Energy Certificates (SRECs) on Flett Exchange for the volume-weighted-average-price of $688.52. The sale invited qualified institutions to participate in a transparent and competitive SREC auction market. This was PSE&G’s first public sale on Flett Exchange. “Their demand was unprecedented,” said Ronald Black, Director of Sales and Marketing, at Flett Exchange. “Today’s market action demonstrates that Load Serving Entities (LSE) need to satisfy their Renewable Portfolio Standard (RPS) obligations and will pay up if necessary.” The PSE&G public auction came at 96.8% of the $711 compliance cap. Five qualified bidders participated in the public auction and began submitting their bids at 9 am (EST). Bidders could either submit their bids directly online or call a Flett Exchange professional. Total market proceeds of the public sale was $930,879.04.
The U.S. Department of Energy and the U.S. Department of the Treasury announced they are now accepting applications for the funding of renewable energy projects. The solar portion of the program will pay 30% of the property basis used for solar projects in the form of direct payments oppose to tax credits. Facilities built and placed in service beginning January 1, 2009 are eligible for the grants.
Flett Exchange was recently mentioned in a Kiplinger.com article highlighting how “Private Stock Exchanges Help Firms Grow.” The article emphasizes the importance of specialty exchanges active in niche markets (i.e. Solar Renewable Energy Certificates) and their ability to bring transparency, price discovery and liquidity to otherwise impenetrable markets.
About Us:
Flett Exchange is online auction exchange for Solar Renewable Energy Certificates (SRECs). Our exchange is the most cost-effective and efficient way to transact and monetize SRECs. Flett Exchange has been servicing the solar community for over two years. Utilities, institutions, municipalities and residents are some of our best customers. Our exchange brings price discovery, transparency and liquidity for NJ, PA, DE, MD, OH, NC and DC SRECs. Buyers and sellers can negotiate price and quantity of SRECs on live markets for immediate delivery. Flett Exchange provides a daily SREC settlement price and historical pricing data to assist our clients in marking their portfolios and assess solar projects. Flett Exchange operates on a secure network and is ready to execute your SREC orders 24 hours/7days a week.
Please explore our website or call 201-209-0234 to learn more about our Solar Renewable Energy Certificate (SREC), Regional Greenhouse Gas Initiative (RGGI), Interest-Rate Swap and Physical Gold and Silver Markets.
30% Cash Grants from the Federal Government for your new solar installation!!!
American Recovery and Reinvestment Act Program Plan Cash Assistance for Specified Energy Property in Lieu of Tax Credits Under current law, taxpayers are allowed to claim a production tax credit for electricity produced by certain renewable energy facilities and an investment tax credit for certain renewable energy property. These tax credits help attract private capital to invest in renewable energy projects. Current economic conditions have severely undermined the effectiveness of these tax credits. As a result, the Recovery Act allows taxpayers to receive cash assistance from the Treasury Department in lieu of tax credits. This funding will operate like the current-law investment tax credit. The Treasury Department assistance will be equal to 30 percent of the cost of the renewable energy facility (the percentage depends on the type of facility) within sixty days of the facility being placed in service or sixty days after receiving an eligible application. The Department of Energy and Treasury are working in partnership to develop and implement the program. Objectives The overall purpose of this program is to promote renewable energy. Current law allows taxpayers to claim a production tax credit for electricity produced by certain renewable energy facilities and an investment tax credit for certain renewable energy property. Because of the impact of current economic conditions on taxable income, the value of these tax credits to investors who finance renewable energy projects has decreased. This program’s objective is to provide an alternative means to attract financing for renewable energy projects. Assistance will be given to persons who place in service qualified energy property expanding the use of clean and renewable energy and decreasing dependency on non-renewable energy sources and reducing carbon emissions. Projects to be funded under this program include fuel cell power plants which convert fuel into electricity; projects that use solar power to generate electricity, small and large wind projects, geothermal property that generates electricity and thermal energy, micro-turbines that convert fuel into electricity, and combined heat and power system property that generates electricity. Projects will vary in size and amount of production. Specific projects that receive awards will be reported after they have been financed. Activities Projects to be funded under this program include fuel cell power plants which convert fuel into electricity; projects that use solar power to generate electricity, small and large wind projects, geothermal property that generates electricity and thermal energy, micro-turbines that convert fuel into electricity, and combined heat and power system property that generates electricity. Projects will vary in size and amount of production. The Department of Energy and the Treasury Department are working in partnership to develop and implement the program. Applications can be received beginning in July 2009 through December 31, 2011. This program and the Cash Assistance for Housing in Lieu of Tax Credits program has been appropriated $1 million for administrative expenses. A portion of the funding will be used on this program to develop the documentation requirements and the application forms, processing the applications that are received, and for reimbursable expenses associated with an agreement with the Department of Energy to leverage their expertise in renewable energy and provide compliance support. Characteristics The initiative utilizes cash assistance and makes award dollars available to the owners (or in some circumstances, lessees) of energy-producing projects, as determined and made eligible by Sections 45 and 48 of the Internal Revenue Code. The beneficiaries of the program are: 1) the project owners/lessees that receive funds; 2) individuals and companies that are employed in the construction, operation and maintenance of projects; and 3) users of renewable energy Delivery Schedule The application package for assistance includes a general notice, application form, instructions, and terms and conditions will be available no later than June 30, 2009. Applications will be reviewed within 50 days of receipt. Activity Completion Date General information is released on Treasury.gov website about the program 3/24/2009 Application package is available 6/30/2009 First award 60 days after receipt of application National Environmental Policy Act Compliance The National Environmental Policy Act and Related Laws do not apply to qualified low-income buildings funded with Section 1602 sub-awards. Measures This initiative will support Treasury goals by focusing on timely evaluations and timely release of funds. Performance measures are as follows: Measure Target Cycle time in days between receipt of application and date of award 60 Cycle time in days between notification date and funding 5 Monitoring and Evaluation to Achieve Transparency and Accountability Treasury will monitor and review several items including: percent on-time performance for project activities; obligations and outlays; acquisition competition and contract types; performance measure actual values versus targets; and accountability metrics monthly. Corrective and/or preventive actions that are established as a result of the reviews will be tracked for implementation. Risk factors will be reviewed and mitigation strategies will be implemented to minimize the probability of fraud and abuse. The program will be assessed for the level of risk associated with its activities, and the impact of those factors should they occur. The public will be kept informed through Recovery.gov and Treasury.gov. Additionally, the program will monitor and/or estimate recipient benefit information to determine the extent to which Recovery Act benefits are reaching the American people. Recipient information will be treated as outcome indicators as opposed to performance measures with set targets since many of these benefits are voluntary. Additional compliance information will be developed as the program matures. The following recipient information will be monitored and reported: • Name of recipient entity • Name of project • Brief description of project • Location of project: city/county, state, zip code • Number of jobs created • Number of jobs retained • Number of total projects • Amount of energy produced Barriers to Implementation Treasury has little experience in administering energy related programs. The Department is standing up the program, but it will need to rely on the expertise of the Energy Department to assist in administering the program. National Environmental Policy Act Compliance and Federal Infrastructure Investments The funding provided to Treasury to implement the provisions of the Recovery Act has no identifiable issues with the National Environmental Policy Act, the National Historic Preservation Act, or any Federal Infrastructure investments.
Flett Exchange provides an internet marketplace for New Jersey Solar Renewable Energy Certificates SREC. We also provide Long Term New Jersey SREC contract brokerage. www.flettexchange.com 201 209 0234
According to the New Jersey Clean Energy Program Website you will need to sell your 2009 vintage SRECs by the end of the 2009 true up period. The 2009 SRECs will not be eligible to be used for compliance during the 2010 Energy year. There is confusion in the marketplace that the 2009 vintage SRECs were eligible for a 2 year life. If you do not sell your SRECs by September of 2009 they may drop in value significantly. In the past SREC prices collapsed for the 2008 vintage SRECs at the end of the summer of 2007 because the 2008 vintage SRECs only had a one year life and the buyers pulled out of the market towards the end of the true-up period.
The Rule on 2 year SREC life is in effect for energy generated on or after June 1, 2009. The rule can be found at N.J.A.C. 14:8-2.8(b)1,
1. “For solar RECs based on energy generated on or after June 1, 2009, a solar REC used for compliance with this subchapter shall be based on energy that was generated either during the reporting year for which the REC is submitted, or during the reporting year immediately preceding the reporting year for which the REC is submitted. Please note that the RPS Reporting Year runs from June 1 through May 31st of the following year and is classified by the year in which it ends. ONLY SRECs based on energy generated on or after June 1, 2009 are eligible for the 2 yr SREC life. SRECs issued based upon energy generated on or after June 1, 2009 would thus be eligible for RPS compliance in Reporting Years 2010 or 2011. SRECS issued based on energy generated between June 1, 2008 and May 31, 2009 are only eligible for RPS compliance in Reporting Year 2009.”
Flett Exchange, the only transparent exchange for the trading of New Jersey Solar Renewable Energy Certificates (SRECs), is now publishing their prices on Bloomberg. In our mission to better serve the solar community, Flett Exchange has linked our real time, proprietary (SREC) pricing to Bloomberg under the heading FLTT. This synergy allows Flett Exchange to transmit its (SREC) prices to a wider audience and enables more solar investors to monetize their (SRECs) immediately on Flett Exchange. Bloomberg is an international news and financial broadcasting company. It is a premier source for financial information, breaking news and is the fastest growing real time financial network in the world. If you are looking for real time pricing for New Jersey Solar Renewable Energy Certificates (SRECs) go to your Bloomberg terminal and type in FLTT, or go to the RECU page and look for FLTT.
Flett Exchange launched the New Jersey Class 1 REC market on its Internet Trading Platform. The market enables generators of Class 1 RECs to sell directly to electric generators who need to buy for their RPS. Sellers transfer the RECs on the PJM GATS platform and receive payment immediately via wire transfer or check.
Flett Exchange operates a Micro Exchange for the spot buying and selling of precious metals and renewable energy certificates such as New Jersey Class 1 REC and New Jersey solar renewable energy certificats SREC. Flett Exchange also publishes daily settlement prices for its markets on its website. Customers can either execute on the Flett Exchange trading platform or speak to one of its brokers. www.flettexchange.com 201 209 0234 15 Exchange Place, suite 710 Jersey City, NJ 07302
New Jersey Solar Renewable Energy Certificates (SRECs) Trade $671.00 on Flett Exchange. SRECs traded at an all time high of $671 on January 21, 2009 on the Flett Exchange trading platform. An expected shortage of SRECs for the 2009 energy year has LSE’s racing to buy SRECs below the $711 compliance payment.
Solar producers who would like to sell their SRECs can sign up for an account at www.flettexchange.com . Over 425 individuals and corporations who have solar panels in New Jersey conveniently sell their SRECs on Flett Exchange. Our Micro Exchange is based on absolute transparency. We assist and educate our customers in how to convert their SRECs to cash. All Flett Exchange account holders can view all bids, offers and past sales along with placing buy or sell orders. Users have direct access to our internet-based markets 24 hours/7 days/365 days a year. This flexibility allows users to participate in our SREC market at their leisure. Sellers’ checks are mailed out on the same day as the sale of the SRECs.
Flett Exchange SREC brokers are available at (201) 209-0234 weekdays to assist clients.
Flett Exchange customers consistantly sold their SRECs for $50 above the clearing price of a SREC Auction site. The Auction site, SRECtrade.com, conducts an internet auction once a month. The clearing price for the December 12 auction was $600. Flett Exchange customers had been selling SRECs for $50 higher including the commissions for the week of the auction. Prices on Flett Exchange had been above the $600 mark for well over a month.
The price differential is an example of how inefficient auctions can be compared to a transparent and continuous marketplace. We have seen comparable price dislocations from market prices during auctions in the past. One in particular is the Regional Greenhouse Gas Initiative Auction. In this auction States sell their credits on a quarterly basis. There is a transparent over-the-counter market along with a liquid futures market on the Chicago Climate Exchange. We have noticed that when the states sell during the auction that the prices are depressed compared to the prices on the transparent marketplaces. Auctions also dump large blocks of volume on the market at one time which has a market moving effect.
It seems that governments prefer auctions to continuous marketplaces. Most of the bias towards auctions is the belief that it prevents manipulation. This is less true when the goods auctioned are continuously created like solar credits or greenhouse gas credits. Most “experts” consulted by governments are from academia and that is where we find a leaning towards auctions vs open competitive marketplaces.
NJ SRECs traded at $600 today on Flett Exchange. This is the highest recorded price to this date for SRECs in New Jersey. The current market is $560 bid, $625 offer.
The cap for the SRECs for the 2009 energy year is $711.
Buyers and sellers of New Jersey SRECs can access the Flett Exchange market via the internet 24x7x365. There are over 400 registered users who have bought or sold SRECs on Flett Exchange with over 50 new customers registering every month. The Flett Exchange SREC market has had a continuous market for SRECs for the past year and a half. Sellers can observe where others are selling SRECs, place and move their order at will. If you sell your SRECs the check is sent out the same day as the seller transfers the SRECs into escrow on the NJCEP website.
Sellers can also use our brokers Monday through Friday 7am to 5pm or email their order at any other time. (201) 209-0234 or email srec@flettexchange.com
The trading statistics for NJ SRECs reported by the New Jersey Office of Clean Energy are misleading. They reported that the cumulative weighted average trading price ($/MWh) for SRECs in Energy Year 2009 is $331.62 for transactions to the end of September. Prices on the Flett Exchange, which represents a competitive and transparent marketplace, during the same period averaged $513.09. Flett Exchange cumulative weighted FY2009 SREC prices are $181.47 which is 64% higher.
This difference in price is because the New Jersey Office of Clean Energy uses the prices attached to every transfer going through its tracking system run by Clean Power Markets. Flett Exchange only uses the prices and quantities established by its transparent marketplace. The Flett Exchange is used by over 400 solar owners and more than 5 of the LSEs and a number of other buyers. Flett Exchange is policed by its customers along with staff who determines if trades are done in a competitive manner. If a trade is done in error off of the market Flett Exchange will break the trade and not allow the data to go in. If participants bid too high or offer too low the buyers and sellers quickly correct and bring the market back to equilibrium. We do only spot transactions, not long term contracts.
Flett Exchange prices reflect the true value of NJ SRECs on the spot market. Prices reported by the New Jersey Office of Clean Energy reflect a large number of long term contracts. The prices of these long term contracts further distort the price due to double counting. This double counting is attributed to aggregators taking delivery of NJ SRECs and reselling at the same low long term contract prices. This dilutes the lesser quantity that are transacted at current spot prices.
Entities looking to install solar in New Jersey should not rely on the New Jersey Office of Clean Energy data because it does not represent the current market conditions. At this point the prices are skewed to the downside.
The State of New Jersey is doing its best to get investment into renewable energy. Investment is only possible if there is an accurate reporting of prices of SRECs since these are the instruments used to pay back loans backing the renewable energy projects.
Most of the turmoil on Wall Street can be directly linked to lack of transparency. This lack has been to the detriment of investors. The State of New Jersey can say it is green and build a green future but it will not last if the underlying prices of its SRECs are mispriced. An SREC program built on the laws of supply and demand should have its published prices reflect just that.
Srectrade.com, which offers a monthly auction for New Jersey SRECs (Solar Renewable Energy Certificates), conducted an auction on October 10. The clearing price was $526.23. Buyers pay a commission of 3% which puts the buyers cost at $542.02. The volume auctioned off was not advertised on the site.
The market for SRECs on Flett Exchange was $542 bid, at $575 with trades on the auction day conducted at $542.50. Flett Exchange charges buyers and sellers a flat rate of $2.50 per SREC which translates to less than 1/2 of 1% per side.
63. The Multi-family/Affordable Housing segment will target existing multi-family, new
construction and single family homes.
64. PSE&G will originate loans for the Multi-Family/Affordable Housing segment based on
income guidelines established in the NJHMFA funding programs for multi-family
affordable housing projects. NJHMFA’s multi-family affordable housing income limits
13 BPU Docket No. EO07040278
vary based on household size and housing type. The most recent data available from
the NJHMFA is presented in a chart set forth in the attached Settlement.
65. The interest rate for loans in the Multi-family/Affordable Housing segment will be 11.11%.
66. The repayment term will be 15 years.
67. If the loan is paid off early, PSE&G (or its subsidiary) will retain the call option through the
end of the 15thyear.
Municipal Segment/Not-for-Profit Segment (30%) – 9MW
68. This segment is similar to the C&I segment.
69. PSE&G will provide financing to the project owner, which would likely be an equity partner.
70. The participating municipal entity would benefit from receiving solar electricity that the PV
system generates under an agreement with the project owner.
71. The interest rate for loans in the Municipal/Not-for-Profit segment will be 11.11%.
72. The repayment term will be 15 years.
73. If the loan is paid off early, PSE&G (or its subsidiary) will retain the call option through the
end of the 15thyear.
74. Credit Criteria to be used for all segments other than residential single family:
i. Applicant must submit to a credit check.
ii. Commercial/industrial customers must have an Experian
Commercial Intelliscore or an Experian Small Business Intelliscore
of 70 or higher. Minimum credit score must be maintained
between approval and loan closing.
iii. Customer must be in good standing with respect to payment of
energy bills (PSE&G bill payment credit assessment code of 1 or
2)
•Score of 1 means pays promptly, no delinquency.
•Score of 2 means fewer than 6 delinquencies in past 12
months or delinquent less than ½ of months a customer
and no notice.
iv. There must be no liens on the property where the solar equipment
will be installed that will interfere with PSE&G’s ability to obtain a
first lien on the solar equipment.
v. Customer will be asked to disclose the existence of any liens in the
application process.
vi. A search for liens will be conducted immediately prior to closing.
viii. No bankruptcy filing within the last three years.
14 BPU Docket No. EO07040278
Cost Recovery and Related Issues
75. The parties agree that PSE&G will recover the net monthly revenue requirements
associated with this Program through a new charge of the Company’s electric tariff
called the SPRC. The SPRC will be a new charge in the Company’s electric tariff,
applicable to all electric Rate Schedules on an equal cents per kilowatthour. The SPRC
rates will not be implemented at this time. PSE&G will defer costs and net monthly
revenue requirements it incurs for the Program to the SPRC for future recovery,
consistent with the terms of the Settlement Agreement. Interest on the deferred SPRC
balance (both on under- and over-recovered balances) will be calculated at the same
rate and methodology as PSE&G currently uses for the electric Societal Benefits
Charge. PSE&G will implement the SPRC rates through a future filing it will make with
the Board. The Parties agree that the SPRC filings shall be filed annually by PSE&G.
Each future SPRC filing will include estimated costs to be incurred under the Program in
the upcoming period, along with the amortization of any prior period over or under
recovery, with the resulting SPRC rate being either positive (a charge to customers),
negative (a credit to customers) or zero. Attachment C to the Settlement provides a
proposed SPRC tariff sheet showing the SPRC structure with the initial value of the new
component set at zero, as well as additional tariff language that will be added to each
electric Rate Schedule.
The net monthly revenue requirements would be calculated and deferred as follows:
Net Monthly Revenue Requirements = (Cost of Capital * Net Plant) + Amortization +
recoverable Administrative Costs – net proceeds from the sale of SRECs – cash
payments received in lieu of SRECs.
The amortization of each loan shall occur when an SREC or a cash payment is received
by the Company from the borrower, after deducting accrued interest expense. Any loan
amortization accumulated in a month will be booked as Amortization expense to the
SPRC. If an SREC is received, the SPRC will be credited when the SREC is sold. If a
cash payment is received, the SPRC will be credited in the month that the cash payment
is received.
76. The parties agree that the Cost of Capital for this Program is 11.11%, including a return
on Common Equity of 9.75%, which is the most recent Return On Equity established by
the Board for PSE&G electric in Docket No, ER02050303, and including income tax
effects. The resulting monthly Cost of Capital used for calculating the Net Monthly
Revenue Requirements is 0.92583%. Net Plant equals the original loan amounts booked
less the accumulated amortization through the SPRC. The Amortization is equal to the
sum of the amortizations of all of the outstanding loans for each month until the total
amount is recovered (Net Plant equals zero). Any cash payments received by PSE&G
from the Project Owner for early termination of a contract will be credited against the Net
Plant for the specific project. The Company agrees that it will not seek collection of make
whole payments (lost revenue) resulting from Phase I of the Solar Program through the
SPRC.
77. PSE&G agrees that it shall recover 50% of the administrative costs of the Solar Program
through the SPRC, based on the annual grand total amounts set forth in Attachment D to
the Settlement. Administrative costs are defined as reasonable and incremental costs
incurred by the Company to implement the Program. The maximum administrative cost
recovery through the SPRC in any year is $1.0 million.
15 BPU Docket No. EO07040278
78. Because of the changes in the interest rate for residential loans and other changes
agreed to in the Settlement, the total amount of PSE&G’s loans under this phase of the
Program will be approximately $105 million.
79. The Parties agree that the cost recovery mechanism as set forth in the Settlement
Agreement is reasonable. The Parties also agree that PSE&G, as a public utility, will be
engaging in and administering the Program as a regulated service. The Parties further
agree that the Program is a pilot program that is separate and apart from the renewable
energy programs administered by the Office of Clean Energy for budgetary and cost
recovery purposes. Each Party agrees that it shall not seek to modify the cost recovery
methodology for Phase I of the PSE&G Solar Program for any reason.
Other Issues
80. PSE&G will use its best efforts to develop a solar energy program that provides sufficient
incentives and subsidies to low-income, single-family homeowners so that they can
benefit from participation. The Company will work with Rate Counsel, BPU Staff, private
nonprofit organizations such as New Jersey Shares, and others to develop this Program,
and present it to the Parties and the Board within one year after Board approval of this
Solar Energy Program.
81. The Parties agree that the Settlement is being entered into exclusively for the purpose of
resolving the issues in this matter.
82. The Parties agree that this Settlement was negotiated and agreed to in its entirety with
each section being mutually dependent on approval of all other sections. Therefore, if
the Board modifies any of the terms of the Settlement, each Party is given the option,
before implementation of any different terms in this case, to accept the change or to
resume the proceeding as if no agreement had been reached. If these proceedings are
resumed, each Party is given the right to return to the position it was in before the
Settlement was executed.
83. The Parties agree that the Settlement has been made exclusively for the purpose of this
proceeding and that the Settlement, in total or by specific item, is in no way binding upon
them in any other proceeding, except to enforce the terms of the Settlement.
84. Nothing in the Settlement of this Program is intended in any way to bind any
determination made by the DOBI.
85. PSE&G will fully comply with all requirements and determinations of the DOBI.
COMMENTS OF OTHER PARTIES
On March 21, 2008, JCP&L filed a letter with the Board stating that JCP&L would not be signing
the Settlement and takes no position in support of or opposition to the Settlement. Similar
letters were filed by RECO and RESA on March 27, 2008.
16 BPU Docket No. EO07040278
By letter dated March 24, 2008, NJLEUC submitted comments indicating that it would not sign
the Settlement and would not formally support or oppose it. Noting that the parties’ settlement
efforts had improved upon the solar pilot program originally proposed by PSE&G, which
NJLEUC states it would have actively opposed, NJLEUC enumerates the improvements as
including: administrative costs to be passed onto ratepayers are capped at a specific dollar
amount per year; a reduced return on common equity; a separate mechanism, the SPRC, rather
than the SBC, to recoup program costs not otherwise recovered through the SREC auction or
other loan payments; ratepayers receive direct monetary benefits from SREC auction proceeds;
elimination of “make whole” payments; and clearly labeling the program as a one-time, pilot
effort without binding effect. NJLEUC indicates that in light of these improvements, it does not
affirmatively oppose the proposed Settlement.
While not affirmatively opposing the proposed Settlement, NJLEUC raises five primary concerns
about the proposed Settlement, which it states cause it to not affirmatively support it. NJLEUC
takes the position that: 1) the cost of capital (11.11%) and return on equity (9.75%) remain too
high for what it refers to as a risk free investment; 2) the allocation of the costs among ratepayer
classes on a per-kWh basis is unfair to high load factor customers like its members; 3)
interclass subsidies are created due to the 6.5% interest rate for consumer program loans made
to residential ratepayers as opposed to the 11.11% interest rate for commercial, industrial, nonprofit,
and government participants; 4) the proposed Settlement has language which could be
construed as an effort to place the pilot program outside the reach of the Board’s recently
adopted 2% cap on ratepayer subsidies to solar initiatives and the Board should make the
proposed Settlement subject to the outcome in the Board’s ongoing separate consideration
regarding implementation of the cap; and 5) the Board should not view the proposed Settlement
in isolation, but in the broader context of the State’s evolving energy policies as a whole.
Specifically, NJLEUC argues that the return on equity provided for the pilot program remains too
generous. NJLEUC states that the settling parties selected the 9.75% settlement figure
because it “is the most recent Return on Equity established by the Board for PSE&G electric in
Docket No. ER02050303.”4NJLEUC asserts that in a rate case, PSE&G receives nothing more
than the opportunity to recover its cost of service; PSE&G assumes the risk of doing business
and the rate case return on equity reflects the assumption of that risk. NJLEUC contends that
conversely, in the proposed pilot program, PSE&G is generally guaranteed to recover its entire
program investment making the investment risk free. NJLEUC requests that the program’s
return on common equity be reduced to eliminate the risk-related portion of the 9.75% return on
equity approved in the last PSE&G electric base rate case. Alternatively, NJLEUC states that if
the Board were to eliminate any recovery through the SPRC, then including the risk component
in PSE&G’s Settlement return on equity would be appropriate.
Additionally, NJLEUC states that it remains concerned with the allocation of the costs among
ratepayer classes that underlies the SPRC. As spelled out in the Settlement, the SPRC would
spread pilot program costs among ratepayers on a per kWh basis. NJLEUC argues that the
program is intended to foster capacity investment and opposes the allocation of capacity related
costs on a per kWh basis because it asserts that it is systematically unfair to high load factor
customers like its members. NJLEUC maintains that any program costs recovered via the
4Final Order, In the Matter of the Petition of Public Service Electric and Gas Company for Approval of
Changes in Electric Rates, for Changes in the Tariff for Electric Service, B.P.U.N.J. No. 14, Electric,
Pursuant to N.J.S.A. 48:2-21 & 48:2-21.1; for Changes in its Electric Depreciation Rates Pursuant to
N.J.S.A. 48:2-18; and for Other Relief, Docket No. ER02050303 (April 22, 2004).
17 BPU Docket No. EO07040278
SPRC should be allocated among rate classes on a coincident peak demand basis, rather than
a per kWh basis.
According to NJLEUC, the Settlement as proposed would create a new interclass subsidy to be
paid by non-residential ratepayers based on the disparate treatment afforded those who apply
for pilot program loans from PSE&G. As proposed, the pilot program would lend to participants
from commercial, industrial, non-profit, and governmental sectors at an 11.11% interest rate.
For residential participants, PSE&G would charge a 6.5% interest rate. NJLEUC argues that to
alleviate this concern, the Board could raise the interest rate for residential participants to
11.11%, lower the interest rate for all program loans to 6.5%, or direct that only residential
ratepayers subsidize PSE&G’s reduced-rate loans to residential pilot participants.
NJLEUC further argues that language in paragraph 79 that the “pilot program is separate and
apart from the renewable energy programs administered by the Office of Clean Energy for
budgetary and cost recovery purposes” could be construed as an effort to have the pilot
program be outside the reach of the Board’s recently adopted 2% cap on ratepayers’ subsidies
to solar power initiatives. NJLEUC requests that the Board make the proposed Settlement
subject to the outcome in the Board’s ongoing separate consideration of how to best implement
the 2% cap.5
NJLEUC also urges the Board to not view the proposed Settlement in isolation, but rather in the
broader context of the State’s evolving energy policies as a whole. NJLEUC notes that since
the filing of the pilot program much has transpired that should be considered in any assessment
of the proposed Settlement. NJLEUC believes the wiser course of action would be to hold in
abeyance any final action on the proposed Settlement pending greater clarity with respect to
other aspects of the State’s energy policy debate.
DISCUSSION AND FINDINGS
The Board has carefully reviewed the record in this matter, including the Petition, comments
from the public hearings, the Settlement, and the comments submitted by NJLEUC and
submissions by the other non-signatories. As discussed below, the Board finds that the
Settlement represents a fair and reasonable resolution of this matter and is in the public interest.
In reaching its determination herein, the Board notes that during the pendency of this matter, L.
2007, c. 340 was enacted into law on January 13, 2008. The statute contains provisions
relevant to the Regional Greenhouse Gas Initiative, or RGGI, which is a cooperativeeffort bystates to reducecarbon dioxide emissions from power plants in a 10-state region that includes
all of New England, New York, Delaware, Maryland, and New Jersey. The statute authorizes
the auction or other sale of greenhouse gas emissions allowances; establishes a “Global
Warming Solutions Fund” to receive the revenues from the sale of allowances and such other
moneys as may be appropriated by the Legislature and designates uses for those revenues;
directs the Board to adopt a greenhouse gas emissions portfolio standard or other regulatory
mechanism to mitigate leakage; and authorizes participation by the Department of
Environmental Protection Commissioner and Board President, or their designees, in
agreements or arrangements with representatives of other states. In enacting the statute, the
Legislature declared that energy efficiency (EE) and conservation measures and increased use
of renewable energy (RE) resources must be essential elements of the State’s energy future
and that greater reliance on EE, conservation, and RE resources will provide significant benefits
5See n.2 regarding the cap referenced by NJLEUC.
18 BPU Docket No. EO07040278
to New Jersey citizens. L. 2007, c. 340, §1; N.J.S.A. 26:2C-45. The Legislature further found
that public utility involvement and competition in the RE, conservation and EE industries are
essential to maximize efficiencies and the use of RE and the provisions of the statute should be
implemented to further competition. Ibid. To that end, the statute provides that an electric or
gas public utility may invest in class I RE resources or offer class I RE programs on a regulated
basis in accordance with the statute; provides similar authorization with regard to EE and
conservation programs; and authorizes program cost recovery as determined by the Board. L.
2007, c. 340, §13(a); N.J.S.A. 48:3-98.1(a). Ratemaking treatment may “include placing
appropriate technology and program cost investments in the respective utility’s rate base, or
recovering the utility’s technology and program costs through another ratemaking methodology
approved by the board, including, but not limited to, the societal benefits charge.” L. 2007 c.
340, §13(b); N.J.S.A. 48:3-98.1(b).
Turning to the proposed Settlement, the BoardFINDSthat the proposed pilot program, by which
PSE&G will offer a class I renewable energy program in its service territory on a regulated basis
and with ratemaking treatment for certain program costs as set forth in the proposed Settlement
through the SPRC, is in accordance with the law as set out by L. 2007 c. 340.6Furthermore,
while the Board has carefully considered NJLEUC’s comments regarding the proposed
Settlement, the BoardFINDSthat the proposed Settlement represents a fair and reasonable
resolution of this matter and is in the public interest. The pilot program whereby PSE&G will
provide upfront capital to install up to 30MW of solar capacity for its customers, will further the
State’s and this Board’s goals and commitment to foster clean renewable energy in the State.
Specifically, pursuant to the Board’s RPS regulations, the State will have 20% of electricity used
in the State come from class I renewable energy sources, with 2.120% from solar, in the
reporting year ending May 31, 2021. In addition, Governor Corzine’s Executive Order No. 54
and the Global Warming Response Act, L. 2007, c. 112, N.J.S.A. 26:2C-37 et seq., call for
reducing New Jersey’s greenhouse gas emissions to a level at or below 1990 levels by 2020,
and to a level 80% below 2006 levels by 2050.
NJLEUC requests that the Board view the proposed Settlement as an interlocking part of a longterm
energy strategy and await final action on the proposed Settlement pending greater clarity
with respect to aspects of the State’s energy policy debate. Although the State’s Energy Master
Plan is currently being updated, the Board has sufficient information about the relevant aspects
of the State’s energy policy to proceed with final action on the proposed Settlement.
Specifically, Executive Order No. 54, the Global Warming Response Act, and L. 2007, c. 340,
as well as the Board’s 2006 adoption of the solar renewable portfolio standard through May 31,
2021, which was left unchanged by all of those subsequent actions, already express not only
the State’s commitment to reducing greenhouse gas emissions but also its commitment to
meeting more of our energy needs through the use of renewable sources, including solar. The
Board, therefore, finds that the pilot program, as set forth in the Settlement, is consistent with
and will help achieve those commitments. Accordingly, the Board concludes that Board action
on the Settlement should not be deferred.
6L. 2007, c. 340 requires the Board to issue an order allowing electric public utilities and gas public
utilities to offer EE and conservation programs, to invest in class I RE resources, and to offer class I RE
programs in their respective service territories on a regulated basis. The order is to be issued within 120
days of the enactment of L. 2007, c. 340, or by May 12, 2008, and is to thereafter be reflected in
regulations. L. 2007, c. 340, §13(c); N.J.S.A. 48:3-98.1(c). Such an order will be forthcoming and will be
followed thereafter by a rulemaking. The within Decision and Order is limited to the particular matter and
the circumstances presented herein.
19 BPU Docket No. EO07040278
As to NJLEUC’s comment that language in paragraph 79 of the proposed Settlement that the
“pilot program is separate and apart from the renewable energy programs administered by the
Office of Clean Energy for budgetary and cost recovery purposes” could be construed as an
effort to have the pilot program be outside the reach of the Board’s recently adopted 2% cap on
ratepayers’ subsidies to solar power initiatives, the Board does not read the cited Settlement
provision as exempting the pilot program from consideration within the 2% solar cost cap in
connection with achieving the solar RPS requirements as set forth in the Board’s December 6,
2007 Order, Docket No. EO06100744. The net cost of the SPRC, which is the cost of the
SPRC minus the revenues of the SRECs, shall be considered in the ongoing regulatory
proposal to implement the 2% solar capping mechanism pursuant to the Board’s December 6,
2007 Order, Docket No. EO06100744.
The Board also has considered NJLEUC’s other comments on particular terms of the proposed
Settlement and pilot program. NJLEUC requested that the program’s return on common equity
be reduced to eliminate the risk-related portion of the 9.75% return on equity approved in the
last PSE&G electric rate case. The Board notes that PSE&G originally requested a return on
equity of 11.00%, as well as make whole payments. As reflected in the Settlement, the
Company has agreed to a lower ROE, and has agreed to forego its request for any make whole
payments associated with the pilot program, to cap the annual administrative costs to be borne
by ratepayers, and to bear a portion of the administrative costs. The Board also notes that this
is a pilot program for two years, or 30 MW of projects, whichever comes first, and any additional
phases will require a petition, public notice and hearing, and Board review and approval. The
issue of the appropriate return on equity on any program beyond the initial pilot will be
addressed in any such proceeding. Therefore, while the Board has carefully considered
NJLEUC’s comments with respect to the return on equity, given the entirety of the proposed
Settlement, the Board is not persuaded that the proposed Settlement should be modified in this
regard for the purposes of the pilot program.
With respect to NJLEUC’s concern regarding the allocation of SPRC charges on a per kWh
basis, the Board notes that the pilot program provides needed incentives for the installation of
solar photovoltaic systems to generate electricity. The benefits of the program are not specific
to one rate class, but to PSE&G’s service territory as a whole. Additionally, the Board notes that
under the terms of the proposed pilot program, the program will have four segments, with the
following hard caps in the first year, subject to possible conversion to “soft” caps in the
program’s second year depending on market conditions and the status of projects accepted into
each segment in the initial year: 9 MW (30%) for municipal/ not-for-profit segment, 9 MW (30%)
for residential and multi-family/affordable housing segments combined, and 12 MW (40%) for
the C&I segment. Thus, while the C&I class as large users may pay more, that segment will
constitute a larger part of the program than other customers. The C&I customers will benefit
proportionately more by any reduction in usage due to solar, both on a peak and annual basis.
Therefore, the Board finds the Settlement’s allocation of the pilot program costs on a per kWh
basis to be reasonable.
The Board also has considered NJLEUC’s concern regarding the potential interclass subsidies
created by the 6.5% interest rate for consumer program loans made to residential ratepayers as
opposed to the 11.11% interest rate for commercial, industrial, non-profit, and government
participants. With regard to the installation of solar photovoltaic systems, the market barrier
largely is with the residential segment. To reduce that barrier, the Board finds acceptable the
Settlement’s proposed differential in the incentive. Furthermore, in assessing the
reasonableness of the cost recovery, this particular individual pilot program cannot be viewed in
20 BPU Docket No. EO07040278
isolation. Different market barriers for different programs must be considered. Also to be
considered is that all ratepayers will benefit on the whole from an increase in solar generation.
In addition to having considered NJLEUC’s comments, the Board has carefully considered other
aspects of the proposed Settlement’s cost recovery mechanism. While there will not be a
change to the SPRC at this time, and hence there will be no immediate change in customers’
electricity distribution bills, the Board has considered whether the proposed cost recovery
mechanism will result in rates which are unjust or unreasonable. The Settlement attempts to
mitigate future rate impacts by requiring PSE&G to recover only 50% of the annual grand total
amounts of administrative costs through the SPRC and to cap the recovery of these costs
through the SPRC in any year. Although the exact amounts of any increase and the
subsequent impact on customers cannot precisely be quantified and known at this time due to
variations that may occur, including the number of loans issued and the value of SRECs sold by
PSE&G and credited to the SPRC, the Board is satisfied that the cost recovery mechanism
proposed is reasonable and should not cause rates to be unjust or unreasonable.
Accordingly, the BoardHEREBY ADOPTSandAPPROVESthe attached Settlement as its
own, and incorporates its provisions herein, as if they were fully set forth herein, effective on the
date of this Decision and Order. PSE&G isHEREBY DIRECTEDto file the appropriate tariff
sheets conforming to the terms and conditions of this Decision and Order within ten (10)
business days from the date of this Decision and Order.
In issuing this Decision and Order, the Board reiterates its commitment to the market structure
created in its December 6, 2007 Decision and Order Regarding Solar Electric Generation in In
the Matter of the Renewable Energy Portfolio Standards-Alternative Compliance Payments and
Solar Alternative Compliance Payments, Docket No. EO06100744. The implementation of the
PSE&G solar loan program, particularly the disposition of program SRECs, should be
undertaken, to the extent possible, so as to minimize the impact, if any, on the non-pilot
program SREC market. The Settlement provides for PSE&G to report data regarding the pilot
program on a semi-annual basis to Board Staff with copies to Rate Counsel. In reviewing the
data, the Board reserves its right to initiate an audit of the pilot program at any time it deems
appropriate to determine whether the program is consistent with this Decision and Order and
the Settlement and is achieving its intended objectives, as well as any relevant objectives set
forth in the forthcoming Energy Master Plan.
This Decision and Order and the Board’s approval herein is conditioned, as is the Settlement
pursuant to paragraph 85, upon PSE&G conducting the solar program in full compliance with
any and all requirements and determinations of the New Jersey Department of Banking and
Insurance as may be applicable. Nothing in this Decision and Order adopting and approving the
Settlement is intended in any way to bind any determination by the New Jersey Department of
Banking and Insurance. The BoardHEREBY ORDERSPSE&G to report back to the Board and
all parties within 30 days regarding the status of the New Jersey Department of Banking and
Insurance’s determination per paragraph 53 of the Settlement and to provide copies to the
Board and all parties of all determinations and decisions by the New Jersey Department of
Banking and Insurance with respect to PSE&G’s Solar Program. If PSE&G is unable to obtain
either an exemption from New Jersey Department of Banking and Insurance licensure or a
declaratory ruling that its proposed treatment of the equal monthly payment requirement is
acceptable, and the Call Option does not constitute a prepayment penalty, PSE&G shall, within
60 days of the date of this Order, meet to discuss with the other parties suitable alternatives for
the residential segment or to discuss the status of any requests that remain pending at the New
Jersey Department of Banking and Insurance and report back to the Board and obtain any
The market for New Jersey Solar Renewable Energy Certificates SRECs has moved up significantly in the last month. Prices on Flett Exchange for the 2009 vintage SRECs reached a record price of $545.00 per SREC on September 22. The current market is $523 bid, $547.50 offer with a trade done today at $540.00. This represents the immediate purchase and transfer of SRECs via the New Jersey Clean Energy Program website.
Prices for SRECs generally trend upwards during the energy year which runs June to June. This year has been particularly interesting since the SRECs generated now apply to the first year in which the New Jersey Board of Public Utilities has made major changes the program. When the SREC program was first introduced a few years ago the State of New Jersey gave out money to entities who installed solar. The money was in the form of a rebate and it funded somewhere in the range of 60% to 70% of the installation cost. These entities were also eligible to sell SRECs with a cap of $300.
The Board of Public Utilities transitioned the SREC program away from relying on rebates and SRECs to SRECs only for the energy years 2009 going forward. To ensure a continued investment into solar in New Jersey they raised the cap to $711 in 2009.
The rise in value during the first 2 months of trading in the 2009 vintage SRECs is in the right direction. During the planning of the SREC program and the establishment of the new cap of $711 it was estimated that prices of SRECs would need to rise to at least above $500 with a goal of approximately $611 to keep solar installations on track.
The SREC program in New Jersey is a result of a tireless effort on the part of the Board of Public Utilities. The BPU staff spent years and countless hours in designing rules to ensure solar power generation in New Jersey at the lowest cost to the consumers.
The New Jersey Clean Energy Program “NJCEP” released its SREC trading data today for vintage year 2008 SRECs which are due to expire to the voluntary market august 31 2008. The data shows a clear increase in trading volume through the previous two months and an increasing average price per SREC over the same period. Note that the average prices reported are relativity low in comparison to the prices Flett Exchange customers have achieved in the 2008 market. As well the extreme monthly highs and lows are based simply on prior long term contracts and are unrelated to the spot market where Flett Exchange and its customers operate.
For more information select the link below to view the full report from the NJCEP or call the Flett Exchange SREC Trading Desk. NJCEP SREC Trading Statistics
Flett Exchange saw its first Vinetage 2009 Solar Renewable Energy Certifiacte (NJ SREC) trade yesterday afternoon at $450. This along with news of a contact locking a full years a production from an outside source at $500 an SREC with terms “payed as produced” currently values the market around the $500 level.
Although volume has been light Flett Exchange have seen moderate interest on the sell side as individuals will look to profit from the recently increased Solar Alternative Compliance Payment (SACP). If the current market price holds up SREC producers can expect to receive a 150% premium over Vintage year 2008 SRECs and considering SRECs generated after July 5th will carry a life of two years oppose to a previous one year lifetime producers will have the option to bank their SRECs in hopes of a higher price in the future. However, producers banking their SRECs hoping to benefit from future price spikes will remain subject to full market risk.
Flett Exchange customers are starting to place orders to sell their 2009 New Jersey Solar Renewable Energy Certificates NJ SRECs on our elecronic platform. Our Sellers are comming in at $525 t0 $550. We have one small buyer willing to pay $450. Sellers on the New Jersey Clean Energy Program website are posting at $500 to sell all of their EY2008 SRECs or $515 to sell the ones currently available.
None of our major buyers have yet to post bids as they are more concerned with the 2008 vintage SRECs at this time. The Load Serving Entities LSEs have until August 31 to either purchase SRECs or pay the $300 SCAP.
The prices for 2008 New Jersey SREC (Solar Renewable Energy Certificates) dropped slightly on Flett Exchange in mid-May compared with prices traded in April. The average price for an SREC traded on Flett Exchange in April was $257.07. The Average price as of May 16, 2008 was $ 255.71. That is a drop of $1.36 per SREC.
This may not reflect the prices of SRECs traded in the cash market between producers and aggregators. Flett Exchange saw a drop in volume on its platform during the second week of May. We believe this is attributed to higher prices found off of the Exchange. A few customers reported receiving higher bids over the phone via aggregators than bids shown on the Flett Exchange SREC internet based market. The higher bids seem to have corresponded with larger SREC offers. Sellers with 30 to 50 SRECs reported higher bids for their SRECs . Talk of $260 for a block of 34 and a block of 50 SRECs were reportedly done in the second week of May.
Flett Exchange still has a block order for one of its buyers willing to pay $265.00 per SREC however, the minimum volume is 200 with a maximum volume of 1200 SREC.
Flett Exchange has a bid of $258.00 for SRECs with no minimum volume as of Monday May 19th. SREC buyers and sellers can open an account with Flett Exchange by emailing SREC@flettexchange.com or calling 201 209 0234.
PSE&G received approval by the New Jersey Board of Public Utilities BPU to offer $105 million in loans to help finance the installation of solar in New Jersey.
Here are the details:
– PSE&G’s solar program will be open to all of its electric customers, including low-income, residential, commercial, industrial and municipal/governmental. The solar panels would be owned by the developer or the host customer.
— Applications will be available for two years and accepted on a first-come, first-served basis until 30 megawatts of projects have been developed.
— PSE&G would provide loans to developers or customers to cover approximately 40-60 percent of the cost of a solar installation project, depending on the projected output of the solar energy system and the cost of the system. The borrower would repay the principal, plus interest, over 10 years for residential customers and over 15 years for all other borrowers, a considerably longer investment timeframe than traditional lenders are willing to provide for solar installations.
— The remaining project cost would be funded by the owner of the solar installation. The owner may have access to funds from banks and investors. In addition, the owner may be eligible for a federal investment tax credit. (Utilities are currently not eligible for this tax incentive.)
— Owners of solar energy systems would repay the loan with Solar Renewable Energy Certificates or SRECs, which are created every time the system generates solar electricity. It takes one megawatthour of solar generation to create one SREC, which has value in the marketplace. An SREC is a New Jersey tradable product that represents the clean energy benefits of electricity generated from a solar energy system. For the purposes of this program, an SREC is valued at the market price or $475, whichever is higher. Borrowers could also repay the loans in cash.
— PSE&G’s electric customers will pay for the cost of the solar program through the Solar Pilot Recovery Charge (SPRC), which will be included in the delivery part of their monthly bill. PSE&G will sell the SRECs it receives for loan repayment in an auction, and credit the proceeds from the sale to customers through the SPRC, which will offset a portion of the program costs.
There will be big changes this year in the NJ SREC market. The cap SCAP is going to rise for the first time since the inception of the market. The cap goes from $300/SREC to $711/SREC for 2009 vintage SRECS. Our estimate of 2009 vintage SRECs are in the high $400 to low $500 range.
At Flett Exchange we look forward to the changes as we feel that our open market structure will help buyers and sellers establish a trading price. If the SREC market on Flett Exchange increases in volume our price data may help the New Jersey Board of Public Utilities (BPU) manage the SREC program more effectively. The target price range of SRECs is more crucial now than it has ever been since the phase out of the CORE rebate program and the increased dependence of the SREC value to pay for the solar infrastructure.
Leave a comment below on your opinion of where 2009 SRECS will be trading. This summer you can put your money where your mouth is and trade on Flett Exchange when we launch the 2009 vintage SRECs!
Activity in the NJ SREC market has recently picked up. Producers have now produced approximately 70% of their 2008 SRECs. The production period ends on May 31 for the 2008 generation year.
Electricity Providers in New Jersey are also actively satisfying their requirements. They have until August 31 to procure enough SRECs for the 2008 reporting period.
SREC producers are actively selling their SRECS to avoid the possibility of them going worthless as they did at the end of the 2007 reporting year. Some producers waited too long last year. This year they may not risk making another $10 per SREC and letting the price get away. See our chart on the SREC market home for the price action at the end of the 2007 vintage period.
There is also the view by most others that demand is tight and the Buyers will be forced to pay the $300 SCAP payment if there are not enough 2008 SRECS.
A stakeholder meeting is scheduled for January 30, 2008 at 10 am in the Board of Public Utilities Hearing Room on the 8th floor of Two Gateway Center in Newark, NJ. They will be discussing the changes proposed during the September 12 BPU board meeting regarding the SREC program. The changes will be made to the NJ Renewable Portfolio Standard.
The proposed changes will affect the 2009 energy reporting year which includes energy produced from June 1, 2008. The major proposed changes are raising the Solar Alternative Compliance Payment from $300 to $711. This is the payment electricity producers will have to make for the shortfall in solar production or in the shortage of SRECs purchased to comply. There also may be an extension to the life of an SREC from one year to two years. Also, there may be a 15 year limit put on systems to generate SRECS.
These changes have profound impacts on the future value of SRECS.
The 3rd NJ Clean Energy Conference was held at the Hyatt in New Brunswick, NJ on Sep 27th & 28th. Flett Exchange was an Exhibitor, displaying it’s commodities trading platform to those in attendance. Others attendees were energy companies, state agencies, consultants and environmental advocacy groups.
The keynote speaker was Ted Turner (yes, that Ted Turner: CNN, Superstation TBS, landowner, philanthropist, etc.) who emphasized his positive attitude toward solar as an investment, having recently purchased a solar installation company in NJ.
The conference was extended to two days for the first time in its history, allowing municipalities to concentrate on the first day’s events. Panels discussions or workshops were presented which focused on strategies for clean energy and Awards were given for leadership in promoting NJ’s economic competitiveness and environment.
Have any comments on this article or the conference? Leave a Reply in the blog below.
The New Jersey Board of Public Utilities (BPU) voted on and passed the straw proposal recommended by the Clean Energy Program staff. This ensures a future for the SREC program based on the improvements crafted over the last year through proposals, consultation and public recommendation. The pilot program will continue as it seeks ways balance the interests of buyers and sellers over time. Among the recommendations accepted are:
SRECs starting in 2009 …
Value of SRECs will approximately double, then taper down over time. That is, the value and alternative compliance payment amount (ACP) will be set higher
Two year vintage – Certificates can be sold for two years instead of one
Qualification Life – SRECs will be earned for 15 years after rebate has been received (Valid for existing installations 15 year earning period will begin when rebate was received)
Rebates will be made available only for smaller systems (<10 KWH) under the SREC program
To be worked out over the coming year …
Annual Caps – To adjust incentives of the program so that Solar becomes on financial par with other means of producing electricity over time
Securitization – While there is always risk involved in buying and selling a commodity such as an SREC, the value should be secured so that it is attractive to invest in Solar
We look forward to a healthy future for solar in NJ and to your posted comments about the passage of the proposal!
2007 NJ SRECS traded at $1.00 on the last day of trading. There were SRECs offered on Flett Exchange and on the NJCEP bulletin board for $1.00. Buyers did not surface in the last few days. The assumption is that all of the requirements by electricity generators to buy SRECS had been fulfilled.
All generators of electricity in New Jersey will file reports with the Board of Public Utilities (BPU) in September. We will then see if some just opted to pay the $300 compliance payment instead of actually buying the SRECs in the open market. If there were no compliance payments made this will indicate an oversupply of 2007 SRECs. The question then will be how many. If it only affected a few late sellers then it is not a big deal. However, if the oversupply is large then it may affect future SREC values.
Proponents of higher SREC values will argue that the % required for generators to buy in 2008 is higher then the 2007. This may in turn lend to a supported 2008 SREC market.
Market activity has sparked. There has been recent selling with buyers scrambling to fill out their REC portfolio to avoid paying penalty amounts. SRECs are selling at bargain prices roughly around $150 as sellers seek a last-ditch effort to avoid losing income from their certificates.
Sales for Solar Renewable Energy Certificates (SRECs) for the reporting year 2007 are coming to a close before their Aug. 31st expiration. Buyers for the publics’ SRECs have been scarce, presumably because utilities have already met Renewable Portfolio Standard (RPS) requirements for the year-end true-up period OR are willing to pay $300 each for Solar Alternative Compliance Payments (SCAPs). The question remaining is how the following years’ markets will work if supply far outweighs demand.
The best price now being paid for 2007 SRECs is $35.00. Offers to sell have continued to drop lower and lower as the month continued, showing the lowest price at $100. 00 — a far cry from the hoped for price of well above $200. Past low monthly averages for the reported ten months of this year hover around $138 with reported highs averaging close to $255. Reported lows are likely due to deals that were contracted for multiple years when that price seemed attractive. In a healthy open market, SREC sales would be likely to fetch far above this price.
Due to the scarce market for buyers, system operators who have either been allotted their SRECs too late into the true-up period or who haven’t taken the time to post them are left out in the cold. SREC owners are anxious to find an efficient marketplace where they can be sold. Currently, acceptable buyers are no where to be found.
Please let us know what you think by leaving a reply in the blog.
SRECs for reporting year 2007 have 1 week before expiration, thus far there have been no signs from utilities that more SRECs will be needed in order to meet RPS requirements for the end of true up period (august 31st). The current best bid on Flett Exchange and the Bulletin Board for 2007 SRECs is $45.00 at $170.00 with size on the offer. This suggests system operators have either been allotted their SRECs too late into the true up period or haven’t taken the time to post their SRECs. As the RPS requirement for 2008 increases to 0.082% the market cap will need to increase 36,808 SRECs in order to meet demand. This added supply will come from new installations already under construction, most of these new systems should be online by late fall as the summers projects are wrapped up. This added supply in the later part of the year will help create liquidity.
As reporting year 2007 comes to an end, values of 2007 SRECs on the NJ CEP website and the Flett Exchange SREC marketplace have been increasingly winding down. The $200 bid on the bulletin board is stale and an offer at $182.50 has not received any attention. The market on Flett Exchange for 2007 SRECs is $45.00 bid, $180.00 offer. Bids and offers on the Flett Exchange are executable as opposed to the indications placed on the bulletin board which do not show real-time price discovery.
The over-all lack of liquidity in the SREC market currently suggests utilities have filled their RPS and will now focus on reporting year 2008 as system operators begin accumulating 2008 certificates. For reporting year 2006, 1855 SRECs expired, becoming worthless except to the voluntary market, while 163 SCAPs were paid to meet RPS. This signifies market inefficiency in connecting buyers and sellers and in leaving excess supply on the table. Hopefully excess supply will be met by increased RPS requirements for 2008. The number of RPS are slated to continually increase each year in order to bring supply in-line with demand. The next step involves finding an efficient marketplace where they can be sold – Flett Exchange looks to fill this void for the 2008 SREC market and beyond.
As crude oil remains above the $70 dollar mark Renewable Energy and more importantly solar energy have been gaining momentum in both the private and pubic sectors. The Wall Street Journal recently reported the $11 billion solar market has been growing by 25% a year. However, the United States in 2006 only captured 8% of these world wide solar installations which was led by Japans 17% and Germany’s 55% of installations. This clearly leaves room for extensive growth which will benefit as new technologies become more readily available to individual system operators lowering the costs operational ownership. While this growth continues through 07 and into the 08 presidential elections, reducing our dependence on fossil fuels will remain at the forefront of debate. Thus renewable energy programs, government incentives, and state run mandated compliance markets will continue to grow paving the way for increased market activity. The facts are the worlds renewable solar energy industry is growing at an annual rate of 25% and the remainder of 07 into 08 will again see impressive growth.
Since its inception Flett Exchange, LLC has been increasingly adding liquidity and transparency to the NJ SREC market. They have already brokered a number of trades in a seemingly inactive market and as they continue to bring buyers and sellers together in a live market based environment we should see greater activity. This will be visible especially as reporting year 2007 draws to a close and system operators begin receiving 2008 SRECs and Utilities begin buying to meet their RPS. For Utilities, Flett Exchange will add cost-effective and time-saving measures to purchasing SRECs for RPS. Utilities will be able to place large working orders eliminating the the need for expensive phone brokers and aggregators. This web-based platform will greatly increase liquidity in the market since system operators will now be able to interact with each other to place real-time bid, offers and, more importantly, counter-offers — thus creating a true commoditzed market.
Flett Exchange announces its entry as a broker in Solar Energy in the NJ SREC program, providing a live electronic website for the state of New Jersey’s “Solar Renewable Energy Certificates” (SRECs). By using an innovative commodity platform Flett Exchange makes buying and selling of certificates on the internet fast and easy. Users benefit by seeing live buy and sell orders in real-time, providing instant price discovery through market transparency.
With Flett Exchange’s electronic platform those trading Solar Energy credits will have direct access to an open marketplace to interact with aggregators, brokers and individuals looking to buy or sell SRECs.
This platform will enable all market participants to access an open and transparent marketplace thus commoditizing the NJ SRECs. Market based pricing should help the State of New Jersey reach its goal of increasing solar capacity from 90 megawatts (MW) in 2008 to 1500 MW in 2020 and help the state go 20% green by that time. Without an SREC market the State would have to contribute $500,000,000 per year to achieve the goals. An open marketplace for SRECs will be needed to reach that type of capital requirements. Flett Exchange will enable the type of transactions needed by the program.
Flett Exchange will offer its exchange services to all market participants interested in the NJ SREC program – call Flett Exchange at (201) 209-0234.
Once accounts have been created participants will then be able to actively enter buy and sell orders in real time on the Exchange’s open market place. All transfers of SRECs are done on the NJCEP.com website.
Flett Exchange has entered the NJ SREC program as a broker, bringing 12 years of energy trading and brokering experience along with their innovative internet trading platform. This trading platform will lend market transparency and real-time price discovery to the NJ SREC program. This increased market transparency should help the SREC program and the state of New Jersey achieve its goal of implementing 20% renewable energy by 2020.
As volume increases, the Flett Exchange platform will be able to handle greater demand for credits and mirror a true market environment. Trading on Flett Exchange will benefit solar energy system operators because they can now control how quickly they modify prices and trade credits. Better tools will also allow businesses required to meet the state set renewable portfolio standard (RPS) to revaluate their compliance portfolio. A more efficient SREC market will increase the confidence of new solar energy operators who are considering installing solar enerfy systems. With more participants and projected increases in the current cap of $300 per credit, greater market activity will be generated and higher volume reached, all of which will help New Jersey achieve its long term goal of implementing 20% renewable energy by 2020.
Flett Exchange saw its first trade in the NJ SREC market just seven days after the launch. A trade for 3 SRECs was done at a price of $200 each. The market after the trade was $192.00 bid, $225.00 offered for 2007 vintage certificates. The market for 2008 is $185.00 bid, no offer.
The seller has a home solar installation and earns about 12 certificates per year.
Buyers and sellers of SRECs can call in their orders to a Flett Exchange representative or manage them their selves from any computer.
