New Jersey SREC Market Faces Possible Crash



New Jersey Governor Chris Christie

 Since New Jersey first began to put together a Renewable Energy Portfolio Standard in 1999 the state’s solar industry has been growing. Growth expanded into full-on boom as the New Jersey Board of Public Utilities successively increased the size of the solar carve-out over the past decade. This past month New Jersey reached 10,000 solar installations statewide. The only other state with more solar is California.


However, there is an important market factor to consider in the New Jersey solar bonanza. As solar became successful, New Jersey SREC prices soared to over $600 per REC. With the boom in solar installation the amount of renewable energy being generated by solar panels is now exceeding the Renewable Portfolio Standard’s requirement. This means that there is an excess of RECs and consequently the once high prices have steeply declined and there is substantial volatility in the market.

This is to be expected to a degree, as it conforms to the universal economic law of supply and demand. Most experts believe that following the correction, the market will stabilize over the next couple of years. On the other hand, there are steps state governments can take to ease the financial burden of homeowners who are counting on SRECs to help pay for their solar systems. Some legislators in New Jersey are now pushing for measures similar to those in Massachusetts that create a “floor” for SREC prices. However it is unclear how successful these efforts will be.


Pennsylvania's Tom Corbett, which
way will he go.

 While he is not as overtly hostile to renewable energy as his shale-rich counterpart in Pennsylvania, Governor Chris Christie of New Jersey has taken some steps that alarm those in the renewable energy industry. As part of his “common sense” government solutions, Christie has unilaterally decided to withdraw the state from the Regional Greenhouse Gas Initiative, claiming that New Jersey has already done its part. In a 2010 Executive Order, Governor Christie also created a “Department of Environmental Protection Waiver Program”. This allows the state’s Department of Environmental Protection to disregard environmental regulations that it deems “overly burdensome” to the business community. This has been criticized by some as the “ultimate pay-to-play loophole”.

So while the SREC market will likely stabilize in the future, New Jersey’s highly admirable position as a renewable energy powerhouse is precarious at best right now. Hopefully the Governor and legislature will see the benefits of keeping their state as a beachhead of renewable energy on the East Coast and a center of green jobs. Only time will tell.

by Richard Harrod


California Hits a Renewable Energy Home Run

Motley Fool

By Travis Hoium
More Articles The California Public Utility Commission may be redefining the way we view subsidies for renewable energy. Instead of a government defined feed-in tariff, which is often slow to react and leads to wild swings in demand, ...
 
Where Will We Plug In?

Wired News

Nissan CEO Carlos Ghosn boldly predicts battery electric vehicles will comprise 10 percent of the global market by 2020. This is not an insignificant question, but neither is it the major hurdle some suggest. We'll plug in mostly at home, often at work ...
 
Ford, Toyota Plan Collaboration for Hybrids

Bloomberg

Ford is joining forces with the Toyota City, Japan-based automaker, maker of the best-selling Prius gasoline-electric car, as the US automaker plans to triple North American output of electric vehicles and hybrids to more than 100000 by 2013. ...
 
The value of being greener

Boston Globe

“We rely on electricity to run everything: pumps to circulate water, oil to run the boilers,'' said the plainspoken cheese maker, chatting on the porch of his country store. “We are heating a lot of milk and need hot water for sanitation. ...
 
Suntech sees margins, shipments improving sequentially

Reuters

Suntech expects photovoltaic shipments to rise 15 percent this quarter from the previous three months, but improved demand for solar panels will come at a cost. Solar subsidy cuts in Germany and Italy earlier this year triggered a global glut of solar ...