SREC = Solar Renewable Energy Credit
1,000 Watts Generated = 1 SREC = 1 Megawatt Hour = 1 MWh
PJM (the grid manager) monitors how much a solar system creates, and issues credits to the generator every month. It's done over the internet.
A little education (and keep in mind my background is Pennsylvania so my experience is based on our state).
Governments required Utility companies to produce so much of their power from renewable resources. And since utility companies are no longer power generation companies, they aren't building solar systems directly. They want the market to build them (solar systems) and they will buy the output. In this case it's the SREC and the electricity. Most times you will have a different buyer for each of the two components.
In Pennsylvania, the current mandate is for about 12,000 SREC's and goes up every July 1. Currently systems are installed that take us all the way through the state mandate of June 2013.
In our state, most of the small systems <200KW were built with an expectation of $300-$400/SREC Prices. The most recent auction value? $149. Couple reasons. The 30% federal grant was new last year. So all the solar systems built prior to 2010 were built at market cost without that separate subsidy. They required $350/SREC prices (in a long term contract) to get built. The people expecting $350/SREC prices with a 30% federal grant thought the free market would just magically allow the profit margin to go up. In 2009 Joe gets a long term contract at $350/SREC but in 2010 Joe gets 30% grant up front, hmmm, I'll take $200 for my SREC thank you. That's exactly what happened.
Additionally, in 2010 Pennsylvania awarded over a hundred million in direct grants to builders of solar systems. The result? We get way ahead of our solar mandated utility purchase and SREC prices crash. We have way more than we need.
I use this page to watch prices.
http://www.flettexchange.com/
Moral of the story: If you're building the system because of SREC prices be sure to sign a long term contract. Otherwise, as grants come and go (eventually the 30% federal grant will go away) prices will fluctuate with the total amount of grants available. If you're building it in NJ because you think you're going to get $600/SREC prices, eventually enough systems will be built under the grants system that prices will be forced to go down if you're a seller on the spot market.
1,000 Watts Generated = 1 SREC = 1 Megawatt Hour = 1 MWh
PJM (the grid manager) monitors how much a solar system creates, and issues credits to the generator every month. It's done over the internet.
A little education (and keep in mind my background is Pennsylvania so my experience is based on our state).
Governments required Utility companies to produce so much of their power from renewable resources. And since utility companies are no longer power generation companies, they aren't building solar systems directly. They want the market to build them (solar systems) and they will buy the output. In this case it's the SREC and the electricity. Most times you will have a different buyer for each of the two components.
In Pennsylvania, the current mandate is for about 12,000 SREC's and goes up every July 1. Currently systems are installed that take us all the way through the state mandate of June 2013.
In our state, most of the small systems <200KW were built with an expectation of $300-$400/SREC Prices. The most recent auction value? $149. Couple reasons. The 30% federal grant was new last year. So all the solar systems built prior to 2010 were built at market cost without that separate subsidy. They required $350/SREC prices (in a long term contract) to get built. The people expecting $350/SREC prices with a 30% federal grant thought the free market would just magically allow the profit margin to go up. In 2009 Joe gets a long term contract at $350/SREC but in 2010 Joe gets 30% grant up front, hmmm, I'll take $200 for my SREC thank you. That's exactly what happened.
Additionally, in 2010 Pennsylvania awarded over a hundred million in direct grants to builders of solar systems. The result? We get way ahead of our solar mandated utility purchase and SREC prices crash. We have way more than we need.
I use this page to watch prices.
http://www.flettexchange.com/
Moral of the story: If you're building the system because of SREC prices be sure to sign a long term contract. Otherwise, as grants come and go (eventually the 30% federal grant will go away) prices will fluctuate with the total amount of grants available. If you're building it in NJ because you think you're going to get $600/SREC prices, eventually enough systems will be built under the grants system that prices will be forced to go down if you're a seller on the spot market.