January 2012 SRECTrade Auction Results: Where is Market Demand?

Steven Eisenberg
January 10, 2012 | 6 Comments

SRECTrade's January 2012 SREC Auction closed last week. Below are the clearing prices by vintage across the markets SRECTrade is currently active in.

January 2012 SREC Prices	Energy Year Ending
State	2010	2011	2012*
Delaware	-	-	$65.00
Maryland In-State	-	$204.99
Maryland Out-of-State	-	$35.00
Massachusetts	-	-
New Jersey	-	$245.00	$245.00
Ohio In-State	-	-
Ohio Out-of-State	$30.00	$35.00
Pennsylvania	-	$20.00	$29.99
Washington, DC	$250.00	$270.00

Notes: *Delaware, New Jersey and Pennsylvania operate on a June-May energy year. Green text represents a price increase over the last auction clearing price for that vintage, red text represents a decrease. "-" reflects no sale, which would result if there were no matching bids and offers that cleared for a sale in the auction.

State Market Observations:

Please note, all capacity references are from the latest SRECTrade capacity analysis and reference the amount of supply registered as of the end of December. Additional details regarding SREC issuance are provided in the capacity analysis.

Delaware (Supply: 25.5 MW | Demand: 19.8 MW): Pricing increased slightly this period, trading up to $65.00/SREC. The Delaware PSC approved the SREC Procurement Pilot Program for long term contract solicitations. As of January 3, 2012, PJM GATS reported the issuance of approximately 13,560 DE2011-12 vintage SRECs. Additional SRECs from prior eligible periods may also impact the market should there be a demand for these older vintage SRECs.

Maryland (In-state Supply: 37.8 MW | Demand: 27.6 MW): SRECs declined slightly to $204.99 this past auction period. While not seeing any demand all year long, MD2011 Out-of-State traded at $35/SREC. The state continues on pace to maintain a balanced supply relative to demand for the compliance year. As 2011 compliance obligations are finalized, a shortage of SRECs in the state, if any, will be reflected by an increase in prices at the end of the trading period.

Massachusetts (Operational Supply: 32.5 MW | Demand: 55.7 MW): There was no sale of MA2011 SRECs this period. The next quarterly MA SREC auction will close on Tuesday, January 17, 2012.

New Jersey (Supply: 483.2 MW* | Demand: 368 MW): The 2012 market increased to $245 this auction period. Approximately 15% of the available supply in the auction cleared, representing a gap between buyer and seller's expectation of value. Oversupply continues to grow as the state has averaged 32.0 MW installed per month since the beginning of the compliance period. October 2011 saw an increase in 41.2 MW. *Note: This figure represents the capacity registered in PJM GATS as of December 2011. Please reference the capacity analysis link above for details on NJ Office of Clean Energy installed capacity figures.

Ohio (In-State Supply: 29.0 MW; Out-of-state Supply: 68.0 MW | Demand: 39.1 MW) : There was no sale of OH2011 sited SRECs. The out-of-state SREC market saw activity, increasing in value from $30/SREC to $35/SREC.

Pennsylvania (Supply: 159.4 MW | Demand 41.2 MW): PA2011 SRECs traded up to $20/SREC and PA2012 increased to $29.99/SREC. HB 1508 will go before the Pennsylvania Commerce Committee this Wednesday, 1/11/12.

Washington, DC (Supply: 21.7 MW | Demand: 41.9 MW): Prices continue to increase as legislation closing the DC market borders and increasing requirements take effect on the market. The 2010 vintage cleared at $250/SREC, while the 2011 vintage cleared at $270/SREC. Note, the SREC and capacity figures do not take into consideration the amount of electricity delivered into the district that may be exempt from complying with the Distributed Generation Amendment Act increases, considering some electricity contracts may have been signed prior to the amendment’s implementation

For historical pricing please see this link. The next SRECTrade auction covering Q3 MA2011 generation closes on Tuesday, January 17 at 5 p.m. ET. The following auction covering all markets closes on Tuesday, January 31 at 5 p.m. ET.

This post comes from SRECTrade.

The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy, spelling or grammar.

6 Comments

Tim Dolan
January 13, 2012

Since I favor small distributed roof-top solar it is working great for me.

The answer is of course I have not done any 500kW SREC deals (excepting of course that an SREC itself is valued at 1mWh of power or 1,000 kWh of power, so in that case 10 2x500kWh per year). However, you are likely talking about a 500kWh system, which would be likely over 50 times what mine produces.

I will say I prefer large solar arrays to increasing coal power plants, but I would prefer even more to fill up every possible reasonable already existing remotely south-facing roof with solar first. That is where it benefits humanity the most, by using already existing land space. I do note some industrial building have enough room for 500kWh arrays, but not all that many, so I may be wrongly presuming your 500kWh arrays are planted in the ground.

Phil Manke
January 12, 2012

I don't understand the question. An SREC is 1K, KWh's. I let an accumulator handle mine. They take a cut. I sold over 20 this past year at the going rate, minus the cut. Some may forward contract all of theirs for reduced risk and, hopefully, price.

Peter Lynch
January 12, 2012

Phil - Longwatcher

Just curious how many SREC deals over 500KW have you done ?? I have done over a dozen and I have found them to be complex and way over bureaucratized. Maybe just my experience.

Peter

Tim Dolan
January 12, 2012

The SREC market seems to be working exactly like it is supposed to and very well from my perspective.

1. I note that the states with SRECs and mandatory RPS with solar cutouts have tremendously more Solar PV installed then states without.

2. I note that until there was a huge glut in solar PV installations, the market was doing great. That huge glut was caused by the SRECs returns being really really good, it will stabilize over the next couple years and the prices will likely go back up. A perfectly balanced SREC market should have the SRECs between $200 and $350 per SREC at this time.

3. Luckily my residential system is grandfathered in the DC market, even though I am in Virginia (and I would like to thank DC very much for that). Every SREC I have sold has been over $200. By being able to show what SRECs can do if properly engineered, I hope someday I can convince Virginia to adopt SRECs and increase their Solar PV capacity. But I am doubting that will happen for the next two years.

4. My favorite part of SRECs is that when you reach the desired goal, they go away naturally. No other planned form of incentives outside of Grants/Credits tend to do that. Feed-In-Tariffs, won't go away without congress critters taking action if those are adopted nationally and given the fine examples of the fossil fuel and agro insustries likely they would take action to sustain them. SRECs go away without intervention, I rather like that.

Phil Manke
January 12, 2012

Comment 1 distorts an already distorted article. The SREC markets are wavering poorly because the people responsible are finding their balance in keeping it steady in a somewhat resistive and conservative climate. Firstly, except for the DC trade, most states find the need for SREC's satisfied near years end, so little trading occurs in the last month of the year. Using the last month of the year's trading activity is an intentional distortion of the overall trade movement.
.....Second, many states using SREC trading had become oversubscribed because of the popularity in it's use, and the tiny percentage used for their 'solar carveout', usually less than one percent. The DC market, et. al., had been recently oversubscribed and was at very low solar crediting levels, until the last two months. Now it is recovering because of 'carveout' adjustments upward of fractions of a percent. There is a definite need for stability in this market in order to encourage private investment in solar energy hardware. Investment companies have difficulty tapping into homade energy income.
............It seems to be taking much time to stabilize the leveincentive paid for solar power. I feel this may be continually stressed by Ute shills and investors, whom want a cash cow to milk only for themselves. As distributed energy becomes more mainstream, we may hear more grumbling from the 'status quo' of indentured profit streams. The SREC program represents 'distributed profits as well as energy', tho the trading companies, or accumulators, are always seeking ways to increase their margins also. I feel the pioneers in Solar Energy ought to be given the ability to earn recovery on, and encouraged for their investment scaled to carbon producer demand. 'More carbon dioxide produced=more incentive for solar energy producers' with SREC's. The variable that is being adjusted is the ratio of CO2 to solar power incentivizing. The SREC market can take care of this without federal government subsidy

Peter Lynch
January 12, 2012

If anyone was wondering why SREC's do not work and are a silly convoluted idea - see table above. I am constantly amazed at how we (the U.S.) ignores a simple, cost effective, toally proven way to do this - Feed in Tariffs.....

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Steven Eisenberg

As Vice President, Business Development at SRECTrade, Steven focuses on SRECTrade's brokerage services for commercial solar projects including forward and spot transactions. Additionally, Steven covers SRECTrade's RFP services and oversees...