NJ - need feedback SREC Solar Annuity

[monroe]

I am close to sign a contract with local installer. Quote shows payback time of 5 years, federal tax incentive + utility savings + $250/SREC. I am looking to protect my investment using a long term contract at discount price. Flett Exchange does not allow individuals to sells long term contracts.

Is there a reason to believe prices would be stable and may go up (NJ ACP payments, and In state only market supporting upward price vs. more installations)?
Any risk going with solar annuities other than missing higher prices?
How to evaluate companies offering annuities?
Any recommended companies, I have checked solar review I did not find anything specific in this area.

Wiki shows NJ as reached 1.1% solar production and required to have 2.1% produced by 2021, essentially double the current capacity.
I don't want to post a link, below is snap shot of 2010 article, may be they were promoting the long term contracts because they provide SREC services.
Any one have incite in the reason 1,

"So why do so many people in New Jersey believe that solar is a surefire investment?
There are two main reasons.
REASON 1: The Alternative Compliance Payment (ACP) for not creating or purchasing SRECs is high (currently $675/SREC with scheduled decreases annually) and the current supply of solar capacity does not generate enough SRECs to meet the legislation-driven demand.
REASON 2: Installers who want to sell more solar have an inherent incentive to lead prospective solar energy system owners to believe that SREC values will remain high because it shows a higher ROI."


Thanks in advance for your feed back.

[icebox]

SREC prices will trend downwards in NJ, it's only a matter of fact, how fast, nobody knows.

I just purchased my system, so I have an investment in knowing the facts.

[monroe]

SREC prices will trend downwards in NJ, it's only a matter of fact, how fast, nobody knows.

I just purchased my system, so I have an investment in knowing the facts.

So how are you protecting the investment?

[icebox]

Just as with most other investments...knowledge on the subject coupled with positive speculation.

It made sense for me to go solar, my bills were outrageous due to having 2 EV's and a larger home... I already reduced my consumption by as much as possible prior to going PV.

I based my ROI on SRECs trading below $200/per, anything above that, and I'm doing well.

[monroe]

Makes sense, ROI with SREC at $250 is less than 5 years, $200 its 6 years, and $150 is 7 years. Other than that I am protecting increase in utility price and I have plans for EV. Have to stagger purchases.

search on "nj SACP" got below information,
New Solar Alternative Compliance Payment (SACP) Schedule: Beginning in the 2014 energy year, the SACP will be reduced to $339 declining to $239 by 2028.
reference

http://www.csglaw.com/?r=news_events/474-governor-christie-signs-bill-increasing-new-jerseys-solar-renewable-portfolio

https://www.gomercatus.com/good-news-for-new-jersey-srec-prices/

So potential upside is limited and every year the upside is getting lower. For next 5 years penalty is above $280, therefore there is a market for power suppliers to buy long term SREC contracts below $250. I just need to find players in market place, I'll be happy with rate lock for next five years at $220-$230/SREC.

Flett Exchange eligible participants: Utilities, Energy Companies, Solar Developers and Financial Institutions with a market capitalization of $5 million or more can participate in our long-term SREC market.

My installer suggested a company, I am looking for feedback from individuals who got into those long term contracts.

[Beachsolar]

I'm at the almost-ready-to-sign-a-deal phase in NJ as well and would be interested in this concept too (would like to pay off my system loan sooner than otherwise by selling future SRECs).

If you can find a way to enter a long term contract and get a good price, please post again. When I looked very briefly earlier this year (I forget where even), it seemed the discount for such long term deals was quite significant (I don't remember the details but perhaps 50% off the then-current SREC prices). That made me think that approach was untenable, but I did very little research. If you can find north of $200 for a 5+ year deal (or even 3+), I'd want to jump on that as well just to avoid getting stuck holding the bag if SREC prices tank.

I have no idea on future SREC prices but my installer did the math using a conservative $100 figure as SREC prices in NJ have fluctuated quite a bit.

[skellig]

Hi Monroe. Did you choose an installer yet? I'm also in NJ and currently getting quotes. Will post and ask for feedback in the next week or two. If you could post your quotes and which one you chose that would be appreciated.

[monroe]

NJ clean energy web site, residential - tools & resources - Trade ally search - SREC aggregates shows 14 listings. I found one giving 3 year $230/SREC, I have not signed up

[NYHeel]

I'm just going to play the market. My model uses a current price of $270 and assumes prices fall at the same rate as the SACP. At that level, my payback time is a little over 4 years. Of course, I'm taking out a loan so I don't actually care about my payback time and more that my energy savings plus SREC proceeds exceed my loan payments.

One question, who do you guys recommend to use for an SREC broker/aggregator/trader? I'm mostly down to Flett Exchange and SRECTrade. I'm looking for a low cost broker that will easily allow me to sell my SRECs on a regular basis. Price transparency is very important as well. I have no issue handling the decision making myself. I'm pretty hands on financially and like to have as much data to analyze as possible. So I'm probably not looking to use a broker where you pay higher fees to have them handle everything for you. Any recommendations?

[monroe]

Flett Exchange is a good option, I hope the prices fall at the same rate as the SACP, but I see solar installations have picked up a lot, If there is glut in the market the prices is fall.
If prices average $270 for 4 years, my system would be paid off.

I am looking for any one who can write a contract for $220 for 5 years, my pay back time increases by an year. But it's guaranteed.
But best offer so far is $180, 5 years, Flett Exchange is my go to place for now

[NYHeel]

I found an SREC broker called SolSystems that seems to sell futures contracts or as they call annuities. They have a 3 year for $250 and a 5 year for $200. I linked to their pricing sheet for May.

I do realize that solar construction has been picking up and SREC pricing may fall. However, there's also a new bill that passed the NJ house and senate that would increase the NJ RPS all the way to 80% at 2050, though I don't think they change the solar carve out at all. The bill probably won't get signed by Christie though the next governor perhaps can sign it. We'll see.

Thanks for the Flett Exchange recommendation. That's who I was leaning towards as they appear to have the lowest fees. I thought I saw that they charge just a few dollars per SREC sold. Is that right?

[monroe]

I found an SREC broker called SolSystems that seems to sell futures contracts or as they call annuities. They have a 3 year for $250 and a 5 year for $200. I linked to their pricing sheet for May.

I do realize that solar construction has been picking up and SREC pricing may fall. However, there's also a new bill that passed the NJ house and senate that would increase the NJ RPS all the way to 80% at 2050, though I don't think they change the solar carve out at all. The bill probably won't get signed by Christie though the next governor perhaps can sign it. We'll see.

Thanks for the Flett Exchange recommendation. That's who I was leaning towards as they appear to have the lowest fees. I thought I saw that they charge just a few dollars per SREC sold. Is that right?

today rate is 5 year = $190 & 3 year $225