New Jersey-based environmental brokerage and consulting firm Flett Exchange says the decline in installations shown in the New Jersey Clean Energy Program's (NJCEP) latest solar report could serve to support the market for solar renewable energy credits (SRECs), which has crashed in the past.
According to the NJCEP report, there are now 23,076 solar installations in the state with a total capacity of 1,106 MW. Flett Exchange notes that there were only 11.5 MW installed in July. This is the lowest amount of solar installed in one month since MayÂ 2011. A continued trend of low installation months such as this should support the SREC market, Flett Exchange says.
According to the brokerage, 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 state goals. Flett Exchange estimates that an average of 15 to 17 MW a month is the pace of development needed to keep prices level.
Flett Exchange attributes this year's steady SREC prices to two main factors. The first is the controlled pace of development. The second is electric suppliers' hedging activities in preparation for the increase of SRECs required for energy year 2014.
For a chart of New Jersey solar installations and SREC pricing, click here.