New Jersey Solar Renewable Energy Credits (SREC)
The State of NJ has a law that requires utilities to produce a certain amount of their energy (I think it’s 1/100 of 1%) per year from solar energy. Of course, the utilities haven’t actually built solar facilities yet.
Enter the Solar Renewable Energy Credit (SREC). This is a credit of the “greenness” of 1 MWh (megawatt hour) produced in a particular year that can be sold separate from the actual electricity to meet the Renewable Portfolio Standard requirement. One SREC is created for each MWh of electricity produced by a grid-connected solar power system in NJ. That SREC can be sold to a buyer (usually an aggregator, broker or utility). The state estimates (on a conference call training session held today) that up to 7200 SREC’s will be required for the plan year 2005.
A plan year runs from June 1 to May 31, with SREC’s generated in the year eligible for sale through August 31 of that year. If you don’t sell the SREC’s, you lose their value.
Systems under 10KW will have SREC’s generated from their estimated generation. Systems over 10KW must use a meter reading (systems under 10KW can opt for meter readings, but once you make that choice there’s no going back). In this case, the meter reading in question is a special meter counting ALL output from the system or the counter built into the inverter that counts power produced since initial activation. Systems that use meter reading for credits will self-report their production, and the state has the option to do an in-person inspection. All systems may be inspected to ensure that they are actively in use and grid-connected.
Another requirement for participation is that you have not already sold your SREC or applied it towards a requirement. For example, a company that is producing solar electricity and using that production to offset a reduction in NOx output cannot sell their SREC – that would be double-counting the production. If you’ve already sold your SREC (also known as a “green tag”) out of state, you can’t sell it again.
SREC values in NJ are essentially capped at $250 each, since the state portfolio standard has an alternative route for utilities to satisfy their requirements at that cost. Brokers are estimating values at about $150 each, but a perusal of the state trading site shows SREC’s being currently offered at $200 each.
SREC’s can also be retired without sale. This will be done by buyers who need the credits for themselves (after they buy them). It can also be done to remove SREC’s from the NJ system (because they are sold in another state) or to permanently take them off the market to make a statement about pollution (an SREC that is retired without sale can never be applied against a requirement – forcing the potential buyer to reduce emissions instead).
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Generators with an NJ system should follow this procedure to get started:
1. Read the information available at the SREC website http://www.njcep.com/srec/. The Overview and Attestation document is a good place to start.
2. FAX or mail the Attestation document to the NJBPU at the location shown on the document.
3. Create a user ID on the SREC website (see the Training Overview document for information).
4. A few days later, your facility will be linked to your user ID.
5. If required, report meter readings between the 1st and 3rd of each month.
6. SREC’s will be generated on the 5th of the month and made available for sale on the site.
7. Negotiate the sale of one or more SREC’s off-line (the Bulletin Board can be used to find buyers).
8. Record the sale on the site. You have 30 days to cancel for non-payment.
If you have more questions, contact Scott Hunter at the NJBPU, or Jan Pepper at Clean Energy Markets at the contact locations found at the NJCEP website.
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