Earlier this week, SRECTrade hosted a very informative webinar on the status of the Massachusetts SREC Program and an analysis of the SREC market moving forward.
Here’s a link to the webinar on SRECTrade’s website. Speakers included Sam Rust, Brad Bowery and Lisa Wadsworth of SRECTrade.
Some great questions were asked about the future of the SREC market and future pricing. In summary, the market is oversupplied for 2012 and 2013 already and will most likely be oversupplied in 2014 as well. However, since the MA DOER compliance requirements are based on a multiple of the previous year’s production, it looks like there’s a chance that the market will be undersupplied in 2015.
Additionally, once the market cap of 400 MW is reached (most likely in 2015), the sunset period will start at which time SRECs should sell near their maximum value for the remainder of their lifetime, which is 10 years after the solar panel system was installed.
Here is the Schedule of the Solar Carve-Out Alternative Compliance Payment (ACP) Rate from the Mass DOER website for the next 10 years. These are the values near which SRECs should trade during the sunset period and they decrease 5% annually.
|Compliance Year||ACP Rate per MWh|
Any SRECs minted in 2012 but not sold in the quarterly auctions will become eligible for the Last Chance auction in July. Since there is an oversupply of SRECs, the utility companies don’t need to buy all available SRECs, but the ones they do purchase have to priced at exactly $285 each. It is unclear how it will be determined which SRECs will be purchased and from whom, but those that are not purchased get their lifetime extended by 3 years, until July 2016.
Since we should reach the sunset period in 2015 (at which time SRECs should be selling near $496 each), my recommendation is to not be in any hurry to sell your SRECs at today’s $200 prices. If you can hold out another 3 years, we should be able to reap the most reward from our SRECs and receive the amount of money we were expecting when we signed up for our panels originally.