New Jersey's renewable portfolio standard (RPS), requires each electricity supplier/provider serving retail customers in the state to include in the electricity it sells 22.5% qualifying renewables by 2021.One way these suppliers are meeting this quota is through the purchasing of SRECs, or Solar Renewable Energy Certificates.
For those who install solar photovoltaic systems, SRECs are awarded and eligible to be sold. Each time a system generates 1,000 kWh of electricity, an SREC is earned and placed in the customer's electronic account. SRECs can then be sold on the SREC tracking system, providing revenue for the first 15 years of the system's life.
In the SREC Trading market, buyers and sellers engage in an auction similar to the stock market. Buyers and sellers respectively call out prices they are willing to buy and sell their certificates for, and these prices are then lined up by price at the close of the auction. A supply and demand curve are created from these prices, and the intersection of the two is referred to as the closing price. This closing price is what all the certificates in that auction will be sold for. If a seller sold their certificates for under the clearing price, their profit will be more than what they originally sold their SRECs for. If a seller sold for higher than the clearing price, they will receive less than what they sold for. This process ensures a fair market and a fair selling price.
July 2010 Trading Statistics:
Low: $170
Average: $550
High: $685
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