Over the past few months SREC Prices in Delaware, Maryland and adjacent states have fallen or there were no sales.What is happening and what can we expact in the future?

Lets step back: What are SRECs?

 Think of SRECs like Airline Miles on you credit card. They actually have a lot in common:

• Qualified (Solar) Owners accumulate them
• You can sell them or hold on to them
• They expire
• Depending on when you use (sell) them they are worth more or less

Utilities are (by law) required to buy a certain amount of RECs, e.g. Delaware requires about 2,267 RECs to be bought by it's Utilities in 2010/11

With the passage of a RPS bill in July 2010 this requirement changes significantly. In the Energy year 2011-2012 are required to purchase much larger quantities of SRECs.

The anticipated requirement is 25,571 RECs, more that a ten fold increase! This demand will likely lead to higher pricing for SRECs in Delaware.

Why are SREC prices (in Delaware) falling?

Basically: Supply and Demand. In the energy year 2010/2011 utilities were to buy about 2,000 RECs, but solar power generated more RECs than needed.

In other words there was an over supply of RECs.

Now what?

Wait! With the new laws enacted and several other factors we expect the SREC prices to come back to a very competitive level, so just hold on to your RECs (just like your airline miles) and sell them later in 2011 or 2012. Prices should come back.

As with all supply and demand based systems, you can't predict the future. We think that the combination of the above will effectively raise the SREC prices in Delaware to about $400 for the energy year 2011/12.

What does the future of SRECs look like?

• For 2010/11 the demand for RECs was approx 2,000 RECs.
• For 2011/12 Legislation requires was approx 25,000 RECs.
• For 2012/13 Legislation requires was approx 52,000 RECs.
• For 2013/14 Legislation requires was approx 79,000 RECs.

By 2020 we are looking at a demand of more than 300,000 RECs and continues to climb. This will greatly bolster the value of SRECs. In addition Energy prices keep rising, so the value of the electricity that a solar system produces increases too.

Indeed a very bright future for bright peolpe!