The following is an excerpt from the December issue of PVNews:

Despite plummeting SREC prices in New Jersey and Pennsylvania, installations in these states remained high through Q2 2011. Now that Q3 2011 installation figures have been recorded, the effects of SREC oversupply are starting to take hold in both markets.

For the past three quarters, GTM Research has been predicting that the New Jersey market would suffer from an oversupply of SRECs that would push SREC prices down and negatively impact installations. While the former began to take place as soon as SRECs for Energy Year 2012 (June 2011 to May 2012) began trading, installation levels remained stubbornly high through the second quarter of this year. In Q3, the New Jersey market began to play out as expected, declining from 76 megawatts to 65 megawatts. At this point, every installation drives further oversupply and even a 65-megawatt quarter is unsustainable.

Source: SEIA/GTM Research U.S. Solar Market Insight

Looking forward, we anticipate that the non-residential market will remain flat to slightly down in Q4. However, we expect to see installations pick up again in early 2012 as a result of projects having qualified for the 1603 Treasury Program. In addition, a number of utility-scale projects currently in construction will be completed in late 2011 or early 2012 and could add another 50 megawatts or so to the total installed capacity in New Jersey. (The implications stemming from the expiration of the 1603 Treasury Program are explained in greater detail in the Q3 2011 SEIA/GTM Research U.S. Solar Market Insight report, which will be released Dec. 16.)

There are two big questions facing the New Jersey market today, the first being where spot SREC prices will go in 2012. Either they will remain steady, if low, around $200, and enable the most economic projects to continue moving forward, or they will plummet as they have in Pennsylvania and result in a near-complete stoppage in the New Jersey market. We are inclined to believe that the former scenario will transpire, although we are closely monitoring spot pricing across a number of platforms to be sure. The second question is when we can expect to see a market recovery. In large part, this depends on how much is installed over the next three quarters. Given the impact of 1603, we anticipate that, in the absence of new legislation, New Jersey will remain oversupplied at least through Energy Year 2013 and possibly into Energy Year 2014... To continue reading, please subscribe to PVNews!

 

New in the December issue of PVNews is the GTM Research SREC Price tracker, with both spot and contract figures for key SREC markets. With uncertainty surrounding the eastern states, it's of the utmost importance to know the going rates when planning to sell or acquire SRECs.

Source: GTM Research

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Now in its 30th year of publication, PVNews continues its tradition as the solar industry's premier periodical. Focusing exclusively on the global PV industry and drawing on the expertise of the GTM Research solar analyst team, at only $395/year, PVNews is undoubtedly the industry's best value for in-depth market research. This renowned newsletter includes the following key components in each issue:

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