New Jersey solar renewable energy credit prices were aimed lower during the first week of June following recent strength. SREC prices for energy year 2018 in the state came in at an average of $241.50/MWh as energy year 2019 SRECS saw an index at $240.08/MWh, easing 83 cents and 42 cents, respectively, week over week.
Garden State class I REC prices continued to edge higher. New Jersey vintage 2018 class I RECs notched an index at $7.56/MWh, with vintage 2019 markets priced at $8.29/MWh, up 6 cents and 3 cents, respectively, from the week prior.
New Jersey REC and SREC prices for both solar and nonsolar credits gained ground at the end of May after Gov. Phil Murphy, a Democrat, signed A. 3723/S. 2314, a bill that, among other things, hikes the state's renewable portfolio standard. The legislation requires 50% of the state's energy to come from class I renewables such as solar and wind by 2030. The state's earlier requirement was for 17.9% of its power by 2021 to come from class I resources.
In addition, the legislation moves up a goal to have 5.1% of the state's power come specifically from solar by 2021 instead of 4.1% by 2028. The governor's goals to have 2,000 MW of storage by 2030 and 3,500 MW of offshore wind are codified in A. 3723.
In Pennsylvania, SREC prices were mixed during the week ended June 1. Pennsylvania SRECs for reporting year 2018 saw an average at $14.92/MWh, down 8 cents from the week before. Pennsylvania SRECs for reporting year 2019 posted an index at $20.08/MWh, increasing 25 cents.
In early May, the Pennsylvania Public Utility Commission issued a final order regarding whether already-certified but out-of-state solar facilities would retain their certifications under the state's Alternative Energy Portfolio Standards.
At the end of 2017, Pennsylvania Gov. Tom Wolf signed into law H.B. 118 that allows only in-state solar projects to count toward its solar target and removes eligibility from out-of-state projects that interconnect to the same regional grid.
Previously, Pennsylvania allowed SRECs to be generated by a source anywhere within the PJM Interconnection region, which led to ample supply and sluggish prices.
The PUC order states that Pennsylvania-certified but out-of-state facilities would not be grandfathered with the SREC eligibility under the tier I solar requirement. Pennsylvania-certified SRECs generated after Oct. 30, 2017, would be recertified to non-solar RECs.
The order enables out-of-state facilities already certified in the state and having contracts with a Pennsylvania utility, supplier, load serving entity, electric or municipal cooperative to maintain certification until those contracts expire. Additionally, out-of-state SRECs generated before Oct. 30, 2017, will retain their tier 1 solar attribute for their banking lifetime.
Although SREC prices in Pennsylvania have moved higher in recent months in response to the recent legislation, the state's reporting year 2018 SREC market remains fundamentally oversupplied by about two million credits, according to a recent analysis by SRECTrade.
"While the analysis shows the oversupply becoming less meaningful moving forward, assuming relatively modest in-state build rates, the market could still expect varying degrees of oversupply (40-70% even in reporting year 2023). One potential factor that could change this oversupply dynamic dramatically would be market participants willingness to purchase [Pennsylvania]-certified out-of-state SRECs from the existing SREC bank (generation from October 2017 and prior)," SRECTrade said.

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