Another interesting tidbit that I discovered was that the state of NJ just recently lowered the percent of clean energy prodcution from 30% to 22.5% which means that there won't be a need for as many of the solar energy systems as previously needed to prodcue enough clean energy so that the utilities can meet their clean energy quota which
also means that the utility won't need to buy as many SRECs and leads me to believe that the SRECs will drop at an even faster rate than they were previously.
Also, you really don't own the system. In 20 years the company will either come and remove the system (if they are still in existence) and they will sell you a new system which sounds like you are starting all over again, or sell you the system at fair market value which is unknown. The company claims that the technology will be much more advanced in 20 years and thus the system will be "worthless" yet in the same breath they say that the technolgy now is basically the same as what it was in the 1960's so you have to make you're own assumptions.
So unless you do not really care about recouping all of your initial investment , I would be wary of investing in solar. In my case I would be getting free electric for 20 years but it doesn't make any sense to me to prepay for my electric for the next 20 years if I can't fully recoup the investment.
Jul 04, 2011 Rating
solar electric considerations-part2 by: JC
The utility companies do not want to make billions in investment to produce solar and currently still rely on dirty fuels (fossil fuels liek coal and natural gas) to produce electricity so it makes more sense for them to buy the SREcs from producers of clean solar energy in order to comply with the clean air standards.
To do this, the utility company has to purchase a predetermined amount of SREcs each year so they will either buy up SRECs available on the open market or pay a fine which is equivalent to about $640 per SREC in the state of NJ right now (July 2011).
So the utility will buy up the SREC BUT do you think they want to pay $640 for it? Hell no, that is the same as paying the fine. They want it for less. SO as long as there are few SRECs available for sale everything is fine (meaning supply is low) and the SREC will probably hold its value (albeit still lower than they would pay out for the fine), but as more of these systems are installed , there will be more of a supply of SREcs and hence people will be willing to take less for them on avaerage.
Also over time the amount of the fine for each SREC that the utility needs is going to be reduced by about 3% annually also leading to a decline in the value of the SREC. Plus you can only sell them on an exchange and there is a fee incurred to sell your SREC. I don't know how much the trade fee is but it just another cost chipping away ta the money you are relying on to break even on the system.
The main point is that you are really gambling that the SREC maintain a high average value over the expected life of your system (about 20 years), but the redemption price is not guaranteed. The SREC could be worth $50 next year and then it is really unlikely that you could recoup the initial investment quickly. Do I need to mention Ponzi scheme or Bernie Madoff here?
Recently in Pennsylvania where they had the same program, the SREcs lost 70% of their value in just 1 year.
Jul 04, 2011 Rating
solar electric system considerations -part1 by: Joe C
I looked into a solar electric system and it seems like a good deal at first because the system would cost 39K and the I would get 78K in SRECs back which is basically a credit that you get for producing solar PLUS 99% of the electricity that I need to run my houshold would be generated for free by the system. Also, The solar company will maintain teh sytem for 20 years free of cost for parts and labor. But there is a lot of other things to take into consideration when determining if it makes sense for you to buy such a system.
The system that you are permitted to install is determined by the amount of sun your house gets plus the direction that your house faces and the roof structure. It is also limited by the amount of electric that you currently used in the past year. The state will not allow you to put up a system that produces more power than you need.
The system that I would be able to get would prodcue nearly all of the electric that I currently use since my house is ideal for a solar electrical system. It is possible that the system that you would be allowed to get would produce less than you really need to power your household.
An SREC is issued for each megawatt that your system generates . I would receive about 10 SREcs per year with my 10 megawatt system. The SRECs are worth about $640 right now so I would get about 6K per year from the sale of my SREcs. The SRECs would be paid out for 20 years. If I got $6K per year for 20 years then it would be an awesome deal. However the assumptions is that you will get and average of $475 per SREC over the 20 years in the state of NJ , (every state varies) however no one can really say what the future value of SREcs are going to be and even at $475 it would still be an awesome deal which I could recoup within 4.5 years, however I think the SRecs will be sold for a much lower proce over time.
The problem is that the value of the SRECs are REALLY based on supply and demand just like a stock certificate. The are also traded on an exchange like stocks. But you ask , who buys them? Utility companies by them. They have to buy so many SRECs per year OR produce clean energy via solar on their own.
Oct 13, 2010 Rating
Lots of paranoiac ignorance here by: Anonymous
It's depressing to hear comments like many of these, which clearly indicate the low level of knowledge amongst our citizens. Solar panelmaking is an extremely competitive business, which means that, unless there are shortages because of heavy demand, prices will always be the lowest possible. The idea that governments could produce anything efficiently is about as big a lie as one can imagine. Governments don't know how to do anything, nor do they take responsibility for anything they do do. Utilities pay lower panel prices because they are buying THINFILM panels, which cost way less per watt but require more than twice the space, making them useless for rooftop applications for residential homes. You, or I CAN buy thinfilm if we want to, but that would be rather dumb. They also won't last anywhere near as long as silicon panels, and therefore their cost advantage isn't what
the uninformed might think. And a residential solar system isn't just about panels. Even in grid-tie systems, the inverter can cost almost $4000. But with the advent of micro-inverters and the entry in the past few months of several new companies, inverting will shortly be possible for
less than $2000 and will increase solar panel
outputs by 10 to 25%, requiring fewer panels,
further reducing system cost. And the govt is providing outrageous subsidies of $1000 per kilowatt, as are many utility companies. I like
solar panels, but hate to see folks who can't use
them paying the electric bill for those that can.
The govt has no business ripping off taxpayers like that.
Feb 17, 2010 Rating
toast by: Anonymous
i like solar power . is it healthy for my toes . my neighbor goes on this website all the time'. my mom only lets me on the computer for 20 min. -jimmy
Sep 07, 2009 Rating
Making it another tax... by: Macca
If the big polluters do indeed buy these RECs, and I cannot see any reason why they would not, then they are effectively another tax on the little guy to allow the big boys to do business as usual.
Sep 07, 2009 Rating
just a thought by: Anonymous
Im curious about the REC'S and the trading of them. When you have your system installed it seems the installers collect your REC credits as part of the payment. So Im wondering who do they sell these credits too? and how much for? and what for? Do the big polluters of our world perhaps buy these credits to cheaply pay the cost of creating more mess than were already in?
Feb 20, 2009 Rating
Not enough is being done by: Cas
I agree that the price of panels is too high, and this keeps most people from buying them. This will be even more so in the current and upcoming tough economic times.
Governments should be getting on board and producing cheap panels and selling them at subsidised rates to anyone and everyone.
