Tanking Solar Market Halts Project

How things can change in a year.

Late last summer, over 15 years by installing solar panels.

On Monday night, Trice explained to council the volatile solar market has struggled as of late, rendering the aforementioned project—an array of solar panels on a seven-acre parcel near the sewage treatment plant on Pine Street—economically inadvisable.

According to Trice, an imbalance of supply and demand—too much of the former, not enough of the latter—has driven down the price of SRECs (Solar Renewable Energy Certificate; pronounced “Shrek,” as in the cartoon ogre) to the point where it would be unlikely the township would save money on its electricity usage.

SRECs, representing one megawatt-hour of production, work somewhat like stocks. Energy suppliers pay to have solar fields built, then turn a profit by selling the SRECs to utility companies, which are required to produce a certain percentage of the electricity they provide through renewable sources (i.e. solar). This allows the energy suppliers to offer the electricity to the user—in this case, the township—at a reduced rate.

But as Trice and township manager Scott Carew explained Monday, the market has been inundated with solar projects the last few years, while tax incentives from the federal government have been reduced.

“It’s really hurt the market,” Carew said, specifically the value of the SRECs.

Trice said the value of a SREC currently (about $154) is about $50 lower than the township needs it to be in order to realize any savings, and the price has been “artificially propped up” by a bill passing through the Legislature that’s intended to breathe new life into the solar market. However, that bill, if passed, wouldn’t drive up the value of SRECs until 2014 at the earliest—if at all.

He said the only way to keep the SREC value in the $200-250 range is if demand outpaces supply.

“But that’s not going to happen,” Trice said. “These developers are going to jump right back into the market once they see there’s a chance to make some money.

“My advice at this point is just to wait and see what happens with the SREC market.”

Resident Greg Newcomer, who has urged council to pursue solar at previous meetings, was discouraged by council’s willingness to drop the solar project.

Newcomer, a Democratic council candidate, suggested the township continue to investigate opportunities for solar.

“I’m fairly certain you could do better with solar panels,” he said when told the township paid 12.5 cents per kilowatt hour for electric.

“We want to do it,”  said Deputy Mayor Greg Gallo, “as long as it’s not going to cost the township.”

 call for space for solar panels on the roof should the township opt to add them in the future.