“Green” Energy Producing Red Ink
By Art Gallagher, Hat tip to the Linden Forum
Government entities and private enterprises that borrowed to install solar panels expecting the excess energy the panels produce to cover the debt service are in for a rude awakening. An oversupply of solar energy in New Jersey has lead to a 50% reduction in the price of Solar Renewable Energy Credits (SREC).
Rather than getting the “free” solar panels and free or cheap energy they were promised, taxpayers and businesses are faced with digging into other pockets to make the payments on their panels.
According to Michael Flett, founder of Flett Exchange, LLC, an energy exchange, brokerage and consulting firm located in Jersey City:
The Drop in prices is directly correlated to the potential of an oversupply of SRECs for the 2012 Energy year. There has just been too much solar installed too quickly compared to the mandates put on the electric producers. Electric Producers in New Jersey are required by law under the Renewable Portfolio Standard to purchase 442,000 SRECs from solar owners during the June 2011 to May 2012 time period (energy year 2012). There is currently almost enough solar installed to produce that amount of SRECs. The oversupply is coming from the rate that solar is being installed. In June of 2011 alone there was 40 Mw of solar installed in NJ. This was more than 10% of all the solar ever installed since the inception of the program in 2004. At this rate there may be more than a 100,000 oversupply of energy year 2012 SRECs.
John Burry of TheCountyWatchers, a Union County watchdog blog, saw this problem and many other problems with the solar scam coming a year ago.
Middletown Mayor Tony Fiore says the township has mitigated this risk in their solar program:
Our proposal will not be to put any capital money towards the project. It will be a pure PPA (power purchase agreement) whereas, providers will bid to install and maintain the project on their own dime and will sell us the power back at a much reduced rate from what we pay. The SREC risk will be born by the PPA provider, not the township. This is a main reason why we decided to go down this route vs putting up money ourselves (aside from the fact we can’t spend what we don’t have!).The couinty on the other hand is thinking about using MCIA money to help the PPA finance the project. They could see an impact.
Township Committeman Gerry Scharfenberger, a former mayor added:
Posted: August 4th, 2011 | Author: Art Gallagher | Filed under: Energy | Tags: SRECs | 5 Comments »I wish solar, biofuels, wind, plankton, goose crap, etc. all worked so we can let the Middle East self destruct and not have to worry about our energy supply. The fact is, it seems all of these alternative energies have to be subsidized up the wazoo to even have the appearance of being viable. In the meantime, we need cheap, efficient, reliable energy and we need it now if we have any hope of jumpstarting the economy and bringing the cost of government down