A few thoughts on SRECs

[Jim Elkind]

Hi,

 

First the disclaimer: I am not an expert in solar renewable energy certificates (SRECs) nor have I done thorough research on the options so take this all with a grain of salt nor am I a lawyer. Also, I am not advocating for Knollwood over another SREC aggregator.

 

Selling Your SRECs

I have elected to sign a 10 year contract with the aggregator Knollwood to sell my SRECs when my system goes live -- should be near the end of the month.

 

Why Knollwood? They seem to be a dominant player in the SREC market. They attempt to sell the SRECs they are handling outside of the auction market to obtain long term commitments from buyers. I suspect this results in a lower up front price but probably a higher overall payment as they lock in the price for multiple years rather than being subject to the whims of the auction market. Also,

a friend of mine that used to be an energy trader also selected Knollwood -- he is a person I trust. His thinking is similar to mine.

 

Why 10 years? It's easier to "set it and forget it" than to have to remember to revisit this more frequently.

 

There are other SREC aggregators out there. For example, http://www.solsystemscompany.com/sol-brokerage will sell your SRECs for the same fee as Knollwood. Astrum will also sell your SRECs for you http://www.astrumsolar.com/astrumsrecs/overview but they do not disclose their fee on their website. Or you can sell your SRECs yourself using www.srectrade.com.

 

I did review the Knollwood contract fairly carefully. For the most part, it was what I expected. However, the language in Section VII describing the process and requirements for me to assign my contract with Knollwood to a buyer of my home seemed a little one-sided. The language says Knollwood has to agree to my assigning my contract to another party. However, the contract omitted the typical language that would require Knollwood to agree to the assignment quickly and in reasonable circumstances. Knollwood agreed to modify the language in this section by adding the clause, which consent shall not be unreasonably withheld or delayed. to the end of the second sentence of the second paragraph of Section VII. I suspect this is scant protection but it is something.

 

Please see the tracked changes in the attached for the details.

 

If you want to contact Knollwood, I have found Karen Adelman to be responsive and helpful:

Karen Adelman
VP Customer Relations
Knollwood Energy, LLC
PO Box 30
Chester, NJ 07930
862-432-0370
908-879-9067 (fax)

ka...@knollwoodenergy.com

I suspect she will contact you as your Solarize installation progresses.

 

As always, with contracts and legal agreements, consult your attorney if you have any questions.

 

SREC Contract Start Date

Finally, the start date of your system is important. You are entitled to sell your SRECs for 40 quarters. You should choose a start date for your contract that optimizes the money you will receive during those 40 quarters. For example, if your system goes on the grid at the end of December, you could choose to have your first quarter of production be everything that was produced during December (only a few days worth of solar energy). These few days would count as a full quarter in the SREC market. In other words, a few days in December would cost you a whole quarter at the end of my contract.  Alternatively you could choose to start the SREC contract on the first of January to capture a whole quarter of power generation to sell on the SREC market. Think about the time value of money as you consider your start date. SREC prices are high now but probably not high enough to warrant entering the SREC market with just a few days of production to sell.

 

In my case, rather than starting my SREC contract at the end of December, I will start it in early January.

 

I hope this helps.

 

Jim Elkind

(m) 508-517-0800