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Pre-seling SRECs in Massachusetts

asked 2013-05-30 15:29:02 -0500

Victor gravatar image

Is it a good idea to pre-sell SRECs, that I will accrue over the next 10 years?

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answered 2015-04-24 09:51:51 -0500

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updated 2015-04-24 09:51:51 -0500

john gravatar image

The option to pre-sell SRECs is not always available and each installer might have access to different investors who may or may not be up for this. Always good to ask around to see if this option exists. In general, the determination of whether this is a good idea or not is based on your risk tolerance, desired deal economics and expectations for the future market. Typically, pre-selling SRECs will result in a significant discount in the price for each SREC. This gives the investors room for profit and also takes into account the time value of money (money now is more valuable than money in the future for various reasons, including the ability to invest current money to generate future returns). If pre-selling SRECs allows you to "net down" the cost of your solar installation to get it to a range where you can make the financials work, then that is good reason to do it. Also, if you plan to sell your home before the 10 year period and don't think a new owner would place a value on this income, this is another reason why pre-selling might make sense. The good thing about the MA SREC market is that there is a floor price that is defended by the DOER, unlike in other markets. This gives consumers some semblance of an assurance of what the price will be in the future, reducing the need for pre-selling, but also increasing the pre-sale value, so helps and hurts the case for pre-selling. Hope that helps a little. - J

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Asked: 2013-05-30 15:29:02 -0500

Seen: 1,441 times

Last updated: Apr 24 '15