The price drop caught Ned Ligon by surprise. The retired Latin teacher had planned to pay off the $27,000 solar energy system installed on his Wrentham home in 2010 within seven years, based on federal and state tax credits and rebates, and his quarterly projections of $500 certificate sales.
The tax credits took care of the first $13,000, and for a while the solar certificates seemed to be paying off as Ligon had hoped, he said. He received checks for $470.58 and $497.55 in 2011, and two checks for $502.20 last year.
However, the most recent check from his broker was for $204.60.
“I was happy how it was going and how I was told it was going to go, but, whoa, the bottom dropped out,” Ligon said.
His rooftop array of 18 solar panels was installed by SunBug Solar of Somerville, where company vice president Ben Mayer said homeowners are given projections based on ranges of solar certificate prices that include what has been mistakenly seen as a state-established floor price of $285 — the fixed price for the clearinghouse auction that is ramping up for its debut in July.
“From the point of view of SunBug, our model is based on long-term stable growth,” Mayer said. “I love the wonderful things that have happened in Massachusetts in terms of solar adoption. I’m not so interested in explosive growth. I’m not interested in a boom-bust.”
A solar boom is exactly what Massachusetts has seen since 2007, with solar power installations growing from a total of just 4 megawatts to 194 megawatts of power today, according to the Massachusetts Clean Energy Center.
Mayer and Bowery both said the state is doing a good job keeping the Massachusetts market balanced at a time when other states, like New Jersey and Pennsylvania, have seen more dramatic swings in solar certificate pricing. New Jersey, the biggest certificate market in the country, has seen prices peak at $680 and drop as low as $70, while Pennsylvania has swung from $330 to just $10, Bowery said. Most recent trading has seen solar certificates fetching $90 in New Jersey while Pennsylvania prices are just $12.
“I don’t think SREC fluctuation will be a long-term problem. We are experiencing a first-ness, for lack of a better term,” Mayer said. “I’m psyched for August, when we will all see how this plays out. It will stabilize things for long-term growth.”
As for Ligon, a self-described “spreadsheet nut,” he still considers himself to be ahead of the game. He has records of his electric bills dating back to January 1988, when his family moved into the 2,600 square-foot home. Most years, they paid about $700 for electricity, Ligon said, but he and his wife, Barbara, ended up with credits of $128 in 2011 and $138 last year. The empty-nesters donated the profits to their church, since by law they cannot get paid cash by the electric company for credits earned by generating excess power.
“My records show we produced over 9,000 kilowatt-hours. That is nine SRECs. I got reimbursed for five of them. I have four more out there waiting to be cashed in,” Ligon said.
“I guess I have to be patient and keep my faith in the broker that they are going to do what it takes to get us the best price. They have indicated they are going to be putting the SRECs into the auction.”
Jose Martinez can be reached at Martinezjose1@mac.com.