A Message For the New Year
It has been a tradition at Knollwood Energy to make charitable contributions each December in honor of our customers and installer partners as our way of thanking those who have participated in our successes while giving back to the community. In light of the terrible destruction in our own state from Hurricane Sandy, we have chosen the Hurricane Sandy New Jersey Relief Fund for our 2012 holiday contribution.
We wish you all the best in 2013.
3rd Quarter 2012 SREC Minting
Production from third quarter 2012 will be minted on January 15, 2013. SRECs are created in increments of 1,000kWhs. Third quarter SRECs are currently trading around the same price as last quarter ($205 – $215). Knollwood Energy is still cautious about the prospects for the Clearinghouse Auction for the 2012 year. Based on our evaluation of risk and return, we are planning to sell all third quarter credits for our customers who are set up under Knollwood’s Discretion and our Sell Quarterly option.
Here are answers to some F.A.Q’s:
Will I be creating an SREC on January 15th?
If you had production of at least 1,000kwhs between July – September you will create an SREC(s). If you had production during those months but did not produce a full 1,000kwhs, or if your system interconnected after September 2012, you will not create an SREC this quarter. Partial production over/under 1,000kwhs rolls to the next quarter.
Am I set up to sell at Knollwood’s Discretion?
Unless you emailed us specific instructions with a minimum price or advised us to sell your credits every quarter, you are set up as Knollwood’s Discretion. If you would like to change your monetization option, please email instructions by January 18th to Jodi@KnollwoodEnergy.com.
I am creating an SREC(s). When should I expect payment?
We will process payments the first week of February.
How will the Clearinghouse Auction work?
Unsold SRECs from 2012 can be deposited into the Clearinghouse Auction which will take place in July 2013. It is anticipated that approximately 25,000 SRECs will be deposited into the auction. The auction price is set at $300. The buyers bid against each other for the quantity of SRECs they want to purchase. It is possible that some or even all of the SRECs deposited will not be sold. Since this is the first year the Clearinghouse Auction will be held, it is an untested market. We are currently expecting that not all credits deposited will be sold.
Sold SRECs will be allocated on a pro-rated basis, so that an equal percentage of SRECs are allocated for each system that deposited SRECs. All remaining SRECs will be returned. These returned SRECs can then be sold anytime over the next three years but they can never go into the Clearinghouse Auction again. If they are not sold at the end of the three years they will expire.
Why is the current SREC price less than $300?
The floor mechanism is really more of a price support mechanism. During the initial heavy installation stage, there are so many new systems coming online, that buyers of SRECs are able to acquire what they need well below this price. Therefore, they don’t need the extra SRECs offered in the auction.
Once the build out is finished, or when the dynamics of the auction create an incentive to purchase the SRECs in the auction, we should see the quarterly price get closer to the Clearinghouse Auction price.
Why are we choosing to sell?
We believe that on a risk-adjusted basis, it is a better decision to sell at current prices.As market dynamics change, we will adjust our selling strategy.