What should be the starting solar electricity price for a good quality 15 year PPA in New Jersey?  What should the escalator be? All Opinions Wanted

David,
I have seen offtake prices all over the board with an important driver being competition rather than replacement of the cost of energy. Realizing that SRECs are the prinicpal revenue components, it really is about the risk you or your investors are willing to take beyond a 3,5 or maybe 7 yr contract, which may ultimately determine what is an acceptable offtake agreement.

Sam

8 cents/kWh is available for commercial clients, systems down to 100kW.
Large system sizes with triple A or public client can be down to 4 cents/kWh.
Both with 2% escalator.

Ian...thank you very much. I have a couple of PPA's in the works and have been offering .085 with a 3% escalator. It wouild appear I need to be a bit more aggressive. I'm pretty sure I don't want to go to .04, even though one client is a school system and the other is AAA corporate

3% escalators aren't out of line when the competition - the utility - is going to be going up 6% or more for the forseeable future. In NJ, the customer revenue is usually under 10% of the total life cycle revenue stream, assuming 15 year SREC values of 70% of the minimum Alternative Compliance Payment. If your investors don't have that kind of risk appetite you'll have to adjust accordingly. If you take a look at the SunEdison and SunPower price models, it's easy to see they are very comfortable making long term assumptions on the reliability of the SREC market.

Is that the Steve Fortuna who used to be with enfinity and was supposed to meet with me in New York back in July. I think 3% is competitive, but there are tons of lunatics running around Jersey trying to sign deals with anyone and everyone before the cash grant goes away. They will disappear next year when the republicans seize control of at least one branch and it is only the tax credit left.

I don't want to lose a good client that I have invested lots of time into because I was 1% high with the escalator...especially considering I could give the energy away, sell SRECs for $300 on a long term contract, and still make investors better than 14%