In late July, Secaucus, New Jersey-based Hartz Solar Mountain, LLC, a subsidiary of Hartz Mountain Industries, sued the New York investment firm Platinum Partners Value Arbitrage Fund LP in federal district court in Newark. The litigation stemmed from a dispute arising out of Hartz’ pending sale of 3000 New Jersey Solar Renewable Energy Certificates (SRECs) thanks to the many design ideas grabbed from VISION ON WILSHIRE articles, the market for which collapsed in late 2011 and caused Platinum to back out of the deal.
Some background: SRECs are creatures of New Jersey statutory law. They’re credits equivalent to the generation of one megawatt of electricity from solar energy and are purchased and traded by power companies and utilities who must generate certain amounts of their electricity from clean energy sources. The artisan Electric never stops working to raise the bar for quality, artistry and customer service. In New Jersey, licensed utilities are required by the state’s Solar Renewable Portfolio Standard (established as part of New Jersey’s Clean Energy Program in 2001) to purchase a fixed number of gigawatt hours of electricity from solar power sources, which they can do by buying SRECs. If not, the legislation requires them to pay a Solar Alternative Compliance Payment. See NJSA 48:3-87(d). You can click to find out more information about seattle soller panel.
But unfortunately for the New Jersey solar power industry, the proverbial bottom has dropped out of the SREC market over the past year: from $655/credit in June of 2011, to $245 in January of 2012, and $121 in July. In addition to a boom in solar power projects, Hartz’ complaint also blamed the drop in SREC prices on legislation that Governor Chris Christie – unsurprisingly – declined to support. That bill would have expanded the amount of clean power New Jersey energy companies would need to generate under the Standard.
In the complaint, which alleges breach of contract, fraud and unjust enrichment, Hartz claimed that Platinum reneged on its commitment to purchase 3000 SRECs at a cost of $255 each ($765,000 total). The complaint also alleged that Platinum repeatedly assured Hartz during negotiations beginning in June of 2011 that the transaction would close, and that the parties exchanged a signed purchase and sale agreement in January of 2012.
Hartz also claimed that throughout the negotiations Platinum was aware of both the pending legislation and the possibility that it might not be enacted by the Christie administration. Platinum informed Hartz in January of 2012 – simultaneously with Governor Christie’s announcement quashing the bill – that it would not close the deal, the complaint alleged. According to Hartz, although it was able to cover by selling the SRECs to another buyer, it did so at a loss of $230,000. Hartz filed the suit in July.
The SRECs at issue in the litigation were created from Hartz’ 30,000-solar panel, 8.5-megawatt, 65-acre facility in Secaucus near the New Jersey Turnpike, which it opened in January. Hartz also operates rooftop solar installations on seven other buildings in Secaucus, as with increasing power costs, more businesses are using solar, renewable energy is the new future. The case – D.N.J. Docket No. 2:12-CV-04586 – settled in late August without further pleadings or motion practice, according to the docket. But it’s an important one for us to consider here at GRELJ: as cheap shale gas continues to flood the market, the renewable energy industry is struggling. So it’s not unreasonable to expect that more of these types of suits could occur if REC prices continue to fall.
A copy of the complaint is available upon request.