Newark, N.J.-based New Jersey Board of Public Utilities (BPU) recently approved a $143-million expansion to the solar loan program by Public Service Electric and Gas Company (PSE&G), a subsidiary of Public Service Enterprise Group (PSEG). The expansion will finance the installation of an additional 51MW of solar energy systems on homes, businesses, and municipal buildings throughout PSE&G's electric service area.
Since the utility’s initial solar loan program was approved by the New Jersey BPU in April 2008, customers have applied for loans totaling $105 million that have resulted in 30MW of installed solar capacity.
“There’s no question that providing a source of stable, secure capital — especially in our tough economy — has helped boost the number of solar energy systems in New Jersey,” says Ralph LaRossa, president and COO of PSE&G. “With today’s BPU approval, this expanded program will support the development of another 51MW of solar energy to help our state meet its aggressive renewable goals and reduce carbon emissions. We’re pleased to do our part to make New Jersey a leader in solar energy installations, second only to California.”
The major components of the loan program expansion include:
- PSE&G's solar program will be open to all of its electric customers, including residential, commercial, industrial, and municipal/governmental. The solar systems will be owned by the borrower of the loan, typically the developer or the host customer.
- The program will be available for two years and applications will be accepted on a first-come, first-served basis until 51MW of projects have been developed. Projects in this program may not exceed 500kW (a typical residential system is 7kW).
- PSE&G will provide loans to developers or customers to cover about half of the cost of a solar installation project, depending on the projected output of the solar energy system and the cost of the system. The borrower will repay the principal, plus interest, over 10 years for residential customers and over 15 years for all other borrowers.
- The remaining project cost will be funded by the owner of the solar system. The owner may also be eligible for a federal investment tax credit and rebates from the New Jersey Clean Energy Program.
- Borrowers will repay the loan with cash or with Solar Renewable Energy Certificates (SRECs), which are created every time the system generates solar electricity. It takes one megawatt hour of solar generation to create one SREC. Under the program, SRECs are guaranteed to be valued at no less than an agreed price as approved by the New Jersey BPU.
- Initially, the SREC floor price for residential systems is $450. For non-residential systems up to 150kW the price is $410. For systems larger than 150kW up to 500kW it is $380. The floor prices offered for SRECs for new loan applications will be reduced by about 3% to 6% every six months.
- PSE&G's electric customers will pay for the cost of the solar program through the RGGI Recovery Charge (RRC), which is included in the delivery part of their monthly bill. PSE&G will sell the SRECs it receives for loan repayment in an auction and credit the proceeds from the sale to customers through the RRC, which will offset a portion of the program costs. The average residential customer who uses 722 kilowatt hours in a summer month and 6,960 kilowatt hours annually will pay about 36 cents more per year.