New Jersey’s new system of Renewable Energy Credits is designed to spur the installation of alternative-energy solar systems on business properties and homes. It has been met with both optimism and skepticism among installers of those systems. A new solar project in North Jersey, announced today, indicates it may be working
As readers of this blog know from past posts, including Solar energy heats up in New Jersey again and A big NJ solar project via a PA utility, New Jersey has been one of the nation's leaders in the installation of solar-panel, alternative energy systems for businesses and homes.
It's a success story you wouldn't expect in a northeast state not known for year-long sunshine.
How did it happen? Credit forward-thinking leadership at the state Board of Public Utilities (BPU), the Department of Environmental Protection (DEP) and within the governor's office which resulted in a program of generous state grants. Those grants gave business and home owners a substantial break when installing the costly solar systems.
But the program proved to be far more successful than anticipated. So many applicants took advantage of the grants that the program quickly became unsustainable (especially in light of the state's overall dire financial condition). So the BPU restructured the program, creating a market-trading financing structure called Renewable Energy Credits (REC).
The new system has been met with both optimism and skepticism by those in the solar-installation business, and it's still too early to judge how it will all work out.
At least one apparent success story, however, was announced today in a press release from Clear Sites Solar. The firm says it is installing a 122 kw solar photovoltaic system on the roof of the new headquarters of McGowan Builders, Inc in East Rutherford, NJ, designed to offset most of the building’s current energy usage charges.
McGowan was able to do the deal, according to Clear Sites, because of the state RECs which "created an outstanding investment opportunity."
When combined with deprecation, the federal tax credit and the finance package McGowan chose, the deal will produce a positive cash flow for McGowan within the first year, and drive the effective cost of the system down significantly, according to Clear Sites.
So, at least in this case, RECs appear to be off to a good start.
More good news for the future of solar installations in New Jersey was the July 16 announcement by Public Service Electric and Gas Company (PSE&G) that it plans to extend to residential customers participation in the company's $105 million loan program for solar installations.
Under the new program, residential electric customers in single family homes can qualify for loans of 40 to 60 percent of the total cost of a solar installation project, depending upon the efficiency of the solar system. The loans are limited to systems of up to 6 megawatts and will be available on a first come, first served basis over the next two years.
More information on the PSE&G loan program is available at: www.pseg.com/solarloan or by calling 973 430-8460.
Have you been considering a solar installation at your business or home? Click on the "comment" line below and tell us about your experience. Opinions on the state REC program or solar energy in general also are welcome.