Solar Market FAQs
- Does the Clean Energy Program still offer rebates for solar projects?
- How do I know that you received my registration if I mailed it in?
- How long will it take to receive an acceptance letter for my solar project once the NJCEP receives my SRP registration package?
- How do I know where my registration is in the process or if my rebate check was sent?
- When will I get my New Jersey certification number?
- How has New Jersey become such a leader in solar energy?
- Why is New Jersey considered a ‘model program’ for solar development?
- What has been the result of this integrated approach?
- What are your goals for the growth of New Jersey’s solar program?
- What alternative solar financing models were considered by New Jersey?
- How do New Jersey’s program participants justify the cost of installing a solar system?
- What is the solar transition and how does market-based financing work?
- What is “Net Metering”?
- NJ has some of the best interconnection and net metering policies in the country. How do they work and why are they so beneficial to consumers?
- Where can I find more information on New Jersey’s solar financing programs?
- What is a Solar Renewable Energy Certificate (SREC)?
- How do SRECs help finance solar development?
- Who owns the SRECs produced by a solar generator?
- Who buys SRECs?
- Why can't I just sell my SRECs to the utility company directly?
- How long will my system generate SRECs?
- How is the price of the SREC determined?
- Does the BPU guarantee SREC prices?
- Does money from the sale of SRECs need to be treated as taxable income?
- What happens if I sell my house?
- Can I move my solar energy system to a new property?
- I have lost my username/password - do I need to create a new account?
- What if I change or add additional equipment to my solar system?
- If my system was installed prior to receiving a rebate commitment letter, do SRECs go back to the interconnection date?
Does the Clean Energy Program still offer rebates for solar projects?
We no longer provides upfront rebates for solar systems. However, NJCEP is still accepting rebate applications for wind and biopower projects. Solar projects must be registered through the SREC Registration Program (SRP) to ensure eligibility for generating NJ SRECs.
How long will it take to receive an acceptance letter for my solar project once the NJCEP receives my SRP registration package?
As long as the SRP package is complete, it typically takes about 5 to 7 weeks. Incomplete registrations are returned to the host site contact. Once a registration is reviewed by the processing team, it will be data entered into the registration system. You can also review the Program Status Reports to see your project status.
How do I know where my registration is in the process or if my rebate check was sent?
NJCEP updates the website with project activity reports. Please review the Updated Project Status List on the NJCEP website. Please know that the program will communicate with you and/or your contractor regarding missing or incomplete information, as well as approvals. Updates to the status of your application will also appear on the project activity reports.
When the inspection has passed or has been waived, the project will go directly into the payment process (REIP) or be pushed to the complete status (SRP). A letter will be sent with the New Jersey certification number within 5-7 weeks from the date the inspection report is received or the date of the waiver letter.
How has New Jersey become such a leader in solar energy?
New Jersey is one of the fastest growing markets for solar photovoltaics in the U.S. The success is due to New Jersey’s solar financing model, which relies on strong Renewable Portfolio Standards (RPS).
Why is New Jersey considered a ‘model program’ for solar development? Since the inception of the New Jersey’s Clean Energy ProgramTM (NJCEP) in 2001, New Jersey has developed a model program and an integrated approach to solar development that includes:
- A strong RPS with a solar requirement of 306,000 MWhs in Energy Year 2011 and progressively higher values in each succeeding year;
- A Solar Alternative Compliance Payment (SACP) schedule initially established for eight years at levels set high enough to motivate compliance, create demand for Solar Renewable Energy Certificates (SRECs), and build investor confidence in the market;
- Excellent Interconnection and Net Metering Standards that have made it much easier to connect to the distribution system and be compensated at retail electric rates for the generation of clean, emission-free electricity;
- An SREC Registration Program that facilitates access to the SREC tracking system and marketplace which provides a revenue stream and long term financing options for solar installations.
What has been the result of this integrated approach?
In 2001, the Clean Energy Program had only six solar installations. Over the past ten years, the program completely transitioned from a rebate only program to a market based program through the sale of SRECs or Solar Renewable Energy Certificates. In just three years of existence, the SREC Registration Program has contributed over 60% of the installed solar capacity while the rebate programs which have been in place for over ten years account for the other 40%.
More detailed reports including installation summaries by technology, individual program statistics, SREC pricing and NJ REC market updates can be found under Project Activity Reports.
What are your goals for the growth of New Jersey’s solar program?
New Jersey’s solar industry has seen substantial growth over the last few years and is well positioned to continue to grow. The New Jersey Legislature passed new solar legislation called the Solar Energy Advancement and Fair Competition Act which was signed into law (P.L. 2009, c. 289) on January 17, 2010. The new law sets a fixed annual solar requirement for the state’s Solar Renewable Portfolio Standard (RPS); extends the RPS to the year 2026; extends a REC life to three years; and calls for the establishment of a 15 year SACP schedule, among other things.
This law changes the NJ RPS solar requirement from an annual percentage based requirement to an annual fixed Gigawatthours (Gwhrs) requirement (see table below).
EY 2011 306 Gwhrs
EY 2012 442 Gwhrs
EY 2013 596 Gwhrs
EY 2014 772 Gwhrs
EY 2015 965 Gwhrs
EY 2016 1,150 Gwhrs
EY 2017 1,357 Gwhrs
EY 2018 1,591 Gwhrs
EY 2019 1,858 Gwhrs
EY 2020 2,164 Gwhrs
EY 2021 2,518 Gwhrs
EY 2022 2,928 Gwhrs
EY 2023 3,433 Gwhrs
EY 2024 3,989 Gwhrs
EY 2025 4,610 Gwhrs
EY 2026 5,316 Gwhrs
What alternative solar financing models were considered by New Jersey? BPU directed that the solar incentive program in NJ transition from a rebate dependent program funded through the Societal Benefits Charge (SBC) to a market-based incentive program relying predominantly on the value of Solar Renewable Energy Certificates (SRECs). Stakeholders including representatives from the solar industry worked to develop recommended policy models for the transition.
How do New Jersey’s program participants justify the cost of installing a solar system?
Program participants rely on a combination of electricity cost savings through net metering, selling SRECs through the RPS marketplace, federal tax credits or grants and depreciation benefits to reduce the total cost of installation and drive their investment in solar.
What is the solar transition and how does market-based financing work?
After a two-year process that involved various stakeholders, experts, businesses and other state agencies, the Board approved the market-based SREC framework on September 12, 2007, to promote the greatest amount of renewable energy at the least financial impact on ratepayers. This model builds on a well established RPS market that has been developing since 2004. The overall goal of New Jersey’s solar transition is to adapt its solar financing program to support installation of sufficient solar capacity to meet the Renewable Portfolio Standard requirements at the least cost to ratepayers, taking into account other policy goals – such as fairness and equity to all ratepayer classes, job growth, improved reliability/security and improved environmental quality.
This continued growth in the SREC market is closing the gap between the solar RPS goal and the registered solar capacity that is eligible to generate SRECs. Electricity suppliers and providers, the primary purchasers of SRECs, are required to pay a Solar Alternative Compliance Payment (SACP) if they do not meet the requirements of New Jersey’s solar RPS with SRECs retired. As SRECs are traded in a competitive market, the price may vary significantly. The actual price of an SREC during a trading period can and will fluctuate depending on supply and demand.
What is “Net Metering”?
In New Jersey, Electric Distribution Companies and third party electric suppliers are required to credit customers with solar systems or other renewable energy generators for each kilowatt-hour produced on an annual basis. The customer-generator reduces consumption for electricity with their renewable energy system during a monthly billing cycle with any excess generation being credited at retail rates on the following month’s bill. Should excess generation accrue to the end of an annual period, the customer-generator is compensated for any remaining credits at the wholesale power rate by the Electric Distribution Company or their third party electric supplier.
In New Jersey, all BPU-regulated Electric Distribution Companies and electricity suppliers offer net metering to their residential and commercial customers that generate electricity on the customer’s side of the meter, using Class I renewable energy sources, provided that the generating capacity of the customer-generator’s facility does not exceed the customer’s annual electric consumption.
Together, our interconnection and net metering rules ensure solar generators are compensated for the clean, renewable energy they are generating, and that New Jersey ratepayers share in the benefits of solar and other small renewable energy generation.
NJ has some of the best interconnection and net metering policies in the country. How do they work and why are they so beneficial to consumers?
New Jersey was one of the first states to streamline its interconnection rules to ensure that customers with small on-site renewable energy systems could easily connect to the grid and receive compensation from the utility.
New Jersey now requires utilities to follow a standardized process, making it easy to connect to the grid. This is critical to getting the full value of small generation systems for both the customer and for New Jersey.
One of the key benefits of solar electric generation, for example, is that it can offset peak demand. During the summer, when air conditioners are running full tilt, solar electric systems are also producing at near peak capacity reducing strain on the distribution systems and the need for heavily polluting sources of peak generation.
Where can I find more information on New Jersey’s solar financing programs?
More information on New Jersey’s utility solar financing program is available here or you can call 866-NJSMART.
What is a Solar Renewable Energy Certificate (SREC)?
SREC stands for Solar Renewable Energy Certificate and is a type of clean energy credit in the form of a tradable certificate useful for demonstrating compliance in state RPS markets. In New Jersey’s RPS rules, an SREC is issued once a solar facility has generated 1,000 kWh (1MWh) through either estimated or actual metered production. The SREC represents all the clean energy benefits of electricity generated from a solar electric system. SRECs can be sold or traded separately from the power, thus providing solar system owners a source of revenue to help offset the cost of installation.
How do SRECs help finance solar development?
New Jersey’s RPS requires that electric suppliers and providers retire SRECs in scale with their retail electricity sales in increasing amounts each year through 2026 and beyond. This long term demand for SRECs provides owners a predictable source of additional revenue that can facilitate long term financing for solar installations.
Who owns the SRECs produced by a solar generator?
SRECs are owned by the owner of the solar generating facility, unless sold or granted by the owner to another entity. The value of an SREC is determined by the market subject to demand and supply.
Who buys SRECs?
Solar system owners can choose to sell their SRECs to a broker, aggregator, or Load Serving Entity (LSE) ie the electric suppliers and providers, who must buy SRECs to meet their RPS obligations. Some solar installers or project developers will offer to buy the SRECs as part of the project financing, thereby reducing the installation costs and hence the amount of capital needed up front to finance a project. All customers considering financing options for a solar installation should ask their installer about the value of SRECs and who will have the rights to claim them. Prospective investors in solar energy equipment are advised to seek alternative quotes from at least three project developers or installers. A courtesy listing of project developers is available at http://www.njcleanenergy.com/findavendor.
New Jersey’s Electric Distribution Companies (EDCs), who provide regulated electric transmission and distribution services, offer solar finance programs that provide competitive long term contracts for SREC off take or loans in exchange for the SREC amortization. The SRECs procured under each model are auctioned to buyers for use toward NJ RPS compliance by electric generation suppliers and providers.
Why can't I just sell my SRECs to the utility company directly?
The utilities (referred to as Electric Distribution Companies since enactment of the Electric Discount and Energy Competition Act) do NOT have an RPS obligation. Rather, the RPS requirements are mandatory to the Third Party Suppliers and BGS Auction providers of electric generation supply. However, the Board of Public Utilities has approved EDC Solar Finance programs that competitively solicit long term contracts for SRECs (open to ACE, JCPL or Rockland customers) or provide loans in return for SRECs (PSEG). You can learn more about these programs at njedcsolar.com or pseg.com.
How long will my system generate SRECs?
Solar electric generation facilities that are accepted and installed in accordance with all requirements of the SREC Registration Program are eligible to generate NJ SRECs for a period of 15 years. This period is known as the SREC Qualification Life which begins on the date on which the facility was interconnected to the local electric distribution system; and ending on the first May 31 that is at least 15 years after the date of completion of the interconnection.
How is the price of the SREC determined?
The price of an SREC is determined by a number of factors, including supply and demand for SRECs in any given year and the SACP level. Electric suppliers and providers (load serving entities) are required to pay a SACP if they do not meet the Solar RPS through purchasing SRECs. Generally, SACP levels are set by the BPU above the SREC levels necessary for electric suppliers to have an incentive to purchase SRECs instead of paying SACPs and necessary to provide an internal rate of return attractive for enough solar capacity to reach the RPS requirements. Historical SREC pricing information is recorded and reported at www.njcep.com.
Does the BPU guarantee SREC prices?
No. SREC pricing is neither determined nor guaranteed by the BPU. SRECs trade in a competitive market, and SREC pricing is determined by competitive factors such as supply and demand. SRECs are expected to trade somewhere below the SACP. It should be noted that SRECs are a market instrument to assist in financing solar energy development. The actual price of an SREC during a trading period can and will fluctuate depending on supply and demand, contract terms and other factors. The BPU makes no representation as to current or future prices of SRECs, and this risk is entirely assumed by the registrant or investor.
Does money from the sale of SRECs need to be treated as taxable income?
Prospective investors in solar energy equipment are advised to consult their accountant or other tax professional with any tax related questions.
What happens if I sell my house?
Ownership of the solar energy system and the SRECs it generates typically transfers to the new property owner when a home is sold. If you sell your house, you must download the 'Major System Change Form' from the PJM-EIS Generation Attribute Tracking System (GATS) website, fill that out, and submit it to the program administrators at www.pjm-eis.com. The new owner will also be required to submit a new attestation form.
There are several alternative models of solar energy system ownership in New Jersey’s solar market. Ownership of SRECs often remains the same as ownership of the solar energy system. Frequently, the ownership of SRECs is transferred by the owner of the solar energy system to a third party in exchange for a reduction in installed costs. It is also common for property owners to lease their property to a solar energy system owner in exchange for reduced electricity costs under a Power Purchase Agreement. SREC ownership under each of these models must be recorded with the SREC administrator, currently PJM-EIS GATS (Generation Attribute Tracking System).
Can I move my solar energy system to a new property?
Yes. In this case you must download the 'Major System Change Form' from the PJM-EIS GATS home page, fill that out, and submit it to the GATS program administrators.
Please visit www.pjm-eis.com, call 610-666-2245, or email the administrator at GATSAdmin@pjm-eis.com.
If you make any changes, such as adding additional modules, changing inverters or changing your meter, you must fill out and submit a Major System Change Form to GATS.
Yes, SRECs can begin with the interconnection date as long as GATS is still issuing SRECs for the current reporting year. The reporting year in New Jersey runs from June 1 to May 31. For example, Energy Year 2011 covers solar production from June 1, 2010 through May 31, 2011.