Solar Energy in NJ

New Jersey is a solar energy leader!

Also in 2004, the NJ Board of Public Utilities (BPU) expanded and simplified New Jersey's net metering rules (no fees, insurance requirements or offsets) and interconnection standards for residential and commercial customers. The new rules clarified the requirements and made the process more transparent and cost-effective. In addition, the rules increased the maximum capacity to 2 megawatts --the largest in the country. The higher limit is viewed as a key to allowing solar solutions to grow and contribute to future energy needs by encouraging businesses to invest in larger, low-cost solar energy systems.

NJ’s interconnection standards and simplified net metering have a proven track record as a low-cost, easy-to-implement regulatory tool that has removed significant barriers to implementing a renewable energy project.

Energy Goals and Objectives Set by the NJ Clean Energy Program
By December 31, 2008

• 6.5% of the electricity used by NJ residents and businesses will be provided by Class I and/or Class II renewable energy resources
• A minimum of 4% will be from Class I renewable energy resources

• Install 300 MW of Class I renewable electric generation capacity
• A minimum of 90 MW will be derived from photovoltaics

• 785,000 megawatt hours per year and 20 billion cubic feet gas per year of energy savings will be derived from energy efficiency and renewable energy measures

Clean Energy Program™

The decades before the NJCEP

• 1950’s - “Happy Daze“ of the post war manufacturing boom-plenty of affordable energy for everyone
• 1960’s – Started to become aware of the harm we were doing to the environment
• 1970’s – In the midst of an energy crisis the environmental movement began to become more main stream
• 1980’s - EPA’s Firm Command and Control
• 1990’s - Public Awakening
• Next Millennium 2000+ The Big Blue Marble Era

The NJCEP is working to transform NJ’s energy marketplace so that energy efficiency and renewable energy technologies are cost effective and widespread. In the Comprehensive Resource Analysis conducted in December 2004, the funding levels for NJCEP were set for the next four years (2005 to 2008) at over $750 million. The renewable energy programs were dedicated $273 million or 37% of the total NJCEP budget.

The primary tool for expanding the solar photovoltaic market in NJ is the Customer on-site Renewable Energy (CORE) Program. Rather than give the electric producers and distribution companies rate increases for system redesign and improvements, NJ made the decision to adopt a program that gives local trades people and businesses infrastructure. Through rebates and incentives, CORE reduces the cost of on-site renewable energy systems as a way of stimulating demand, increasing sales, and encouraging manufacturers, vendors, and installers to expand operations, improve distribution, and reduce system costs. The CORE program complements other tools that remove the barriers and make the financial viability of clean energy investments by NJ business possible.

New Jersey’s Funding Plan - 2004 to 2007

• No State Tax Funds are used – Politically Neutral
• Funds gathered from Utility Bills via “Societal Benefits” Charges
• $ 0.0026 Collected for each watt or Therm Used.
• Funds held by the bank, not a utility or the NJ BPU
• Funds release only after inspection controls and State approvals
• NJ Clean Energy Fund Grants
  – Up to 60% for Commercial Renewable Energy Systems
  – Up to 70% for Residential Energy Systems

Financing Assistance

State Grants
Renewable Energy Advanced Power Program (REAP)

• Provides incentives and financing for renewable electricity generation facilities
• Projects over 1 megawatt
• Combines 20% grant with optional guaranteed low-interest, long-term financing

• Provides incentives to renewable energy companies for growing their business in NJ
• Open to applicants who seek funding for research, business development, commercialization and technology demonstrations of innovative products or services that advance the delivery of renewable energy systems to the marketplace
• Total program funding at this time is $5 million

Sales Tax Exemption
Solar and Wind Energy Systems Exemption

• A full exemption from the state 6% sales tax for all solar and wind equipment
• Exemption is available to all taxpayers

Rebate Programs
New Jersey Clean Energy Rebate Program

• Eligible technologies include fuel cells, photovoltaic, small wind and or sustainable biomass technologies
• System output should not exceed 125% of the historical or expected (if new construction) consumption
• Systems must include at least a 5 year, all-inclusive warranty
• Solar electric systems are eligible for incentives which are paid incrementally based on the size of the system installed
  • $5.30 per watt for the first 10 kW of system size
  • $4.30 per watt for the next 30 kW of system size
  • $3.75 per watt for the next 60 kW of system size
  • $3.60 per watt for the next 600 kW of system size

Production Incentives
NJ Board of Public Utilities - Solar Renewable Energy Certificates (S-REC)

• NJ’s renewables portfolio standard requires electricity suppliers to use solar energy to generate a certain percentage of their power
• S-REC provides a way for solar certificates to be created and verified, and allows electric suppliers to buy these certificates in order to meet their solar RPS requirements
• NJ’s on-line marketplace for trading S-RECs is the first such operation in the world
• Generators must register with the BPU in order to participate in this program
• When a generator has S-RECs in an account, the generator can use the electronic bulletin board on the S-REC web site to announce a sale offering. Interested buyers can also use the web site to request an S-REC purchase
• S-RECs are bundled and traded in minimum denominations of 1 MWh (1,000 kWh)
• The maximum price for an S-REC is forecast to be approximately $250 per MWh ($0.25 per kWh)

Sample Cost/Benefits

NJCEP solar renewable energy certificate financial example
Assume a 100 kW solar energy system costs $650,000 and receives a Customer on-site Renewable Energy (CORE) Program rebate of $390,000 (60%) for a net system cost of $260,000.

• The energy generation or savings over 20 years is 2.4 m kWhs @ $ 0.12 / kWh is $288,000.
• An SREC value of $150 adds an additional $90,000 in the first five years for total return of $378,000
• First five years: $72,000 energy savings + $90,000 SREC = $162,000.
• Net return after twenty years would approximate $118,000 or 6%, assumes constant electricity costs and SREC value

New Jersey’s Clean Energy Program™
Here you will find the support you need to learn how to implement renewable energy generation technologies and systems and how to save on energy costs now and in the future

NJ Board of Public Utilities (NJBPU) A regulatory agency whose responsibilities include oversight of the telecommunications industry in New Jersey.

The Database of State Incentives for Renewable Energy (DSIRE)-NJ Page A comprehensive source of information on state, local, utility, and selected federal incentives.

NJ’s Net Metering Rules NJ’s interconnection standards and simplified net metering have a proven track record as a low-cost, easy-to-implement regulatory tool that has removed significant barriers to implementing a renewable energy project.