Only a small percentage of the buildings eligible for NJ solar systems installation are taking advantage of the significant savings with New Jersey solar systems through the use of Solar Renewable Energy Certificates (SRECs).
What is the SREC Registration Program?
NJ solar systems applicants start by registering their intent by using the SREC Registration Program (SRP). Even though rebates are not available for NJ solar power projects, the purchasers of solar projects must register their projects in the SRP before they begin construction so that they may establish the project’s eligibility to earn SRECs. Registration of the intent to participate in New Jersey’s solar power marketplace provides participants with information about the future new solar capacity and valuable information on future SREC pricing.
Once the registration is approved and construction is complete the project receives a New Jersey certification number. This number allows the owner to receive New Jersey SRECs. An electric distribution company, such as Atlantic City Electric or PSG&E (EDC), must authorize the solar system to be energized before SREC’s can be generated.
How do SRECs Work?
When a solar power system generates 1,000 kilowatt-hours (kWh) of electricity, the property owner earns an SREC. New Jersey solar power project owners report their solar system production to the SREC Tracking System which allows SREC’s to be posted in the customer’s electronic account. The owner of the SRECs can then sell the SRECs on the SREC Tracking System. This method of managing SRECs will provide the owner revenue for the first 15 years of the New Jersey solar power project’s life.
Electricity suppliers in New Jersey are the usual purchasers of SRECs because they have to pay a Solar Alternative Compliance Payment (SACP) if they fail to meet the requirements of New Jersey’s Solar renewable portfolio standard which requires that electric companies generate or purchase a set portion of their portfolio from solar power each year. Purchasing SRECs is one way they can meet the RPS requirements. SRECs are also traded in a competitive market much like stocks, and so the price may vary significantly however the price ceiling is typically whatever the SACP is. Currently, New Jersey SRECs can go anywhere between $300 and $675.