On Tuesday, the New Jersey Board of Public Utilities (“BPU”) approved PSE&G’s $105 million Solar Loan Program, which will provide $105 million towards financing photovoltaic systems across residential, multi-family/affordable, commercial, industrial, and non-profit/municipal buildings throughout New Jersey.
The program will distribute loans to projects totaling 30 megawatts in solar power generation over the next two years on a first-come, first-served basis, though caps do exist for each sector. (For example, only 3 megawatts are available for affordable housing projects). Participants will pay back the loans, which will cover 40 to 60 percent of installation costs, either with cash or through Solar Renewable Energy Certificates (“SRECs”)- tradable certificates issued by BPU each time a solar power system generates 1 megawatt-hour of power (i.e., the amount of energy equivalent to a 1 megawatt power system running for one hour). The Solar Loan Program sets the value of the SREC at the higher of $475 or market price. Loans will be paid back over 15 years, and PSE&G has the right to purchase a project’s SRECs at 75 percent of market value if the loan is paid off early.
BPU has set the ambitious goal of providing at least 20 percent of New Jersey’s energy needs from clean and renewable sources by 2020, and PSE&G hopes that the Solar Loan Program will encourage further investments in alternative energy technologies throughout the Garden State. Should the Solar Loan Program prove successful, the utility company- which is New Jersey’s largest- is prepared to invest up to $1 billion in alternative energy programs.