New Jersey continues to lead the solar community by offering the state’s highest incentive levels since 2012. These initiatives include an increase in Solar Renewable Energy Credit (SREC) prices from $185/SREC to $275/SREC! Given that solar equipment prices (modules, racking, etc.) have decreased by about 30% in the same timeframe, the value proposition for commercial businesses in New Jersey to go solar can be extremely attractive. To understand how dramatic the impact of these incentives are, let’s outline what SRECs are, and how they work:
What exactly are SRECs?
Some utilities do not have the capacity to create “utility-scale” solar projects, however they are obligated to fulfill their state’s Renewable Portfolio Standards (RPS) and produce a specific annual percentage of renewable energy. Instead of installing their own systems, or paying a fee for failing to meet their RPS percentage, utilities choose to purchase SRECs from solar system owners. Solar Renewable Energy Credits (“SRECs”) are tradeable environmental credits that represent the generation of 1MWh (1,000 kWh) of solar energy on a rooftop, ground-mount or carport system. Once these production levels are achieved, each SREC can be sold on the “SREC Market”. This is especially advantageous to system owners in New Jersey, who can earn $0.275 for every kilowatt-hour, in addition to the energy savings it produces.
What do SRECs mean to a solar system owner?
If a business owner were to own a 1MW solar system (Approximately 100,000 ft2 of usable roof space), they would generate roughly 1,250,000 kWh per year. This would deliver two cash benefits:
- Energy Savings (no longer having to purchase from the utility) in an amount typically equal to $0.10-$0.12/kWh or $125,000+ a year
- SREC Revenue of $0.275/kWh, or about $340,000 a year
A 1MW system could yield over $400,000 of cash benefit in New Jersey, and when compared to the affordable cost of building solar, the result is a rapid payback and high return-on-investment.
What about non-system owners?
Given the strong economics in New Jersey, another option is to be a host site for a solar system. You wouldn’t incur any capital costs, and in exchange you would be able to purchase the electricity from the system owner at a deep discount versus current utility rates. This creates a mutually beneficial arrangement. You save substantially on your energy bill, and the owner takes advantage of SRECs and other solar perks.
Here’s how you can enter solar in New Jersey
EnterSolar are experts in working with commercial enterprises in New Jersey to deliver optimal energy solutions with compelling, long-term ROI. We customize each system, and have partnered with companies such as Chelten House, Perfect Printing, and Dykes Lumber Company to deliver guidance in order to best leverage financial incentives at the regional and state levels.
Want to learn more about solar in New Jersey? Here are the “5 Reasons Why the Garden State is the Next Golden State”