Is there anything sweeter than lounging under the sun and soaking up those rays?? How about turning those sun-soaked moments into a profitable pastime? Now, that might sound like a daydream, but for people with residential solar setups in New Jersey, it's as real as it gets, thanks to the Successor Solar Incentive program.
In 2021, the BPU (New Jersey Board of Public Utilities) took significant steps to introduce a new solar incentive program, replacing the state's Solar Renewable Energy Credit (SREC) market, as reported by solar reviews.
Now, you might wonder why this program is so important. Well, it has simplified the concept of SRECs and put an end to all the fluctuations in market prices. In this post, we will discuss how the SuSI program, as one of the best New Jersey solar incentives, works and how many dollars it can put in your pocket each year.
The SuSI Program: What's It All About?
The SuSI Program is a central part of the SREC Registration Program. It offers homeowners, businesses, and other eligible solar system owners the opportunity to earn and sell their SRECs.
An SREC is like a golden ticket for solar system owners. Every time your solar panels system generates 1,000 kilowatt-hours (kWh) of electricity, you earn one SREC. This certificate, known as an SREC-II under the SuSI program, can be sold, adding some extra cash to your wallet. Now, it is a notable fact that each solar system will keep generating SREC-II certificates for 15 years.
There are two NJ successor solar sub-programs:
The Administratively Determined Incentive (ADI) Program
This program offers predetermined incentives for residential or non-residential net-metering systems and approved solar projects. It also applies to residential & community solar panel projects with a size of less than 5 MW.
The Competitive Solar Incentive (CSI) Program
This program is for big commercial and grid supply solar projects greater than 5 MW in size, and their incentives are determined through a competitive process.
Note: As per the New Jersey Clean Energy Program, starting from March 13, 2023, SREC 2s for net-metered residential solar systems have a value of $85 each.
Financial Benefits of the SuSI Program
Participating in the SuSI Program can be financially rewarding. The income you earn from selling SRECs can lower the initial cost of your solar system. Over time, this can lead to a significant amount of savings on your energy bills and even provide you with an additional source of income. Plus, you're doing your part to reduce greenhouse gas emissions and promote cleaner energy sources.
How Do You Cash in Those SREC 2s?
After you've submitted your SRECs, they'll be reviewed and certified by the New Jersey Office of Clean Energy. Once certified, you can sell your SRECs on the open market, where buyers are typically energy companies that need to meet their renewable energy quotas. The price you receive for your SRECs can fluctuate, but they can be quite valuable, especially if you have a more extensive solar system.
SREC 2 certificates are traded like stocks on the New York Stock Exchange. Most homeowners selling their SREC 2s go through aggregators, like using E* TRADE or Robinhood for trading stocks. Some of these aggregators include names like NJSREC.com, SREC Marketplace, and SRECTrade.
But here's the deal: unlike stocks with their crazy price swings, SREC 2s earned through the ADI solar program have a fixed value. So, you can count on that $85 per SREC 2 incentive, which might be lower than the old New Jersey SREC program, but it still stacks up to a nice chunk of change over 15 years. Now, let's crunch some numbers to see how much homeowners can make through the ADI solar program.
How Much Can NJ Solar Owners Pocket with the ADI Program?
Over the 15-year run of the ADI solar program, New Jersey solar owners can rake in some serious dough for their solar power. Remember that the earnings from the ADI solar program are supplementary to other New Jersey solar incentives, such as the 30 percent federal solar tax credit, net metering, and New Jersey's sales and property tax exemptions. Combining these incentives significantly lowers the net cost and enhances the savings of adopting solar energy.
For example, if the 7 kW solar panel system costs you around $25,000, here's how combining SuSI and the solar tax credit would decrease the total cost.
Gross System Cost- $25,000
30% Federal Tax Credit- $25,000-$7500= $17,500
15 Years of SREC 2 Earnings- $11,500 (Approximately)
Net Cost- $17,500-$11,500= $6,000
New Jersey's Old Incentive Programs: SRECs and TRECs
Before SuSI, New Jersey had a couple of other programs in play: the SREC market and TRECs. They each had their own quirks and aren't open to new solar setups anymore.
New Jersey SRECs
The New Jersey SREC market kicked off in 2004. Like SREC-IIs, you'd earn one SREC for every 1,000 kWh of solar energy your setup produced. The big difference is in the pricing. SRECs were part of a market, so their value went up and down with market trends. But because you couldn't predict how much they'd be worth, it was a riskier game.
New Jersey TRECs
TRECs, or Transitional Renewable Energy Credits, were pretty much the same as the SuSI program. One TREC was equal to 1,000 kWh of solar energy. But unlike SRECs, TRECs weren't traded on the market. Your TREC earnings depended on your setup type. The TREC program closed its doors for new residential solar setups on August 27, 2021, although some large projects might still qualify.
How Will the New Jersey Successor Program Impact the State's Solar Industry?
The Successor Program may offer a lower incentive value, but it hasn't slowed down the solar wave in New Jersey. Residential solar applications keep pouring in, to the point that the BPU had to raise the program's capacity limit. It seems that the program's simplicity makes up for the lower payouts.
The BPU will keep an eye on the solar market and adjust incentives as needed to meet the state's clean energy goals. They already tweaked things in March 2023 when they noticed that big installations weren't jumping on board fast enough. This led to slightly lower incentives for homeowners and a bit more for larger projects in hopes of getting more of them rolling.
Conclusion
The New Jersey Solar Incentives, particularly the Sustainable Solar Incentive (SuSI) Program, have opened up exciting opportunities for residents and businesses to embrace clean, renewable energy solutions while simultaneously reducing their carbon footprint and saving on energy costs. This initiative offers substantial financial incentives and rebates, making solar energy more accessible than ever before in the Garden State. By partnering with a reputable solar installers company, you can increase your ROI while taking advantage of the SuSI program. Their expertise in solar technology and a proven track record of successful installations will help you contribute to a greener future for New Jersey and beyond.
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