Last Updated February 27, 2017
Public Service Electric and Gas (PSE&G)
Eligible Renewable/Other Technologies:
Solar Photovoltaics, Solar Photovoltaics
NOTE: The program held its 17th round of solicitation from January 23, 2017 to February 13, 2017. Applications are accepted through 4-6 competitive solicitations on an every-other month basis until program capacity of 97 MW is met.
Public Service Electric and Gas (PSE&G) of New Jersey, the largest utility in the State, offers loans for "behind the meter" photovoltaic (PV) systems to all customer classes in its electric service territory. The program opened in April 2008 with a goal of installing 30 megawatts (MW) of customer-sited PV through the issuance of loans totaling $105 million. The initial program, termed Solar Loan I, was operating with a waiting list by July 2009. Solar Loan II was opened in December 2009 to provide additional loans of $143 million with an initial goal of supporting a further 51 MW of capacity. The most recent version Solar Loan III began accepting application in Fall 2013 with a goal of installing additional 97.5 MW of solar over 2-3 years.
The current program provides loans which typically cover 40-60% of the cost of PV systems with the remainder to be paid for or financed separately by the customer. A loan term of 10 years is available to both residential and non-residential customers at an interest rate of 11.179%. The actual maximum loan amount is based on how much energy the customer’s PV system is expected to produce over the term of the loan. The loan program website contains a loan calculator tool for this purpose. Loans are only available to systems of 5,000 kW DC or less that are eligible for net metering and to generate Solar Renewable Energy Certificates (SRECs) under New Jersey State regulations.
Customers may repay the loan through cash payments or by assigning their SRECs to PSE&G. An SREC is equivalent to 1 megawatt-hour (MWh) of solar electric generation under the State SREC trading system. The value of an SREC will vary according to market conditions. However, customers lock in a guaranteed floor price on their SRECs when they enter into a PSE&G solar loan. This floor price is bid in by the customer when the customer applies to the Solar Loan III Program. Bids must be made in $5 increments. Bids are evaluated by a third-party Solicitation Manager, which determines if floor price bids are competitive and should be accepted.
The floor price accepted for a loan remains in effect for the duration of the loan. Customers will receive at least the floor price per SREC toward the repayment of loan principal and interest, but may receive more if market trading prices for SRECs are higher. For the purposes of loan repayment the market value of SRECs will be determined using the average monthly cumulative weighted price of SRECs published by the New Jersey Office of Clean Energy. Higher SREC prices will reduce the time period over which the loan is paid off. The customer will own all SRECs generated subsequent to the end of the loan term. Under the New Jersey SREC related regulations solar facilities only eligible to generate SRECs for 15 years after the solar facility is placed in service.
Participants in this program remain eligible for benefits offered by PSE&G or New Jersey Board of Public Utilities (BPU) renewable energy programs, including net metering, as well as other forms of assistance (e.g., federal tax credits). Solar panels must be covered by a 20-year warranty and the customer is responsible for having a system maintenance agreement in place to ensure system performance. In addition, the customer must currently have a PSE&G account in good standing, and meet the minimum credit rating and insurance requirements determined by the PSE&G. Previously the applications for solar loan program was accepted on a rolling basis, starting 2015, applications are accepted through 4-6 competitive solicitations each year.
Loan applications are scheduled to be accepted on an every-other month basis until program capacity is met. Loan availability is divided into five segments, with each segment allocated a portion of the overall target. Total allocations are as follows (in dc):
- Residential: 9.75 MW
- Residential Aggregated: 9.75 MW
- Non-residential Small, up to 150 kW: 13.14 MW
- Non-residential Large, greater than 150 kW but up to 2,000 kW: 59.86 MW
- Landfill, up to 5,000 kW: 5.00 MW
For each application period, each segment is allocated a certain amount of capacity to serve eligible applicants on a first-come, first-serve basis. Excess capacity that exists from a solicitation may be carried forward to the following solicitation, while applications in excess of the available allocation will be prioritized based on the time of application submission and SREC floor price bid. Such applications are then put on a waiting list for the next solicitation.
It is expected that the Solar Loan III program will issue $100 million in loans with certain costs to be recouped by PSE&G through the Regional Greenhouse Gas Initiative (RGGI) recovery charge (RRC) on all PSE&G New Jersey electricity customer accounts. The utility will periodically sell the SRECs it acquires through the program in auctions open to all SREC market participants. The proceeds from these auctions will be circulated back into the program cost calculations that will be used to determine the actual charge. For further information on this program, please consult the program web page or contact PSE&G.