The payback/economics have changed dramatically for customers in New Jersey that are looking to become more sustainable by accessing solar energy. In 2020, New Jersey rolled out a new incentive program – the Transition Renewable Energy Credit (TREC) – to replace the Solar Renewable Energy Certificates (SREC) program. This program provides temporary access to extremely attractive terms.
What does this mean for businesses in the state? How could the new program impact your company's bottom line?
The new program has some key improvements that have been well-received by the solar industry. Unlike the SREC program, which was subject to fluctuating market prices, TREC funds are allocated based on a fixed value of $152 per megawatt of electricity generated over the first 15 years of operation.
This provides companies with fixed cash flow, either directly or through a third-party solar company.
- Significant savings versus current utility and third-party supplier rates. Power purchase agreements are being offered at 2-3 cents per kilowatt-hour for the first 10 years, versus current rates of 8-12 cents per kilowatt-hour – a savings of more than 300%.
- In 2020, the popular SREC program expired, marking the start of the new “transition” renewable energy credit (TREC) program, however, this is a temporary program for which window of applications closes 10/30 of this year. Thereafter, TRECs will likely be replaced by less favorable pricing.
- One TREC is generated for every 1,000 kilowatt hours of solar energy produced. Systems generate TRECs for 15 years.
- NJ TRECs are factorized, meaning that different project types will qualify for different incentive rates.
- Although the price of TRECs is lower than the price of SRECs, the fixed price of TRECs allows installers to give more accurate solar savings estimates to customers.
- Beyond the TRECs, additional savings could be realized through reductions in “demand” charges.
- In addition, federal tax credits are still available to further enhance the economics of solar installations.
BLS & Co. can work with you to take advantage of this program.
- Review current electricity consumption
- Conduct a high-level review of your site to evaluate for solar energy potential
- Estimate potential savings
- Solicit proposals
- Review proposals to determine savings
- Costs (if any)
- Long term obligations
- Review any impact on current Third-Party Supply agreements
- Interface with a selected vendor
- Assist with financing options
Contact Tim Comerford at firstname.lastname@example.org or reach out to BLS & Co. at 609.924.9775 with any questions.