New Jersey’s solar energy rebate program is somewhat fickle, to saythe least. In recent months, the state’s Renewable Energy IncentiveProgram (REIP) has been switched off, then on, then back off again. Last we heard, the solar rebatewas tentatively slated to return at the beginning of September — but noone knew at what level, and uncertainty abounded.
The New Jersey Board of Public Utilities last week moved to provide a bit of clarity. The NJ solar rebate, it seems, will return on September 1, 2010, at thefollowing levels:
- Residential solar installations: $0.75 per watt of installed solarcapacity, up to 7.5 kilowatts (kW); notably, home solar systems largerthan 10 kW are not eligible for the rebate.
- Public and non-profit solar installations: $0.75 per watt up to 30kW.
- Commercial solar installations are not eligible for solar rebates.
Previously, the residential rebate level was $1.35 per watt.
As many New Jersey residents know, solar renewable energy credits —or SRECs — provide strong incentive to install solar panels,irrespective of the solar rebate. Put simply, owners of renewable energy systems also own the SRECs associated with their systems’ electricityoutput. Sell your SRECs, either up front or over time, and you’relooking at a pretty decent return on investment — arguably the best inthe entire country. The SREC market is so promising, in fact, that NewJersey homeowners have been proceeding with their solar projects usingonly SRECs and the federal 30-percent renewable energy tax credit, acombination that, by many measures, provides incentive aplenty.
Back to the REIP rebate news: if you’re considering solar power foryour New Jersey home, you may be wondering how to proceed. Do you tryfor the rebate? Or do you proceed with the installation solely on thebasis of SRECs?
As with most things, we try to counsel a conservative approach. Thelast time the New Jersey Clean Energy Program opened, it received over1,000 new applications — literally in a matter of hours. As a result,the REIP was shuttered shortly thereafter. One can only assume, then,that when the rebate program reopens on September 1, the office willagain be hit by a deluge of applications. There’s no guarantee, in other words, that you’ll be able to secure solar rebate funds for yourproject.
So, if you’re interested in installing solar panels for your NewJersey home, we’d suggest that you start by looking at SREC-onlyproposals (i.e., proposals that don’t take into account solar rebates).If that looks good to you, proceed. If the proposal doesn’t meet yourfinancial or budgetary criteria, but you’re still interested in pursuing solar, go ahead and factor in the newly announced $0.75/watt rebate.But do so with a grain of salt. As stated before, there’s no guaranteeyours will be among the applications accepted under the next cycle offunding. If it’s not accepted, your application would likely be rolledinto the next funding cycle — which will be even further out and,doubtless, at a lower per-watt rate. All the while, you’d be missing out on generating SRECs, which (as noted above) deliver real value toowners of renewable energy systems.