FAQs
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New Jersey's Solar Renewable Energy Certificates (SREC) Program and New Jersey's Solar Market: Transition to Market-Based REC Financing System Frequently Asked Questions Click here to link to FAQs about the Solar Transition. |
SREC stands for Solar Renewable Energy Certificate and is a tradable certificate that represents all the clean energy benefits of electricity generated from your solar electric system. A SREC can be sold or traded separately from the power. It is issued once a solar facility has generated 1,000 kWh, through either estimated or acutal metered production, and can be listed on the bulletin board on this Website.
What is the New Jersey SREC Program? The New Jersey SREC Program provides a means for SRECs to be created and verified on your behalf. It also facilitates the sale of SRECs to electric suppliers that are required to invest in solar energy under New Jersey's Renewable Portfolio Standards (RPS). The RPS requires electricity suppliers to get a minimum of 0.16% of the electricity they sell in reporting year 2009 from solar systems in New Jersey. This requirement increases each year, so that a total of 2300 MW of solar electricity will be required by 2021. All New Jersey electric suppliers are required to use the SREC Program to show compliance with this part of the State's renewable portfolio standard.
How do I get started in the Program? Go to the Solar Renewable Energy Certificate website and click on the link "Open An Account". Fill out an attestation form, which can be found on the "Background Information" page of the website, and send it in. Once these two items are completed, the SREC Program Administrator will connect your facility to the account. You will receive an email from them indicating that your facility has been connected.
How do SRECs differ from Green Tags? “Green Tags” is a generic term which refers to renewable energy certificates (RECs) generated from a variety of renewable energy sources including solar, wind, small hydro and biomass. Green Tags are widely used to meet various state renewable portfolio standards and are traded in wholesale and voluntary retail markets across the U.S.
Who is eligible to participate in the New Jersey SREC Program? All solar system owners in New Jersey with grid connected generators that have participated in and passed an inspection in the New Jersey Clean Energy Program can set up and electronic account for the sale and trade of SRECs on this Website. You must register for an electronic account, and attest to the ownership or disposition of the renewable energy certificates. The attestation form can be downloaded from the “PRS Background Information” page on the SREC website. The SREC Program Administrator will link your solar system to your electronic account when these steps have been completed.
What portion of my electricity is eligible for the program? Each kWh produced by your solar electric system that is metered or that is verified through an approved method of estimation, is eligible to be counted towards SRECs.
How are SRECs generated and sold? Once you have registered and established an account on the SREC website, SRECs will be generated each month and deposited in your account. For solar generators smaller than 10 kW, an engineering estimate will be used to calculate the monthly SREC generation. For solar electric systems that are equal to or larger than 10 kW, the SREC website will allow you to upload your monthly meter readings and/or production information into the site. Once SRECs are in your account, you can use an electronic bulletin board on the SREC website to let others know you have SRECs for sale. Interested buyers can also make a request to buy SRECs through the bulletin board. Buyers and sellers can then contact each other offline and execute a sale. Once a sale is made, the seller will use the website to transfer SRECs to the buyer. Electricity suppliers will also use the website to retire SRECs that have been used to meet their RPS requirements.
SRECs can be bought by electricity suppliers, renewable energy marketers, private businesses and individuals interested in supporting the development of solar energy. A list of interested aggregators and brokers is available on the SREC Website. Additionally, the website will list the weighted average price for SRECs, updated periodically to inform buyers and sellers of the latest pricing.
How much are SRECs sold for now? The price of SRECs will fluctuate. If a supplier of retail electricity in New Jersey does not purchase a sufficient quantity of SRECs to meet their RPS requirements, they must pay the Solar Alternative Compliance Payment set at $711 per MWh (or SREC) for Energy Reporting Year 2009. Therefore, due to transaction costs for suppliers to obtain SRECs, the Office of Clean Energy estimates the range for SREC trading to be between $300 to $611 per MWh. The SREC Pricing page of the New Jersey Clean Energy Program Website has the latest publicly available SREC pricing information.
Can someone else sell my SREC for me? Yes, some solar electric system owners may have agreements with agents or “aggregators” to handle the disposition or sale of their SRECs. However, only one party can claim ownership or rights to an SREC at any one time. Each solar electric system can be linked to only one SREC account. For an aggregator to be authorized to sell or trade SRECs, the aggregator must provide a written agreement with each solar system owner that has hired the aggregator to handle their SRECs. The SREC Program Administrator will then link those solar electric systems to the aggregator's electronic SREC account.
How often can an SREC be sold? An SREC can be sold an unlimited amount of times but only to one party at any time. No single SREC can be jointly claimed by two parties.
Do I have to wait until I earn all of my SRECs before I sell them? No. You can sell them as you earn them or wait until you have earned all of them.
If I don't sell my SREC what are my options? If you choose not to sell your SREC, you can “retire” it which means that you maintain rights to all the clean energy benefits and nobody else will claim those benefits or count them towards their goals or mandates. You can post retired SRECs on your account.
If I sell my SRECs, can I still claim that I am solar powered? No, if you sell your SRECs, you have sold the claiming rights for being solar powered. However, you can state that you are “hosting” a solar system on your roof.
Please ask your accountant the following questions:
What happens if I sell my house? Ownership of the solar energy system and the SRECs it generates typically transfers to the new property owner when a home is sold. If you sell your house, you must download the 'Major System Change Form' from the SREC home page, fill that out, and submit it to the program administrators. The new owner will also be required to submit a new attestation form.
Can I move my solar energy system to a new property? Yes. In this case you must download the 'Major System Change Form' from the SREC home page, fill that out, and submit it to the program administrators.
What if I change or add additional equipment to my solar system? If you make any changes, such as adding additional modules, changing inverters or changing your meter, you must fill out and submit a 'Major System Change Form.'
The SREC Web site says that New Jersey will require only 90 MW of solar power to be generated in NJ by 2009. If that is correct and an SREC is issued for each 1 MW generated then only 90 SREC will be bought and sold. Is this correct? No. SRECs are issued for every 1 MWh (megawatt-hour) of solar production. The confusion comes in distinguishing between megawatts (MW), which is a measure of installed capacity, with megawatt-hours (MWh), which is a measure of electricity generation. So 1 MW of solar installations is the same as 1000 kilowatts (kW) of solar installed. Each kilowatt installed will generate approximately 1200 kilowatt-hours of solar electricity per year, or 1.2 megawatt-hours of solar electricity. Therefore, 90 MW of solar installed will produce: 90 MW * 1000 kW/MW * 1.200 MWh/kW = 108,000 MWh of electricity. This translates into 108,000 solar RECs, since each solar REC is issued for every 1 MWh of electricity produced.
Sale of home - Can I keep my SRECs when I sell my home? The SRECs are expected to remain with the home. Any arrangement made between the buyer and the seller will be at their own risk.
Username/Password: I have lost my username/password - do I need to create a new account? No - Please e-mail njsrec@cleanpowermarkets.com and that information will be sent to you.
How does the estimates table work? How are estimates calculated? Please e-mail at njsrec@cleanpowermarkets.com and it will be explained to you. General information on how estimates are calculated is on the NJSREC FAQ page.
Why does my account look blank when I log in? There are three possibilities:
If my system was installed prior to receiving a rebate commitment letter, do SRECs go back to the interconnection date? Yes, SRECs will go back to the interconnection date as long as we are still issuing SRECs for the current reporting year. . The reporting year in New Jersey runs from June 1 to May 31. For example, Reporting Year 2009 covers solar production from June 1, 2008 through May 31, 2009. In order to give solar owners time for their system information to get to the SREC Program Administrator, we will continue accepting meter readings for Reporting Year 2009 production until July 31, 2009, and will issue RECs at that time.
When do SRECs start accumulating? SRECs start accumulating from the date of utility interconnection.
My utility bill looks incorrect. Who should I contact? Each of the electric utility companies has a person devoted to net metering billing. Their name and numbers are listed under "Applications and E-forms" , then click on "Interconnection forms". By clicking on each utilities contact info, you will see who is in charge of net metering billing at your electric utility.
Please refer your question to your electric utility company. There are a number of different meters that are installed.
What is the difference between SRECs and net metering? Net metering refers to the amount of electricity you are being billed for by your utility company after you use all of the electricity you generate with your solar system. If you need additional power after you use the power your system generates, you will draw that power from the grid and be billed for the usage. If you don't need all of the power you generate and you are feeding the grid electricity, this will appear on your bill as a credit. At the end of the year (usually on the anniversary date of your becoming a net metering customer), you will be paid for the difference. You will need to check with your utility company to determine the tariff they will use to compensate you. SRECs are earned based on your total production from your solar system, whether that power was consumed on-site or fed back into the utility grid. Every 1000kwh is equal to one SREC. This is completely separate from your net metering.
I had an inverter replaced. What do I do with my readings? Please contact the SREC Program Administrator and let them know. They will make a note in your file and explain how to adjust your readings if you report them. Please also be sure to fill out and ubmit a Major System Change Form.
I do not know how to upload my readings. Only systems that are 10kW or larger and system that have been installed through the former SREC-Only Pilot Program are required to report their readings in order to earn SRECs. If your account says that there are no generators associated with the facility, it means that you do not have to upload readings, or your system has not been connected to your account yet. Please check with the SREC Program Administrator for specific account information.
I uploaded incorrect readings to my facility. Please contact the SREC Program Administrator and they can assist you in correcting faulty readings.
What is the energy year? When do I need to sell my SRECs? The energy year runs from June 1 to May 31st. The last SRECs for the energy year are deposited into accounts on June 5th. You have until August 31st to sell them for the compliance market. After this date, the SRECs will become "reserved" and will only be available for sale on the voluntary market.
My SREC is labeled as "retired". What does this mean? This means you may have retired your SREC. If you intend to sell your SREC and accidentally retired it, please contact the SREC Program Administrator. They can assist you in reversing this process.
Why can't I just sell my SRECs to the utility company directly? Because the utility companies need to purchase large quantities of SRECs, they prefer not to carry out individual transactions with facility owners. Typically they have contracts with aggregators and brokers who buy SRECs on their behalf and then re-sell them to the utility companies in large batches.
I transferred my SREC to the wrong person. Please contact the SREC Program Administrator and they can reverse the transaction.
I received an email telling me I have "SRECs into Escrow". I haven't bought any SRECs. Someone may have accidentally transferred SRECs into your account. Please contact the SREC Program Administrator and they can look into it for you.
I would like to finalize my SREC sale. How do I "force" my SRECs out of escrow? You can release these SRECs from escrow through your account. When you log in, please click on "account info". Make sure you pick the current reporting year (which is 2009). Then scroll down to where it says "SREC Transactions (2009)". Click on "show table". The screen will update, and put you back at the top of the web page. Scroll down until you see the opened Transaction Table. It will show the SRECs in escrow under the heading "Status". The words "in escrow" are blue. By clicking on "In Escrow", it will ask if you want to force the transaction. By clicking on "force", it will release them from escrow and finalize the sale.
I received an email telling me I have "SRECs into Escrow". I didn't intend to sell any. You may have transferred your SRECs to a buyer. Please contact SREC Program Administrator and they can look into it for you.
What is the difference between the compliance market and the voluntary market? The compliance market is where SRECs are traded to meet the RPS requirements in the state. If a utility company does not purchase enough SRECs, they will pay an ACP (alternative compliance payment), currently set at $700. This is why SRECs trade below this $700 cap. The voluntary market is where SRECs are traded to companies who have interest in purchasing clean power. Since they are not subject to an ACP payment, they can offer you whatever they would like so they can purchase the SREC.
My system is just over 10kW. Can't I use estimates? No. The rules of the program state that if a system is 10kW or larger, they must report their actual meter or inverter readings.
SREC Program Administrator calculates estimates for each solar facility using the PV Watts algorighm, which is a program maintained by the National Renewable Energy Laboratory. The estimates take into account the location of the solar system, the orientation (toward south), and the tilt. For details on your specific estimates, please contact SREC Program Administrator and they can explain this to you.
My system is producing more than the estimates. If your system is <10 kW, and you think it is producing more power than the estimates, you can switch to report actual inverter/meter readings for your SRECs. Once you switch to this method, you cannot switch back to the estimates method. If you would like to change to actual readings, please contact SREC Program Administrator and they can assist you.
Why is New Jersey considered a ‘model program’ for solar development? New Jersey’s Clean Energy Program was established in 2001. That year there were only 6 solar installations. Since that time we have established a model program and integrated approach to solar development that includes:
All designed to foster a vibrant and competitive marketplace for solar energy in New Jersey.
What has been the result of this integrated approach? Today, five years after initiation New Jersey has more than 3,490 solar installations and 63 MW of installed solar capacity. This is largely due NJ’s Solar Financing Model which builds on our integrated approach to help finance solar development.
How does New Jersey’s Solar Financing Model work? New Jersey’s Solar Financing Model relies on five sources of revenue that work together to drive investment in solar and provide a payback within ten years:
Together these revenue streams provide for an average payback period and return on investment within 10 yrs! For more information on Federal Tax Credits available for Solar Systems, please click here.
How do Solar Renewable Energy Certificates help finance solar development? If you consider our current financing model without Solar Renewable Energy Certificates (SRECs) – just the rebate, tax credits, electric cost savings – you are looking at a payback period of about 25 yrs for an average 10 kW system. However add in the SRECs - which are paid out over the life of the system and provide about $2,400 a year for a 10kw system – and the payback period is reduced from 25 yrs down to 10 yrs. This is critical – and suggests a source for long term financing that can pick up where the rebates leave off.
How will SRECs reduce the need for solar rebates? SRECs can provide an additional source of revenue and long term financing necessary to drive investment in solar. By increasing the value of SRECs, the rebate amount can be significantly reduced or eliminated thereby reducing the annual impact of the Program on rate payers.
What are your goals for the growth of New Jersey’s Solar Program? New Jersey’s Solar Program has seen triple digit growth over the last 3 years putting us well within reach of our 2008 RPS goal to install 90 MW of solar capacity. We are well positioned to continue to grow. New Jersey recenlty expanded this commitment by adopting a goal of 30 percent Renewable by 2020 with 2% or 1500 MW of SOLAR ! This is the Nation's largest solar commitment relative to population and electricity consumption.
How will New Jersey reach the mandate of installing 1,500 MW of solar by 2020? And how will the Clean Energy Program be vital to that goal? New Jersey’s 30% by 2020 Renewable Energy Portfolio Standards (RPS) will require at minimum approximately 4,400 MW of renewable energy capacity and 1500 MW of Solar capacity. To meet these goals, we will need to expand New Jersey’s renewable capacity and foster a strong regional market for renewables like wind, biomass and landfill gas. More importantly, we will have to substantially grow and expand New Jersey’s solar capacity goal from 90 MW in 2008 to 1500 MW by 2020! In just 12 years we will need to add over 1400 MW of solar capacity or approximately 117 MW a year!
Are there sufficient funds within the Clean Energy fund to achieve the 1,500 MW target as outlined? No. If we did, this cost would be in the billions of dollars and would require an annual funding level of approximately $500,000,000. The rate impact of this funding level could be approximately 5 to 7 percent. Clearly it is not an option to simply “buy” our way to the RPS goals by relying only on rebates or grants to construct this capacity. We must consider other models and sources of capital. New Jersey’s Clean Energy Program is vital to this effort in that it provides both the financial incentives and market-based tools necessary to fuel growth and help drive investment.
What alternative solar financing models are being considered by New Jersey? BPU has directed that the solar incentive program in NJ make a transition from a rebate dependent program funded through the Societal Benefits Charge (SBC) to a market-based incentive program relying predominantly on the value of Solar Renewable Energy Certificates (SREC’s). Stakeholders including representatives from the solar industry are working to develop recommended policy models for this transition. A number of models or approaches to solar financing are being considered based on other market experiences:
What is New Jersey’s strategy and timeline for establishing a REC based financing system? The New Jersey Board Of Public Utilities (BPU) is establishing a strategy to evolve from an market dominated by up-front rebates to a market with greater focus and reliance on the sale of Renewable Energy Certificates (RECs). This transition allows a more market-oriented approach to foster economic development, and reduce dependence on the programs needed to provide rebates. The resulting REC-based financing will result in performance based economics, enhanced market growth and elimination of current growth barriers, and cost improvements through scale. BPU has launched a Pilot Voluntary REC Program to finance 17 MW of installed solar capacity. This will provide a test of market response to REC based financing for solar in New Jersey. In addition, the state's regulated electric utilities are required to enter into long term contracts for the purchase of RECs that are then sold to electric suppliers, or load-serving entities, which are parties that must comply with the state's RPS.
NJ has some of the best interconnection and net metering policies in the country how do they work and why are they so beneficial to consumers? New Jersey was one of the first states to streamline its interconnection rules to ensure that customers with small on-site renewable energy systems could easily connect to the grid and receive compensation from the utility. Where as before, each utility had a different interconnection standard and procedure, New Jersey now requires utilities follow a standardized process – making it easy to connect to the grid. This is critical to getting the full value of those small generation systems – for both the customer and for New Jersey. One of the key benefits of solar for example is that it can offset peak demand – so during summer when the ac is running full tilt, the grid can take advantage of those small solar systems which happen to be producing at near peak capacity.
In New Jersey, net metering is a metering option that credits customers with solar systems or other renewable energy generators for each kilowatt-hour produced over the course of a year. The customer is compensated at the end of the year for any remaining credits or excess power it will have provided to the grid. In New Jersey, all Electric Distribution Companies and suppliers/providers offer net metering to their residential and small commercial customers that generate electricity, on the customer’s side of the meter, using Class 1 renewable energy sources, provided that the generating capacity of thecustomer-generator’s facility does not exceed 2 MW, and does not exceed the customer’s peak electric needs. Together, our interconnection and net metering rules ensure solar generators are compensated for the clean, renewable energy they are generating and that New Jersey’s ratepayers share in the benefits of solar and other small renewable energy generation.
Whom should I contact with questions? Please call 866-NJSMART (866-657-6278) |