New Jersey businesses are saving big time by converting to solar and taking advantage of the State’s SRECs program. SolarKal explains how it all works.
Combined with the unbeatable rewards of switching to solar electricity, ranging from 20-50% in electric cost savings, to the lasting environmental benefits, comes an additional bonus: SRECs. Solar Renewable Energy Credits (SRECs for short) represent the positive environmental benefits of solar and are an added financial benefit to any business that chooses to switch to solar in New Jersey. Here’s how it goes:
- Step 1: Switch to solar, reduce your energy costs, and use the additional SREC revenue to offset more of the costs of a solar system
- Step 2: Your solar installation creates SRECs for 15 years, so that in addition to spending no money on your solar electricity, you can essentially sell your clean energy attributes and generate more revenue.
How does this work?
Every megawatt hour (MWh) of electricity produced by a solar installation creates one SREC. For perspective, a solar installation on a 12,000 sq ft roof will produce approximately 100 SCRECs per year. A typical SREC today sells for over $200. That means you could be easily making $20,000 in SREC revenue per year. As solar adopters get SRECs for 15 years, that’s a nice income – on top of not having to pay the utility.
New Jersey has an active SREC market where businesses and homeowners that have solar produce SRECs that utility companies are required to buy. In 2017, an industry publication has ranked New Jersey as the 2nd best U.S. state for solar investment.
Why do NJ generators have to buy my SRECs?
SRECs exist because of a state regulation called the Renewable Portfolio Standard (RPS). In New Jersey, a bill was signed requiring utility companies to have 4.1% of their power coming from solar installations by 2028. If they don’t achieve this, they must pay a solar alternative compliance payment (SACP).
What does this mean for me?
In short, it means that companies need SRECs to meet their share of the NJ RPS. They can either generate their own solar energy SRECs, or purchase from others in order for their SRECs to “count” towards their RPS goals. New Jersey is one of the few states that has these state incentives that generate significant value for businesses that switch to solar.
SREC prices vary based on state, and since New Jersey is one of the best in the nation for its solar incentives and SREC market, your business is well positioned to benefit from this income.
When can I get started?
SREC market prices were high for several years, but are now somewhat lower, reflecting larger solar installations and lower solar system costs. During years of SREC shortage an SREC in sold for upwards of $600. Today SREC Trade indicates that the going rate is just over $200, as seen below.
SRECs aren’t new, and continue to be attractive for businesses interested in switching to solar. SREC prices may continue to decline over the next few years so, if you’re considering when to go solar, now is the time!
Copyright © 2017 SolarKal, All rights reserved.