Like an itinerant millionaire without an heir, PSE&G (the utility, not the sponsors of Sesame Street) is seeking to give away millions. Like an itinerant millionaire without an heir that’s not altogether ready to shed his wealth, PSE&G is giving it away in the form of loans. Who gets those loans? Anyone who fancies putting a solar system up on their house or place of work, no less.
The utility announced it will be spreading the love after it got the approval for the loans from local regulators after proposing the plan last year.
What did it propose? Why it proposed this:
PSE&G’s solar program will be open to all of its electric customers, including low-income, residential, commercial, industrial and municipal/governmental. The solar panels would be owned by the developer or the host customer.
• Applications will be available for two years and accepted on a first-come, first-served basis until 30 megawatts of projects have been developed.
• PSE&G would provide loans to developers or customers to cover approximately 40-60 percent of the cost of a solar installation project, depending on the projected output of the solar energy system and the cost of the system. The borrower would repay the principal, plus interest, over 10 years for residential customers and over 15 years for all other borrowers, a considerably longer investment timeframe than traditional lenders are willing to provide for solar installations.
• The remaining project cost would be funded by the owner of the solar installation. The owner may have access to funds from banks and investors. In addition, the owner may be eligible for a federal investment tax credit. (Utilities are currently not eligible for this tax incentive.)
• Owners of solar energy systems would repay the loan with Solar Renewable Energy Certificates or SRECs, which are created every time the system generates solar electricity. It takes one megawatthour of solar generation to create one SREC, which has value in the marketplace. An SREC is a New Jersey tradable product that represents the clean energy benefits of electricity generated from a solar energy system. For the purposes of this program, an SREC is valued at the market price or $475, whichever is higher. Borrowers could also repay the loans in cash.
• PSE&G’s electric customers will pay for the cost of the solar program through the Solar Pilot Recovery Charge (SPRC), which will be included in the delivery part of their monthly bill. PSE&G will sell the SRECs it receives for loan repayment in an auction, and credit the proceeds from the sale to customers through the SPRC, which will offset a portion of the program costs.
After all that approval, the plan should see the development of 30 megawatts of solar power.