Second to California in the US. I wish our condo association would think in these terms.
New Jersey’s continuing solar boom depends most heavily on its alternative approach to subsidies. When the state kicked off its solar program in 2002, it relied on a small “societal benefits” charge on all ratepayers’ bills to provide a simple, straightforward rebate that amounted to about 60 percent on solar installations, combined with a full retail net metering (backwards-meter) mandate. But by 2007, the program had become so popular that it was overwhelming available funds.
In the hope that market efficiencies could help control costs over time, the state has turned not to a tariff-style guarantee, but to a complex approach that relies on a floating, market for tradable solar renewable energy credits (SRECs).
An oversimplified version: install a solar system on your roof (or install a commercial system on a warehouse or in a field) and each year you’ll earn SRECs based on how much power your system generates annually — one credit for each 1,000 kilowatt hours. You can then turn around and sell your credits back to companies that generate power for the state’s grid. The companies can use the SRECs to help them meet state renewable portfolio standards that steadily ramp up to a mandate requiring that 22.5 percent of their energy come from renewables by 2021.
The credits are actually sold by brokers on an electronic market, like stocks or bonds, at whatever price the market will bear. At the moment, the market is bearing a fabulous price. It takes a calculator to work through the complexities, but with SRECs currently selling for just under $700, and the federal tax credit as well as a reduced state rebate in play, a homeowner in the state can pay for a solar system in four years or less.
After the system is paid for, there’s the promise of not only free, clean energy but of SREC profits for years to come. (SRECs are expected to decline in value over time, but could still be worth multiple thousands of dollars annually to the owner of a residential solar system, and far more to owners of large commercial installations.)
Some other states, including Maryland, Delaware, and Pennsylvania have also begun to turn to SRECs, although so far those programs are providing a far less generous payout: in the $200 to $250 range. (The divergence appears to be occurring mostly because New Jersey is wielding a bigger stick, assessing a high “alternative” charge as a de facto penalty if companies do not hit their benchmarks.)
Hey thanks for these suggestions..I think every one should use the solar energy as it is the best way to cut the energy bills..Thanks for the post..and keep posting some more like this.
Posted by: Laurie Martin | November 11, 2009 at 02:46