Solar loans enable customers who don’t have available cash savings to buy solar panels.
The Public Service, Electric and Gas of PSE&G of New Jersey, is the largest utility in the state of NJ providing loans for behind the meter PV systems to entire customer classes on its exclusive electric services territory. This special program officially opened in April 2008 with the aim of installing about 30 megawatts of customer-sited Photovoltaic or PV through the issuance of loans with a total of about $105 million.
The Solar Loan I, an initial program operated with waiting list July 2009 and the Solar Loan II was exclusively opened in December 2009 to give extra loans of amounting to $143 million with initial aim further supporting a-51 W capacity. The latest version Solar Loan III started accepting applications in Fall 2013 with the aim of installing added 97.5 MW of solar over 2 to 3 years.
The latest program offers loans that commonly cover 40 to 60% PV systems’ cost with a reminder that needs to be paid for or funded separately by clients. A 10-year loan term is made available for non-residential and residential customers with 11.179% interest rate. The actual and maximum loan amount depends on how much energy the PV system of the customers is expected to produce over the loan’s term.
The program’s official website contains a loan calculator tool that can help with this purpose. The loan is available only to systems of 5,000kW DC or even less which are qualified for the net metering and to also generate Solar Renewable Energy Certificate or SRECs under the New Jersey State regulations.
Clients will repay the loan by means of cash payments or by assigning their PSE&G and SRECS. An SREC is actually equivalent to one megawatt-hour (MWh) of solar electric generations, and this is under the SREC trading system of the state. SREC value varies depending on market conditions. Nevertheless, clients locked in certain floor price in their SRECs upon entering to PSE&G or solar loan. This particular floor price is actually bid in by clients when they apply to Solar Loan III.
The particular floor price fully accepted for a loan remains in effect for the loan’s duration. Clients will get the floor price at least per SREC towards loan interest and loan principal repayment. You might get more if the SRECs market trading costs are higher. For loan repayment purposes, the SRECs market value will essentially be determined using average cumulative weighted price monthly as published by New Jersey Office of Clean Energy.
The participants of this program remain highly eligible for the benefits provided by PSE&G or the New Jersey Board of Public Utilities or BPU renewable energy programs including the net metering and other types of assistance such as federal tax credits. The solar panels should be covered by a 20-year warranty. Customers are responsible for having system maintenance agreement to guarantee system performance.
PSE&G Solar Loan will be back with an open solicitation period from September 17th – September 28th, 2018. Individual looking for solar loan NJ can take advantage of the opportunity.