Utility Proposes $100M Solar Initiative

NEWARK-Public Service Electric & Gas has unveiled an initiative designed to spur investment in solar power in New Jersey. Pending approval of the New Jersey Board of Public Utilities, the state’s largest utility is prepared to invest upwards of $100 million over the next two years to help finance the installation of solar systems in businesses, municipal buildings and homes.

“Our proposed initiative highlights our intention to be a leader here in New Jersey in finding ways to improve the environment,” says Ralph Izzo, chairman and CEO of Public Service Enterprise Group, PSE&G’s parent company. “Climate change is a reality that needs to be addressed now. We are prepared to invest a substantial amount of capital, and we have developed an innovative regulatory approach to provide new avenues and incentives for investment in renewal energy.”

If approved by BPU, the utility would provide loans to developers and businesses to cover approximately 40% to 50% of the cost of a solar installation project. The utility would be repaid the principal plus interest over 15 years, a considerably longer time frame than traditional lenders are willing to provide for solar installations.

The remaining project cost would be funded by a host customer or equity partner, such as a bank or investor, who would be eligible for a federal investment tax credit. PSE&G would be repaid in the form of credits called Solar Renewable Energy Certificates (SRECs), which have value in the energy marketplace. The solar systems themselves would be owned by the developer or host customer.

“One of the biggest barriers faced by solar enthusiasts is the lack of financing,” says Thomas Leyden, president of the Mid-Atlantic Solar Energy Industries Association. “PSE&G’s ability to provide long-term financing means that there will be greater penetration in the market.”

“The funding will provide a source of stable, secure capital to spur additional investment in solar energy,” Izzo says. PSE&G also estimates that the program will meet upwards of 20% of the New Jersey’s renewable energy needs by 2020 as mandated by the state’s energy master plan.