The Solar Renewable Energy Certificates (SREC) registration program allows solar projects in New Jersey to receive energy credits which can then be traded to meet the state’s Renewable Portfolio Standard (RPS) requirements. The state requires that 15% of energy come from renewable sources to lessen fossil fuel carbon emissions. With this requirement, solar panel owners are empowered to sell clean energy to utility companies.
How do SREcs work?
When solar panels generate 1,000 kilowatt hours (kWh), of electricity an SREC is earned. These SRECs are placed into a customer’s account, where they are tracked and provide revenue in the first 10/15 years of having solar. To be eligible, participants need to register their solar project with the SREC registration program. To meet the requirements, the solar project must have:
Net metered facilities
Eligibility with aggregated net metering
Facilities approved by the BPU (Board of Public Utilities) that is owned or operated by a public utility company.
Have a system at 69 kilovolts or less that is also approved by the BPU
Facilities certified by the BPU and DEP (Department of Environmental Protection)
Solar energy systems eligible to earn SRECs need to report the production of energy based upon meter readings in accordance with the American National Standards Institute. The electricity meter will be installed by the local utility company to measure the electric consumption of homes/businesses. Once you are approved for the SREC, your online account will be established and credits will be deposited into your account.
The 2018 SREC
SRECs represent the positive of renewable solar energy generation. New Jersey’s SREC program allows credits to be created and verified. Electronic suppliers are also able to buy and retire certificates to meet their solar RPS requirements. The price of SRECs are determined by market availability and the price of the solar alternative compliance payment (SACP). Electricity supplies are generally the primary purchasers of SRECs. They are required to pay a SACP if they do not meet the requirements of their RPS.
The bill passed in 2018 states that legislation will now stop SREC applicants by June 1, 2021. This bill states that the Board of Public Utilities will adopt regulations to terminate the program to new applicants. It also demands closure when energy providers reach the 5.1% benchmark for sold kWh sourced from solar power generators. Unless you are a facility that is connected to the grid, newly signed applicants will have their eligibility reduced from 15 years to 10 years. Grid-connected facilities will be eligible to earn renewable energy certificates beyond the 10 year limit. This new bill will ultimately end the SREC program but it allows the BPU to revise and recreate the SREC program in order to continue promoting solar energy generation.
In addition to those changes, this bill calls for an increase in RPS requirements. This emphasizes New Jersey’s desire for clean, renewable energy sources. Desired renewable energy sources include:
Solar thermal electric
Municipal solid waste
The RPS goal is now 50% by 2030 with a 21% milestone in 2021 and 35% in 2025. This aggressive tactic is in place to push toward 100% emission free energy by 2050. The state presented a map towards this goal in June of 2019.
Increase in Energy Storage
This new bill also requires a goal of 600 MW of energy storage by 2021 and 2,000 MW by 2030 to help power necessary facilities in times of crisis/blackouts.
With these requirements, the BPU must consider how renewable energy storage will benefit ratepayers. It will also consider if the storage systems could impact electric vehicle usage. The energy storage analysis needs to examine current storage technology and weigh the cost-benefit analysis associated with adding new storage technology. The BPU also needs to establish an ideal storage area for the energy over the next five years, identifying the favorable entry points to distribute electricity for energy resources.
Increasing Energy Efficiency
According to this bill, energy efficiency is one of the most important factors. The BPU created an energy efficiency program for electric utility companies and public gas companies to reduce natural gas and electricity usage. This calls for utility companies to introduce peak demand reduction measures, as well as reducing natural gas. The governor demands that natural gas and electricity usage decrease by 2% compared to the past 3 years — and providers must reach this goal within 5 years.
Energy and carbon emissions reduction is one of the top goals in many states, with many implementing aggressive plans to reduce carbon emissions massively by 2050. Many states are planning to use several different natural, renewable energy sources which do not emit carbon dioxide into the environment. If you want to be a part of the clean energy movement contact YSG Solar today to learn more about solar for your home or business at 212.389.9215.
By Kasey Liu