The use of solar energy has grown by leaps and bounds. The Solar Foundation indicates that the solar industry in the US has witnessed a growth as the industry’s jobs have increased by 20% between 2012-2013. In itself, the solar industry has grown by 53% in recent years.
Among all the states in the country, California takes home the winner’s trophy as the leader in the solar industry. The Solar Energy Industries Association (SEIA) reveals that the other leading states in solar power development also include New Jersey on number six. New Jersey exhibits a solar power capacity of 2.5 GW.
Moreover, there are over 417 solar businesses in the State. The state of New Jersey’s solar renewable energy department hasn’t always been this glorious though. It has taken the state government multiple subsidies and incentives to encourage the growth in the solar industry.
One such subsidy that has been favorable for the growth of solar power in New Jersey is the Solar Renewable Energy Certificates (SREC) program. The program has been functional since 2004 and is credited as the largest SREC program in the country. However, lawmakers are now planning to end the SREC program in New Jersey.
Here’s an in-depth look at what the solar renewable energy certificate is and its end that it just around the corner.
Table of Contents
The basics of Solar Renewable Energy Certificates (SREC) program
New Jersey demands utilities to produce a specified amount of clean energy from renewable sources of energy. Essentially, it is an attempt to curtail the carbon emissions that come from dirty fossil fuels.
The SREC program promotes the production of clean energy. In that, the average homeowner is paid to use solar power. As per the program, excess solar power produced by home owners is to be fed into the utility grid. The homeowner who does that will be paid for adding clean energy to the utility grid.
The SREC is unique in contrast with other programs as it pays a person for not only generating clean energy and adding the excess to the system but also using clean energy. SolarPowerRocks.com highlights that an average homeowner can make roughly 6 SRECs in a year. This is $200 for people using solar energy.
A person availing SREC can reap the benefits for fifteen years after owning renewable energy. This adds to $12,000 over a period of fifteen years. However, the SREC program is now closing to new applicants with effect from 2021.
On top of that, new applicants who apply to the program before its closure will get ten years of benefits instead of the standard fifteen years. Therefore, there are two significant developments. One, the solar renewable energy certificate program in the US is closing by 2021. And, two, new applicants to the program will receive SRECs for a full of ten years instead of fifteen years.
When and why will the SREC program end in New Jersey?
SREC in NJ has been a very successful program in the state so much so that the government has decided that it has achieved its aim of encouraging the use of clean, solar energy and should be closed.
Presently, New Jersey gets 4% of its electricity supply from solar power. Once this electricity supply hits the mark of 5.1%, the program will end. This could be in 2019. However, the Renewable Portfolio Standard’s expansion in the state demands that the SREC program ends in 2021. Therefore, the program is expected to roll to an end by 2021.
For homeowners in New Jersey who haven’t taken the advantage offered by SRECs, this is the best time to install solar power. Although the program ends in some time, it will continue offering benefits to enrolled homeowners for ten years from their application time.
Moving forward- what’s next?
As the solar renewable energy certificates program phases out as per the Senate bill 2276, lawmakers are aiming to pair solar incentive and federal investment tax credit. The bill notes that solar construction’s present design does not capitalize the federal Investment Tax Credit.
Consequently, lawmakers have also proposed upping the amount of solar power that utilities have to meet with NJ’s Renewable Portfolio Standard (RPS). This rate is suggested to increase from 4.1% to 5.3% by 2022.
Summing up, the New Jersey’s SREC program has been successful in accomplishing its primary goal of increasing solar power use. It is now set to end by 2021. Any people entering the program between now and the program’s closure, will be offered the subsidy albeit for ten years instead of the original fifteen years.
