New Jersey offers some of the best solar incentives in the country, which is part of what makes us one of the top ten states for solar energy.
One such incentive, New Jersey solar renewable energy credits, makes solar panel installation more profitable for homeowners, businesses, and industrial organizations.
At NJ Solar Power, we’re committed to helping our customers make money with solar panels. We can help you squeeze your investment in residential or commercial solar panels for all its worth with incentives like SRECs. Keep reading to learn everything you need to know about solar renewable energy credits in NJ!
What Are Solar Renewable Energy Credits?
Solar renewable energy credits (SRECs) are a certificate that represents the environmental benefit of generating solar energy. You receive SRECs, which have financial value, simply for generating clean electricity with your solar energy system. Utility companies and other organizations buy SRECs to meet their renewable energy generation requirements.
How SRECs Work in New Jersey
Solar renewable energy credits are a key component of solar policy in several states, and there are different rules surrounding SREC programs depending on where you live. Most states have a marketplace through which SRECs are bought and sold. New Jersey utilized this system until 2021 when it launched the Successor Solar Incentive (SuSi) program to replace its traditional SREC program.
The SuSI program is divided into two subprograms—one for residential systems and another for commercial and industrial systems.
- The Administratively Determined Incentive (ADI) program is for residential and community solar projects smaller than 5 MW.
- The Competitive Solar Incentive (CSI) program is for commercial and industrial solar projects larger than 5 MW.
Under the new programs, SRECs in New Jersey are referred to as SREC 2s. Here’s how they work:
- Generation – You receive one SREC for every megawatt-hour of electricity your solar panels generate for 15 years.
- Tracking – You are required to report your solar energy production to the SREC Tracking System in New Jersey, which determines the number of SRECs earned. This is a simple process and we will guide you through it.
- Trading – SREC 2s are traded in a marketplace, similar to stocks. Residential solar owners typically use an aggregator to sell their SREC 2s, which makes the process easier. In most states, SREC prices fluctuate based on market conditions. But in New Jersey, SREC 2s have a fixed rate. Every residential SREC 2 is sold for $85 and every commercial SREC 2 is sold for $110.
How Much Can You Earn with SRECs?
The number of SRECs you can earn and the resulting amount of money you can make with them depends on how much solar energy you produce.
Let’s say you install a 10 kW residential solar energy system. You should be able to produce a little over 12,000 kWh a year with a system that size in New Jersey, which is equal to 12 megawatts. Since each megawatt earns you one SREC 2, you’ll receive 12 SRECs throughout the year and can sell each for $85, earning you $1,020 in just one year. Over the course of the program’s 15-year participation period, you’ll earn $15,300 with SREC 2s.
These earnings are an additional benefit that you receive on top of all other state and federal incentives, including the 30% solar tax credit, net metering, and NJ’s solar sales and property tax exemptions. Collectively, these incentives can significantly reduce your upfront costs and help you earn more money with solar over time.