New Jersey just decided to replace its current solar incentive with their “Successor Solar Incentive” program by the end of August. Despite lower incentives, the new program still provides significant value for property owners.
However, there is now a state-wide capacity limit of 150 megawatt (MW) for commercial projects that will not last long.
For New Jersey commercial property owners that missed out on the previous “TREC” program, this means that you have another chance to benefit from solar before potentially losing out on incentives altogether. Keep reading to see how Nessel Energy can help you to take advantage of the state’s lucrative incentives before they are no longer available.
The long-awaited update to New Jersey’s solar incentives has finally arrived. After nearly three years of discussion and debate, the New Jersey Board of Public Utilities (NJBPU) announced that they will be replacing the existing solar incentive (TREC) with the new “Successor Solar Incentive” (SuSI) program in August of this year.
Under the previous program, rooftop and canopy solar projects reaped the greatest incentive of $152 per megawatt-hour of system production over a 15-year period. The TREC program allowed developers and project owners an opportunity to better predict their returns over time, resulting in a solar market boom with incredibly low power purchase agreement (PPA) rates and impressive returns for system purchases.
However, the program was short-lived and is now replaced. The new program is less lucrative, but still offers a valuable opportunity for property owners. If you missed out on TRECs, you still have another chance.
The new SuSi program essentially works exactly like the former TREC program, where a solar project owner receives a solar renewable energy credit (SREC) for every megawatt-hour (MWh) of electricity their system produces. Instead of calling it a TREC, it is now called an SREC-II.
Where the SuSI program differs from the traditional TREC program is how the value of the SREC-IIs are determined. The program offers two incentive types:
NJBPU hopes to use the two-incentive approach to support various solar market segments and different project types, while also mitigating the costs of running the program.
Commercial property owners should look at the ADI sub-program as it is the most relevant to typical facilities. Like the previous program, rooftop projects reap the highest incentives. For example, a commercial building with rooftop solar would earn either $100 or $90 per megawatt-hour (SREC II), depending on the project size. The following table outlines the varied incentive amounts for non-residential solar projects under the ADI sub-program:
Incentive Value per SREC-II
Small Net Metered Non-Residential on Rooftop, Carport, Canopy and Floating Solar
Large Net Metered Non-Residential on Rooftop, Carport, Canopy and Floating Solar
1 MW to 5 MW
Small Ground Mount Net Metered Non-Residential
Large Ground Mount Net Metered Non-Residential
1 MW to 5 MW
Interim Subsection (t) projects
All types and sizes
While this new program provides a lower credit value opportunity for commercial solar, there are still significant savings to earn by installing a rooftop system.
Instead of a 3 cent per kilowatt-hour PPA rate, which was feasible with the TRECs, a property owner might expect a contract today at around 7 cents. While this may be higher, it still offers significant savings versus today’s high utility costs across New Jersey, which average between 10 and 12 cents per kilowatt-hour, depending upon the utility company that serves the building.
Overall, the NJBPU aimed to strike a balance between incentivizing continued investment in solar, without causing boom and bust cycles for the state’s solar market.
The SuSi program officially launches on August 28 with a 150 megawatt (MW) capacity limit for commercial net-metered projects. Because of this capacity limit, property owners and developers will be moving quickly to ensure projects are accepted into the program. This means the longer you wait, the greater chance you lose out on the incentives.
That’s where Nessel Energy can help. Through our unique Rooftop Revenue Program℠, Nessel Energy brings a new source of lease revenue and reduced OPEX through lower electricity costs. The result is double the impact to your building’s NOI.
Our team leverages experience on both sides of rooftop solar, as well as 40 years combined experience in the New Jersey real estate market. As a real estate company, we understand the importance of risk mitigation and tenant satisfaction. As an energy company, we understand how to overcome typical barriers and provide a solution that creates value for all parties. We have the unique skills and experiences to get your solar project successfully up and running.
Take advantage of higher solar credits in New Jersey before the opportunity runs out. Get started today by contacting us at 908.209.8379.
A combination of Federal and state-level incentives is creating a unique opportunity to earn high lease rates for solar on your property. Learn how Nessel Energy’s Rooftop Revenue Program℠ can benefit your organization.
Nessel Energy provides sustainable energy solutions for real estate owners and developers through our unique Rooftop Revenue Program℠. We leverage over 20 years of real estate experience across commercial, multifamily, and industrial properties to provide unparalleled energy advising and services.
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