Solar Cells Info

By Stephanie Brown, September 23, 2007
Source: NJ.com
http://www.nj.com/news/gloucester/index.ssf?/base/news-2/1190532324185840.xml&coll=8&thispage=3

As the Delsea Regional school district decides to move forward on a large solar energy project, the timing of its decision may cost it nearly $500,000. That’s because it is catching the state midstream in changing what has been the most generous renewable energy incentive program in the nation. The New Jersey Board of Public Utilities’ Clean Energy Program promotes increased energy efficiency and the use of clean, renewable energy sources, like solar, by offering financial incentives, programs and services for residential, commercial and municipal customers. The program is funded by the state’s ratepayers, who pay a societal benefits charge on their electricity/gas bills.

Those who install a solar energy system can receive an up-front rebate based on the size of the system and the wattage it generates.  In Delsea’s case, project architect Robert Garrison Jr. expects that the school board’s 180-kilowatt system will be eligible for a $469,750 rebate from the Board of Public Utilities. As the Clean Energy Program has matured, it has become increasingly popular.

In 2001, when the program was launched, there were six applicants, according to Brian Loos, BPU spokesman. Since then, New Jersey has experienced unprecedented growth driven by the combination of rebates, financial incentives and support provided by New Jersey’s Clean Energy Program. “Now, there is over 2,200 solar installation projects that the program has helped fund,” he said.

In Gloucester County, a number of local municipalities, including Harrison and Elk townships, as well as school districts like Delsea Regional and Washington Township, are opting for solar panels to cut down on escalating energy costs. As a number of these projects move forward or not, the certainty of payback through rebates is becoming more and more a 50-50 shot.

Earlier this month, the Board of Public Utilities approved switching from the rebate program to one that’s market-driven. Under the new system, which is slated to begin June 2009, solar power system owners will earn Solar Renewable Energy Certificates, or SRECs, based on the amount of solar energy their system generates.  These SRECs can be sold to electricity suppliers, which are required to either purchase these certificates or pay a fee.

Rebates will only be available for systems 10 kilowatts or smaller, which is about the size of a residential or smaller commercial system, said Loos. The rebate system will continue through 2008, he said. However, Loos could not say at what point those with a solar energy project should apply for the rebate to make sure they are approved before funding runs out or the new SREC system goes into effect. He said applicants must wait in a queue for approval, and said the time it takes to move up the queue varies.

Delsea school board officials said last week that they were going to be moving “full speed ahead” on their solar energy system/roofing project and are pushing for a January bond referendum. As of Sept. 14, there were seven applications waiting for approval in the Public Schools K-12 queue. “They still can move forward with (the projects) and operate under the new system,” said Loos. “There’s no halt to the system.”

The state’s decision to switch to the SREC system was done to safeguard New Jersey ratepayers against costs associated with meeting the state’s Renewable Portfolio Standard (RPS), said Loos. The RPS goal is to generate 22.5 percent of New Jersey’s electricity from renewable sources including 2 percent from solar electricity by 2020.  To meet the RPS demand with the rebate system would have been too expensive on the state’s ratepayers, said Loos.

The rebate system would have cost $10.9 million, or a 5 percent increase paid by the state’s ratepayers, while the new system should cost between $2 million and $3 million, which is about a 2 percent impact, he said. “The new system is a more affordable way of meeting RPS requirements,” he said. Under the rebate system, ratepayers would have seen a 5.7 percent impact.

Steve Masapollo, CEO of SolarWorks NJ in Washington Township, worries how the new SREC system will affect his business and the solar energy industry. “The N.J. BPU and the office of Clean Energy have worked very diligently and intensely on a very difficult problem,” said Masapollo. “I believe more time is needed as I do not feel that they have adopted the best solution for the ratepayers and the vendors.” Masapollo said the SREC system could threaten the viability of the solar industry because the cash incentive right off the bat wouldn’t be there.

“They’re banking on the fact the SRECs will be enough and that the homeowner will at some point around 10 years have the system paid off, but there’s no guarantee of that,” he said. Masapollo said municipalities and school districts could enter into a Power Purchasing Agreement as an alternative to purchasing their own solar energy system.

Under a Power Purchase Agreement, a solar energy company would pay for the system, but take the SRECs and federal tax credits for it. “They don’t get all the benefits that they would if they had bought a system, but at the same time they would still get significant savings in their electric bill,” he said.