What is the Solar Transition and how does market-based financing work?
On September 12, 2007 the BPU adopted a market-based financing program that relies primarily on the use of SRECs with provisions to continue rebates for small solar systems less than 50 kW. To support this approach the SACP, the amount that electric suppliers and providers must pay if they are unable to meet their solar RPS requirement with SRECs, was increased and extended in a multi-year SACP schedule for reporting years 2009 – 2017. A higher SACP, in effect, increases the value of SRECs which offset the need for rebates.
After a two-year process that involved various stakeholders, experts, businesses and other state agencies, the Board approved the market-based SREC framework on September 12, 2007, to promote the greatest amount of renewable energy at the least financial impact on ratepayers. This model builds on a well established RPS market that has been developing since 2004. The overall goal of New Jersey’s solar transition is to adapt its solar financing program to support installation of sufficient solar capacity to meet the Renewable Portfolio Standard requirements at the least cost to ratepayers, taking into account other policy goals – such as fairness and equity to all ratepayer classes, job growth, improved reliability/security and improved environmental quality.
