If you were to stop people on the street and ask them to name states known for strong growth in solar-electric system installations, chances are that few would mention New Jersey. But the state has some of the most favorable residential and commercial solar incentives in the nation. Here’s how a New Jersey couple put solar electricity to work for them—at home and on their rental properties.
In 2006, the total number of residential and small business grid-tied solar-electric systems in New Jersey topped 1,500. This was an exponential increase from just five years earlier, when there were only six installed in the state. The impetus for this amazing change? New Jersey’s incentive-based clean energy program, which was launched in 2001.
Strong financial incentives enticed Peter and Tanya Ptak to invest in three solar-electric systems. In 2005, they installed a system on their Red Bank home and, because New Jersey’s solar support was so sweet, decided to have two more systems installed on their rental properties in 2006.
The Ptaks wanted to put an end to their electric bills and support clean energy in a state that generates almost half its electricity by burning coal. Then they discovered that New Jersey’s Clean Energy Program (NJCEP) could allow even a family with an average income to afford an investment in solar electricity.
Especially enticing was the short economic payback period for PV systems under NJCEP’s program. “Many people here pay [their utility] $200 per month for electricity,” says Peter. “When do they finish paying that off? Never!” In contrast, investing in a solar-electric system can be likened to paying electricity bills several years in advance, and at a fixed rate. With New Jersey’s attractive renewable energy incentives, the Ptaks calculated that a properly sized PV system that would meet all their electricity needs could pay for itself within seven to ten years. After that, all the electricity it produces is not only free, but surplus electricity generated means that the system will be earning them money.
When the Ptaks installed their first system, they received a one-time rebate of 70% of the system’s total cost. New Jersey also issues Solar Renewable Energy Certificates (SRECs)—financial credits granted by the state’s public utility commission. Owners of systems that produce energy from renewable sources receive credits for the clean energy their systems generate—credits they can then sell to electricity suppliers to help them meet the state’s renewable portfolio standard.
Another important financial incentive is net metering, by which utilities credit owners of grid-tied PV systems at the retail rate for any electricity their systems produce, until their cumulative electricity use is offset. In New Jersey, annualized net metering zeroes a customer’s account at the end of a 12-month cycle, based on the system’s initial commissioning date. This allows surplus energy generated during sunnier months to be banked, and the credits applied against utility electricity used during seasons when the PV system produces less energy. At the anniversary date, any surplus energy credit generated beyond what the home or business has consumed is purchased by the utility at their “avoided cost” rate (usually about 25% to 30% of the retail rate per kilowatt-hour), and a check is issued to the customer.
The up-front incentives, coupled with solar energy certificates, a solid net-metering program, and the prospect of generating pollution-free power, appealed to the Ptaks. They were consuming approximately 6,800 KWH of electricity per year, and spending up to $90 per month on electricity for lighting, localized space heating, and appliances. Investing in PV systems to power both their home and rental buildings would be good for the environment—and their pocketbooks.