All Solar Renewable Energy Certificate (SREC) applications made after Oct. 29 will have a lifespan of 10 years, according to an order issued Monday by the New Jersey Board of Public Utilities.
It clarifies language in the 2018 Clean Energy Act, signed by Gov. Phil Murphy in May, according to the BPU. The law’s language said the ten-year term applied only to projects seeking connection to the distribution system. It implied other projects had no term limit.
“This action by the Board clarifies the SREC life span and is in line with the intent of the Clean Energy Act, which is that all SRECs have a life span of ten years, not only certain projects seeking connection to the distribution system,” said NJBPU President Joseph L. Fiordaliso.
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New Jersey’s solar program is currently financed through SRECs, which are a tradable commodity. SRECs are generated by owners of solar projects for the energy they produce and then sold to electricity suppliers. Costs are then typically passed on to ratepayers.
“Limiting all SRECs to 10 years will provide a direct savings to ratepayers without imposing significant financial hardship on developers,” Fiordaliso said.
BPU is actively working with stakeholders to define a process to replace the SREC program with a long-term program.
A thriving solar industry is critical to achieving 100 percent clean energy, Fiordaliso said.
New Jersey is number six nationally in the number of solar installations with almost 100,000, according to the BPU.