PSE&G approved for Solar Loan package

May 8, 2008

As reported in MSN money 

BPU approves innovative initiative to help meet New Jersey’s aggressive renewable energy goals $105 million investment in solar loans to begin

NEWARK, N.J., April 8, 2008 /PRNewswire-FirstCall/ — Public Service Electric and Gas Company (PSE&G) today received approval from state regulators to begin offering $105 million in loans to help finance the installation of solar systems on homes, businesses and municipal buildings throughout its electric service area. The funding will provide a source of stable, secure capital to spur additional investment in solar energy.

“Now that the Board has approved our proposal, we will move as quickly as possible to begin offering solar loans to developers and customers,” said Ralph LaRossa, president and COO of PSE&G. “We welcome this new opportunity to play a strong role in meeting the state’s aggressive renewable and conservation goals, and reduce carbon emissions.”

Initially the program will only be available to non-residential customers. PSE&G needs approval from the NJ Department of Banking and Insurance to provide direct loans to residential customers. There are also plans to review residential loan documents with a group of stakeholders before the program is offered to residential customers.

Filed with the New Jersey Board of Public Utilities (BPU) last April, the innovative proposal was the first of a number of new plans the company announced during 2007 as part of a long-term, comprehensive strategy to combat climate change.

Since then, PSE&G has invested in hybrid vehicles and biofuel, as well as energy efficient wires and transformers. The utility has also proposed a carbon abatement pilot program that would provide energy-saving measures such as home energy audits, programmable thermostats, attic insulation and high- efficiency lighting upgrades to residential and business customers.

PSE&G’s solar program addresses the goals put forth by the state through the Energy Master Plan process, and by the BPU through the renewable portfolio standard (RPS). Both call for the ability to meet 20 percent of the State’s energy needs with renewable energy by the year 2020. Solar is a Class I renewable energy supply resource and is specifically called for as a clean source of renewable energy in the state’s goals.

The proposal was reviewed by a stakeholder working group, which included BPU staff, the Department of the Public Advocate, solar developers and installers, large energy users, and other electric and gas utilities. These discussions led to a settlement agreement that resolves various issues, paving the way for today’s approval by the BPU. The program had received strong support from the solar industry, environmental advocates and the business community when it was first unveiled last year.

The program will support the development of 30 megawatts of solar power, designed to fulfill about 50 percent of the RPS requirements in PSE&G’s service area for the energy years 2009 and 2010. That’s enough electricity to power 24,000 homes and, in terms of CO2 emissions, is the equivalent of removing about 3,700 cars from the road.

Here are the major components of the program as approved by the BPU:

      -- PSE&G's solar program will be open to all of its electric customers,
         including low-income, residential, commercial, industrial and
         municipal/governmental. The solar panels would be owned by the
         developer or the host customer.
      -- Applications will be available for two years and accepted on a
         first-come, first-served basis until 30 megawatts of projects have
         been developed.
      -- PSE&G would provide loans to developers or customers to cover
         approximately 40-60 percent of the cost of a solar installation
         project, depending on the projected output of the solar energy system
         and the cost of the system. The borrower would repay the principal,
         plus interest, over 10 years for residential customers and over 15
         years for all other borrowers, a considerably longer investment
         timeframe than traditional lenders are willing to provide for solar
         installations.
      -- The remaining project cost would be funded by the owner of the solar
         installation. The owner may have access to funds from banks and
         investors. In addition, the owner may be eligible for a federal
         investment tax credit.  (Utilities are currently not eligible for
         this tax incentive.)
      -- Owners of solar energy systems would repay the loan with Solar
         Renewable Energy Certificates or SRECs, which are created every time
         the system generates solar electricity.  It takes one megawatthour of
         solar generation to create one SREC, which has value in the
         marketplace.  An SREC is a New Jersey tradable product that
         represents the clean energy benefits of electricity generated from a
         solar energy system. For the purposes of this program, an SREC is
         valued at the market price or $475, whichever is higher. Borrowers
         could also repay the loans in cash.
      -- PSE&G's electric customers will pay for the cost of the solar program
         through the Solar Pilot Recovery Charge (SPRC), which will be
         included in the delivery part of their monthly bill. PSE&G will sell
         the SRECs it receives for loan repayment in an auction, and credit
         the proceeds from the sale to customers through the SPRC, which will
         offset a portion of the program costs.

Customers interested in learning more about PSE&G’s program should visit http://www.pseg.com/solarloan, send an email to george@hbsadvantage.com to learn more about solar opportunities available for you company.

Recent State and Federal credits and incentives have made Solar Sexy again.

One Response to “PSE&G approved for Solar Loan package”

  1. Passaic Arms Condo Assn said

    We are a 30 unit condo assn looking for information about the installation of a solar system for a hot water system. Please have an appropriate person contact me.

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