Call for information on the NJ Clean Energy Program (609) 737-6566
Jersey Solar Electric FAQ's
Specializing in the design and installation of solar
Question: Why should I choose Jersey Solar to install my solar photovoltaic system ?
Answer: We have over 35 years of experience in installing solar energy systems. We installed the first grid-connected photovoltaic system in NJ in 1997 have over 250 residential and commercial customers throughout NJ. We are NJ-based and licensed electrical contractors, and take very seriously the most important aspects of any installation – quality work and best materials-in-class. We design and build systems on a case- by -case basis, so the customer can be assured of receiving a well-sited and custom installation. We service what we sell and install, and most of our photovoltaic sales come from our customer’s referrals. We do not over-estimate the energy production of our systems and our customers know what to expect in terms of performance. We care deeply about our customers, the quality of our work, and the solar industry as a whole. When the NJ Clean Energy Program was tracking completed inspections, our inspection approval rate was over 99%. We do all the NJCEP paperwork, utility interconnection paperwork, utility financing program paperwork, are present at all municipal inspections, and assist our customers with setting up their on-line SREC accounts. We are well-trained and stay up to date with all the newest solar technology and training programs. We send out newsletters alerting our customers to the most current news in the NJ solar market, and interact with NJ regulators to achieve solar-friendly statewide policies. We are firmly committed to our solar energy customers to help them achieve safe, reliable, and productive operation for the life of their system.
Question : What are the economic incentives currently available in 2013 for the installation of solar photovoltaic (“PV”) systems ?
A) THE FEDERAL GOVERNMENT provides a 30% Federal tax credit on the installed cost of solar photovoltaic systems for residential and commercial systems. Additionally, for commercial systems installed on business property, the solar energy equipment can be fully depreciated in two years.
B) The STATE OF NJ, through its NJ Clean Energy Program (“NJCEP”), awards Solar Renewable Energy Credits ( “SRECs”) based on the amount of energy the PV system generates, for a period of 15 years, also known as the “Qualification Life”. One (1) SREC is awarded for every 1,000 kilowatt hours the system generates. Monthly electrical generation from the system is taken from a revenue-grade meter which is connected to the system, and the monthly meter readings are entered into the Customer’s SREC account, administered by the General Attribute Tracking Service, also known as GATS. The SRECs are kept in a secure on-line account managed by the Customer. The Customer can then sell these SRECs to brokers or electric service/electric generation providers which have been approved by the NJCEP. SRECs have five year banking lives, which means that the Customer can bank their annual SRECs for a period of five years before being required to sell them, so the Customer can wait until SREC prices rise instead of having to sell them when their prices are low. This is because SRECs are market-based incentives, and prices of SRECs have ranged from a low of $ 75/SREC to a high of $ 675/SREC in preceding years. Electric generation providers ( “Load-Serving Entities”) are required by NJ law to purchase a certain amount of SRECs annually from Owners of photovoltaic systems to meet their Renewable Portfolio Standard ( “RPS”). Basically, when the electric generation providers have met their annual SREC-purchase requirements, the price of SRECs remain low. In years where they have not met their annual SREC-purchase requirements, SREC prices rise. In 2013, the Load Serving Entities ( LSE’s) are required to purchase over 1,000,000 SRECs, representing 1 gigawatt of solar electric generation in NJ. This is also the capacity of a typical nuclear generating plant located in NJ. By 2026, utilities will have to purchase about 2.5 gigawatts of solar electric generation in NJ, one of the highest RPS requirements in the nation.
C) Solar photovoltaic systems are exempt from NJ State Sales Tax and are exempt from property tax increases as a result of the installation of the system.
D) UTILITY INCENTIVES include “net metering” and SREC-Financing Programs. Net metering allows customers to sell back excess power back to their electric utility at the retail rate, which is the same rate they pay when they purchase the electricity from the utility. Excess generation essentially “spins” the meter backwards during times when the solar system is generating more electricity than what the building is using at the time it is generating the electricity. All electric utilites in NJ also have SREC-Financing Programs. Public Service Electric and Gas (PSE&G) , NJ’s largest electric utility, offers loans which are paid back from SRECs which have been awarded to the Customer for their electric generation. The term of the loan is ten years for residential systems and fifteen years for commercial systems. Jersey Central Power and Light ( JCP&L) , Atlantic City Electric ( ACE) and Rockland Electric offer competitive long term SREC contracts for a period of ten or fifteen years. More information on these utility SREC-Financing Programs can be found on the NJ Clean Energy Program website, www.NJCEP.com, or you can go to www.PSEG.com/solarloan for customers in the PSEG service territory, and www.njedcsolar.com for customers in the JCPL and ACE service territories. The PSEG Solar Loan III Program is expected to commence about June 1, 2013, and the JCPL/ACE SREC-Financing Programs are expected to commence about August 1, 2013.
Question : How much energy will my solar system generate annually and how much can I save from my system ?
Answer: Most properly- sited systems will generate approximately 1,100- 1,200 kilowatt hours of electricity annually per kW of installed capacity. For a 10 kilowatt ( 10 kW) system, 11,000-12,000 kilowatt hours ( “ kwhrs”) will be generated annually. For residential systems, the average rate per kilowatt hour purchased from the electric utility is about $ .18/ kwhr, which means that the system will save about $ 1,800 - $2,000/yr. or more ( due to higher summer rates) in electricity costs. For commercial systems, the average rate per kilowatt hour is about $ .09-.22/kwhr, so a 50 kW system will save about $ 5,000 - $ 12, 000/yr. in electricity. Since the solar (fuel) is free, savings increase as electricity rates increase over time.
Note: It is very important to have a properly-sited solar photovoltaic system, which means that the array is free from shading at least 80% of the time, with the solar panels orientated in a southerly direction.
Question: How big a system do I need ?
Answer: The size of the system depends on the amount of southerly roof area the customer has on their roof, or the entire footprint for flat roofs. Typically, a 5 kW system will take up about 300 sq. ft. of roof space for the typical high efficiency modules that Jersey Solar installs. A 10 kW system will take up about 600 sq. ft. of roof space, and a 50 kW system will take up about 3000 sq. ft. of roof space. Normally, systems are sized to generate from 50% to 100% of the electricity demand of the building.
Note: There are some sites where a roof-mounted system is not practical, for reasons of roof orientation, type of roofing, or shading. A ground-mounted system, located adjacent to the structure, can be installed and must comply with typical municipal property setbacks and local zoning ordinances.
Question: How do I know if my system is working properly ?
Answer: All systems must have a revenue-grade meter showing their output, similar to the conventional utility meter located at the property. The meter’s output should correspond closely to what the system is estimated to produce. Information about estimating system performance should be provided by the system installer and can also be estimated from an on-line program, PV Watts. http://rredc.nrel.gov/solar/calculators/pvwatts/version1/ The NJ Clean Energy Program uses PV Watts to estimate system performance, and these estimates must be submitted to the NJCEP with the initial SREC Registration Program application. Once installed, the system’s annual production information is also saved for review in the Customer’s GATS account.
Question: What are different ways I can finance my solar photovoltaic system ?
A) Cash Sale: The system is paid for in cash and the customer pays back their investment with the electricity savings and the sale ( monetizing) of the NJ Solar Renewable Energy Credits (“SRECs”). After subtracting the Federal 30% Solar Energy Tax Credit, the typical time to recover the initial investment is about seven years, making the ( tax-free) return of investment greater than 10%, far better than keeping the money in an interest-bearing bank account. Taking into account that the photovoltaic system adds value to the home, and that most of the original investment is recovered upon sale of the property, the return on investment is even greater, and the electrical savings become tax-free dividends generated from the original investment.
B) Bank Loan: A home equity loan or business loan can be used to purchase the system, with the interest on the loan being tax-deductible. Customers can borrow up to 100% of the cost of the system and then have the option to pay-down the loan once the tax credit is received. Or a combination of cash and bank loan can be utilized. With low interest rates, a bank loan is an excellent way to finance the system cost.
C) Utility Loan: PSE&G will loan from 20% -50% of the cost of the system once the system is installed. PSE&G will then take ownership of the SRECs for 10 years for residential systems and 15 years for commercial systems at a pre-determined floor price. Details on the PSE&G Solar Loan Program can be found at www.PSEG.com/solarloan and an on-line loan calculator is available at the site. All the customer needs to do is input the system price and kW capacity and the pre-determined floor price and the amount of the solar loan will be shown in their calculator. A customer can use a conventional bank loan/cash and the PSE&G Solar Loan to help finance their system.
Note: With customers who have JCP&L or Atlantic City Electric as their utility company, the customer can enter into long term contracts ( 10-15 years) to sell their SRECs to their utility at a guaranteed price. These SREC contracts are competitive in nature, with contracts being provided to customers with the lowest net present value. Historically, these SREC contracts usually are successful in the $ 100-120/SREC range. Jersey Solar highly recommends these long term SREC contracts, and while they are not a loan, the SREC prices are guaranteed over time, minimizing risk to the customer, as opposed to selling the SRECs in the current or “spot” SREC market. While not a loan, a guaranteed SREC sale price over time is recommended to help pay down a conventional bank loan or cash investment.
D) Leasing: For little or no money down, customers can lease their solar photovoltaic system. The lease is paid back with the electric savings. The leasing company installs, owns, and maintains the system and takes the Federal tax incentives. The term of the lease is usually 20 years. Some leasing companies will receive and own the SRECs, and others will lease systems where the customer receives and owns the SRECs to help pay the lease costs. Since third-party leased systems are not eligible for utility financing, there is no guarantee on what the SRECs are worth, and Jersey Solar does not recommend leasing unless the leasing company takes ownership ( and risk) of the SRECs. Although Jersey Solar thinks the customer is better served owning their own systems, for customers who do not want to purchase their solar photovoltaic systems, leasing can be a viable option. Contact us to see what types of leasing programs Jersey Solar has at the present time.
Question: How are the solar modules attached to the roof, and what effect do they have on the roof surface?
Answer: For typical asphalt/fiberglass shingles, the aluminum support structure, located underneath the modules, are attached directly to the roof rafters of the home. They are guaranteed to withstand local wind requirements in the 90-125 mph range, and the weight of the modules is evenly distributed throughout the solar array. Modules add an additional load of about 2.5-3.0 pounds per square foot (psf) on the roof, which is well within the roof loading capability of the typical building. The modules will actually protect the roof surface from the harmful rays of the sun, which causes shingles to dry and curl. In addition, the solar modules block hot summer sun from hitting the shingles, leading to cooler attic temperatures and decreased air conditioning costs. A polyurethane-based sealant is placed between the shingle and the aluminum support “feet” to prevent leaks from occurring.
For standing seam metal roofs, Jersey Solar utilizes an S-5! Clip ( www.S-5.com) , which attaches directly to the standing seam without penetrating the metal roof. For flat roofs, we use a ballasted mounting system, with concrete block as ballast, to minimize roof penetrations.
Even with Hurricane Sandy and Hurricane Irene, Jersey Solar lost no solar panels to the high winds on all the systems we installed.
Question: What are some of the environmental benefits associated with the installation of a solar photovoltaic system ?
Answer: The annual emissions offset for a 10 kW system is :
1) 10 pounds of oxides of nitrogen, the main ingredient in smog.
2) 45,000 pounds of carbon dioxide, the main cause of global warming.
3) the equivalent of driving your car 56,500 miles per year.
4) the carbon dioxide absorbed by 5 acres of trees.
Question: Where can I go to find our more information on NJ’s solar energy programs ?