by Jedediah Drolet, MCRP '11
In recent years solar development has become increasingly popular in New Jersey. Probably the most visible manifestation of this is the placement of small solar panels on utility poles throughout the area served by PSE&G, the largest utility in the state, although rooftop solar panels on residential and commercial buildings are also becoming quite noticeable. This is all due to aggressive policy incentives by the state, starting about ten years ago, to encourage solar. Initially these consisted of rebates, but recently the state shifted away from providing money directly and now relies on a system of Solar Renewable Energy Certificates (SRECs), which are tradable credits that utilities can use to meet their requirements under the state’s Renewable Portfolio Standard (RPS), which mandates a certain percentage of electricity generation in the state has to come from renewable sources each year, with a specified level of that specifically from solar. SRECs are generated by all solar installations registered with the state and traded freely, which provides a major incentive for the development of solar. At current SREC prices, the income stream from SRECs vastly outweighs the income stream from the electricity generated by solar installations.