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19 April 2007 ¿ New Jersey utility PSE&G said it will earmark approximately $100 million over the next two years to help finance the installation of as much as 30 MW of solar systems on homes, businesses and municipal buildings throughout its service area.
If approved by state regulators, the initiative could begin by the end of this year and support 30 MW of solar power in the following two years, fulfilling about 50 percent of the RPS requirements in PSE&G's service area for 2009 and 2010.
PSE&G's solar initiative addresses goals put forth by the State through the energy master plan process and by the Board of Public Utilities 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 resource.
If approved, PSE&G would provide loans to developers to cover approximately 40 percent to 50 percent of the cost of a solar installation project. The utility would be repaid the principal plus interest over 15 years. The remaining project cost would be funded by a host customer or equity partner, such as a bank or investor, to be eligible to collect the federal investment tax credit.
PSE&G would be repaid in the form of credits called Solar Renewable Energy Certificates or SRECs, which have value in the energy marketplace. An SREC is a New Jersey tradable product that represents the energy benefits of electricity generated from a solar system. PSE&G would earn a return to compensate the company for its full cost of capital, plus an incentive for helping to develop the solar market. The solar panels would be owned by the developer or the host customer.
PSE&G customers would continue to pay for solar incentives through the Societal Benefit Charge (SBC) on their monthly bill.
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