PSE&G Receives Green Light to Launch Solar Investment Program
09 April 2008 - 4:30AM
PR Newswire (US)
BPU approves innovative initiative to help meet New Jersey's
aggressive renewable energy goals 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 or
call the Solar Loan Program at 973-430-8460. Public Service
Electric and Gas Company (PSE&G) is New Jersey's oldest and
largest regulated gas and electric delivery utility, serving nearly
three- quarters of the state's population. PSE&G is the winner
of the ReliabilityOne National Achievement Award for superior
electric system reliability. PSE&G is a subsidiary of Public
Service Enterprise Group Incorporated (PSEG) (NYSE: PEG), a
diversified energy company (http://www.pseg.com/). DATASOURCE:
Public Service Electric and Gas Company (PSE&G) CONTACT: Karen
Johnson of Public Service Electric and Gas Company (PSE&G),
+1-973-430-7734 Web site: http://www.pseg.com/
http://www.pseg.com/solarloan
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