New Jersey Utility Offers $105 Million in Solar Loans
May 7, 2008
New Jersey's Public Service Electric and Gas Company (PSE&G) is now offering up to $105 million in loans for the installation of solar photovoltaic systems. The New Jersey Board of Public Utilities (BPU) approved the loan package in early April to support the development of 30 megawatts of solar power installations throughout the utility's service area, helping the utility to meet about half of its solar energy requirement for 2009 and 2010. For now, the loans are only available for nonresidential customers, but the program will be expanded to residential customers in the future. PSE&G will provide loans to cover roughly 40%–60% of a solar project's costs, offering 10-year loans for residential systems and 15-year loans for nonresidential systems. According to PSE&G, the nonresidential loans are currently being offered at an interest rate of 11.11%.
The borrower can then repay the loan with cash or with solar renewable energy credits (SRECs), which are created as the solar power systems generate power. Every 1,000 kilowatt-hours of solar generation result in one SREC, which PSE&G will value at the current market price or $475, whichever is higher. The utility's goal is to provide loans for 12 megawatts of solar power at commercial and industrial facilities, 9 megawatts of solar power at municipal and not-for-profit facilities, 6 megawatts of residential solar power, and 3 megawatts of solar power at multi-family and affordable housing units. As of May 5, the loan program had committed to more than 3.1 megawatts of commercial and industrial solar power installations and 330 kilowatts of solar projects at municipal and not-for-profit facilities. See the press releases from the New Jersey BPU (PDF 75 KB) and PSE&G, as well as the PSE&G Solar Loan Program Web page. Download Adobe Reader.
California's Sacramento Municipal Utility District (SMUD) is taking another approach to providing its customers with solar power: the utility is paying enXco, Inc. to install a 1-megawatt solar power system, and SMUD's customers can sign up to buy a share of that system. Through the utility's new SolarShares program, customers will pay roughly $5–$30 per month to receive 10%–50% of their power from the solar power system (the utility hasn't released exact cost details yet). The system is being built near Wilton in southern Sacramento County and will be completed in July. According to enXco, the project will be the largest solar power system in the United States that is built to serve voluntary purchases of solar power by a utility's customers. See the press releases from enXco and SMUD (PDF 32 KB), as well as SMUD's "Solar Power for Your Home" Web page.