You probably already knew that you can save a lot of money by investing in renewable energy, but did you know that in the state of New Jersey, you can save even more and even stand to make money?
How can solar save me money?
Those who invest in solar energy receive a federal investment tax credit, in which 30% of your investment can be written off, no matter where you reside in the United States. In addition to that, New Jersey offers tremendous incentives for local residents and businesses who choose to adopt a solar lifestyle, known as the Solar Renewable Energy Credit (SREC).
So, how can solar make you money?
When you invest in solar, your rooftop becomes a Photovoltaic (PV) system. Like a business, which generates revenue and then issues stocks and bonds to be sold, your PV system generates clean energy. As your rooftop generates a predetermined amount of energy, shares are issued in the form of an SREC, which you can then sell to the highest bidder.
Many states have a Renewable Portfolio Standard (RPS), which demands that a certain percentage of a state's total electricity has to come from solar power. If these percentages aren't met, huge fines are incurred. To avoid this fine, the government looks to residential and commercial suppliers to buy green power credits.
In the state of New Jersey, once your installer has connected your PV system to the grid, you’ll earn one SREC for every 1000 Kilowatt hours (kWh) of generation, which is the same as one Megawatt hour (mWh). Mid-Atlantic states typically get 10,000-12,000 hours of usable sunlight per year, so for every kilowatt in your PV system, you’ll earn an average of 1-1.2 SRECs annually. Once you install your system, you can earn SRECs for up to fifteen years.
Once your system is registered within the SREC tracking system, you’re green power generation is logged. Then, you're issued energy credits, which you can then sell directly with utility buyers. For those who’d prefer to let someone else handle the negotiations, you can arrange to have an agent or “aggregator” handle the sales of SRECS.
How much can you make from SREC sales?
New Jersey has a Solar Alternative Compliance Payment, which is a penalty per mWh that utilities have to pay if they don’t have enough SRECs relative to their target. This acts as ceiling price - they’ll never pay you more, but they will pay up to it per SREC. In 2017, the average price has hovered around $550 per SREC in New Jersey. So if you’re generating 7 SRECs this year, that’s $3850 in cash going back into your wallet!