New Jersey has one of the most progressive incentive programs that advocate for solar technology. TRECs emerged as the newest addition to their system available to residents, business owners, and institutions. Let’s discuss everything you need to know and how you can benefit from it.
What is the TREC System?
Transition Renewable Energy Certificates (TRECs) is the program that preceded SRECs following the amendment of the Clean Energy Act. TRECs is a performance-based incentive that carried NJ’s successful incentive program but instead imposed a consistent price option. Instead of variable pricing, they issued a fixed price at $152 after generating 1 mWh. For instance, if your system can generate 12,430kWh annually, you can receive 12 TRECs. These 12 TRECs amounts to $1,824 worth of savings.
Here are the criteria to begin the transition to the TREC system.
- Projects installed after October 29, 2018
- These projects should not be receiving SREC payments anymore before the program hits the 5.1 caps.
- When your project hits the cap on or before April 30, 2020, you can receive TREC.
The Value of the TREC Varies Based on the Type of Installation
The main difference associated with NJ’s TREC is in its pricing structure. SRECs have varying prices, for it depends on the current trend of market supply and demand.
The new Transition Renewable Energy Certificates imposed a predetermined price instead of quickly accumulating the value of energy each year. The amount of TREC fixes at $152 for this program’s duration, which is 15 years. Along with this pricing structure, they also based their value on the type of installation involved.
One of the significant amendments to this new program involves the concept of factorization. The previous system has a fixed energy credit value regardless of our solar system’s type, size, and scope. In contrast, the energy credit value in TREC can be determined based on the kind of project.
The project types alongside the equivalent factorization are listed below.
|Landfill, brownfield, areas of historic fill||1.0|
|Grid supply rooftop||1.0|
|Net metered non-residential rooftops and carports||1.0|
|Grid supply ground mount||0.6|
|Net metered residential ground mount||0.6|
|Net metered residential rooftop and carport||0.6|
|Net metered non-residential ground mount||0.6|
Those that factor as one (1), like landfill and brownfield projects, can receive TREC’s full value, $152. As you can see, solar installation projects cannot obtain the maximum value and instead receive 0.85 of TREC. Thus, you can only redeem $129.20 for each TREC with these projects.
Each megawatt per hour generated equals one Transition Renewable Energy Certificate. Therefore, the amount of TRECs you receive depends on the overall performance of your solar system. If you want to make the most out of your TRECs, monitor your system’s scope, capacity, and efficiency.