With New Jersey’s SREC (Solar Renewable Energy Certificate) program closing its doors on April 30th, 2020, a new program is making its way in as a new replacement. When Governor Murphy signed the Clean Energy Act in May 2018, one of the requirements is that NJBPU closes its SREC program by June 2021 or when at least 5.1% of the electricity sold in the state is generated by solar.t.
The board concluded that they had reached the 5.1% milestone, which means they closed the SREC program before June 2021. The TREC (Transition Renewable Energy Certificate) program is now live as the new program that is taking over as we await what will be the final successor program to the SREC program.
So, what is TREC and how can it benefit you? Here is everything you need to know about TREC.
What is New Jersey’s TREC System?
. The SREC and TREC are very similar in many ways. They both offer solar energy generation incentives, based on a megawatt-hour (MWh) basis.
The difference is that SREC pricing was variable while the TREC pricing is fixed. With SRECS, the value depended on market supply vs. demand, while the TREC works from fixed pricing. That means that while the rewards changed with the SREC program, you are always guaranteed the same price no matter what with the TREC program. Another difference is that the TREC system is priced based on the type of solar system installed defined as the sector which we will go over below…
How Does it Compare to Their Old SREC System?
The SREC program was a 10-year program, while the TREC program is a full 15-year program. Originally, the SREC program was a 15-year program, but in order to keep the price stable through supply and demand, it was reduced to a 10-year program. The TREC program being introduced as a 15 year program is a welcome change because it will add 5-years’ worth of incentives to the solar installation. Beyond the term, the flexible pricing of the SREC had advantages and disadvantages. At its height, the price of an SREC was over $600, but at its low point, it fell below $50. This type of volatility can make it difficult for investors to find financing for a project or achieve predictable returns. The TREC is based off a set price of $152 per TREC with factors based on the sector in which the solar installation is implemented.
The factors are as follows:
Subsection (t): landfill, brownfield, areas of historic fill: 1.0
Grid supply (Subsection (r)) rooftop: 1.0
Net metered non-residential rooftop and carport: 1.0
Community solar: 0.85
Grid supply (Subsection (r)) 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
What this means is you use the $152 SREC price and apply it to the above factors depending on where and how the project is implemented. For Green Power Energy, the most commonly used TREC factors will be roof mounted commercial at a fixed price of $152 for 15 years and roof mounted residential projects at .6 which comes to $91.20 for 15 years.
How Can I Benefit from the New TREC System?
The average household in New Jersey may require a 7.2 kW system, which would produce approximately 9,000 kWhrs per year and earn you a little over 9 TRECs per year, which based on $91.20 per TREC, would equate to around $840 a year. That, plus the solar tax credit along with net metering, will help you quickly pay off your solar system and increase the amount you save each year in your electric bill. The TREC program is a 15-year program, so after you reach your return on investment in or around year 7, you can still collect additional TREC income from your solar project through year 15!