New Ways to Boost Solar Development

New Jersey is the number two U.S. state (after California) for solar power generation. In the hope that market efficiencies could help control costs over time, the state has turned not to a tariff-style guarantee, but to a complex approach that relies on a floating, market for tradable solar renewable energy credits (SRECs).

An oversimplified version: install a solar system on your roof or install a commercial system on a warehouse or in a field and each year you’ll earn SRECs based on how much power your system generates annually — one credit for each 1,000 kilowatt hours. You can then turn around and sell your credits back to companies that generate power for the state’s grid. The companies can use the SRECs to help them meet state renewable portfolio standards that steadily ramp up to a mandate requiring that 22.5 percent of their energy come from renewables by 2021.

The credits are actually sold by brokers on an electronic market, like stocks or bonds, at whatever price the market will bear. At the moment, the market is bearing a fabulous price. It takes a calculator to work through the complexities, but with SRECs currently selling for just under $700, and the federal tax credit as well as a reduced state rebate in play, a homeowner in the state can pay for a solar system in four years or less.

Read full article at WorldChanging.com.