The New Jersey Board of Public Utilities Implements New Solar Incentive Program

On July 28, 2021, the New Jersey Board of Public Utilities (“NJBPU”) issued an order implementing the long awaited successor solar incentive program pursuant to the Clean Energy Act of 2018 (the “Order”). The Successor Solar Incentive Program, also known as the “SuSi” program, replaces the State’s Solar Renewable Energy Certificate (SREC) and Transition Renewable Energy Certificate (TREC) programs.

The SuSI program will take effect at 12:00 a.m. E.T. on August 28, 2021, and contains two sub-programs:

(1) The Administratively Determined Incentive (“ADI”) – a fixed incentive payment for net metered solar projects of 5 MW or less – including all residential customers and most commercial and industrial buildings – and all community solar installations. The incentive value will vary based on project type and size, and will be guaranteed for a term of 15 years.

(2) The Competitive Solar Incentive (CSI) – a competitive solicitation designed to incentivize the lowest financial contribution from ratepayers for grid supply projects and net metered commercial and industrial projects larger than 5 MW. The first competitive process is anticipated to launch in early-to-mid 2022, following additional stakeholder engagement throughout this summer and fall.

Similar to the legacy SREC and TREC programs, the SuSi program will provide one New Jersey Solar Renewable Energy Certificate II (“SRECII”) for every megawatt-hour (MWh) of solar electricity produced by a qualifying facility, with an additional $20/MWh adder for public entities – such as school districts, municipalities, and public colleges and universities – as well as a temporary incentive for projects built on contaminated lands.

Incentive levels for the ADI program are as follows:

Market SegmentSize (MWdc)Incentive Value ($/SREC-II)Incentive Value for Public Entities ($/SREC-II)
Net Metered Residential All types and size$90N/A
Small Net Metered Non-Residential on Rooftop, Carport, Canopy and Floating SolarProjects smaller than 1 MW$100$120
Large Net Metered Non-Residential on Rooftop, Carport, Canopy and Floating SolarProjects 1 MW to 5 MW$90$110
Smal Ground Mount Net Metered Non-ResidentialProjects Smaller than 1 MW$85$105
Large Ground Mount Net Metered Non-ResidentialProjects 1 MW to 5 MW$80$100
Community Solar Non-LMI (low and moderate income)Up to 5 MW$70N/A
Community Solar LMIUp to 5 MW$90N/A
Interim Subsection (t)All Types and Sizes$100N/A

Concurrently with the issuance of the Order, the NJBPU issued a second order scheduling the closure of the TREC Program at 11:59:59 EST on August 27, 2021. Applications for the TREC Program that are complete and received before closure, or those which have minor deficiencies which can be cured within seven (7) days will be deemed to continue in the TREC program. Otherwise, they will be ineligible for the TREC program, but may be eligible for the SuSi program.

In addition to closing the TREC program, the NJBPU also closed the subsection (t) program established under the Solar Act of 2012 to provide incentives for the development of solar on brownfields, historic fill areas and properly closed landfills. Only administratively complete applications received by the Board on or before 11:59:59 pm EST on August 27, 2021 will be accepted and sent to the New Jersey Department of Environmental Protection for review. If the NJBPU issues conditional approval of the timely and complete application, the applicant will be registered under the TREC program and will have a two (2) year registration deadline consistent with the existing rules of the TREC Program. Notwithstanding the forgoing, projects selected for Year 2 of the Community Solar Program will continue to qualify in the TREC program regardless of when those applications are selected by the NJBPU.