New Jersey’s SuSI solar incentive program explained
In 2021, the New Jersey Board of Public Utilities (BPU) finally agreed on a framework for a new solar incentive program to replace the state’s Solar Renewable Energy Credit (SREC) market. The current program called the Successor Solar Incentive program, or SuSI for short, takes the idea of SRECs and simplifies it, eliminating confusing market prices and fluctuations.
Even though incentive rates offered by the SuSI program are lower than what homeowners could have potentially earned with SRECs, New Jerseyians can still save thousands of dollars across the system's lifetime through SuSI. Plus, the state’s high electricity rates and net metering policies allow homeowners in the Garden State to pay back their system in less than six years.
Let’s take a closer look at how the SuSI program works and just how much money it can earn you each year.
New Jersey’s SuSI program at a glance:
- New Jersey replaced its SREC market with the Solar Successor Incentive program.
- Under the new program, one SREC-II is created for every 1,000 kWh of solar energy a solar system produces.
- Solar homeowners will earn $85 per SREC-II they generate for 15 years.
- An average 6 kW system in New Jersey can earn about $6,700 through SREC-II’s over the system's lifetime.
- Although the value of SREC-II is slightly lower than previous state incentives, the simplicity and dynamic nature of the program has the potential to expand the solar industry in the Garden State.
How does the NJ Successor program work?
The SuSI program works kind of like other Solar Renewable Energy Credit (SREC) programs: your solar panel system generates electricity as it normally does, and for every 1,000 kilowatt-hours of electricity it generates, you are awarded a certificate that represents the positive environmental value of solar electricity.
These certificates, called SREC-II’s under the SuSI program, are then sold, earning you extra money. SREC-II’s are sold independently from electricity, meaning you will still earn all of the money you normally would through your utility’s net metering program. SREC-II’s just earn you additional cash on top of that.
A solar system will generate SREC-II’s for 15 years.
Where New Jersey’s Successor program differs from traditional SREC programs is how the value of SREC-II’s are determined. Different solar system types will receive different incentive values. There are two sub-programs within the SuSI program that solar systems can fall into:
- The Administratively Determined Incentive (ADI) program provides incentives of predetermined value to residential net-metered systems, small non-residential net metered systems, community solar systems, and solar projects that qualify for certain conditional approval.
- The Competitive Solar Incentive (CSI) program is for large commercial and grid supply solar projects, where incentive values are determined through a competitive solicitation process.
How much are SREC-II’s worth?
Residential net-metered solar panel systems will receive $85 per SREC-II generated. The following table outlines incentive values for other solar system types that fall under the ADI sub-program:
|System type||Size||Incentive value per SREC-II|
|Residential net-metered||All types and sizes||$85|
|Small non-residential net-metered (rooftop, carport, canopy, floating solar)||Projects smaller than 1 MW||$110|
|Large non-residential net-metered (rooftop, carport, canopy, floating solar)||1 MW to 5 MW||$100|
|Small non-residential net-metered ground mount||Projects smaller than 1 MW||$90|
|Non-low-middle income (LMI) community solar||Up to 5 MW||$70|
|LMI community solar||Up to 5 MW||$90|
|Interim subsection (t) projects||All types and sizes||$100|
The BPU will re-evaluate these incentive values periodically to determine if the program is properly incentivizing solar projects.
Changes to the value of SREC-IIs. Starting on March 13, 2023, new systems participating in the residential net-metered program will receive $85 per SREC-II generated instead of $90. This price change does not impact systems already registered with the program. Incentive rates for larger installations have increased to promote more installations.
How much can you save with the NJ Successor Program?
How much you’ll save depends on the size of your solar system and how much solar electricity it generates. However, based on the average solar panel system in New Jersey, you can expect to earn over $7,000 just from SREC-II’s over the lifetime of the system.
Let’s break down how you can figure out how much you can save with SREC-II’s.
Step 1: How much electricity do your solar panels generate in a year?
In New Jersey, you can expect to produce about 1,200 kWhs of solar electricity for each kilowatt of solar panels you install. So, a 6 kW system would produce about 7,200 kWh of electricity in the first year they’re installed.
But we need to know how much electricity the panels will produce over 15 years. It’s important to keep in mind that solar panels degrade over time, so as they age, they will produce less electricity. Usually, solar panels degrade at a rate of about 0.5% per year, but the specifics for your solar panels will be listed in the panel’s production warranty.
Once you take degradation into account, our 6 kW system will produce about 79,800 kWh over 15 years.
Step 2: Determine the number of SREC-IIs you generate
This step is easy. One SREC-II is created for every 1,000 kWh of electricity your solar panels produce.
We estimated that our solar system will generate around 79,800 kWh over 15 years, which works out to 79.8. We’re going to round that number down to 79, as you don’t get paid for partially generated SREC-IIs. Typically, that “partial credit” would carry over to the following year, but since this is the total at the end of 15 years, there’s no “next-year” for the credit to carry over to.
So, over the course of 15 years, our 6 kW system will generate about 79 SREC-IIs.
Step 3: Find out how much money you’ll earn!
Now that we know how many SREC-II’s our system will generate, we can figure out how much money we’ll get. All you have to do is multiply the number of SREC-II’s by the incentive value:
79 SREC-IIs x $85 per SREC-II = $6,715 total
How does the Successor program impact solar savings?
The SuSI program technically provides lower savings than both of New Jersey’s previous solar rebate programs: the Transition Incentive program and the NJ SREC program. The following table outlines how much a 6 kW system in New Jersey would earn annually under each of the programs:
|Program type||Incentive rate (per MWh)||Estimated annual rebate amount|
*Estimated value at the time of programs close in mid-2020.
As you can see, the original SREC program had the potential to earn you almost three times as much money. But, NJ SRECs were traded on a market where the value of the SRECs fluctuated based on market conditions. This means there was no guarantee of how much you would earn when selling your SRECs.
The Transition Incentive program took out that guesswork. Each 1,000 kWh created a TREC, which was not sold on a market like SRECs. This means there were no price fluctuations, and you could more accurately predict how much you would earn.
For residential installations, the SuSI program works a lot like the Transition Incentive, just with a lower rate. As of March 13, 2023, each SREC-II will be worth $85. Previously, the rate for residential projects was $90, but the rate was lowered to put more funds towards large-scale projects to encourage more growth.
Although the SuSI program incentive is lower than previous New Jersey solar rebates, homeowners can still save thousands of dollars over their system's lifetime, and less risk is involved since incentive rates remain the same.
How to apply for the NJ Successor program
In order to produce SREC-IIs, your solar panel system must be registered with the state’s Generation Attribute Tracking System (GATS). Once registered, you must enter your solar panel system’s monthly solar generation in GATS for SREC-II’s to be generated and sold.
Your solar installer can help you with the application process and explain the best ways for you to report your solar generation and sell your SREC-II’s.
How will the New Jersey Successor Program impact the state’s solar industry?
The Successor Program may have a lower incentive value, but it hasn’t slowed down solar by any means. Residential solar applications have continued to pour in, so much so that the BPU needed to increase the program’s capacity limit. The program’s simplicity compared to traditional SRECs seems to have made up for the fact that homeowners get paid less.
The BPU will continue reevaluating the solar market and gauge if incentives must be increased or decreased to meet the state’s clean energy climate goals. This has already happened in March 2023, when the state found that large-scale installations weren’t joining the program fast enough to hit the mark. This led to slightly lower incentives for homeowners and slightly higher incentives for those larger installations, hoping it would encourage more projects.
Previous proposals for the SuSI program have mentioned that the state may be looking into establishing an energy storage incentive program, so we should be on the lookout for that in the near future.
If you’re looking to go solar in New Jersey, you should start by using our solar panel calculator. Our calculator will estimate how much a solar installation will cost for your specific home and how much you could earn back in solar savings. Plus, you can get in contact with local solar installers in your area, who can help you better understand how much extra cash you can earn with SREC-II’s.