Solar power options grow in S. Jersey

June 14, 2010

By Eileen Smith

New Jersey is the sunniest state in America, offering solar energy incentives for residential systems that can pay for themselves in as little as 2.8 years.

The state is second only to California in the number of homes outfitted with solar technology, drawing so many applicants for generous rebates in May that the Board of Public Utilities has put new requests on hold.

“New Jersey has the best economics in the country for solar,” said David Lloren, CEO of San Francisco-based One Block off the Grid (1BOG), a broker for residential installation services.

Starting Monday, 1BOG is rolling out a Garden State initiative, offering discounts of up to 15 percent to homeowners in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, Monmouth, Ocean and Salem counties. 1BOG is partnering with Freehold-based Trinity, the state’s largest solar installer.

1BOG has targeted New Jersey and other solar hot spots such as New Orleans, choosing locations where green energy is the most economical for consumers.

Earlier this year, the company launched a campaign in North Jersey, where about 100 homeowners signed up to have solar photovoltaic panels installed on their roofs to generate electricity. The average cost was about $35,000 after rebates and credits, with 1BOG’s take averaging $1,000 per home.

John Martin of River Vale in Bergen County paid $37,500 out of pocket for a $75,000 system.

A retired film editor, Martin expects solar power will provide about 60 percent of his energy needs.

He has been intent on raising his level of energy independence since the 1973 oil embargo, which sparked long lines of cars at the pumps and generated America’s first solar power boom.

“I’m doing it to be a responsible citizen of the planet — and to stick it to OPEC a little,” Martin said.

Lloren said consumers who have been interested in green energy for years are now taking the plunge because rebates and advances in technology have dramatically lowered the cost.

New Jersey residents also are motivated by the high cost of electricity produced at coal-fired and nuclear plants. The average cost per kilowatt hour in the state is 19 cents, compared to the U.S. average of 11 cents.

According to the federal Energy Information Administration, the use of solar electricity grew 40 percent between 2004 and 2008. Still, solar represents only a tiny fraction of the market, just over 1 percent.

In New Jersey, population 8.7 million, there are currently 5,800 solar-powered homes, said Bill Granger, Trinity vice president.

“That tells us there is tremendous potential,” he said.

In the past month, Trinity has installed systems in 46 homes. This year, the company expects sales to increase at least 50 percent, Granger said.

Lloren acknowledges Americans’ romance with solar energy has been fickle over the years. He has watched installers rip out obsolete circa 1970 panels with piping for hot water.

“We call them carcasses,” he said.

Yet he believes solar has found its place in the sun, thanks to tax credits from the federal government that are equal to 30 percent of the cost of an installed system. The deal will run through 2016, which Lloren figures gives the program time to gain traction. Previously, Uncle Sam’s contribution topped out at $2,000.

On May 3, the first day of the state funding cycle, more than 1,100 New Jersey residents submitted applications for rebates averaging about $10,000 per household. On May 11, the BPU announced it would stop taking applications until September.

Other states, strapped for cash, have batted back renewable energy rebates. In Delaware, rebates for solar photovoltaic installations were reduced from 50 percent to 25 percent.

Trinity’s Granger expects New Jersey’s program will resume in a diminished state.

“Our understanding is that the state is considering a lottery for people who want rebates,” he said. “The likelihood is that not everyone who applies for a rebate will get one.”

BPU spokesman Gregory Reinhert did not return calls for comment.

Martin and other homeowners can expect to earn Solar Renewal Energy Credits, or SRECs, one credit for every 1,000 kilowatt hours of generation.

“When I’m using more electricity than I produce, the meter goes one way,” said Martin, a PSE&G customer. “It turns the other way when I’m producing more than I need.”

New Jersey is the only state to mandate a Solar Alternative Compliance Payment, essentially a penalty a utility must pay if the company does not reach its SREC target. To make that goal, utilities buy these green-energy credits from consumers and businesses.

So, how much money can a homeowner expect to make selling SRECs to utilities?

An SREC unit is currently selling for up to $600 in New Jersey. The average residential solar producer can expect to generate seven SRECs annually, according to Residential Solar 101, a renewable energy blog. Total savings: $4,200.

With SRECs, the federal tax credit, state rebates and energy savings, 1BOG estimates it will take a household in New Jersey 2.8 years to pay for a solar system. If the state turns out the lights on the rebate program, it will take 4.2 years to recoup the costs. “That means it goes from being great to really good,” Lloren said.

The return outpaces California, which boasts the highest number of solar-powered residences. In that state, the break-even point is 6.7 years. In New Orleans, which also offers generous incentives, homeowners can expect the system to pay for itself in 7.6 years.

Martin is hopeful wallet huggers as well as tree huggers will be inspired to make the transition.

“It makes me feel good that something our country has needed for a long time is now attainable,” he said.