Here are some of the main points of the Solar Loan II program as laid out in yesterday’s press release:

• Any solar installation is eligible, including residential, commercial, industrial, government, etc., as long as it’s a project of a PSE&G electric customer
• Projects may not exceed 500 kw
• The loan may cover up to half of the gross cost of the solar installation, to be repaid over a span of up to 10 years for residential customers and up to 15 for all others
• Participation in the loan program does not affect eligibility for other solar incentives, such as New Jersey’s solar rebate and the federal tax credit

But here is what may be the coolest part of this program: the loan may be repaid with cash, or with the solar renewable energy certificates or SRECs generated by the system. This means you would be repaying your solar loan with value entirely produced by your solar panels. And the clever use of SRECs doesn’t end there: PSE&G will use the SRECs it receives to help offset the bill for this program, which is being footed currently by a surcharge on its customers’ monthly bill.

PSE&G’s electric customers will pay for the cost of the solar program through the RGGI Recovery Charge (RRC), which is included in the delivery part of their monthly bill. PSE&G will sell the SRECs it receives for loan repayment in an auction, and credit the proceeds from the sale to customers through the RRC, which will offset a portion of the program costs. The average residential customer who uses 722 kilowatthours in a summer month and 6,960 kilowatthours annually will pay about 36 cents more per year than they do now.

New Jersey’s unique package of incentives–a rebate coupled with a strong SREC trading program, on top of the federal tax credit–has made it one of the best states in the nation in which to pursue a solar installation for both homes and businesses. If you’ve been on the edge, you’re a PSE&G customer, and financing is what’s been holding you back, it may be time to take the leap.

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That’s all changed. Homeowners can now take advantage of a new rebate, between $1.55 and $1.75/watt (the two shiny extra dimes per watt are only yours if you get  a home energy audit before installing your system). This is a huge step down from the program’s previous rebate level, which at one point was up around $4/watt. Still,

A typical solar power system that generates seven kilowatts costs about $60,000, state Board of Public Utilities spokesman Doyal Siddell said. A rebate would cover $12,250 of that cost. [APP.com]

Aside from the fact that a typical home solar electric system generates more like 3.5 or 4kw than 7, that’s not a bad rebate when you take into account the fact that homeowners can still take advantage of the SREC trading scheme on top of that. This might put NJ in the lead again. Think about a state like Massachusetts, which has a great set of tax incentives for commercial customers but a miserly base rebate of $1/watt for residential customers. Or even California, where the tiered incentive program has been so successful that, in some parts of the state, rebates have already been scaled back to around $2/watt with no auxiliary cash incentives available.

Commercial and industrial concerns in New Jersey will be eligible for a $1/watt rebate; again, that’s on top of the SREC trading program. Each 1-mw SREC is selling currently for over $450.

The new solar rebates will be available to applicants who get in queue before April 30th, 2009. Although the line only started forming yesterday, you might want to get a move on: the $27.2 million the state has made available for these rebates may not last long, if last year’s example is anything to go by.

For more information, spend some quality time on the website of New Jersey’s Clean Energy Program. Then, fill out the relevant GetSolar web form (Residential or Commercial) to determine if solar is right for you.

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Solar energy credits in New Jersey jumped to as much as $675 a megawatt-hour for 2009, more than double the 2008 price, as delays in new rooftop installations and an increase in utility penalties create a shortage.

Last year, New Jersey’s nation-leading solar rebate program (Clean Energy) ran plumb out of money, which it got from surcharges on consumer electric bills. In a risky move, the state chose to transition to an experimental SREC (solar renewable energy credit) trading program as its main solar incentive. This sort of approach has more potential value for the owner of a solar energy system, but doesn’t help with the up-front price tag as a traditional rebate does. With the market rate for each bundled megawatt (one SREC) double what it was just a few weeks ago, I’m sure solar owners are breathing a big sigh of relief. The rest of the country is keeping an eye on Jersey’s program–it’s a lower-cost effort from the state, compared with handing out rebates, and if it can be managed properly, it may be the type of approach taken by newcomers to the solar incentive scene. Or perhaps the type of approach adopted by other states whose rebates are in trouble, like Florida and Maryland.

Curious about how this fits in to the larger solar picture? Take a look at Adam’s post on the perhaps troubling tendency of state legislatures, of late, to downsize their solar incentives, and visit GetSolar.com’s interactive map for summaries of the solar incentives available nation-wide.

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