New Jersey BySolar
973.784.4191 Renewable Energy Systems for Businesses & Residences
15
Nov
2012

A report published last week by Clean Power Research found that solar power gives ratepayers an impressive return on investment deal.

Following the booming popularity of solar in New Jersey and Pennsylvania in the past few years, many naysayers complained that solar energy was an expense to the ratepayers because of the Renewable Portfolio Standard (RPS) that was signed into law in both states during the last ten years. The law requires electrical utilities to have a portion of their energy generated by solar sources each year. To meet these quotas, utilities needed to purchase Solar Renewable Energy Certificates (SRECs), causing the premium cost for solar to get passed to ratepayers.

The study found that solar electricity provides a premium value of $150 to $200/MWh (15 cents – 20 cents/kWh) above the value of solar electricity generated and a levelized value of $256 – $318 per MWh (25.6 cents – 31.8 cents per kWh). Currently, SRECs in NJ are being sold for $60 per MWh (6 cents per kWh) while PA’s are going for $20 per MWh (2 cents per kWh). This signifies that ratepayers in NJ and PA are getting more than a 2:1 return on their investment in solar energy.

Even if the price of SRECs increases 100%, the value of solar power to ratepayers will continue to exceed its cost. Additionally, the research concluded that by offsetting the need for conventional power, distributed solar power delivers measurable benefits that include:

  • Lower conventional electricity market prices due to reduced peak demand;
  • Reduced need to build, operate, and maintain natural gas generating plants;
  • Reduced outages due to a more reliable, distributed electric power system;
  • Reduced future costs of mitigating the environmental impacts of coal, natural gas, nuclear, and other generation; and
  • Enhanced tax revenues associated with local job creation.

The full report can be found here: The Value of Distributed Solar Electric Generation to New Jersey and Pennsylvania


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