There is only one week left for potential New Jersey solar projects to submit applications into Round 2 of the PSEG Solar Loan Program prior to the Tuesday March 11, 2014 application deadline. We have long been big supporters of this program, which – despite its complexity – provides a terrific value proposition for New Jersey businesses that are considering going solar.
PSEG’s Solar Loan Program provides solar system owners with an innovative form of financing that can fund a significant portion of the upfront cost of a commercial solar system. The Program also provides system owners with a fixed price for all SREC’s generated, eliminating the key risk of SREC price volatility, and providing unparalleled project cash flow certainty in tandem with highly attractive ROI.
Having said that, in our view, the PSEG Solar Loan has been frequently misunderstood. In many ways, the label “Solar Loan” is a misnomer, and the high implicit “interest rate” of 11.2% is often a turn-off for prospective participants (i.e. your company’s CFO says “we borrow at 3%, why on earth would we ever pay 11%??!!”). The important thing to keep in mind is that this “loan” is first and foremost a mechanism that allows the owners of a solar project so sell 10-years of future SREC production to PSEG at the beginning of the project, with very competitive SREC pricing. In our opinion, the high implicit rate is a small price to pay for the SREC pricing certainty that PSEG Solar Loan participants enjoy (and is something that is simply not available outside of this program).
Since the 2009 launch of the PSEG Solar Loan I Program, PowerFlex has helped numerous NJ businesses to take advantage of the PSEG Solar Loan Program, under both “direct ownership” scenarios and “power purchase agreement” (“PPA”) scenarios. We strive to provide our corporate clients with the most objective (and timely) guidance when it comes to solar power solutions, and the solar incentives that allow commercial solar project economics to “pencil out”. For NJ businesses located within PSEG’s electric service territory, the time to explore solar (again) is now!Contact Us Today!