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General Questions & Answers
PSE&G’s Cost Recovery for its Solar Programs
Q: Why are customers paying for PSE&G’s investment in solar?
A:  New Jersey law requires that an Energy Master Plan (“EMP”) be developed every three years, the purpose of which is to ensure safe, secure and reasonably-priced energy supply, foster economic growth and development and protect the environment.    Having obtained required state government approvals, PSE&G has and continues to implement several programs addressing different components of the EMP goals to improve efficiencies in customer use and increase the level of renewable generation in New Jersey.  In order to spur investment in solar power in New Jersey and meet state renewable energy goals, PSE&G has undertaken two major initiatives.  The first initiative is currently helping to finance solar installations throughout PSE&G’s service territory by providing loans to customers.  The second initiative, the Solar 4 All Program, involves the construction and operation of utility-owned solar installations.  Both initiatives yield solar renewable energy certificates (SRECs).  PSE&G sells the SRECs to energy suppliers who must purchase them in order to meet state renewable portfolio obligations.  Proceeds are used to offset program costs.  For the Solar 4 All Program, PSE&G also sells the energy and capacity from its solar installations in the PJM wholesale electricity market.  Proceeds from these sales are also used to offset program costs. 
Q:  How much do sales of SRECs and sales of solar and energy and capacity reduce solar program costs to customers?        
A:  It depends on the SREC and wholesale energy markets.  The value of SRECs is dependent on energy supplier needs and the overall state of the SREC market.  This past year, SREC values declined significantly as did wholesale energy prices.  Recently, Governor Christie signed into law legislation intended to renew New Jersey’s commitment to the solar industry while also stabilizing SREC prices.        
Q: Why is rate recovery needed?
A: PSE&G uses all the revenue that its solar program generates through the sale of electricity, capacity and solar credits plus the value of the federal investment tax credits to offset the cost of the program. However, solar energy is still a developing technology. For the amount of energy generated, it costs more to install solar generation than other generation fuel sources, such as coal, natural gas and oil.  PSE&G ratepayers make up the difference. Annually PSE&G files with the New Jersey Board of Public Utilities to review actual costs incurred and adjust rates to cover those costs.
In addition to cleaner air, the advantage of PSE&G’s Solar 4 All program is that with the State committed to encouraging renewable energy as a component of meeting its energy needs, protecting the environment and fostering economic development, those paying for the program receive the benefits.
Our programs are intended to help New Jersey achieve the recently enacted mandate that 3.5% of the state’s electricity be produced by solar sources by 2021. In addition, PSE&G’s programs are helping to create jobs, the equivalent of 800 one-year jobs, and spur economic growth in the state.  PSE&G has already spent $300 million through Solar 4 All with 15 New Jersey companies.

Q: How much do PSE&G’s solar programs cost?
A: Costs to customers for these programs will vary over time and depend on several variables, including future SREC, energy, and capacity prices as well as the cost for us to implement and manage the programs.  BPU reviews our costs annually and ensures that we are only permitted to recover our prudently incurred actual costs and authorized cost of capital.  .

Q: Do you intend to expand or extend the pole-mounted solar program?
A: No, we have heard the concerns you and others have raised and have no plans to expand or extend the solar utility pole-mounted segment of our program.  We are working with communities to complete the existing BPU-approved program segment in a manner that respects their particular concerns.
Although PSE&G recently filed with BPU a proposal for new installations as well as to continue offering solar loans, consistent with what it has heard from you and others its solar installation proposal calls for installing up to 136 MWs of solar capacity in its service territory over five years, utilizing brownfields, landfills and other underutilized space in addition to warehouse roofs and parking lots.
Q: Are residential customers subsidizing loans to help businesses install solar on their facilities?
A: No. All customer classes receive the benefits and bear the costs associated with the solar loan program, as with all PSE&G Solar Programs.  In fact residential customers only pay approximately 25% of the total net costs of all solar programs since they represent approximately 25% of total electricity usage.