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S4300/A5460
The 2013 SREC law created a competitive solar renewable energy credit (SREC) program for businesses and homeowners to shift the state’s energy policy from fossil fuel to clean energy. Homeowners, business, schools and municipalities took advantage of this program by purchasing and leasing rooftop solar systems. Payback plans coincide with the ten-to-fifteen-year SREC payment schedule. The legacy SREC program reduces each year and terminates in approximately six years. 121,781 New Jersey Solar facilities rely on the legacy SREC program for payments each month. The Murphy Administration, through the BPU, is calling for legislation to terminate or drastically reduce the legacy SRECs program prematurely in June 2025. This action will shortchange homeowners, schools, public buildings and businesses who currently use SREC revenues to pay down debt service for their solar arrays. Such a reversal in policy diminishes the public’s faith in government and creates significant economic hardship for both solar and non-solar homeowners, businesses, schools and municipalities. Taxpayers will have to pick up the lost SREC revenues needed to pay down public bonds for solar on schools and other public buildings.
Recently introduced S4300 and A5460 would either eliminate the legacy SREC program or drastically reduce the SREC payments in June 2025. This action would raise ratepayer costs $550 million for the next three years and grant an $850 million windfall profit for energy suppliers while reducing or eliminating SREC payments to residents, school districts and municipalities who made this investment.
This proposed legislation would financially impact 116,074 residential solar installations with 48% of homeowners relying on SREC payments for their loans or leases, leaving them with approximately 35% outstanding financial exposure. Additionally, 5,568 business, school, and municipal solar installations would face renegotiated PPAs and budget changes, with taxpayers assuming bond debt service currently covered by SREC payments.
To learn more about the detailed impacts on New Jersey homeowners, businesses, schools, municipalities, and ratepayers click the link for our complete analysis.
FlettExchange-impactbulletpoints-4-15-2025.pdf