The Transition from SRECs to TRECs
New Jersey’s renowned Solar Renewable Energy Credit (SREC) program is coming to an end, leaving many solar energy system owners confused about what this means for them and raising questions about what happens next. As the state transitions into its transitional solar energy incentive program, there are many questions concerning the differences in the programs and how this will affect current and future solar system owners.
Below, we’ve outlined everything you need to know about New Jersey’s transition from SRECs to TRECs. Keep reading!
The Transition
The SREC market is regularly unpredictable. Thus, New Jersey has aimed to replace the SREC incentive with a more stable and reliable program and reduce costs to renewable energy credit ratepayers. The transition away from SREC started in April 2020. While the state has not fully developed the new permanent program that will replace SREC, the Transition Renewable Energy Cred (TREC) is being implemented at this time.
Like SRECs, TRECs are given to solar energy system owners on the basis of megawatt-hour of solar energy produced. Both programs are designed to incentivize renewable energy production in the state of New Jersey. Additionally, as with SRECs, utilities can purchase TRECs to reach their solar carve-out quota.
The Differences
The key difference between the SREC system and the TREC system is that TRECs are factorized and have fixed prices. This means that different types of solar panel systems receive different amount of subsidies from TRECs.
With TRECs, the value of your incentive depends on the type of solar panel installation on your property. For example, solar panels installed on landfill or brownfield land, panels on a net-metered non-residential rooftop or carport, community solar projects, solar panels on net-metered residential ground mount, rooftop, or carport, and net-metered non-residential ground-mount projects all receive a different amount of subsidies based on megawatt-hour of solar energy produced. Besides these differences in fixed, factorized prices, TREC prices are also lower than those of SREC.
What It Means
What does this transition ultimately mean for current and future solar energy project owners? Any solar projects that registered with the SREC program after October 29th, 2018 but were not operational by the time that New Jersey reached its cap are automatically placed in the TREC program.
Additionally, solar energy system owners who have already been receiving SRECs will continue to receive them for ten years from the date their energy system became operational.
New system owners will receive TRECs for 15 years from the date their system becomes operational as the state eventually transitions to a more permanent renewable energy incentive program.
Learn More with Synergy Electric
To speak with professional commercial electricians about what the transition from SREC to TREC means for your solar project, or to find out more information about investing in a renewable energy project, contact Synegry Electric today!
