PSEG Launches Residential Solar Loan Program

New Jersey utility Public Service Electric and Gas Company (PSE&G) began offering its solar loan program to residential customers this week.

The program, which is one of the first of its kind in the country,  helps homeowners finance solar energy systems for their homes.

The residential component of the program follows the implementation in April of a solar investment program for non-residential customers. A total of $105 million in loans is available to PSE&G’s electric customers.

Under the new program, residential electric customers in single family homes may qualify for these loans to borrow 40 to 60% of the total cost of a solar installation project, depending upon the efficiency of the solar system. PSE&G would provide the loans directly to customers. The remainder of the project cost is funded by the customer, who may also take advantage of other financial incentives that may be available such as the federal tax credit.

Financing to support the development of up to 6 megawatts of solar power in the residential program is available on a first come, first served basis during the next two years. The loans would be paid off using solar credits that are created from the solar energy their system produces. The credits, known as Solar Renewable Energy Credits (SRECs), are valued at a minimum price of $475 or at market value, whichever is higher, for purposes of loan repayment.

"The program initially offered to our non-residential customers has already proved very successful, with applications received for nearly half the megawatts available under the plan," said Alfredo Z. Matos, PSE&G’s vice president for renewables and energy solutions.

"We anticipate the residential segment of the plan to be equally popular," Matos said. "Customers love the idea of repaying the loan with solar credits generated by their solar systems in lieu of cash repayments."

PSE&G, which is a subsidiary of Public Service Enterprise Group Incorporated (NYSE: PEG), anticipates that about 900 residential applicants can be covered by the 6 megawatts of loans available to residential customers.