PSE&G Receives Green Light To Expand Successful Solar Loan Program

November 10, 2009 1:32 PM EST

NEWARK, N.J., Nov. 10 /PRNewswire/ -- Public Service Electric and Gas Company (PSE&G) today received approval from state regulators to expand its innovative solar loan program by approximately $143 million to finance the installation of an additional 51 megawatts of solar energy systems on homes, businesses and municipal buildings throughout its electric service area.

Since the utility's initial Solar Loan Program was approved by the New Jersey Board of Public Utilities in April 2008, customers have applied for loans totaling $105 million that would result in 30 megawatts of installed solar capacity. Today's new initiative will result in a total of $248 million available for loans and 81 megawatts of solar power for New Jersey.

"There's no question that providing a source of stable, secure capital -- especially in our tough economy -- has helped boost the number of solar energy systems in New Jersey," said Ralph LaRossa, president and COO of PSE&G. "With today's BPU approval, this expanded program will support the development of another 51 megawatts of solar energy to help our state meet its aggressive renewable goals and reduce carbon emissions. We're pleased to do our part to make New Jersey a leader in solar energy installations, second only to California."

Filed with the New Jersey Board of Public Utilities (BPU) in March 2009, the Solar Loan II Program was reviewed by the BPU staff, the Department of the Public Advocate, solar developers and installers, and other utilities. These discussions led to a settlement agreement that resolved various issues, paving the way for today's approval by the BPU.

Here are the major components of the Solar Loan II Program as approved by the BPU:

    --  PSE&G's solar program will be open to all of its electric customers,
        including residential, commercial, industrial and
        municipal/governmental. The solar systems would be owned by the borrower
        of the loan, typically the developer or the host customer.

    --  The program will be available for two years and applications will be
        accepted on a first-come, first-served basis until 51 megawatts of
        projects have been developed.  Projects in this program may not exceed
        500 kilowatts (a typical residential system is 7 kilowatts).

    --  PSE&G would provide loans to developers or customers to cover about half
        of the cost of a solar installation project, depending on the projected
        output of the solar energy system and the cost of the system. The
        borrower would repay the principal, plus interest, over 10 years for
        residential customers and over 15 years for all other borrowers, a
        considerably longer investment timeframe than traditional lenders are
        willing to provide for solar installations.

    --  The remaining project cost would be funded by the owner of the solar
        system. The owner may also be eligible for a federal investment tax
        credit and rebates from the NJ Clean Energy Program.

    --  Borrowers of the loan would repay the loan with cash or with Solar
        Renewable Energy Certificates or SRECs, which are created every time the
        system generates solar electricity. It takes one megawatthour of solar
        generation to create one SREC, which has value in the marketplace. An
        SREC is a New Jersey tradable product that represents the clean energy
        benefits of electricity generated from a solar energy system. Under the
        Solar Loan II program, the SRECs are guaranteed to be valued at no less
        than an agreed price as approved today by the BPU.

    --  Initially, the SREC floor price for residential systems is $450, for
        non-residential systems up to 150 kw the price is $410, and for systems
        larger than 150 kw up to 500 kw it is $380. The floor prices offered for
        SRECs for new loan applications will be reduced by about 3-6 percent
        every 6 months.

    --  PSE&G's electric customers will pay for the cost of the solar program
        through the RGGI Recovery Charge (RRC), which is included in the
        delivery part of their monthly bill. PSE&G will sell the SRECs it
        receives for loan repayment in an auction, and credit the proceeds from
        the sale to customers through the SPRC, which will offset a portion of
        the program costs. The average residential customer who uses 722
        kilowatthours in a summer month and 6,960 kilowatthours annually will
        pay about 36 cents more per year than they do now.

In addition to the loan program, PSE&G has begun to implement its Solar 4 All program, investing $515 million in 80 megawatts of solar projects that will help double the state's solar capacity and create additional green jobs. The utility is installing solar panels on 200,000 utility poles and street lights in about 300 communities. PSE&G also will develop solar gardens and roof-top installations on facilities it owns and also at third-party sites.

Customers interested in learning more about PSE&G's Solar Loan Program should visit www.pseg.com/solarloan, send an email to solarloan@pseg.com or call 973-430-8460.

Public Service Electric and Gas Company (PSE&G) is New Jersey's oldest and largest regulated gas and electric delivery utility, serving nearly three-quarters of the state's population. PSE&G is the winner of the ReliabilityOne National Achievement Award for superior electric system reliability. PSE&G is a subsidiary of Public Service Enterprise Group Incorporated (PSEG) (NYSE: PEG), a diversified energy company (www.pseg.com).

Want to know what's new at PSEG? Go to www.pseg.com/getnews and sign up to have our press releases and weekly environmental commentaries sent right to your inbox.

SOURCE Public Service Electric and Gas Company (PSE&G)

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