1. NEW JERSEY PV MARKET
July 2010
Prepared by:
Marc Arza

2. NEW JERSEY PV MARKET
US market info (1)
PV installed.capacity evolution PV market by state

3. NEW JERSEY PV MARKET
US market info (2)
PV capacity additions per type PV installed costs evolution
Source: US Solar Industry year in review 2009 (SEIA)

4. NEW JERSEY PV MARKET
US market info (3)
Source: Global PV market outlook until 2014 (EPIA)

5. NEW JERSEY PV MARKET
New Jersey market info (1)
Source: Boston Consulting Group

6. NEW JERSEY PV MARKET
New Jersey market info (2)
Yearly irradiation (as Spain's ave.) Yearly PV installed capacity
Source: Google maps

7. NEW JERSEY PV MARKET
Utilities map
New Jersey main utilities:
- Rockland Electric Company
- Jersey Central Power & Light
- Public Service Enterprise Group (PSEG)
- Atlantic City Electric
Source: http://njcleanenergy.com

8. NEW JERSEY PV MARKET
Average electrical tariffs
Source: http://www.eia.doe.gov/electricity/epm/table5_6_b.html

9. NEW JERSEY PV MARKET
Federal support programs (1)
- Business Energy Investment Tax Credit (ITC):
- Corporate Tax Credit for 30% of the investment. Credits are available for eligible systems placed
in service on or before December 31, 2016:
- The credit is equal to 30% of expenditures, with no cap. Eligible solar energy property includes
equipment that uses solar energy to generate electricity.
- The energy property must be operational in the year in which the credit is first taken.
- The American Recovery and Reinvestment Act of 2009 allows taxpayers eligible for the federal
renewable electricity production tax credit (PTC) to take the federal business energy investment
tax credit (ITC) or to receive a grant from the U.S. Treasury Department instead of taking the PTC
for new installations. The new law also allows taxpayers eligible for the business ITC to receive a
grant from the U.S. Treasury Department instead of taking the business ITC for new installations.
Source: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US02F&re=1&ee=0

10. NEW JERSEY PV MARKET
Federal support programs (2)
- Modified Accelerated Cost-Recovery System (MACRS):
- Five year time accelerated amortization period for photovoltaic
installacions.
- The 5 year amortization will be as follows:
Year 1: 30%
Year 2: 32%
Year 3: 19,2%
Year 4: 11,52
Year 5: 11,42%
Year 6: 5,76
- Amortization starts when turning on the PV system.
Source: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US06F&re=1&ee=0

11. NEW JERSEY PV MARKET
Property tax exemption for renewables
- New Jersey enacted legislation exempting renewable energy systems
used to meet on-site electricity, heating, cooling, or general energy
needs from local property taxes. Eligible renewable energy systems*
include solar PV. The exemption may be claimed for all qualified
systems installed on residential, commercial, industrial, or mixed use
buildings as accessory uses.
- In order to claim the exemption, property owners must apply for a
certificate from their local assessor which will reduce the assessed
value of their property to what it would be without the renewable
energy system. Exemptions will take effect for the year after a
certification is granted.

12. NEW JERSEY PV MARKET
Solar energy sales tax exemption
- New Jersey offers a full exemption from the state's sales tax (currently 7%) for
all solar energy equipment. This exemption is available to all taxpayers. All
major types solar energy equipment, including equipment for passive solar
design, are considered eligible for the exemption as described by the New
Jersey Division of Taxation Publication
- S&U-6 (Sales Tax Exemption Administration). According to S&U-6, the
exemption includes all solar energy "devices or systems specifically approved
by the Board of Public Utilities, Division of Energy and designed to provide
heating or cooling or electrical or mechanical power by converting solar
energy to some other usable energy source, including devices for storing
solar-generated energy." The exemption does not apply to devices that would
be required regardless of the energy source being utilized.
- In order to claim the exemption, the purchaser must fill out and submit
Form ST-4 (Exempt Use Certificate) to the seller instead of paying sales tax.

13. NEW JERSEY PV MARKET
NJ's Renewable Energy Incentive Program (REIP)
- New Jersey's Clean Energy Program is a legislative
program of the NJ Board of Public Utilities providing more
than 180 million dollars each year towards renewable
technologies installations.
- NJ's REIP program has two main incentives:
> Upfront rebates
> Renewable Energy Credits (tradable REC's)

14. NEW JERSEY PV MARKET
NJ's REIP upfront incentives (rebates)
- Solar electric (PV) non-residential projects up to 50 Kw are eligible for upfront
incentives.
- Incentives for non-residential will be 1$ per watt. (50kw = 50.000 w =
50.000$).
- Process towards REIP upfront incentives:
> Thre funding cycles opened each year.
> Initial application: Managed by NJ Clean Energy*: Once apprved projects
have 12 months to complete installations. A funding approval letter is
issued granting funds for the project.
> Final application: After reiew and approval expected turnaround time for
upfront incentive payments is 60 days.
> After final application system will be inspected and can apply to the utility
for interconnection.
*http://www.njcleanenergy.com/renewable-energy/programs/renewable-energy-incentive-program/for-customers/application-forms

15. NEW JERSEY PV MARKET
NJ's REIP Renewable Energy Certificates (REC)
- All PV installations generate tradable Renewable Energy Certificates
(REC) as a second source of potential income. The program is managed
by PJM-EIS Generation Attribution Tracking System (GATS)*.
- Generation of REC's start on the date of utility approval to
operate/energize the system and will last for 15 years.
- REC's generation and trading process:
> Registration and REC's account opening**.
> Generation of 1 REC per each 1000 Kw/h of energy metered.
> REC's are sold to utilities at trading prices.
> Average prices for REC's is around 550$-600$ (slight upwards trend).
*http://www.pjm-eis.com/gats/gats.html
**http://www.njcleanenergy.com/renewable-energy/programs/srec-registration-program/registration-forms

16. NEW JERSEY PV MARKET
REC's trading prices & evolution

17. NEW JERSEY PV MARKET
Currently suspended programs
Edison innovation Clean Energy Fund:
- The Clean Energy Fund provides grants of $100,000 to $500,000 to New
Jersey companies to commercialize identified renewable energy
technologies and innovative technologies that significantly increase energy
efficiency. All grants are subject to a 50% matching funds requirement.
CESCI loans:
- Clean Energy Solutions Capital Investment Loans. Projects that meet the
above qualifying criteria are eligible for zero-interest loans with terms of up
to 10 years. Loans are limited to 50% of project costs up to a maximum of
$5 million.

18. NEW JERSEY PV MARKET
PSE&G (utility) Solar Loan Program
- Public Service Electric and Gas (PSE&G) of New Jersey offers loans for
"behind the meter" photovoltaic (PV) systems to all customer classes in its
electric service territory.
- The program will provide loans covering 40-60% of the cost of PV systems
with the remainder to be financed separately by the customer. A loan term
of 15 years is available to non-residential customers at an interest rate of
11.3092%.
- Loans are only available to systems of 500 kilowatts (kW) DC or less that
are eligible for net-metering and to generate Solar Renewable Energy
Certificates (SREC's) under state rules.
- Customers may repay the loan through cash payments or by signing over
their SRECs to PSE&G.

19. NEW JERSEY PV MARKET
Competitors & business models
- A quick look at competitors shows different business models present in the
commercial rooftop photovoltaics market.
- Analized competitors:
> Arosa Solar: http://arosaenergy.com
> Trinity Solar Systems: http://trinitysolarsystems.com
> The Solar Center: http://thesolarcenter.com
- Two basic business models*:
a) Full site-host ownership (through lease or other financial tools)
c) Power Purchasing Agreement (PPA)
- QUESTION: Do REC's justify a rooftop lease business model?
*Tax benefits being the main issue.

20. NEW JERSEY PV MARKET
Full site-host ownership model

21. NEW JERSEY PV MARKET
Business model: Power Purchase Agreement (1)

22. NEW JERSEY PV MARKET
Business model: Power Purchase Agreement (2)

23. NEW JERSEY PV MARKET
Business model: Power Purchase Agreement (3)
- The site host neither owns nor leases the PV system, but instead agrees to buy all of
the electricity generated by the system for a specified term, through what is known as a
power purchase agreement (PPA).
- The project developer either owns (in partnership with it stax investors) or leases (from
its tax investors) the system, and is responsible for operating and maintaining it
throughout the entire PPA term.
- The project developer (and its tax investors) take on the risk that the project does not
perform as expected – i.e., the site host only pays for power that is actually generated.
As the owners of the project, the project developer and/or its tax investors take all of
the project’s tax benefits (and, in effect, pass a monetized portion of them through to
the site host in the form of a lower PPA price).
- From the site host’s perspective, a PPA feels very much like an operating lease: The
primary difference – which reportedly is a major selling point for the PPA10 – is that,
under a PPA, the site host is not required to operate and maintain the system, and
likewise faces no performance risk. In short, the PPA model effectively provides the site
host what it presumably really wants – solar power at an affordable price, rather than
solar equipment that it must operate and maintain.

24. NEW JERSEY PV MARKET
Business model: Power Purchase Agreement (4)
Source: The Solar Group

25. NEW JERSEY MARKET
Electrical contractor license
- Solar contractors need a valid Electrical Contractor license to
work with PV installations in the state of New Jersey.
- The Electrical Contractor license is controled by the Board of
Examiners of Electrical Contractors and requires five years
experience and passing an exam which is scheduled five
times a year.
More information:
http://www.njconsumeraffairs.gov/electric/
http://ibew269.com/library/document-library/20100408082458.ccc_spring2010_solar%20article.pdf

26. NEW JERSEY PV MARKET
Timeline for coming months
SEP - Prepare an agenda of New Jersey contacts to meet during Solar Power
- Meet with New Jersey PV market contacts during Solar Power to learn about the market
OCT - Define a strategy for market penetration
- Look for potential partners
- Contact potential partners (PV installer/PV professional to start joint venture with)
NOV
- Prepare a trip to meet potential partners
DEC - Visit New Jersey and meet potential partners
JAN-FEB - Close agreement with partner and start landing
MAR-APR - Start operations. Be successful!

27. ONTARIO MARKET
PV industry associations & resources
- Solar Energy Industries Association (SEIA): http://seia.org
- Solar Electric Power Ass. (SEPA): http://solarelectricpower.org
- New Jersey Clean Energy Program: http://njcleanenergy.com
- New Jersey Board of Public Utilities: http://state.nj.us/bpu
- North East Roofing Contractors Ass.: http://nerca.org
- Database of Solar Incentives for Renewables: http://dsireusa.org