PSE&G Marks Earth Day with a Bold New Plan Designed to Spur Investment in Solar Energy in NJ

NEWARK, N.J., April 19 /PRNewswire-FirstCall/ -- Public Service Electric and Gas (PSE&G) today unveiled an initiative designed to spur investment in solar power in New Jersey and help meet the aggressive renewable energy goals outlined in the state's Energy Master Plan (EMP) proposal. It is the first of a number of new plans to be detailed by the company this year as part of a long-term, comprehensive strategy to combat climate change.

Details of the program were included in a regulatory filing made today with the New Jersey Board of Public Utilities (BPU). If the plan is approved by regulators, New Jersey could soon see a greater number of solar panels supplying clean power to a greater number of homes and businesses and municipal buildings - while reducing the overall cost of developing, installing and financing solar energy systems.

Ralph Izzo, chairman and chief executive officer of Public Service Enterprise Group, which is PSE&G's parent company, said the utility was making the announcement this week in recognition of Sunday's Earth Day celebration.

"Earth Day emphasizes the importance of addressing climate issues around the world, and our proposed solar initiative highlights our intention to be a leader here in New Jersey in finding innovative ways to improve the environment," Izzo said.

PSE&G's solar initiative addresses the aggressive goals put forth by the State through the EMP process, and by the BPU through the renewable portfolio standard (RPS). Both call for the ability to meet 20 percent of the State's energy needs with renewable energy by the year 2020. Solar is a Class I renewable resource.

Under the plan, PSE&G will invest approximately $100 million over the next two years to help finance the installation of solar systems on homes, businesses and municipal buildings throughout its service area. The funding will provide a source of stable, secure capital to spur additional investment in solar energy.

If approved by the BPU, the initiative could begin by the end of this year and support 30 megawatts of solar power in the following two years, fulfilling about 50 percent of the RPS requirements in PSE&G's service area for the years 2009 and 2010. That's enough electricity to power 24,000 homes and, in terms of CO2 emissions, is the equivalent of removing about 3,700 cars from the road.

"Climate change is a reality that needs to be addressed now. We need fresh thinking if we are to begin to tackle this challenge and reverse the trend," Izzo said. "We are prepared to invest a substantial amount of capital, and we have developed an innovative regulatory approach to provide new avenues and incentives for investment in renewable energy. This initiative will help address our future energy needs with renewable resources in a way that reduces CO2 emissions."

PSE&G's proposal has garnered support from the solar industry, environmental advocates and the business community.

"This is an historic and groundbreaking initiative, and we couldn't be more supportive," said Thomas Leyden, president of the Mid-Atlantic Solar Energy Industries Association (MSEIA). "This represents the beginning of a new relationship between the renewable community and utilities." MSEIA is a non- profit organization dedicated to promoting the benefits of renewable energy. It is made up of manufacturers, developers, contractors, installers, architects, engineers, consultants and other industry professionals

"One of the biggest barriers faced by solar enthusiasts is the lack of financing. While these systems are a great investment, they require significant up-front capital," Leyden said. "PSE&G is a well-known, trusted company with a large and diverse customer base. Their willingness to promote the value and availability of solar, coupled with their ability to provide long- term financing, means that there will be greater penetration in the market. This is a recipe for success." (Attached is a list of organizations that support PSE&G's solar initiative.)

"NRDC has been a long-time supporter of solar energy - especially to meet the growing summer peak demand," said Ashok Gupta, Air & Energy Program Director of the Natural Resources Defense Council. "But more investment is needed to make this clean energy available to homes and businesses. We're pleased that a hometown utility like PSE&G is willing to make that investment and make solar part of their clean energy portfolio."

Joan Verplanck, president of the New Jersey Chamber of Commerce, said, "PSE&G has launched this program to make it attractive and easy for business owners to seriously consider solar energy. By putting in place the financial mechanism for companies to pay for this technology over an extended period of time, PSE&G is making what was once an option only for large companies with significant financial resources into an affordable option for companies large and small."

PSE&G's solar initiative would be open to all of its customers, including low-income, residential, commercial, industrial and municipal/governmental.

In brief, here's how it would work:

PSE&G would provide loans to developers to cover approximately 40-50 percent of the cost of a solar installation project. The loan would look a lot like a mortgage. The utility would be repaid the principal plus interest over 15 years, a considerably longer investment timeframe than traditional lenders are willing to provide for solar installations.

The remaining project cost would be funded by a host customer or equity partner, such as a bank or investor, to be eligible to collect the federal investment tax credit. (Utilities are currently prohibited from collecting this tax incentive.)

PSE&G would be repaid in the form of credits called Solar Renewable Energy Certificates or SRECs, which have value in the energy marketplace. An SREC is a New Jersey tradable product that represents the clean energy benefits of electricity generated from a solar system. PSE&G would earn a return to compensate the company for its full cost of capital, plus an incentive for spurring the development of the solar market. The solar panels would be owned by the developer or the host customer.

PSE&G's customers would continue to pay for solar incentives through the Societal Benefit Charge (SBC) on their monthly bill, just as they do now. If approved as filed, they won't pay any more under PSE&G's solar initiative, since the program will be paid for through funding that is currently earmarked for renewable energy programs.

"PSEG has been a vocal supporter and an active participant in the EMP process from the start," Izzo said. "We've always maintained that meeting these goals would require redefining the role of the state's utilities and energy companies. The plan we've put forth today does that. It recognizes that utilities have the ability to make long-term investments that serve the public interest, as long as there are assurances of earning reasonable returns."

PSEG has built a reputation for environmental leadership over the last decade. Its utility was the first in the nation to sign onto a pre-Kyoto voluntary Greenhouse Gas (GHG) emission reduction accord with the Clinton Administration to stabilize GHG emissions to 1990 levels by 2000. It voluntarily committed to reducing its carbon dioxide emission rate by 18%, to 2000 levels, by the year 2008. And it has been a vocal advocate for mandatory and meaningful GHG emission reductions on a national basis, supporting national legislation that would reduce electric power sector emissions to 1990 levels by 2030.

Call 973-430-7734 to request a transcript of the press availability that followed today's announcement.

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) , a diversified energy company (http://www.pseg.com/).