Commercial Solar Loans FAQ
Your Questions Answered
We recommend that you first review the General FAQs, and then view category-specific questions for non-residential, residential-aggregated, and landfill/brownfield questions.
General FAQ
If you have questions about commercial solar financing, start here before moving on to other sections.
Where can I view the fine print of a solar loan agreement?
Please see the following documents:
Does the 10-year loan term mean borrowers have free and clear title to all SRECs in the event the loan is repaid early? Is there a call option similar to the first two PSE&G Solar Loan Programs?
In the event your system performs better than expected and you pay off your loan before the 10-year term, PSE&G will relinquish control of the PJM-GATS account and you will be permitted to sell all SRECs generated in the market. There is no call option in the Solar Loan III Program.
How much capacity is available in each program segment?
View our Available Capacity page.
Is it possible for program capacity to be transferred between segments?
Yes. During each solicitation, underutilized capacity from either the res-aggregated, landfill or large non-residential segments may be reallocated to other oversubscribed segments for that same solicitation, except for the first solicitation, where any unused capacity in the res-aggregated segment will be added to its segment’s capacity in the second solicitation.
My project is already under construction. May I participate in the Solar Loan Program?
Projects under construction may not participate if they are in the residential/individual, small and large non-residential program segments. In the residential/aggregated and landfill/brownfield segments, projects under construction, but not in commercial operation, are eligible to apply.
How does the program define “under construction?"
“Under construction” means anything other than site clearing or site preparation. The receipt and storage of equipment at the facility site will not be considered “under construction,” provided no attempt is made to assemble or erect the equipment.
How does the program define “commercial operation?”
“Commercial operation” means that the system is operating and has received its final inspection in preparation for the issuance of SRECs.
What are the construction milestones?
PSE&G has established milestones based upon the program segment. Failure to meet these milestones may result in a fee deducted from the loan disbursement. Please see your individual project segment Q&A for details.
Is there a limit on the amount of capacity any one entity can borrow? Do SLI & SLII capacity allocations have any bearing on a borrower?
There are no program capacity limitations for any one borrower. However, PSE&G will evaluate credit worthiness, in part, by our aggregate exposure to any one borrower.
How do I register my solar project with the State of NJ?
Go to the NJ Clean Energy site for instructions. All projects must be registered with the NJ Clean Energy Program in order to be eligible for the PSE&G Solar Loan Program.
What are the costs to participate in the Solar Loan Program?
There are three primary fees related to the Solar Loan Program: the application fee, the administration fee and the SREC processing fee. These are tailored for each program segment. There is also the possibility of missed milestone fees in the event a participant does not meet certain milestones during the project lifecycle. Learn more on our Fee Structure page.
What technical information must be submitted?
At a minimum, you will need to submit the following:
- Interconnection application
- Engineering design layout diagram
- Electrical one-line diagram
- PV Watts simulation and derate sheet
- Specifications and warranties for modules and inverters
Will the PSE&G loan cover all of my solar project costs?
No, the PSE&G solar loan will only cover a portion of the project costs. The loan amount will be determined by the size of your system and its specifications, as well as the accepted floor price. We provide a loan calculator to assist borrowers in determining the approximate loan amount. This is subject to the final specifications of the system once constructed and PSE&G review.
Is this a loan or a rebate from PSE&G?
This is a loan and must be paid back to PSE&G either with accumulated SRECs from your solar system or with cash in the event that SRECs are not available.
Does PSE&G provide construction financing?
No, this is not a construction loan. PSE&G funds the loan once construction has been completed and the applicant has undergone various inspections.
How do I pay for the construction of the project if PSE&G doesn’t provide financing at the outset?
You should discuss your project payment schedule with your solar installer to determine if they can provide any solutions. If not, there are companies willing to provide construction financing for both residential and commercial solar projects.
When will I receive the loan disbursement?
PSE&G will be in a position to close your solar loan once all inspections have been completed, meters have been installed, legal due diligence has been received and a certification letter has been obtained from the NJ Clean Energy Program.
How do I pay my loan back?
You can pay back your solar loan either with SRECs produced by your solar system or with cash.
Will I ever have to directly pay PSE&G from my own funds?
The loan is designed so that it should be paid back entirely with SRECs over the 10-year term, assuming the output of your solar systems meets expectations. However, there is a true-up clause that requires the borrower to make cash payments once a year if that is not the case.
What is a SREC?
A SREC is a Solar Renewable Energy Certificate. It is a clean energy certificate issued once a solar system has generated 1000 kWh (kilowatt hours) of energy.
Will SRECs reduce my monthly PSE&G electric bill?
No. SRECs will not affect your monthly electric bill.
Do I register and trade my own SRECS?
No. Once your solar loan closes, PSE&G will set up your account with PJMGATS and manage the SRECs on your behalf.
Will the SREC floor price remain the same for the entire loan term?
Your floor price is guaranteed by PSE&G for the entire loan term or until your loan is paid in full. Your floor price is the higher of your winning SREC bid price or the market price as defined in the loan agreement.
How will PSE&G monitor my SREC payments?
PSE&G will install a SREC meter at the project site. Each time your system generates 1,000 kWh of electricity, PSE&G will transfer one SREC from your account toward repayment of the loan. Your electric usage will be tracked by a separate net meter.
Will I have access to the SREC account online?
No. At this time, PJM-GATS only allows one entity access to the account.
How is my monthly electric bill determined?
Your monthly electric bill is determined by the readings of the net meter installed at the project site prior to the closing of your loan. Once your system is constructed, you can contact the PSE&G Net Meter Billing team with any further questions at 609-291- 5207.
How does net metering work?
Net meeting measures the difference between the electricity you buy from your utility and the electricity you produce with your solar system. Your net meter keeps track of this difference automatically. Under net metering, excess electricity produced by your solar electric system is delivered back into the utility grid, effectively spinning your meter backwards. Your meter spins forward when your solar system does not produce all of the electricity you are currently consuming.
Who installs the meters and how do they know when to install them?
Please contact the PSE&G meter/interconnections department prior to installing any meters. They can be reached at 800-722-0256. A PSE&G meter box must be installed and inspected before meters can be installed. PSE&G will schedule the inspection and install the meters upon receipt of the municipal UCC Certificate of Approval, Part 2, or Attachment B of the Interconnection Agreement, as well as the meter installation fee of $253.89.
What inspections are required to participate in the PSE&G Solar Loan Program?
Three inspections are required:
- Municipal Certificate of Approval (COA) provided to the PSE&G meter group
- Meter inspection prior to meter installation is conducted by PSE&G
- Field Inspection, ordered by PSE&G through a third party, to verify technical details and that the system is in proper working order
Can I pay off my loan before the 10-year term?
Yes, you can pay the loan off early, but you will lose the guaranteed floor price at the time of loan payoff.
Does PSE&G maintain the panels and solar energy system?
No. The borrower is responsible for maintaining the panels and solar system. PSE&G is the lender only.
How long is the solicitation window open?
The Solicitation Schedule will be posted to the PSE&G website in advance of each solicitation. Typically, the solicitation window will be open for approximately two weeks.
Who will determine if my bid and application are accepted?
PSE&G will determine if your bid is accepted. However, all bids will be reviewed by an independent solicitation manager to confirm that they are competitive.
Can I apply and bid at any time?
No, there are specific periods to bid that will be posted on the PSE&G website in advance of each solicitation.
Do you accept an unlimited number of applications in the solicitation period?
Yes, however, there is a limited amount of capacity available for each solicitation period, which is divided between the different program segments.
When will I know if my bid was accepted?
You will be notified by PSE&G after we have completed our initial review of your application and the independent solicitation manager has provided their guidance regarding the competiveness of your SREC floor bid price.
If a bidder is successful, what floor price do they obtain—the price they bid or the price at which the auction clears?
The applicant will receive the higher of the floor price they bid or the market price as defined in the loan agreement. This is not a uniform price auction.
Will winning bids/loans be assignable?
No, however PSE&G will consider requests to change the name of an applicant that is a special purpose company. PSE&G reserves the right to reject the request. If the request is accepted and an additional credit or legal review is required, there will be a $3/kW fee to cover the additional administrative cost of accommodating such change.
Will there be any conditions on type of equipment or labor (e.g. prevailing wage) used in the underlying project?
No.
Who should I contact if there is a possibility that my commitment letter from PSE&G may expire prior to closing the loan?
You can request an extension by emailing PSE&G at lisa.robinson@pseg.com. PSE&G will have final authority on whether any particular extension will be granted.
What happens if the system stops operating at any given time?
You should make immediate arrangements to have your solar energy system repaired and inform PSE&G of any issue that may materially impact the production of the system. You may need to provide cash payment per the conditions in your loan agreement.
Will closing funds always go directly to the borrower?
Prior to paying the borrower, PSE&G requires an unconditional lien waiver release from the contractor showing that they have been paid in full. An alternative option is for PSE&G to pay the contractor directly. The contractor and borrower will provide a signed Assignment of Funds letter to PSE&G.
Does PSE&G place a lien on my property?
PSE&G will maintain a first-priority lien position on the solar equipment only and will file the lien against your solar system once the loan closes.
How is the final loan amount calculated?
The final loan amount is calculated based on the final size and technical details of your solar system. This technical information is verified by the field inspector in advance of the loan closing. The estimated value of the SRECs produced over the ten year loan term will dictate the final loan amount.
Do I need legal representation for the closing?
Legal representation is not required, but may be in your best interest. PSE&G recommends that you have legal representation.
What happens after the loan closes?
PSE&G will set up your SREC account with PJM-GATS and administer the account. You will receive quarterly loan statements from PSE&G beginning four months after the date of your loan closing.
Commercial FAQ
If you are unable to find the answers you need here, please be sure to view the General FAQ.
What are the various non-residential program segments?
The non-residential segment is broken down as follows:
- small non-residential: < 150kW system size
- large non-residential: >150 < 2MW system size
Is there a limit on the amount of capacity any one entity can borrow? Do SLI & SLII capacity allocations have any bearing on a borrower?
There are no program capacity limitations for any one borrower. However, PSE&G will evaluate credit worthiness, in part, by our aggregate exposure to any one borrower.
What are the fees associated with the non-residential program segment?
Fees include:
- Application Fee—$20/kW (maximum of $7,500 per application); nonrefundable upon receipt of conditional bid award
- Administration Fee—$85/kW deducted from the loan proceeds at closing
- SREC Processing Fee—there will be a fee for the processing and management of the SRECs generated by the system. The SREC Processing Fee will initially be set at $10.18/SREC and then will be reset on an annual basis as described in the loan agreement. The SREC Processing Fee will be billed annually at the time of the borrower’s annual true-up.
- Possible Missed Milestone Fees (see below)
What are the milestones and missed milestone fees for non-residential projects?
Unless waived by PSE&G, non-residential projects must meet certain milestones during the project development lifecycle. These milestones are shown here.
| Milestone | Due Date (Days) | Grace Period (Days) | Missed Milestone Fee ($/kW) | Remedy Period (Days) |
|---|---|---|---|---|
| Commitment Letter Signed by Borrower | 5 | 10 | 25 | 15 |
| File Permits | 60 | 75 | 25 | 90 |
| Commence Construction | 90 | 105 | 25 | 120 |
All due dates are calendar days relative to the date of the commitment letter signed by PSE&G. For example, the Commitment Letter Grace Period ends ten calendar days after PSE&G issues the Commitment Letter. If an applicant misses a due date and fails to cure within the applicable Grace Period, and has not been granted an extension by PSE&G, the applicant will be charged the appropriate Missed Milestone Fee, which will be deducted from the proceeds of the loan at closing. Applicants can incur multiple Missed Milestone Fees for a single project.
If, by the end of the Remedy Period, the applicant has not complied with the Milestone, the loan commitment may be revoked, at PSE&G’s sole discretion, and the associated capacity will become available for a subsequent competitive solicitation.
Can any commercial entity apply for the PSE&G Solar Loan Program?
Commercial applicants must be registered to do business in NJ.
Will the commercial borrower need to undergo a credit review?
Yes. The borrower will undergo a full commercial credit review.
Residential-Aggregated FAQ
If you are unable to find the answers you need here, please be sure to view the General FAQ.
Is the Residential-Aggregated (Res-Agg) program segment similar to the Residential program segment?
No. The Residential program segment provides financing directly to the homeowner purchasing solar. The Res-Agg program segment provides financing to 3rd-party residential solar financing companies. Each applicant that owns the solar equipment and extends a lease or power purchase agreement to a residential host must apply under the residential-aggregated program segment. 3rd-party residential solar financing companies, a.k.a residential-aggregators are treated as non-residential applicants within the Solar Loan Program.
Will the applicant provide one SREC floor bid price for the entire pool of host residential projects?
The residential aggregator is permitted to submit one SREC floor price bid or vary the bids for each host project. In the event that host residential projects have different SREC floor bid prices, a weighted average SREC floor bid price will be calculated, but only with respect to the accepted bids. The weighted average SREC floor price of accepted applications will be rounded to the nearest $5.00 increment.
Will the aggregator be able to substitute host projects within the pool?
No. Once individual residential project applications have been accepted and the res-aggregator has been assigned capacity, substitute projects will not be accepted.
Many of my host residential projects are already under construction. May I participate in the Solar Loan Program?
In the residential-aggregated segment, projects under construction but not in commercial operation are eligible to apply for the Solar Loan Program.
How does the program define “commercial operation?"
“Commercial Operation” means that the system is operating and has received its final inspection and Permission to Operate (“PTO”) from PSE&G.
What are the fees associated with the aggregator program segment?
Fees include:
- Application Fee—$20/kW (maximum of $7,500 per application); non-refundable 2 upon receipt of conditional bid award
- Administration Fee—$85/kW deducted from the loan proceeds at closing
- SREC Processing Fee—there will be a fee for the processing and management of the SRECs generated by the system. The SREC Processing Fee is reset on an annual basis as described in the loan agreement. The SREC Processing Fee will be billed annually at the time of the borrower’s annual true-up.
- Possible Missed Milestone Fees (see below)
How is a Res-Agg application registered with NJ Clean Energy?
Each host project must have a separate submission with the state and a copy of the SREC Registration Program Acceptance Letter must be sent to PSE&G. Application Process Note: All applicants of Residential–Aggregated projects are required to speak to a PSE&G Solar Business Specialist prior to submitting an application. Please contact Thomas.Pooley@pseg.com.
Will the applicant fill out one application or numerous applications for each host property?
The applicant will fill out one application which will have separate sections for each host property. The aggregator must submit a minimum of five host projects with each application. All required host information must be submitted with each Third-Party Aggregated Residential Solar Loan Application. Incomplete applications will be rejected if their deficiencies are not satisfied within five business days of submittal.
What technical information is needed?
PSE&G requires that the applicant provide individual technical information for each separate host property, such as PV Watts Sheets, Electrical One Line Diagrams and Interconnection Applications.
What are the milestones and missed milestone fees for non-residential projects?
Unless waived by PSE&G, all aggregator projects must meet certain milestones during the project development lifecycle. These milestones are shown here.
| Milestone | Due Date (Days) | Grace Period (Days) | Missed Milestone Fee ($/kW) | Remedy Period (Days) |
|---|---|---|---|---|
| Commitment Letter Signed by Borrower | 5 | 10 | 25 | 15 |
| File Permits | 60 | 75 | 25 | 90 |
| Commence Construction | 90 | 105 | 25 | 12 |
All due dates are calendar days relative to the date of the commitment letter signed by PSE&G. For example, the Commitment Letter Grace Period ends ten calendar days after PSE&G issues the Commitment Letter. If an applicant misses a due date and fails to cure within the applicable Grace Period, and has not been granted an extension by PSE&G, the applicant will be charged the appropriate Missed Milestone Fee, which will be deducted from the proceeds of the loan at closing. Applicants can incur multiple Missed Milestone Fees for a single project.
If, by the end of the Remedy Period, the applicant has not complied with the Milestone, the loan commitment may be revoked, at PSE&G’s sole discretion, and the associated capacity will become available for a subsequent competitive solicitation. Aggregators will be required to provide PSE&G proof of permit submittals for each host project. SREC Production Monitoring.
Please contact Greg.Pizarek@pseg.com
Who is responsible for collecting system generation data?
Each aggregator must provide PSE&G with SREC generation data on a monthly basis along with access to the data for validation upon request. Aggregators are responsible for ensuring the accuracy and availability of all data.What must the borrower do to track SREC production?
The borrower must collect production data from each of the host properties and send it to PSE&G both at the time of closing and on a monthly basis thereafter. This must be sent on the required PSE&G form.What is the procedure for doing this?
During the pre-closing procedure, the borrower must provide PSE&G the data from the date of the PTO letter up until the month prior to the closing. The production data is required to be sent to PSE&G by the 15th of each month for the previous month’s data. This must be sent on the required PSE&G form.
Landfill and Brownfield
If you are unable to find the answers you need here, please be sure to view the General FAQ.
What is the maximum system size allowed for a landfill or brownfield project under the PSE&G Solar Loan Program?
The maximum project size allowed is 5 MW (dc). The Solar Loan Program includes a 5MW segment for either landfill or brownfield solar projects. These projects can be either net-metered or grid-connected (PJM).
What are the fees associated with the landfill program segment?
Fees include:
- Application Fee — $20/kW (maximum of $7,500 per application); nonrefundable upon receipt of conditional bid award
- Administration Fee — $85/kW deducted from the loan proceeds at closing
- SREC Processing Fee — there will be a fee for the processing and management of the SRECs generated by the system. The SREC Processing Fee will initially be set at $10.18/SREC and then will be reset on an annual basis as described in the loan agreement. The SREC Processing Fee will be billed annually at the time of the borrower’s annual true-up.
- Possible Missed Milestone Fees (see below)
What are the milestones and missed milestone fees for landfill projects?
Unless waived by PSE&G, landfill projects must meet certain milestones during the project development lifecycle. These milestones are shown below.
| Milestone | Due Date (Days) | Grace Period (Days) | Missed Milestone Fee ($/kW) | Remedy Period (Days) |
|---|---|---|---|---|
| Commitment Letter Signed by Borrower | 5 | 10 | 25 | 15 |
| File Permits | 60 | 75 | 25 | 90 |
| Commence Construction | 90 | 105 | 25 | 120 |
All due dates are calendar days relative to the date of the commitment letter signed by PSE&G. For example, the Commitment Letter Grace Period ends ten calendar days after PSE&G issues the Commitment Letter. If an applicant misses a due date and fails to cure within the applicable Grace Period, and has not been granted an extension by PSE&G, the applicant will be charged the appropriate Missed Milestone Fee, which will be 1 deducted from the proceeds of the loan at closing.
Applicants can incur multiple Missed Milestone Fees for a single project. If, by the end of the Remedy Period, the applicant has not complied with the Milestone, the loan commitment may be revoked, at PSE&G’s sole discretion, and the associated capacity will become available for a subsequent competitive solicitation.
What is the review process for the landfill program segment?
PSE&G requires applicants to demonstrate proof of project viability to participate in the PSE&G Solar Loan Program. PSE&G will have final authority on whether any particular application is complete and eligible for a solar loan.
How will the project’s viability be demonstrated?
PSE&G will conduct an engineering review of the project prior to issuing a loan commitment letter. Landfill and brownfield project applicants will need to respond to the following questionnaire once the Solar Loan Program is launched. Please plan accordingly.
Will PSE&G conduct a site visit as part of the project review process?
Yes, PSE&G or a third-party engineering representative may conduct a site visit.
Who will decide if a solar project is accepted?
PSE&G will determine if your SREC floor bid price is accepted. PSE&G has also contracted with a third-party engineering company who will be reviewing each project and providing PSE&G with guidance regarding acceptance.
What criteria will be evaluated during the engineering review?
We will evaluate the bearing capacity of the landfill and the compatibility of the closure plan with the proposed solar system, among other factors.
Are projects required to be approved by the New Jersey Board of Public Utilities (BPU)?
Projects are required to be certified pursuant to subsection (t) of the Solar Loan Act of 2012 and must submit their application to the BPU, with a copy to PSE&G, no more than 10 calendar days after being conditionally accepted into the PSE&G Solar Loan Program. If available, applicants are encouraged to provide their subsection (t) application to PSE&G during the bidding phase. This may speed the engineering review of the project.
PSE&G will not advance funds to applicants that have not received their full certification pursuant to subsection (t) in advance of construction commencement.
Can any commercial entity apply for the PSE&G Solar Loan Program within the landfill segment?
Landfill applicants must be registered to do business in NJ and must have a credit profile acceptable to PSE&G.
