FAQs

Answers to your Frequently Asked Questions ("FAQs") are posted on this page. To ask a question, please use our automated form. FAQs will be posted every Wednesday. FAQs will be posted daily during the week prior to the deadline for submitting Pricing Proposals and Qualification Materials.”

Purchase and Sale Agreement

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FAQ-164:
Can Appendix C be used to assign SREC ownership from the Property Owner to the Developer who will not own the system, or to assign SREC ownership to a bank or lending institution?

Many commercial arrangements can be accommodated within the Program, including the ownership of the premises, the ownership of the Project, and the benefit of the electricity generated by the Project all belonging to different parties. However, the assignment of SRECs to a party other than the Owner of the Project is not contemplated by the standard contract (the SREC Purchase and Sale Agreement or SREC PSA), which must be used for all awards under the Program. Under the SREC PSA, the party that owns the Project and the party that receives the SRECs and sells the SRECs to the EDC is one and the same. Thus, Appendix C cannot be completed to accomplish the commercial arrangements that you are considering and generally these arrangements are neither contemplated nor permissible under the SREC PSA or the Program. We note, however, that once the Owner of a successful Project has signed the SREC PSA with the EDC (assuming the project is successful), the Owner may assign the benefits of the SRECs (i.e., the revenue from the SRECs received under the SREC PSA) to another party through its own arrangements as long as such an assignment complies with Section I of the SREC PSA.

02/08/2011 in Purchase and Sale Agreement
FAQ-162:
Please clarify the requirement for the Owner to install an EDC Kilowatt-hour meter, and indicate the party responsible for the installation of such meter and the cost associated for such installation.

Under the SREC Purchase and Sale Agreement ("SREC PSA"), the owner of the project ("Owner") agrees that the EDC will install, own, and maintain an EDC kilowatt-hour meter (the "SREC Meter"). The SREC meter is the only meter used for registering SRECs under the SREC PSA. The EDC is responsible for monthly meter readings from the SREC Meter. The EDC will also be responsible for uploading the monthly meter readings from the SREC meter to the PJM-EIS GATS system.

For JCP&L, in practice, the customer fills out a request for installation of the meter and submits this form to JCP&L (the form will be posted to the Documents page of our Web site and is attached for your convenience). JCP&L invoices the customer for the cost based on the required meter. JCP&L installs the meter once the invoice is paid. The process for the other EDCs is similar. Meter costs will depend on the capacity and service at the site and are different across the three EDCs. The information we have is as follows:

-- for ACE, SREC metering costs are approximately $850 for the self contained sites and $2300.00 for transformer rated sites.

-- for JCP&L, typical costs are provided in the attached form.

-- RECO is in the process of developing updated information.

Please note that the Companies retain the right to calculate and bill metering costs for non-typical installations.

The SREC meter is the meter that measures the production of the Project and that is used for registering SRECs. The customer will also have a meter that measures consumption. This meter will measure the customer’s net consumption (net of the production from the Project). Proponents in the Program are required to agree to net metering arrangements with the EDC.

02/08/2011 in Purchase and Sale Agreement
FAQ-159:
Is it correct that under Section J of the Purchase & Sale Agreement there is no remedy for default other than contract termination? Thus, if the EDC decides to default and terminate the contract, there is no recourse for the Seller? I'm not clear how it will facilitate financing since it appears the EDC can effectively stop performing under the contract at any time. Am I reading this correctly?

Your reading of this provision is incorrect.The EDC cannot default and terminate the contract. Under the SREC PSA, only the non-defaulting party is allowed to terminate the contract. If the EDC were to fail to pay, the seller could suspend performance. Should the EDC default, the seller's remedy is to enforce the EDC's obligation to make the payments agreed to under the contract. Please note that the EDC is a regulated entity and the contract will have been approved by the New Jersey Board of Public Utilities.

02/08/2011 in Purchase and Sale Agreement
FAQ-153:
Regarding prior round results, please provide the average prices of the awarded projects by duration (i.e., for 10-year vs. 15-year contracts)?

The SREC-Based Financing Program requires that, after each solicitation, the average price and the lowest price among Projects that receive awards be released. No information is provided specifically by duration i.e., for a 10-year or for a 15-year contract. You can find the results information through the Announcements page of our Web site; the results were released as part of the announcement that the Board had approved the results of a round of bids. Alternatively, you may also consult the Board Order approving the results of a particular round of bids, which provide the results for that round. The Board Orders can be found on the Documents page of the Web site under the heading "Results and Board Approvals".

02/04/2011 in Purchase and Sale Agreement
FAQ-147:
Section C of Appendix A of the SREC PSA calls for the Seller to pay the taxes, fees and expenses arising form the sale of SRECs. What are the average or typical costs, fees and expenses that Sellers have been asked to pay?

Please consult your tax advisor regarding any taxes that may apply to payments for SRECs sold as well as any tax credits or allowable expenses that may be available. We would assume that the revenue from selling SRECs must be reported to taxing authorities.

The Seller under the SREC PSA is required to become an account holder in PJM-EIS GATS. Information regarding this process is included in the ""PJM-EIS GATS Process Document"" on the Documents page of our web site. Additional information is available directly from PJM-EIS GATS administrator at 610-666-2245. Any other fees and expenses arising from the sale of SRECs, such as an inspection of the completed Project to ensure that the SRECs generated by the Project are eligible for use in complying with the RPS and the meter owned by the EDC in whose territory the Project resides, are to the Seller's expense. Please see FAQ-76 for additional information regarding meter costs."

01/27/2011 in Purchase and Sale Agreement
FAQ-130:
Section F of the SREC PSA provides for the EDC to make additional requests for information if it chooses to do so. If additional requests are made by the EDC, and those requests prevent us from living up to our obligations under the contract, will we forfeit the deposit?

If the Owner of the Project fails to satisfy its obligations under the SREC PSA, the EDC may retain the Deposit. Further, if the Project is not completed within one year of execution of the SREC PSA, the EDC may terminate the SREC PSA upon notice to the Owner of the Project. The EDC will take into consideration any demand for additional information, instruments, documents or actions made of the Owner of the Project and that the EDC believed were necessary to give full effect to this Agreement in deciding whether to exercise its rights to retain the deposit or to terminate the SREC PSA.

01/13/2011 in Purchase and Sale Agreement
FAQ-126:
I received an award and have a question about the execution of the SREC PSA. Who should I speak with?

For questions and issues regarding the execution of the SREC PSAs, please contact directly the EDC concerned. Contact information is provided in the initial notice of awards, which you should have received via email.

01/13/2011 in Purchase and Sale Agreement
FAQ-119:
Am I committed to building the Project if I submit a Pricing Proposal?

As part of the Qualification Materials, the Owner of the Project must certify that it accepts all the terms of the SREC Purchase and Sale Agreement (“SREC PSA”) and that the Owner will sign the SREC PSA within five (5) business days of being given a Final Notice of Award by the EDC. The EDC provides this Final Notice to the Owner no earlier than forty-five (45) days after the date of service of the Board Order. There is no provision to release the Owner from its promise to execute the SREC PSA, regardless of the reason.

If an Owner receives an award for a project, a cash deposit is due fourteen (14) days after the New Jersey Board of Public Utilities’ approval of the awards for the solicitation. The Owner is subject to a forfeit of any deposit it has posted if the Project is not completed.

All relevant documents can be found on the Documents page of the Web site.

10/11/2010 in Purchase and Sale Agreement
FAQ-112:
Does the SREC-Based Financing Program allow the EDC to enter into long term agreements with a locked in price for SRECs from a Project?

Through the SREC-Based Financing Program ("Program"), each Electric Distribution Company ("EDC"), namely ACE, JCP&L, and RECO, is contracting to purchase solar Renewable Energy Certificates ("SRECs") from solar projects. The Owner of a project that receives an award under the Program enters into a standard contract, the SREC Purchase and Sale Agreement (“SREC PSA”). Under the SREC PSA, the Owner receives the price it bid for each SREC generated by the project and transferred to the EDC over the term of the contract. The term of the SREC PSA is specified in the bid and can be from 10 to 15 years. This stable revenue stream provided by the SREC PSA can facilitate independent financing through loans or other financing mechanisms for renewable projects development and installation. Each EDC only contracts for the purchase of SRECs for the term of the SREC Purchase and Sale Agreement, and not for energy or capacity associated with the Project.

03/01/2010 in Purchase and Sale Agreement
FAQ-100:
Does the Program enable me to sell my SRECs on the open market, but maintain a floor price guaranteed by my electric distribution company (“EDC”) or does the Program require that I agree to be locked into a contract price with the EDC?

Through the SREC-Based Financing Program ("Program"), the EDC contracts to purchase solar Renewable Energy Certificates ("SRECs") from solar projects. The owner of each project approved by the Board would sign a standard contract with the EDC. The standard contract is called the SREC Purchase and Sale Agreement (“SREC PSA”) and can be found on the Documents page of our Web site. Under the SREC PSA, the owner of the Project sells 100% the SRECs generated by the project to the EDC. Please see Paragraph 8A under the Background section of the SREC PSA.

02/26/2010 in Purchase and Sale Agreement

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