New Jersey will offer a flat 15-year price for its Transition Renewable Energy Certificates, the program designed to carry the state from its successful legacy incentive program to its next, more moderate scheme.

In an order issued on Monday, the state’s Board of Public Utilities set the fixed price at $152 per TREC, which a project earns after generating 1 megawatt-hour.

Regulators had also weighed a lower price for the first three years of the program, before kicking the price up for the remaining 12 years. The solar industry favored the consistent price option, citing greater price certainty as the state works toward a goal of 100 percent clean energy. 

Amendments to the state’s 2018 Clean Energy Act helped make the flat $152 price possible, by building in more flexibility for the renewables program cost cap that the original legislation established. When regulators originally proposed the transition program in December, it was unclear whether the state would be able to set a consistent price at the TREC program’s outset.

Now that the decision is made, the level price over 15 years will provide upside to New Jersey’s solar market, said Austin Perea, a senior solar analyst at Wood Mackenzie Power & Renewables.

“It relieves developers from having to explain to investors and customers why the project value would have been lower in those initial three ‘kink’ years,” said Perea, referring to the term regulators used to describe the potential three-year period with a lower price.  

Commission staff recognized the “important policy benefits” associated with electing a flat rate in the December order, when regulators introduced the transition program.

“[Stakeholders] indicated that the revenues in the first three years would be too low to adequately support the solar industry,” staff wrote, noting that lower compensation in the first three years of the incentive may “significantly complicate financing for these projects, therefore increasing financing costs.”

The board’s order should provide a clear signal to developers on what their projects are worth looking ahead in the New Jersey market. Though the lower incentives — SREC prices have hovered above $200 in the last year — depresses project value slightly, policymakers expect that to level out to sustainable growth. New Jersey already ranks in the top 10 states for residential installations, and the SREC program has spurred more than 900 megawatts of installations, according to WoodMac.

Projects are slated to move to TRECs once New Jersey hits 5.1 percent of electricity from solar, which it’s expected to reach this summer.