NEW JERSEY RESOURCES CORP

CEV owns and operates clean energy projects, including commercial and residential solar installations located in six states, including New Jersey, Rhode Island, New York, Connecticut, Michigan and Indiana.

As of September 30, 2024, CEV has approximately 477 MW of solar capacity in service, including a combination of commercial and residential net-metered and commercial grid-connected commercial solar systems.

As part of its solar investment portfolio, CEV operates a residential and small commercial solar program, The Sunlight Advantage®, which provides qualifying homeowners and small business owners with the opportunity to have a solar system installed at their home or place of business with no installation or maintenance expenses. CEV owns, operates and maintains the system over the life of the lease in exchange for monthly lease payments. The program is operated by CEV using qualified contracting partners in addition to strategic suppliers for material standardization and sourcing.

On November 25, 2024, CEV completed the sale of its 91 MW residential solar asset portfolio. See Note 17. Subsequent Events for more information regarding the transaction.

CEV’s commercial solar projects are sourced through various channels and include both net-metered and grid-connected systems. Net-metered projects involve the sale of energy to a host and grid-connected systems into the wholesale energy markets. Project construction is competitively sourced through third parties. New Jersey has the tenth largest solar market in the U.S., according to the Solar Energy Industries Association®, with a large number of firms competing in all facets of the market including development, financing and construction.

Our solar systems located in New Jersey are registered and certified with the BPU’s Office of Clean Energy and qualified to produce RECs. One REC is created for every MWh of electricity produced by a solar generator. CEV sells SRECs generated to a variety of counterparties, including electric load-serving entities that serve electric customers in New Jersey and are required to comply with the solar carve-out of the Renewable Portfolio Standard, a regulation that requires the increased production of energy from renewable energy sources. Solar projects are also currently eligible for federal ITCs in the year that they are placed into service. In December 2019, the BPU established the TREC as the interim program successor to the SREC program. TRECs provide a fixed compensation base multiplied by an assigned project factor in order to determine their value. The project factor is determined by the type and location of the project, as defined. All TRECs generated are required to be purchased monthly by a TREC program administrator as appointed by the BPU.

In July 2021, the BPU approved the first portion of the solar successor program for net-metered projects under 5 MWs. The new program opened to new applications in August 2021. Incentives are structured as a 15-year fixed incentive ranging from $85 to $130/MWh depending on market segment, project siting and size. The second phase of the successor program, the CSI program, was established in December 2022. The CSI program was designed to encourage grid scale solar generation with a goal of incentivizing development of at least 300 MW of solar annually until 2026. Solicitations take place annually, and all projects that meet pre-qualification requirements will compete on price only. Dates for the next solicitation have yet to be announced.

CEV is subject to various risks including those associated with adverse federal and state legislation and regulatory policies, electric grid connection, supply chain and/or construction delays that can impact the timing or eligibility of tax incentives, technological changes and the future market of RECs. See Item 1A. Risk Factors for additional information regarding these risks.