Solar Bill Too Costly, Complicated for Former Backers

One-time supporters are backing away from a community solar-project bill they say adds unneeded subsidies and is too complex for small solar contractors

Does the solar industry need more subsidies to thrive and grow in New Jersey?

It appears lawmakers and policymakers are not on the same page on this question, at least given their positions on a bill making its way through the legislature aimed at promoting community solar projects.

The bill only needs approval from the state Assembly to be sent to the governor, but it now lacks backing from the very people who once championed it, not to mention the New Jersey Ratepayer Advocate, Board of Public Utilities (BPU) and many environmental groups.

A Solar Community

Critics argue the bill strays far from its original intent to allow community-wide solar projects, a strategy that would help the state achieve aggressive goals to dramatically increase reliance on solar power. They also say the legislation sets up an overly complex mechanism, which would make it virtually impossible for small solar firms to participate.

Perhaps more importantly, the legislation would give discounts to people living in all-electric homes, a subsidy opponents argue is unnecessary given other financial aid programs designed to encourage solar. The debate over subsidies for renewable energy technologies has emerged as one of the key issues confronting the Christie administration as it reassesses the state’s aggressive clean-energy goals.

Under the bill, residential customers would be allowed to join together as a cooperative and sign up with a solar developer to sell the power from their solar panels into the PJM grid, the regional power system serving most of the eastern seaboard. It then sets up a complicated system for paying customers for the power their systems generate, one which involves the utility, PJM and members of the cooperative.

“It is an arrangement so complicated that those of us who do this for a living can’t even figure it out,’’ said Stefanie Brand, director of the Division of Rate Counsel. “It is absolutely a recipe for abuse.’’

Paying More Than Their Share

Brand also expressed concerns that all other ratepayers might end up paying for reliability improvements that may be necessary to build the community-wide solar projects, a cost they could ill afford to pay.

“The state is well on its way to developing a robust solar industry and the programs established by this bill do not add to that progress,’’ Brand said. “They create overly complicated and unnecessary subsidies and programs.’’

Her criticism was echoed by Joseph Sullivan, BPU’s ombudsman, who noted the state already has significant subsidies to promote solar. Among other things, the state’s clean energy program is financed by a surcharge on most customers’ gas and electric bills, which last year raised more than $700 million, although only a portion of that was dedicated to clean-energy projects. “The system is working,’’ Sullivan said.

Developing Distributed Generation

Assemblyman Upendra Chivukula (D-Middlesex), the sponsor of the bill, conceded the measure is not a simple bill, but defended it as a way to help develop distributed generation, or power produced from local power stations that ease congestion on the power grid, a major cost to New Jersey electric customers.

Michael Pisauro, who represents the New Jersey Environmental Lobby, also supported the bill, saying the promotion of solar ought to be the paramount priority of New Jersey. “This will help create a market to drive down solar prices,’’ he said.

Others disagreed. Jeff Tittel, executive director of the New Jersey Sierra Club , said the bill creates a system requiring PJM involvement, a setup that will invariably favor the state’s utilities over independent solar firms because they are more accustomed to dealing with the operator of the power grid.

Dolores Phillips, executive director of the Mid-Atlantic Solar Energy Industries Association, a trade group representing solar firms, said the organization believes the bill is “the wrong initiative’’ at this time, particularly given the debate over the value of solar occurring within the Christie administration. “It’s clear that solar is out of favor,’’ said Phillips, saying the new proposed clean energy budget for next year could decimate the ability of homeowners and small businesses to install solar panels.