Survey Confirms that New Jersey is a Solar Power

Tom Johnson | June 10, 2011 | Energy & Environment
Two Garden State utilities finish in the top 10 nationwide when it comes to adding solar capacity

In another indication of the fast-paced growth of New Jersey’s solar market, two of the state’s four electric utilities ranked in the top 10 nationally in adding solar power in the past year, according to a new survey.

Public Service Electric & Gas (PSE&G) and Jersey Central Power & Light (JCP&L) ranked third and ninth, respectively, in the amount of solar capacity added in 2010 according to a survey by the Solar Electric Power Association (SEPA). Atlantic City Electric, ranked 12th in new solar capacity, but broke into the top 10 at ninth in solar watts per customer, which is a measure of the utility’s new solar capacity divided by number of customers. PSE&G finished second in that category.

The annual survey, the fourth one done by the association, reflects the growing trend of utilities to incorporate solar power into their energy portfolios. All told, the nation’s utilities integrated 561 megawatts of solar electricity into their deliveries, a 100 percent increase over the previous year, the association said.

Christie’s Changes

The findings come at a time when Gov. Chris Christie on Tuesday recommended sweeping changes in New Jersey’s solar program, which is second to only California’s in the number of systems that have been installed. The Governor’s overhauled Energy Master Plan recommends steering most of the state’s efforts in developing solar away from residential installations to commercial and industrial applications, where, it argues, the state will get a bigger bang for its buck.

It is unclear how the changes will affect the electric utilities in the state, all of whom have programs geared to encouraging residential solar installations. But Al Matos, a vice president for PSE&G, said the utility will tailor its program to conform to the new recommendations.

“More and more utilities are integrating solar power into their energy portfolios, including many in states like New Jersey, Idaho and North Carolina,” said Julia Hamm, president and chief executive officer of SEPA. “Utilities nationwide are finding new ways to take advantage of the benefits of solar power for themselves and their customers.”

The latest survey revealed a couple of dramatic changes, according to the association. More and more growth in solar capacity is occurring outside of California and the southwest, and there is a growing trend toward more utility-owned projects and third-party power purchase agreements, a switch from customer-owned, net-metered systems.

Part of the growth is being fueled by Renewable Portfolio Standards adopted by states like New Jersey, according to the organization. The RPS requires utilities to purchase a set amount of the electricity they deliver to customers from renewable energy sources.

But that is not the case for all of the top-ranked utilities in the group’s survey, according to Becky Campbell, research manager. For some utilities, growth also could be due to increased interest in renewable energy from customers, rapidly falling costs of solar, or a desire to diversify energy portfolios, she said.

Campbell indicated that Florida is a good example of a state without any solar requirements, but with a utility (Florida Power & Light) that is rapidly expanding its solar portfolio.

Scaling Back

In New Jersey, the Republican Governor this week unveiled a new master plan that scales back the state’s RPS from 30 percent to 22.5 percent. Nevertheless, the state has a separate carve-out for solar that is legislatively mandated and very ambitious. It requires the state to have enough solar to power about 600,000 households by 2026.

PSE&G, the state’s largest electric and gas utility, has been, by far, the state’s most aggressive in promoting solar, spending roughly $465 million on its solar projects in recent years.

According to the survey, 74 megawatts of new solar capacity were installed in PSE&G’s franchise territory in 2010, 30 percent of which is utility owned with the rest being customer rooftop projects, according to the survey. That number includes solar systems installed by homeowners and businesses through the state’s Clean Energy Program.

The utility expects to propose a new solar program to state officials that would reflect the administration’s recommendations to build larger and more economic solar systems on landfills, brownfields and in consultation with local governments, PSE&G’s Matos said.

“We see it as a very underserved market,” Matos said. “It fits well with our strategy. We’re trying to build very efficient systems that have a low impact on ratepayers.”

To that end, the utility is working on a proposal to build up to 120 megawatts of new solar capacity over the next five years, he said.

Of the 561 megawatts of solar added last year, 140 megawatts are actually owned by the utilities. “The ownership trend is a truly significant finding,” Hamm said, representing a 300 percent increase over what was reported in 2009.