Growth in Solar Still Strong in New Jersey

Utility-led program gains participating contractors, locks in 21 megawatts of solar power

There’s been a lot of debate over the future of New Jersey’s growing solar market in recent weeks, but the latest results of a utility-led solar installation program may put to rest concerns that its best days are behind it.

The program, involving utility-sponsored solar installations financed by long-term contracts with customers, locked in deals to develop 21 megawatts of solar capacity. More contractors bid to participate in the program than ever before in a solicitation held last month.

That is a far cry from the early days of the program when it was repeatedly undersubscribed, falling short of expectations set by the Board of Public Utilities (BPU), which oversees the effort. Perhaps, more importantly, prices in the program continued to drop, long an agency priority.

Coming on the heels of a record month overall for solar installations — more than 40 megawatts installed in New Jersey in June — the commissioners said the results deflate concerns raised by some over prospects for the solar sector in the state.

Plunging Prices

In recent months, the price of solar renewable energy certificates (SRECs), which owners of solar installations receive for the electricity their systems generate, dropped by nearly half before rebounding, an event that caused some clean energy advocates to worry the spot market for the certificates could crash. Others, particularly environmentalists, fear a revised Energy Master Plan (EMP) that cautioned about the high prices of solar power might signal a scaling back of the state’s aggressive solar targets.

The success of the utility-run program and the record month in June punctures holes in both those arguments, according to BPU President Lee Solomon.

“The floor hasn’t crashed,’’ said Solomon, noting the solicitation was held in early June, just days after the administration unveiled the revised master plan. “That argument is garbage. It’s clear we’re on the right track.

Other commissioners agreed. “To exceed what we were looking for is absolutely exciting,” added Commissioner Joseph Fiordaliso. “I think we’re going in the right direction.”

A Market Crash?

Whether those views will be reflected in the Democratic-controlled legislature is another question. Sen. Bob Smith (D-Middlesex), the chairman of the Senate Environment and Energy Committee, recently pushed a bill out of his committee that would accelerate how much electricity is produced in New Jersey, a move he argued would avert a crash in the market for solar certificates. The bill (S-2371) was opposed by the BPU.

The debate around the bill and other measures being pushed by the board reflects the stark differences emerging among New Jersey’s solar sector and its advocates. In the past, most argued the way to lower the high cost of solar was to encourage long-term contracts, in which SRECs tend to be much less expensive than those sold on the spot market. The utility-run program locked in prices for the certificates between $265 and $422, far below the more than $600 prices the certificates are selling on the spot market.

The administration’s new EMP recommends promoting bigger solar projects than in the past and siting them on brownfields and landfills as a way of bringing down the costs by the economies of scale. Others say the costs of cleaning up brownfields and landfills may make the economics of the solar projects unworkable. Instead, they suggest putting them on vacant farmland, a proposal the administration does not favor.

“There’s a growing tension on the issue of where do we want to locate solar systems,” acknowledged Terry Sobolewski, business development manager for SunPower, one of the biggest solar developers in New Jersey. “It involves a debate over farmland versus brownfields, rooftop versus ground-mounted systems, and big versus small.”