Senate Ratifies Bill to Stabilize Solar Sector

If enacted, law would send signal that New Jersey is not going to scale back on solar commitments

An eagerly anticipated bill that aims to stabilize New Jersey’s solar sector cleared the Senate yesterday, increasing prospects of it winning final legislative approval before lawmakers break for their summer recess next month.

The legislation (S-1925) now heads to the Assembly Telecommunications and Utilities Committee, where lobbyists for the industry will press for more changes in a measure viewed as the best hope for fixing a sector that has become a victim of its own success. It passed 24-7 without debate.

Despite deep divisions about many aspects of the bill among the widely diverse solar industry, there is a general consensus that a compromise must be signed by Gov. Chris Christie shortly after the budget is signed. If nothing else, it would send a signal to investors and industry executives that New Jersey is not going to scale back its efforts to promote solar.

“I think it’s a good first step,” said Tony Pizzutillo, a lobbyist for the New Jersey Renewable Energy Coalition. “It demonstrates a willingness by the governor’s office and Legislature to correct the market.”

The market has gone haywire since last summer, when the price owners of solar systems earn for the electricity produced by the panels began falling from the mid-$600 range to as low as $85 earlier this spring. The price has rebounded a bit since the bill was introduced and voted out of the Senate Environment and Energy Committee earlier this month, hitting $170 last week.

Michael Torpey, co-executive director of the NJ Business Council for Clean Energy and a lobbyist representing developers of grid-supply projects, is optimistic a deal can get done.

“There’s time; there’s the focus. Typically, big stuff gets done with hard deadlines,” Torpey said shortly before the vote in the Senate. “If we slip past that, a lot of bad things can happen.”

The biggest fear is another collapse in the price of the solar certificates. Most blame last summer’s crash on an oversupply of certificates caused by a rush by solar developers to cash in on lucrative state and federal incentives, which made investments in the technology highly lucrative.

Too lucrative, in fact, say some industry observers. New Jersey, second behind only California in the number of solar installations, installed more solar systems last year than in the previous decade and the pace has not yet slowed this year.

The bill aims to address the overriding problem with the sector by accelerating over the next three to four years the amount of electricity power suppliers must buy from solar systems. It also aims to soak up some of the oversupply of certificates by allowing up to 80 megawatts of large solar projects, which supply electricity directly to the grid, over each of the next three years.

While solar has been credited with creating thousands of new jobs in New Jersey as well as hundreds of small businesses, there has been increasing criticism of the high cost of the state’s efforts, which ultimately fall on the backs of ratepayers who pay for the solar certificates.

Among those opposing the measure is Hal Bozarth, director of the Chemistry Industry Council of New Jersey. “It’s too expensive,” Bozarth said. “We should do a market analysis on what these guys profit margins are and how many of them will survive.”

While the sector is strongly pushing for the bill, many issues remain highly contested, including a provision giving priority to projects on closed dumps and brownfields—contaminated industrial properties no longer in use.

The bill also seeks to limit mega-size grid supply projects by requiring state approval for projects bigger than 10 megawatts. One of the changes already being sought would lift that cap to 20 megawatts, a proposal some fear would soak up too much of the supply of solar certificates.

Not only is there wide debate over how big solar projects should be allowed, but there also is considerable rancor over where they should be located. Some developers want to be able to use agricultural land for solar projects, a use discouraged by the state Energy Master Plan.

“Now comes what I call the Sun Bowl,” said Jeff Tittel, director of the New Jersey Sierra Club. “The real battle will be fought in the Assembly.”