In Turnaround, All NJ Utilities Agree to Promote Solar Development

Electric companies to extend installation program of solar systems on homes and businesses

Solar installation
In a bit of a surprise, all four electric utilities in New Jersey plan to participate in an extension of a program aimed at promoting the installation of new solar systems on homes and businesses in the state.

In letters delivered to the state Board of Public Utilities on Friday, all four utilities agreed to take part in the extended program, an unexpected development given that less than two weeks ago both Atlantic City Electric and Rockland Electric indicated they would not voluntarily join the effort.

The turnaround occurred amidst criticism from one BPU commissioner that the program should not be voluntary and perhaps by the fact that Public Service Electric & Gas had expressed a willingness to install solar systems in franchise territories outside its own, if others opted out of the program, according to industry observers.

The utility-sponsored programs are popular with many solar companies, who say it helps promote installation of the technology in a sector of the market that has been hard hit by a steep decline in prices owners of the systems earn for the electricity they produce on homes and small businesses.

As approved by the agency at its meeting late last month, the program recommends developing 180 megawatts of new solar capacity in the state over three years through the so-called program, which typically involves long-term contracts and loans.

Most people agree long-term contracts reflect the cheapest way to install solar systems, whose ultimate costs are borne by ratepayers who pay for solar renewable energy certificates purchased by power suppliers.

“This is a calming influence on the waters of the market,” said Fred DeSanti, a spokesman for the New Jersey Solar Energy Coalition, referring to a sector that has seen the price of solar certificates fall from the mid $600 range last summer to less than $100 this spring, before rebounding recently.

Lyle Rawlings, president of Advanced Solar Products, said he believed the utilities realize something has to happen to try and stabilize the market. Still, he argued the set-aside for the utility-sponsored program ought to be increased significantly to soak up an oversupply of solar certificates in the market — a problem many say is caused by too lucrative federal and state incentives which have led to a gold rush of investment in the sector.

PSE&G, the most aggressive of the four utilities pursuing solar development, signaled it would continue to promote the development of new solar installations. Under the new program, the Newark utility said it would build up to 95 megawatts of new capacity to develop solar at homes and small businesses.

The company also proposes to build solar on top of closed garbage dumps and brownfields, a priority under the Christie administration’s new energy master plan. The utility also said it would propose other solar programs outside the extended utility program approved by the board. PSE&G officials declined to comment on the specifics of their proposal, which has yet to be filed with the board.

Other companies were more measured in their filings.

Jersey Central Power & Light said it would develop an additional 52 megawatts of solar capacity over the three years, provided the new program is substantially similar to the company’s original solar program, according to a letter filed by Gregory Eisenstark, an attorney for the utility.

Rockland Electric said it also would participate in the extended program, provided the solar loan program is similar to the one the BPU approved for PSE&G, according to Jane Quin, director of energy services for the utility.

While solar advocates generally support the agency initiative, they contend a more comprehensive solution is needed to fix the sector.

Even BPU President Bob Hanna has acknowledged a legislative solution is needed to provide a durable solution to fix the problems plaguing the sector. The Assembly Telecommunications and Utilities Committee is expected to take up the latest version of a bill (S-1925) to do just that, but the measure has deeply divided the industry.

Atlantic City Electric plans to build an additional 20 megawatts of solar capacity under the new program by the state, according to a spokesman for the utility.