Christie Signs Bill to Help Stabilize Solar Sector

Long-awaited bipartisan bill is subject of six-month delay -- and debate

Credit: Governor's Office/Tim Larsen
Gov. Chris Christie signs bill to boost solar sector.
It took a lot longer than expected, but a much-debated bill to maintain and potentially enhance New Jersey’s efforts to develop solar energy in the state was signed into law yesterday by Gov. Chris Christie.

The bill (S-1925), a priority of the Christie administration with bipartisan support in the Legislature for more than six months, aims to ensure investments in solar do not dry up in New Jersey, which is second only to California in the number of solar arrays –with 16,000 systems installed here.

To many, the state’s solar issue comes down to it being a victim of its own success. With lucrative federal tax cash grants and enticing state subsidies, so many solar systems were installed in New Jersey that it led to a collapse in prices owners of the systems earn for the electricity they produce, known as solar credits.

Those prices have dropped from the mid-$600 range last summer to less than $150 in recent days, well below the level needed to convince investors to build new solar systems that would be profitable. The bill aims to deal with an oversupply in the solar credits by ramping up the state’s solar requirements over the next few years, driving up demand for the credits and helping to stabilize the market.

Whether the bill achieves that goal is a matter of some debate, even among those in the solar sector.

“Investors new and old in New Jersey solar still have to keep in mind the risk of overbuilding in the future still exists,” said Michael Flett, president of the Flett Exchange, which buys and sells solar credits, also known as solar renewable energy certificates. In the end, though, Flett thinks the bill is good.

Despite the low prices for solar credits, New Jersey is still seeing a lot of investment in solar. Last month, more than 29 megawatts were installed. In the first three months of this year, 174 megawatts of solar was installed, more than any other state and one-third of the total nationwide.

Others were more hopeful.

“This is a fresh start for the industry,” said Fred DeSanti, a lobbyist who had argued the bill needed some type of throttle mechanism if the sector continued to overbuild the number of solar systems. “If they act rationally, everything will be fine,” DeSanti said.

Asked about the concerns that the bill might not do enough to maintain robust investment in the sector, Christie said he thought the legislation he just signed is the best approach to take to deal with the problems in the sector.

“I think it will make a demonstrable difference,” the governor said, noting it is completely consistent with the goals of a new Energy Master Plan his administration adopted.

“The bill I am signing today furthers these goals and will help us remain a national leader in the solar energy industry as we continue to promote innovative approaches to solar development, like developing landfills and other unusable lands and transforming them into usable sources of clean energy, all while holding down costs for families and businesses,” Christie said.

The governor claimed the bill would reduce energy bills by $1 billion over 15 years by scaling back payments made by power suppliers if they cannot buy solar credits to comply with state solar mandates, a non-issue in recent months with the fall in prices for the credits.

In the short-term, however, some industry trade groups argue that the rapid acceleration in solar requirements — a doubling of what would be required to be installed in New Jersey over the next few years — could cost consumers at least $300 million and as much as $400 million.

The Solar Energy Industries Association, a national trade organization, praised the bill, calling its bipartisan support is a useful model for policymakers across the country.

“Solar is an industry that is creating jobs and driving investment in New Jersey and in states across the country,” said Rhone Resch, president and CEO of the association. “All politicians should take notice.”

That plan seeks to limit huge solar farms on agricultural land and steer utility-grid-sized solar projects to landfills and brownfields, contaminated industrial properties that have lain fallow. The bill aims to achieve those goals by giving incentives to the latter and requiring state review of large solar projects, except for 80 megawatts of projects already far along in the review process for each of the next four years.

Despite those provisions, some argue the bill does not go far enough to prevent overbuilding.

“We still have work to do,” said Lyle Rawlings, president of Advanced Solar Products, and a longtime solar advocate in New Jersey.

Jeff Tittel of the New Jersey Sierra Club agreed. “This is a bill that needed to be done,” he said. “No one really likes it, but it keeps the solar sector viable for two years. After that, it needs a long-term fix.”

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