New Jersey’s Faltering Green Economy Mirrors National Trend

Report traces dramatic falloff in green jobs nationwide to lack of tax credits for wind projects

Is the green economy slowing down?

That appears to be the case, as job growth in the clean energy sector significantly dropped off in the third quarter, according to a report by Environmental Entrepreneurs (E2), a national organization of business leaders who advocate sound environmental policies.

The report blames Congress’s failure to extend the Production Tax Credit to promote development of wind projects, and the uncertainty created by some campaign proposals to end or dramatically scale back federal support for renewable energy.

The same falling off in the green economy can be seen in New Jersey — especially when it comes to the once red-hot solar sector — although it can be traced to a very different origin.

Nationally, more than 10,800 jobs were announced in the clean energy sector and related industries nationwide in the third quarter of this year. That’s a big decline from the 37,000 announced in the second quarter, and the 46,000 created in the first quarter, according to the study.

“These numbers show that policy matters,’’ said Judith Albert, executive director of Environmental Entrepreneurs. “With clean energy job announcements slowing down, it becomes even more important that Congress and the administration take the right steps to ensure that we don’t lose any momentum in the clean energy sector that’s helping both our economy and our environment.’’

In New Jersey, the solar sector, buttressed by lucrative incentives from both state and federal governments, rapidly expanded the number of systems installed — so much so that it crashed the market for solar renewable energy certificates (SRECs), the price owners of solar arrays earn for the electricity they produce.

With the price of SRECs plunging from a high in the mid-$600 range in the summer of 2011 to approximately $80 in recent weeks, it has led to a dramatic drop-off in the amount of solar installed in New Jersey, falling from more than 40 megawatts a month to about 20 megawatts.

The state hoped to right the market by passing a bipartisan bill this summer that required electricity suppliers to buy more power from solar systems over a shorter period of time.
The legislative fix isn’t working just yet, but more may be known by early next year, according to panelists at a briefing on solar issues facing the state last month at The College of New Jersey.

“We have seen a lot of slowing down in the industry,’’ said Steven Gabel, president of Gabel Associates, an energy and environmental consulting firm based in Highland Park.

Two big issues probably will determine whether the new law helps revive the solar sector, according to Gabel. One is how many of a slew of grid-supply projects pending before the New Jersey Board of Public Utilities will be allowed to go forward. “If they get it right, the industry will right itself,’’ Gabel said.

The other issue is whether an annual auction held by the BPU next February will soak up enough solar credits to bring the market into balance. The law passed this past summer accelerates the requirement that power suppliers buy more of their electricity from solar systems, essentially doubling the solar mandate, a step proponents of the law say will stabilize the sector.

The E2 report comes as Congress is about to return to Washington, D.C., and has the opportunity to extend the production tax credit, which is due to expire December 31.

“It’s hard to expand your business and create new jobs with so much political uncertainty affecting the wind industry,’’ said Jacob Susman, founder and CEO of OwnEnergy, Inc., a Brooklyn, N.Y.-based wind-farm developer.

New Jersey also has high hopes of developing an offshore wind industry. But those ambitions have been throttled by the inability of the Christie administration to come up with a financing mechanism that developers are confident would convince banks to back the projects.

Despite repeated assertions by lawmakers and Christie administration officials that New Jersey is taking a leading role in creating green jobs, the report indicated that so far this is not the case.
The top 10 green-jobs states in the third quarter of 2012 were (in descending order): California, New York, Oregon, Washington, New Mexico, Texas, North Carolina, Minnesota, Illinois. and Nevada.