State Agency Slowly Zeroes in on Number of Solar Farms Allowed on Farmland

Tom Johnson | September 16, 2013 | Energy & Environment
With some 20 grid-supply projects proposed, BPU must determine which, if any, get the go-ahead

solar farms on farmland solar arrays
The state is inching closer to deciding how many solar grid-supply projects will be built on New Jersey’s remaining agricultural land.

It is a contentious issue arising out of a bill approved more than a year ago to stabilize the state’s solar sector, with the New Jersey Board of Public Utilities looking to determine which of 20 grid-supply projects proposed on farmlands will move forward. The agency deferred action on the projects last spring.

The controversy revolves around a Christie administration decision — embodied in a new Energy Master Plan — that aims to discourage large solar projects on agricultural land. Instead, it seeks to direct those grid-supply projects to closed garbage dumps and brownfields. Grid-supply projects provide electricity directly to the regional power grid, instead of supplying electricity to businesses and manufacturers to lower their energy costs.

The decision left many developers of grid-supply projects on farmland in a difficult quandary. Many had invested huge amounts of money and time moving their projects forward, which required numerous approvals from local, state, and federal agencies, as well PJM Interconnection, the operator of the nation’s largest electric power grid.

But the bill approved by the Legislature and signed into law by Gov. Chris Christie in the summer of 2012 gave the BPU wide latitude in deciding which of the projects gets built.

So far, few have won approval. Back in April, the agency approved only three projects of more than 50 seeking approval. Another seven were denied because they failed to comply with provisions of the 2012 law, and 27 others were rejected because they had yet to obtain the necessary state, federal, and local approvals.

The agency deferred action on 20 other proposals, which were further along toward completion, but directed its staff to come up with criteria to determine which of those projects, if any, should be approved. A proposal to be considered by the BPU commissioners may come up at its monthly October meeting.

The issue is complicated by the uncertain nature of the state’s solar sector, which once was one of the more robust parts of the state’s economy. So many solar systems were built, however, that the market for solar credits, which owners earn for the electricity their arrays produce, plummeted, drying up investment in the sector. Last month, only 8 megawatts of new solar were installed in the state, ten times less than the monthly record set in January 2014.

To some solar advocates, a rush to build large grid-supply projects on farmland would further swamp the market for solar credits, crushing the prices owners of the systems earn and further depressing investment in New Jersey.

Initially more than 65 applications to build solar systems on farmland were received by the BPU, totaling more than 600 megawatts. That list was later narrowed down to 500 megawatts, but that still would be almost as half as large as the 1,114 megawatts installed in New Jersey over the past decade, according to the most recent figures from the state’s Office of Clean Energy.

In a draft straw proposal issued this past August, the BPU staff also expressed concerns about the 20 grid-supply projects deferred by the agency in April.

“Staff believes that this uncertainty led to an inability to properly forecast new capacity coming into the market and that approving projects, which are only speculative will negatively affect the already oversupplied SREC (solar renewable energy credit) market and contribute to market volatility,’’ according to the straw proposal.

Along those lines, the agency’s straw proposal suggested the criteria that would be useful in evaluating the farmland projects would include its expected impact on the SREC market and whether it would affect the state’s ability to develop solar projects on former landfills and brownfields, both of which are expensive than building on agricultural land.

Michael Cerra, director of governmental affairs for the New Jersey State League of Municipalities agreed, in part. In written testimony provided to the BPU, he urged no more than 20 megawatts of solar-grid farm projects be available for SRECS and none until the latter part of 2017.

Agricultural interests also expressed concerns about the development of solar farms on lands currently producing crops. Susan Payne, executive director of the New Jersey State Agriculture Development Committee, told the staff in written testimony that it should not target any solar projects for lands proposed for farmland preservation.