Legislation Would Encourage Consumers to Deploy Solar Arrays

Tom Johnson | October 7, 2014 | Energy & Environment
By ensuring they can sell power they generate back onto the grid, bill aims to give homeowners and small businesses a reason to go solar

small solar array
Hoping to keep the solar industry growing in New Jersey, legislators will consider a bill this week to promote the installation of solar arrays, a change that will affect mostly homes and small businesses seeking to deploy the systems.

The legislation (S-2420) is part of a package of bills drafted by the Senate Environment and Energy Committee in the wake of extensive meetings with industry stakeholders on how to spur greater use of renewable energy in New Jersey. The measure also addresses fundamental changes in the structure of the energy industry.

Clean-energy advocates have pressed the Legislature and Christie administration to increase the state’s reliance on renewable energy. This is worrisome to many in the business sector, because of the higher costs of solar and wind power compared with traditional ways of generating electricity.

The new bill, sponsored by the chairman of the committee, Sen. Bob Smith (D-Middlesex) and the ranking Republican on the panel, Sen. Christopher (Kip) Bateman (R-Somerset), is probably the least controversial to come out of the deliberations. But it is no less important to some segments of the solar sector.

“It is definitely vital,’’ said Lyle Rawlings, president and CEO of Advanced Solar Products in Flemington, and the president of the Mid-Atlantic Solar Energy Industries Association, a trade group representing many solar installers.

The legislation would revamp the arcane rules governing net metering, which allows customers who generate electricity from solar systems to send the power they do not use back onto the grid.

Under current regulations, energy suppliers and utilities can cease offering net metering to customers whenever the total rated generating capacity owned by net-metering ratepayers statewide equals 2.5 percent of the state’s peak electricity demand. The bill would increase the net metering capacity to 7.5 percent of statewide peak electricity demand — a level the state is approaching, according to some.

With the rapid growth of solar systems in New Jersey, a step that takes localized sources of generation off the utilities’ distribution systems, can result in a decline in revenue for those companies delivering power to customers. So far, however, the issue has not become contentious.

“The throughput is continuing to shrink,’’ Rawlings said. “For sure, there needs to be a long-term conversation how we can do this and still have utility companies viable. In the meantime, net metering is the backbone that will allow solar to continue to grow.’’

Others solar executives agreed.

“We like to do net metering because we like to reduce costs for our customers,’’ said Thomas Lynch, executive vice president of KDC Solar based in Bedminster. Most of the company’s projects involve net metering, he said.

In the long-term, net metering may not be needed, according to Fred DeSanti of the New Jersey Solar Energy Coalition. In another five years, there may be enough advances in energy storage systems that would obviate the need for net metering while still making it economically viable for customers to install solar systems, he said.

Until that happens, net metering is a crucial driver for increasing solar in New Jersey, other said.

“It’s an important bill to move us forward to get more solar built,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “If people can make money by installing solar and putting electricity back into the grid, it will create more investment in solar.’’

The committee also will consider other bills in the package on Thursday, but one of the most controversial measures (S-2444) will be up for discussion only. The draft bill sets a goal of having at least 80 percent of New Jersey’s electricity coming from renewable sources by 2050.