New Incentive for NJ Homeowners, Businesses to Install Solar Panels

Strong move to encourage greater use of ‘net metering’ as advocates push for state to overhaul energy policies and critics worry about cost to ratepayers

solar installer
The state is giving solar energy a boost by expanding a policy that encourages homeowners and businesses to install panels.

With wide backing, the Senate Environment and Energy Committee voted to broaden the use of net metering, a system that allows owners of solar arrays to get paid for the electricity their panels produce when it is fed back into the power grid.

The move comes at a time when most clean energy advocates are strongly pushing the state to overhaul its policies to encourage the use of solar energy, while others criticize its cost to ratepayers, who paid approximately $500 million last year to subsidize its growth.

In Trenton yesterday, however, there was widespread support for net metering, an important component of the rapid expansion of solar energy in New Jersey.

“Net metering needs to be expanded,’’ Doug O’Malley, director of Environment New Jersey told the committee. “This is a great first step.’’

Lifting the cap

In effect, the legislation (S-596) would lift a cap that allows utilities to stop offering net metering when generating capacity of solar systems by net-metered customers equals 2.9 percent of the state’s peak demand for electricity. The bill would double the cap to 5.8 percent of total electricity sales.

“We need to do more,’’ argued Jeff Tittel, director of the New Jersey Sierra Club, citing the state’s continued growth in solar systems, including a new 20-megawatt system at Great Adventure Amusement Park.

Expanding New Jersey’s reliance on renewable energy is one of the priorities of the new Murphy administration, which has proposed having 100 percent of the state’s power produced by cleaner energy by 2050. Solar energy is expected to be a key component of that plan.

New Jersey typically ranks among the top five in states with solar projects, having more than 86,000 installations, according to the state’s Office of Clean Energy. Solar energy is projected to be a key component of the state’s efforts to achieve the 100 percent renewable goal, but it has had its ups and downs.

Net metering offers benefits to the entire public, not just owners of solar arrays, according to clean energy advocates. Those advantages include reducing peak demand during hot, sunny days; eliminating the need for new expensive power plants, and curbing the emission of greenhouse gases and other pollutants.

Forcing utilities to pay more

“Net metering is something that is not going away,’’ predicted Fred DeSanti, a lobbyist for the New Jersey Solar Energy Coalition. “It produces benefits to all customers. Everyone is beginning to wake up to that fact.’’

Without the financial incentives provided by net metering, the economics of putting solar on homes and small businesses just does not work, according to solar firms.

Opponents of net metering argue it forces utilities to buy higher-priced power when it could purchase the electricity elsewhere cheaper. Utilities also do not like net metering because it reduces revenue by lowering the amount of power they deliver to homes and businesses.

The provisions in the net metering bill also are included in another measure pending in the Legislature. The cap on net metering also would be reduced in a bill that would provide subsidies to keep nuclear power plants open in New Jersey. The fate of that bill, however, is uncertain.