NJ Solar Shows Slow Growth, Pace Slackens Nationally as Well

Tom Johnson | March 16, 2018 | Energy & Environment
Lawmakers, administration, and industry work to forge new financing mechanism that will be less of a burden on ratepayers

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The solar market continued to grow in New Jersey and the rest of the nation last year, but the pace slackened a bit across the country overall, according to a new report.

With the Murphy administration and lawmakers working on revamping the state’s incentives for promoting solar, New Jersey saw 356 megawatts of new capacity installed in 2017, slightly above the previous year.

The state’s solar program has been under intense scrutiny in recent weeks, as policymakers wrestle with a number of issues arising in the sector, the largest involving the cost utility customers bear to keep the industry growing.

The legislation (S-2314) aims to address that problem by reducing the overall cost to ratepayers by phasing out the existing system of incentives and putting a cap on how much mandates to use renewables spike bills for customers. By and large, it has won support from the solar sector, which had opposed previous versions of the bill.

The bill, up for a vote in committee next week, also is designed as a short-term fix to the sector to prevent it from collapsing while lawmakers, the administration, and the industry agree on a new system for financing.

“This legislation will keep New Jersey on track and maintain 7,100 jobs now supported by our current program as we transition to a new, less-costly platform,’’ said Fred DeSanti, on behalf of the New Jersey Solar Energy Coalition and the Alliance for Solar Choice.

In 2017, the U.S. solar market installed 10.6 gigawatts of new capacity, led by strong growth in the corporate and community-solar segments, according to the U.S. Solar Market Insight Report. The bill now working its way through the Legislature includes provisions to create a community-solar program, which is growing fast in other states.

Brandon Smithwood, policy director for the Coalition for Community Solar Access, said the bill’s provisions would lay the foundation to provide solar to the millions of New Jersey residents across the state who have been waiting for their chance to choose it.

Community solar offers an opportunity to use solar for those who live in homes with unsuitable locations to take advantage of the technology or who live in rental or multifamily housing.

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According to the latest report, New Jersey ranks fifth in the nation in the number of solar installations, accounting for roughly 3.7 percent of the state’s electricity. In 2017, the sector’s 555 companies employed 7,105 workers. The industry has invested $7.6 billion in New Jersey.

The growth occurred here in New Jersey even with an overhang of uncertainty concerning new tariffs imposed by the Trump administration and other issues. New Jersey ratepayers spent over $500 million last year supporting solar developments.

The over-year downturn was largely expected nationwide, due to the massive influx of installations in 2016, as projects were rushed to completion before the anticipated expiration of the 30 percent federal investment tax credit.

While nationwide installations fell by 30 percent, roughly the same percentage of new electric-generating capacity brought online came from solar, second only to generation from natural gas.