The Devil Is in the Details of Community Solar Plan

Tom Johnson | November 9, 2018 | Energy & Environment
Developers want state subsidies but not everybody agrees with that. And activists say low- and moderate-income New Jerseyans should get discounts on their bills

Credit: Creative Commons
Solar panels on apartments
The state wants to give low- and moderate-income families, mostly left out of the clean energy transformation occurring in New Jersey, the opportunity to cut their electric bills by getting their power from community solar systems.

The concept, widely backed by the solar industry, clean energy advocates and public interest groups, is modeled on programs already in place in at least 17 other states, but New Jersey regulatory officials need to iron out key details of a new proposal if it is going to succeed, according to solar executives and others.

Those details involve whether the projected cost savings are enough to convince households already having trouble paying their electric bills that reductions in their monthly energy bills would be enough to make it worth joining a community solar program.

“If you are already struggling to pay your bills, you are not going to pay more just to save the world,’’ said Nancy Griffeth of UU Faith Action NJ at a hearing on a new rule proposal to develop community solar programs in New Brunswick.

Those communities also ought to benefit from jobs created by those investments, others said. “We want our communities to benefit not only price-wise, but job wise,’’ said Rev. Ronald Tuff, representing GreenFaith.

Savings on energy bills key

If the community solar program is going to work, some said those low- and moderate-income (LMI) families would require up to a 50 percent discount on their bills, a target recommended by the national Sierra Club.

“LMI families are primarily driven by customer savings on their energy bills,’’ said Melanie Santiago-Mosier, program director at Vote Solar, an advocacy group for bringing solar energy into the mainstream. Both California and Washington, D.C. have programs aiming for 50 percent energy savings on their bills, she said.

“It needs to be targeted to those communities already choking on pollution,’’ said Jeff Tittel, director of the New Jersey Sierra Club.

But that won’t happen unless added financial incentives are targeted to LMI programs, according to solar firms at the hearing at the Edward Bloustein School of Planning and Policy at Rutgers University. Without some sort of subsidy, many developers will not invest in those projects, they predicted.

“Without incentives, it’s very unlikely too many projects will get done,’’ said Salar Naini, vice president of business development for Turning Point Energy, a developer of community solar and energy storage projects.

Who’s going to pay?

The pilot project being proposed by the Board of Public Utilities targets developing 75 megawatts of solar systems in the first year, and up to 450 megawatts over three years. As currently drafted, the rule gives the state agency the leeway to award additional incentives to developers for specific types of solar projects, such as in low- and moderate-income communities.

Where those financial incentives would come from has yet to be decided, although solar developers and others said they could tap a clean energy fund financed by surcharges on ratepayers’ bills or possibly revenue the state receives when it rejoins a regional program to combat greenhouse gas emissions from power plants.

Sarah Steindel, a staff attorney for the New Jersey Division of Rate Counsel, said her office opposes any new additions or incentives to promote community solar projects in low-income areas, saying those costs ought to be borne by the developers seeking to build the projects.

The office, which represents ratepayer interests in utility cases, also objected to provisions in the bill which would allow electric utilities to potentially recover lost revenue as a result of the development of new community solar projects.

How’s it going to work?

Solar developers generally praised the program with caveats, in part dealing with how the agency plans to review potential projects. The proposed rule will determine what projects move forward on a competitive basis, a measure intended to drive down the ultimate costs of the program.

“There is not another state with a competitive process like this,’’ said Brandon Smithwood, policy director of the Coalition for Community Solar Access, an organization working to expand access to solar energy.

“The economics have to work,’’ added Joe Henry, a vice president of Dimension Renewable Energy, another solar firm, referring to the need to incent developers to invest money in community solar projects.

The developers argued the application should be based on a first-come, first-served basis — provided the project is well along the path to securing a site for the solar panels, interconnections with the power grid, and other permits.