The state wants to sharply ramp up efforts to build utility-scale solar projects in New Jersey, a strategy that could result in opening up existing agricultural land to huge new solar farms.
Under a bill (S-2605) now under consideration by lawmakers, a policy initiated during the Christie administration of steering new solar projects away from farmland would be scrapped. That would open up land to accommodate large solar projects that supply power directly to the grid.
Without more utility-scale solar projects that provide at least 10 megawatts (MW) of solar power and the land to locate them, the state will not achieve its goal of transitioning to 100% clean energy by 2050, according to proponents of the bill.
“It ain’t going to happen unless we change our policies,’’ said Sen. Bob Smith, the sponsor of the legislation and chairman of the Senate Environment and Energy Committee, which kicked off debate on the issue during a hearing in Trenton. No action was taken on the bill Wednesday.
“It is complicated,’’ Smith (D-Middlesex) conceded.
Utility-scale solar projects are widely viewed as the most cost-effective way of delivering solar power, largely because of the economies of scale associated with building bigger projects rather than putting solar panels on a residence or on warehouse rooftops.
The Murphy administration’s energy master plan identifies solar energy as one of the primary ways New Jersey can convert to using cleaner energy. By mid-century, that plan suggests 34% of the state’s energy needs will be produced by solar. Today, solar accounts for only 5% of its power.
The legislation aims to expand utility-scale projects by using existing farmlands where such projects might be more easily located in the nation’s most densely populated state. It probably would require roughly 25,000 acres to achieve the 3,000 MW of utility-scale projects the bill projects to build by 2030, according to Smith.
Why many environmental groups are opposed
Many environmental groups oppose opening up farmland to big solar projects, calling the bill premature and unnecessary, given that the state Board of Public Utilities (BPU) is currently engaged in an extensive discussion with solar advocates over how new solar projects will be financed going forward.
“We don’t need to cover our best farmland with utility-scale solar projects,’’ Tom Gilbert, campaign director of the New Jersey Conservation Foundation, told the committee.
But Ed Wengryn of the New Jersey Farm Bureau backed the bill. “It is not a huge imposition on farmland,’’ he said. “This is a change in land use. New Jersey does it all the time — where we put new housing, where we build a new industrial park. It is good that New Jersey is tackling this issue.’’
The bill directs the BPU to establish an annual competitive process where solar developers could bid on building utility-scale projects. The goal would be to build at least 375 MW of such projects each year. Once a winner is selected by the agency, each of the four public utilities would be required to negotiate a 20-year power-purchase agreement to buy its energy, capacity and renewable-energy credits associated with the facility.
The power-purchase agreements raised concern among some that it would lock customers into long-term deals that would force them to pay above-market prices for the power. That happened during the Carter administration when a law required electric utilities to enter into long-term contracts with independent power producers, who were expected — wrongly, as it turned out — to produce power more cheaply.
Rate Counsel director Stefanie Brand, in written comments submitted to the committee, said her office is concerned the 20-year length of the contract will commit ratepayers to higher costs for too long a period.
Trying to protect ratepayers
“The costs of solar have continually declined as technology has improved,’’ according to Brand. “Thus, committing ratepayers to paying a contract price for 20 years could lock them into paying more than they need to.’’
Backers of the bill argued a cost cap on the long-term contracts would help limit increases in ratepayers’ bills.
“This bill does an excellent job of protecting ratepayers,’’ said Tim Daniels, a principal and founder of Dakota Power, a company pursuing a number of utility-scale projects, including one in Salem County on about 800 acres of farmland.
Daniels argued the long-term power-purchase agreements would lower the cost to ratepayers. “This bill will reduce the bill for ratepayers,’’ he said. The company plans to invest $1 billion in building utility-scale projects in New Jersey, he said.
Labor officials also strongly backed the bill, saying it would increase economic development in the state, reduce local property taxes, and reduce New Jersey’s reliance on out-of-state renewables to meet its clean-energy goals.
None of the state’s four electric utilities weighed in on the bill. The New Jersey Utilities Association, a trade group representing the companies, declined comment, saying it was still reviewing the bill.