NJ Solar Program Must be Fixed to Prevent Collapse

The New Jersey Sierra Club has submitted comments to the New Jersey Board of Public Utilities (BPU) regarding the development and transition of the New Jersey Solar Renewable Energy Certificate (SREC) Program. New Jersey has had one of the most successful programs in the country but over the last decade we fell behind. We were 2nd in the nation for solar installations and we’re now 7th. We had 10,000 jobs in solar and dropped down to 5,500. Now we’re coming back up with 7,000 jobs. However, we’re afraid that the market will crash again.

“Six months from now, New Jersey’s solar market will crash, hurting clean energy, the environment, and the economy. We’re heading towards the same situation that we were in 2012 and the SRECs are about ready to run out. Even if we fix the program, we may hit the cost cap, blocking the RPS from moving forward. We need a solution to avoid this one-two punch of SRECs running out and then reaching the cost cap. New Jersey has a history of lack of real action when it comes to the solar program because of too many competing interests. The BPU must begin planning on how to avoid reaching the cap,” said Jeff Tittel, Director of the New Jersey Sierra Club. “Unless we act now, the market will crash next year.”

We have suggested using rebates to stabilize the state’s solar programs. If we earmark $120 million a year for the next four years from the SBC towards solar rebates, we can keep the program running at least through 2022. This is because in 2020 the cost of SREC is estimated to be $280 million over the cap. Without this or some other method of controlling legacy SREC costs, meeting the 50% renewable energy by 2030 with a 7% cap will be challenging if not impossible.

“We believe the only way to avoid a near-term crash is by transferring part of the solar program (for example, residential or commercial) out of SRECs entirely and back to rebates and examining wholesale and resale cost impacts. If we dedicate money from the SPC for rebates, we can provide funds for new installations, taking pressure off both the cost-cap and the availability of SRECs. This will keep the program going until a long-term solution is determined,” said Jeff Tittel. “We also need to look at the SRECs program and have the credits reflect the actual cost of certain sectors of the solar market.”

New Jersey’s utility economic model is based on how much power they sell, this is unsustainable and will only lead to more waste and pollution. We should reverse it, like New York is doing. We can also fix this by developing a new, more cost-effective solar program similar to ones that are working in other states such as Massachusetts. We need to change the way we do business with utilities. The BPU can better identify, determine, and calculate the attainment of KW hours by measuring what’s actually going into the grid versus what is being estimated to be going in. This is important because there are some solar projects that are not meeting their approved MW requirements.

“We need to all be on the same page to fix the solar program. The crash could happen because of competition between companies and lack of government action. If we don’t move forward, we’ll lose more jobs and more opportunities for clean energy. We must work to become a leader once more in solar power. why it’s critical for the BPU to work on a program now and to get rid of the cost cap. We must all get on same page to come up with a cost-effective solution that works for all of New Jersey. This includes looking at other funding mechanisms and regulations to push for solar programs to get done,” said Jeff Tittel.

In 2020 the cost of our RPS will exceed the cap by $280 million. This means the BPU will set aside the Renewable Portfolio Standard for that year. This leaves no room for New Jersey to move forward to meet targets of the Renewable Portfolio Standard (50% by 2030). This would send money to help the economy and jobs of other states and is a fraud that actually works against renewable energy.

“We should also be working to expand our community solar program, which is important for our environment and economy because it allows any ratepayer to subscribe to an off-site solar installation. We ideally want at least 20% set aside for community solar in New Jersey and for the state to remove the size cap it has for these community projects to allow for larger projects that can extend to whole neighborhoods and even towns,” said Jeff Tittel. “We should also increase the solar targeted to low-income areas from 10% to at least 30%. We can help urban communities by putting panels on brownfields and rooftops. These are people who will continue to be disproportionately affected by climate change and therefore should directly benefit from investments in clean energy.”

New Jersey should be doing more to strengthen and promote solar energy in our state. Solar power provides more jobs than any other energy sector and is a cleaner and cheaper to use. New Jersey has fallen behind other states when it comes to clean energy and clean energy jobs. If we don’t fix the problems with this cap within the next years, the solar market in NJ will collapse. We should exempt in-state New Jersey renewable energy projects from any cap in order to facilitate the growth of solar and clean energy in New Jersey. Since the solar program went into effect about 10 years ago, solar has become 29 percent more efficient and gone down in price by 25 percent.

“Despite once being a leader in the country for solar power, we our concerned that New Jersey’s solar market will collapse completely within the next year and no longer accept applications for solar projects. This could lead to the bankrupting of countless renewable energy projects costing thousands of clean energy jobs since there are five times as many jobs in the solar sector than there is in the coal industry. This would be a disaster that will put a wrench in our plans to make New Jersey cleaner and greener by destroying the solar market altogether,” said Jeff Tittel, Director of the New Jersey Sierra Club. “Improving solar energy in the state would make our environment cleaner, fight climate change, and increase green jobs.”