Thursday, May 17, 2012

Legislation to save solar energy in NJ gets hearing today

On Monday, NJ Spotlight's Tom Johnson asked: Can Legislators Prevent Solar Sector From Flaming Out?

The answer may be provided today in Trenton where the New Jersey Senate's Environment and Energy Committee, at 10 a.m., takes up legislation that some believe will be the solar-energy ilndustry's last chance to salvage its previously booming New Jersey market.

Committee Chairman Bob Smith's new bill, S-1925, has been the subject of intense negotiation among often disagreeing parties within the solar industry, including solar equipment installers, utilities, unions and financial interests. 

Johnson wrote on Monday:

The widely diverse solar sector has a range of problems with the bill ... mostly dealing with whether the measure [S-1925] could stabilize the market so that it can continue to grow and create thousands of jobs in the state, second only to California in the number of solar installations.
For the first time this year, the price owners of solar systems get for the electricity their units produced traded for less than $100 last month, a steep drop from the more than $600 the so-called solar renewable energy certificates were earning last summer.

If New Jersey's solar sector is going to continue to grow, many industry advocates say the price of the certificates needs to approach $250 at the least. How to achieve that goal, however, remains a major source of contention.

The bill up for discussion this week tries to stabilize the market by a number of means, including accelerating over the next three years the amount of electricity power suppliers must buy from solar systems. 

Flett Exchange
, a company that maintains a public auction for solar energy credits, weighed in with a bulletin 
stating that the bill "addresses the recent overbuilding in solar in New Jersey and attempts to bring the SREC market back into equilibrium." 
"It also increases the amount of solar development for the next few years to provide a robust labor market for the solar installation community. The fine levels that power companies used to have to pay have been ratcheted down to $350 from the previous $600+ range. The reduced cost of solar in the past few years has enabled the NJ program to reduce SACP levels AND increase the amount of solar installed in the short term. Depending upon the final numbers, ratepayers will realize over 3.5 billion dollars in savings, or over 1 billion dollars in NPV.(8.37%) during the course of the program out to year 2028."
Flett provided the following summary of the environmental legislation's main points 
1.Increase the RPS starting in Energy Year 2014. (this is the amount of SRECs that the power companies are required to purchase)

2. Lower the SACP (this is the fine that power companies must pay if they cannot purchase SRECs.)

3. Switch the RPS to a percentage from a fixed number. (this makes it easier for power companies to plan SREC purchases and also protects ratepayers in case overall power consumption drops statewide in the future)

4. Limit solar farm (grid connected solar) development to 100mw per year for 3 years.

5. Requirement for solar farms to obtain BPU approval to receive SRECs in the future. (this will help prevent large solar farms from overbuilding and give latitude to the BPU to approve projects that meet certain criteria)

6.Introduction of net-metering for schools and municipalities. (this allows for these public entities to site solar in a 3 square mile radius from buildings and net-meter)
7. Establishes a Solar Registration Program for new projects. (this will provide a much needed insight   into the pipeline of solar projects in development)         

Are you following all that? Yeah, we know, solar is a complicated business.

Another way to follow the issue and the arguments is to listen to today's committee hearing. You can hear it live on the state legislature's website   A recording also will be available when the meeting concludes.

Do you have an interest in the solar industry and/or the outcome of today's debate? Share our thoughts or concerns in the opinion box below. If one is not visible, activate it by clicking on the tiny 'comments' link.

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