The New Jersey solar SREC market is significantly over-supplied. The renewable portfolio standards (“RPS”) for Energy Year (“EY”) 2012 (June 1, 2011-May 31, 2012) requires that a total of 368 MWs in solar generation capacity be installed by May 31, 2012. That requirement was satisfied in June 2011, only one month into EY 2012. BPU staff estimates that installed solar capacity will exceed the solar RPS through at least energy year 2014 and, depending on the near-term installation rate; the solar capacity may exceed New Jersey solar RPS through EY 2016. As noted by BPU staff in its solar transition straw proposal the pace of construction, installation and operations in the New Jersey solar market is not sustainable within the current solar RPS.
This week legislation (S-1925) was introduced by Senators Smith and Sweeney which proposes long awaited relief to the New Jersey solar market. The bill, which is not yet publicly available, is expected to be scheduled for hearings before the Senate Energy and Environment Committee chaired by Senator Smith on an expedited basis. S-1925 will likely seek to regain lost momentum in New Jersey’s solar market by focusing on: revised RPS and solar alternative compliance payment ("SACPs") schedules, preference for location of solar facilities on brownfields and landfills rather than on farmland, grid connected projects, net metering requirements including clarification of what it means to be connected to the distribution system, and an aggregated net metering program for local government and school districts.
In this client alert, we discuss the proposed legislative remedy as well as regulatory remedies.