The New Jersey Board of Public Utilities (“NJBPU”) is currently accepting applications for “community solar” projects as part of its Community Solar Energy Pilot Program (the “Community Solar Program”). Community solar projects include solar installations owned and operated by a community as well as installations owned and operated by a third-party that shares electricity with a community. Participating members of the community (known as subscribers under the Community Solar Program) receive a credit on their utility bills for their participation in a community solar project. Thus, a community solar project enables access to solar energy to electric utility customers who have previously been unable to participate in solar energy due to a variety of barriers.
The New Jersey Community Solar Program aims to approve a sizable number of individual community solar projects, each generating up to 5 megawatts of power per year, for a total capacity of 75 megawatts annually. The NJBPU plans to open two more application windows—one in 2020 and one in 2021—with the goal of adding at least 75 megawatts of additional capacity each year. According to the NJBPU, the three year Community Solar Program will generate enough energy to cover the electric usage of 45,000 residences.
The current open application window provides ample opportunity for developers of all kinds to get involved with solar power. For example, according to the NJBPU, an applicant may be a project developer, project owner, project operator, municipality, contractor, installer, or site owner. The application form must be submitted and completed by the close of the application period on September 9, 2019 at 5:00 p.m. in order to be considered for the Program. The application form contains detailed questions regarding the proposed project. In fact, among other things, the application form requires the applicant to identify all permits needed for construction and operation of the proposed community solar facility and, in most instances, to meet with the NJDEP Office of Permit Coordination and Environmental Review. An application that does not completely answer all questions (including the listing of all necessary permits) will be deemed incomplete and will not be considered by the NJBPU for acceptance into the Community Solar Program.
Application will be approved based on a point system to incentivize certain types of projects. The NJBPU will consider projects in order of highest to lowest total point score until the 75 megawatt limit is reached. Projects will be scored on the following criteria:
- Up to 30 points if 51% or more of the energy capacity is provided to low/moderate income residents.
- Up to 20 points for projects located on certain property such as landfills, brownfields, areas of historic fill, rooftops, or parking lots.
- Up to 15 points if the project guarantees savings to customers. Savings of greater than 10% and flexible cancelation terms for customers receive high preference, while projects that guarantee greater than 5% have medium preference.
- Up to 10 points for projects with community and environmental justice engagement. Higher preference is given for partnerships with municipalities, local community organizations, and affordable housing providers, while medium preference is given for a letter of support from a municipality or if the project owner is a government entity.
- Up to 10 points for projects that provide more than 51% of capacity to residential customers.
- Up to 10 points for projects that create local jobs, or demonstrate other co-benefits, such as a micro-grid or energy efficiency measures.
- Up to 5 points if subscribers are limited to the municipality or adjacent municipality in which the project is located.
Projects accepted into the Community Solar Program will be eligible to apply for Solar Renewable Energy Certificates (“SRECs”). However, developers should note that projects seeking SREC eligibility must apply for SRECs prior to delivering any energy, and must begin commercial operations prior to the NJBPU’s determination that the state has attained 5.1% of kilowatt hours sold in New Jersey from qualifying solar electric power generators when the SREC program closes to new registrations. In the event that new solar incentives are established before or after the close of the SREC program, it seems likely that these incentives would be available to projects accepted into the Community Solar Program.