New Jersey’s goals for switching to clean, affordable, renewable energy like wind and solar — and phasing out fossil fuels that worsen the dangers from climate change — are ambitious and necessary. It will take an all-hands-on-deck approach to reach them, which is why some state policies that will impede solar development are puzzling and need to be reconsidered.
A key part of New Jersey’s Energy Master Plan for getting to 100% clean energy by 2050 was a program offering incentives to help the solar industry install 17.2 gigawatts of solar generation by 2035. This would mean installing about 950 megawatts of solar each year from 2020 to 2035. The state was making solid progress on that goal under previous versions of its solar incentive program.
But, last August, the New Jersey Board of Public Utilities closed the immensely successful Transitional Renewable Energy Certificate incentive program, which struck a good balance by providing developers with a fixed incentive that made a record number of projects possible. The incentives under the replacement program — Successor Solar Incentive Program, or “SuSI” — are woefully inadequate to spur additional solar development, which is exactly what the solar industry tried to warn the BPU before the switch to SuSI from TREC was made.
SuSI is so unappealing that in 10 months, only 38 megawatts of solar have been installed under the program — compared with the state’s annual goal of 950. Developers are not even applying for the SuSI offers because they are too low to make any investment in solar development workable. Based on the BPU’s own data, there are only about 50 megawatts of applications in the SuSI project pipeline, but still nearly 1,300 megawatts of projects in the TREC pipeline — fighting to remain eligible for TREC-based incentives.
Even in cases where the developers applied to and were accepted in the TREC program, the BPU has signaled that they will be eligible only for the lower SuSI incentives. This is true even where developers bought land and made other business decisions based on participation in TREC. In most cases, the BPU is refusing to extend construction deadlines applicable to TREC projects, even though these projects have faced pandemic-related equipment shortages, supply chain and logistical delays, and utility interconnection challenges. The result will be a complete crash of the New Jersey solar program in the short term.
There are still 6,739 solar projects registered in the TREC program, either under construction or still actively pursuing permits and utility interconnections. Now, these projects risk “timing out” as their TREC approvals expire.
As things stand, the only way these projects can come to fruition would be if their developers spend millions of at-risk capital, complete the project permitting process and construction, and then — after the fact — petition the BPU to extend construction deadlines. Investing all that money in the hope that the board might take mercy simply isn’t a viable business model.
To make matters worse, utility-scale projects — big solar installations that participate in the wholesale power market managed by PJM Interconnection — confront a second obstacle: PJM’s multi-year interconnection moratorium that would take them past the BPU’s inflexible deadline. These projects face all the same challenges as their smaller, net-metered counterparts, but also must contend with the fact that the regional grid operator has publicly announced that most of these projects will not be eligible for connection to the grid until the end of 2025 or, in some cases, 2026. These large-scale projects provide the most jobs, attract the most capital investment and contribute the highest level of green energy to the state’s Energy Master Plan goals.
Solar energy is an $11.7 billion industry in New Jersey, employing nearly 6,000 people across 370 companies. At one time, the state led the nation in solar installations. It slipped to eighth this year, and based on projected growth, and in large part due to the failing SuSI program and backward BPU policies, it could soon drop to 15th. That’s not good for the industry, consumers, or working people for whom solar energy is providing a livelihood.
There’s a better way. New Jersey should take the following steps to keep solar developers in the game, preserve jobs and keep the state’s transition to clean energy on schedule:
Approve pending legislation (S2723) that extends commercial operation deadlines to TREC-registered utility-scale solar projects on brownfields or landfills. The Assembly has already unanimously passed this measure.
Direct the BPU to provide blanket extensions of commercial operation deadlines for other TREC-registered projects.
Build certainty and stability into incentive programs by processing all applications in a timelier manner.
Create the position of Green Energy Advocate — a person or agency with authority, reaching across the several state agencies tasked with implementing solar projects to resolve disputes and help New Jersey achieve its green energy goals.
If the state wants to achieve those, it needs to set — and keep — policies that level the playing field for solar developers. Millions of dollars and thousands of jobs are at stake, and the state is in danger of falling far short of its clean energy goals. But if this is done right, there will only be winners.
Mark S. Bellin is a lawyer specializing in the acquisition, entitlement, and development of utility-scale photovoltaic projects.