The state of New Jersey’s ailing SREC market prompted the re-introduction of legislation geared to increase demand for solar energy. On May 14th, Senators Bob Smith (D-17) and Stephen Sweeney (D-3) presented S 1925, which would adjust the State’s renewable portfolio standard’s solar energy requirements to create an adequate demand schedule that accommodates the astronomical growth of supply during the past two years. The Environment and Energy Committee is expected to vote on the bill on Thursday, May 17th.
The bill proposes increases to the RPS, decreases the SACP and alters net metering. With the passage of this legislation, electric suppliers would supply a determined percentage of retail sales from solar energy, as opposed to the current fixed gigawatt hour requirement. The legislation also includes a provision to increase the solar requirement by 20% should the market remain oversupplied for a period of 3 years. In order to prevent large systems from crowding out the SREC market, S 1925 includes provisions to the net-metering and interconnection requirements that make it harder for large, utility scale systems to enter the SREC trading arena.
The impetus for an immediate fix to the RPS derives from a crash in SREC prices from over $600/SREC this time last year to a market presently selling SRECs at just over $100. For a few years, New Jersey’s market remained heated, drawing in over 600 solar developers to the state, generating the rapid development of solar projects. The growth was so fast that the state satisfied its EY12 obligation of 368MW installed capacity within the first month (June 2011) of the energy year. Without legislative action that effectively creates a sustainable long-term demand schedule, the New Jersey market risks a flight of developers and investors away from New Jersey and towards more lucrative environments such as New York or Massachusetts.
Earlier this year, a similar bill was introduced to the Senate and failed. S 1925 seems to garner the industry-wide support that the previous legislation (S 2371) failed to earn, as it addresses the concerns put forth by the BPU as well as industry stakeholders. If this bill fails to pass through committee, the Board of Public Utilities already stated its intentions to move forward with their plans to repair the SREC market. However, many in the industry believe that only a long-term legislative fix will properly restore the demand and confidence necessary for the New Jersey solar market to regain its status as a secure environment for investment.
The full text of S 1925 can be found here.
Sol Systems will continue to track and report on the progress of S 1925 through the legislative process.
About Sol Systems
Sol Systems is a solar energy finance and development firm that was built on the principle that solar energy should be an economically viable energy solution. With thousands of customers and hundreds of partners throughout the United States, Sol Systems is the largest and oldest SREC aggregator. We provide homeowners, businesses, solar installers, and developers with sophisticated financing solutions that help make solar energy more affordable. Sol Systems also helps energy suppliers and utilities manage and meet their solar RPS requirements efficiently by providing them with access to diverse portfolios of SRECs. For more information, please visit http://www.solsystemscompany.com.