New Jersey’s solar industry is expected to plummet unless imminent action by regulators is taken, allowing subsidies to continue propping up solar installation sales.
The New Jersey solar market has grown steadily in recent years. With over 99,000 solar installations in place and around 7,000 employees currently working in the field, the state is ranked seventh in the U.S. for its solar development. Democratic Gov. Phil Murphy hopes to see the industry grow even further and signed legislation in May that calls for the state’s renewable portfolio standard to reach 50 percent by 2030.
However, advocates warn the state’s solar industry is on track for total collapse.
“[W]e’re afraid that the market will crash again,” Jeff Tittel, director of the New Jersey Sierra Club, said in a statement on Oct. 17. “If we don’t move forward, we’ll lose more jobs and more opportunities for clean energy. We must work to become a leader once more in solar power.”
The concern comes as the subsidies that have helped propel solar installation sales in the state are due to wind down.
New Jersey’s Solar Renewable Energy Credit (SREC) program currently incentivizes solar investment by giving panel owners credits for the electricity they produce. Like other solar incentives, however, this program has become controversial as it comes at a great cost to electricity consumers. The price of the credits — currently trading at around $200 — far surpass the cost of projects. (RELATED: SHOCKER: Fewer People Are Buying Solar Panels After Subsidies Were Pulled)
Under the state’s clean energy law, the SREC program must be shuttered by June 1, 2021. The program can close sooner if 5.1 percent of the kilowatt hours sold by New Jersey’s electricity suppliers originate from solar electricity linked to the state’s distribution system. Additionally, renewable energy advocates are concerned that cost caps — aimed at protecting ratepayers from having to pay too much for sustaining the solar industry — are due to go into effect by 2020.
OCEANPORT, NJ – JUNE 14: Governor of New Jersey Phil Murphy places the first bet at the William Hill Sports Book at Monmouth Park as it opens and welcomes public to place first legal sports bets on June 14, 2018 in Oceanport, New Jersey. (Photo by Dave Kotinsky/Getty Images for William Hill Race & Sports Bar )
“Even if we fix the program, we’ll hit the cost cap in 2020 because of the new law and the market will crash again. We need to change the law so this doesn’t happen,” Tittel continued in his statement. The Sierra Club and other renewable energy proponents are asking the state’s Board of Public Utilities (BPU) to remove the cost caps and implement a new program in place of the SREC.
However, New Jersey residents have reason to want to keep the caps on solar energy in place. Utility customers have shelled out up to $2.8 billion over the past ten years in a costly bid to grow the industry.
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