Building solar power into homes and businesses created 6,500 jobs last year in New Jersey and the Garden State ranks number three in solar power installations. Mid-Atlantic Solar Energy Industries Association President Dennis Wilson told NJTV News Anchor Mary Alice Williams that the solar sector is growing in New Jersey but is growing more on the residential side rather than the business side.
Wilson said that the volatility is because New Jersey’s market is largely driven by the price of solar renewable energy certificates, which represent the environmental benefits and due to a combination of federal benefits in 2011 and 2012, the market got overheated so too much got built compared to the state requirements. He said that is what created the boom and buzz in the industry.
When asked about solar credits, Wilson said that each solar system gets to generate the solar renewable energy certificates for 15 years from when they start and each certificate represents 1,000 kilowatt hours of solar production. He said they are a tradeable environmental commodity and New Jersey set it up so that the state got away from paying rebates, which are a cash payment up front, because they were running out of budget money. So from that a system was created that pays the benefit over a long period of time, said Wilson.
Before the market crashed, solar credits were sold for $600 each but at the end of June last year they were being sold for $180. Wilson said that the reason that the credits were so highly priced early on was because New Jersey had an aggressive goal for getting solar built but the market took a while to catch up, so they were in short supply and were trading near the cap of what they could trade at. He said that was until the market caught up in terms of more building.
The legislature passed the Solar Act of 2012 to stabilize those prices. Wilson said that the act moved some of the demand for solar from those later years to early years. He said that brought about 400 megawatts more demand to soak up that excess, which helped stabilize the markets to some extent.
When asked if energy suppliers are required to use solar where they can in the state, Wilson said that they are required to have a certificate based upon a percentage of their electric sales.
“The solar sector is still growing in New Jersey but it is growing more on the residential side than the commercial side. The crash in prices really turned a lot of businesses away because it became unpredictable what their economic return was going to be if they invested in a solar system,” said Wilson. “But homeowners are getting more and more enthusiastic about solar because they are seeing it in their own neighborhood.”