Key players in the solar industry were gathered to comment on a critical decision — the closure of the SREC [Solar Renewable Energy Credit] market.
In May, Gov. Phil Murphy signed a law called the Clean Energy Act to increase the state’s renewable energy portfolio. The act requires the New Jersey Board of Public Utilities to close the current solar incentive program.
“We’ve reached a point where solar panels are less expensive than they once were. The program doesn’t need to be quite as lucrative. We still want to make sure the market continues, but this is an opportunity under the governor’s leadership for us to hopefully continue to grow the solar industry but at a lower price for the ratepayers,” Ken Sheehan, director of the Division of Clean Energy for the New Jersey Board of Public Utilities, said.
The statute requires the BPU to close the current market to new applications when the amount of solar installations equals 5.1 percent of the total kilowatt-hours sold in New Jersey. Participants recognized the current program needs to be changed and made more cost effective.
“But how it gets closed is very, very critical and when,” said Lyle Rawlings, president and co-founder of Mid-Atlantic Solar Energy Industries Association.
There’s debate going on about the meaning of 5.1 percent installed. Rawlings believes it should be based on the amount of solar on the ground and also the amount that the BPU has approved for construction. That seemed to be the general consensus at the meeting.
“That calculation is very, very critical, because if they take too many applications and then close down the market, and that results in an oversupply situation. It means that the market could go critical and even crash,” said Rawlings.
Barb Blumenthal suggested a third solution to offer a fixed-priced schedule to accommodate all sides.
“Depending on how you do it, prices are either so high that there’s no money left to meet the RPS [renewable portfolio standard] targets, or there’s not enough money to be fair to solar developers,” said Blumenthal, research director of New Jersey Conservation Foundation.
Attorney Scott Weiner says time is ticking. He estimates the current program will close in the first quarter of 2019. He stressed, and other echoed, the importance of having an interim program in place.
“That can be implemented right away while the BPU and stakeholders take the next couple years as anticipated by the statute to develop a successor program,” Weiner said.
What happens if there’s no interim program?
“The industry has to shut down and there are thousands of jobs that could be lost,” Rawlings said.
The state BPU says they are moving as quickly as possible.
“It’s a robust business here in the state and something that the state wishes to make sure that we can continue, and that’s why we want to make sure we get the solar incentive process correct,” said Sheehan.