1. The Utility Scale Industry Requires a Supportive Solar Tariff Founded on Two Principles: Stability and Certainty.
For utility scale projects, certainty and stability are key. These projects are costly to develop and face a challenging regulatory environment. The path from land acquisition to construction is difficult and expensive. However, a supportive solar tariff that is for a fixed amount and a fixed duration mitigates risk and allows these projects to proceed. A tariff based on a competitive solicitation model creates catastrophic uncertainty and instability. Investors in these projects cannot commit to moving them through the development process at risk of not receiving a tariff at a certain rate for a certain duration, or worse, not receiving any tariff at all.
2. “Subsection (t)” Projects Require a Dedicated Program.
“Subsection (t)” projects are those certified as “connected to the distribution system” in accordance with N.J.S.A. 48:3-87(t). These are utility scale projects located on brownfields, landfills, and sites of historic fills. These projects are even more challenging, costly, and difficult to develop than non-“subsection (t)” utility scale projects as they involve more complex and problematic properties. These projects require their own dedicated supportive solar tariff program. In the Solar Act of 2012, the legislature determined that these projects should receive a financial incentive “that is designed to supplement the SRECs generated by the facility in order to cover the additional cost of constructing and operating a solar electric power generation facility on” a brownfield, landfill, or historic fill site. The NJUSSA could not agree more. It is time to implement the legislative directive in this regard, give “subsection (t)” projects their own category of certification and financial incentive, and provide financial incentives that are commensurate with the added cost and difficulty of developing these properties.
3. The NJBPU Should Continue the TREC Program for Utility Scale Projects.
The utility scale industry (including developers, financiers, and owners) understands and has adjusted to the current TREC program structure. A completely new program, with entirely new elements, will freeze new development and halt investment as the industry attempts to adapt. This will result in lost economic opportunity, lost jobs, and lost clean energy production. An entirely new program will set the industry back years and will hurt the state’s efforts in achieving its renewable energy goals. The NJBPU should continue the TREC program with its fixed price, fixed duration supportive solar tariff. If the NJBPU is concerned about cost of the TREC program, it should consider modest reductions in the available subsidy or factoring by project type, which can be achieved easily without overhauling the entire program. NJUSSA would support a 5% across-the-board reduction in the current TREC incentive, which would achieve the dual purpose of controlling costs and providing an incentive that allows these important projects to move forward. Notably, as currently proposed, the Successor Program will not provide an incentive that is strong enough to support the Solar Act’s requirement to utilize union labor for these projects. NJUSSA is committed to utilizing union labor and supports an incentive structure that will continue to allow union labor to be utilized for these projects.
4. The NJBPU Should Allow Utility Scale Projects Currently in Development to Submit TREC Applications Until at Least December 31, 2021.
“Subsection (t)” and other utility scale projects have long lead times for development – typically 24-36 months from inception to construction commencement. Projects presently in development began under either the SREC or TREC program. For these projects presently in development, the NJBPU must extend the deadline for submitting TREC applications to the SRP until at least December 31, 2021. Significant investments in these projects have already been made by developers in reliance on the current incentive program. To force these projects into an uncertain and undefined successor program at advanced stages of development would wreak havoc on the industry and result in forfeitures and damages.
