RODGER FERGUSON | SEPTEMBER 28, 2022 | OPINION
New Jersey’s solar industry is collapsing. Installations are down, the solar pipeline is shrinking, and thousands of jobs are at risk. This distressing reality is set out in black and white in a recently released report prepared by Sustainable Energy Advantage, LLC (SEA).
Gov. Phil Murphy’s 2019 Energy Master Plan set the stage for New Jersey to achieve 100% clean, renewable energy by 2050. The master plan concluded that New Jersey could meet this goal by reaching 20.64 GW dc of solar installations by 2035. To get there, the state needs to incentivize the installation of approximately 1,140 MW dc, annually from 2020 to 2035. Unfortunately, New Jersey installations have declined by an average of 10%-15% per year for the past four years. The projection for 2022 is 280 MW dc — the lowest total since 2015 and only about 25% of the Energy Master Plan’s target. Unless something changes drastically and immediately, it will be all but impossible for the state to meet its solar installation targets.
The solar industry is a multibillion-dollar industry in New Jersey, with over 6,000 people employed. In years past, the state ranked first in the country in solar installations. Based on current projections, it will fall to 21st within five years. According to the SEA report, whereas New Jersey once ranked first in the country in solar jobs, it has now slipped to 12th. In addition to Gov. Murphy’s ambitious and important clean-energy goals, thousands of jobs and millions of dollars of investment in the state are at risk.
Although many factors contribute to the rate of solar installations, including equipment costs and interconnection delays, the SEA report notes that at the same time New Jersey’s solar market is contracting, installation rates across the country are rising. In fact, in the same period (2019-21) that New Jersey’s solar market contracted by 23%, the U.S. solar market expanded by 78%. The report concludes that “NJ-specific characteristics and policy choices are the primary drivers of recent trends.”
‘Abject failure’
The most recent New Jersey-centric “policy choice” affecting the state’s solar industry is the Board of Public Utilities rollout of the Successor Solar Incentive (or “SuSI”) program in August 2021. The SuSI program is, in no uncertain terms, an abject failure. Prior to the enactment of the program, industry leaders and stakeholders warned BPU that the incentives were too low to support a robust solar industry. BPU staff did not listen and instead implemented a program that has completely destroyed the state’s once-thriving solar industry.
The SuSI program includes annual goals of 150 MW dc for both residential and commercial net-metered installations. In the program’s first year, only 95.9 MW dc had been subscribed for the residential segment, and only 1.7 MW dc had been subscribed for the commercial segment. To reiterate, to meet Gov. Murphy’s solar installation goals, the state must install 1,140 MW dc, annually from 2020 to 2035. The state is not even achieving one-tenth of that goal under SuSI.
The SEA report details that, in the years 2010 to 2021, utility-scale projects made up nearly a quarter of all solar installations in New Jersey. SuSI includes annual goals of 150 MW dc for community solar projects and 300 MW dc for grid-supply projects. These larger projects would help boost the dismal net-metered numbers and get the state closer to its goals. However, more than a year into the SuSI program, the BPU has not implemented a permanent program for either community solar or grid supply.
Without a robust utility-scale program, it will be impossible for the state to achieve its solar installation goals. Utility-scale projects — including community solar and grid supply — are larger projects that employ the most people. They typically provide hundreds of high-paying, union-labor jobs per project and attract the most capital investment. These projects also contribute the most MW dc toward the state’s solar installation goals. The SEA report notes that, while solar installations, in general, have declined over the last several years, “[u]tility-scale installations declined the most sharply, falling from 135.3 MW [dc] installed in 2020 to 23.4 MW [dc] in 2021.” The report also states that “projections suggest nearly no utility-scale solar will be developed in the state in 2022, with installations increasing slowly and not reaching 100 MW [dc] in a single year until 2027.”
There are two critical steps that New Jersey can take to try to reverse these negative trends.
The Legislature must pass, and Gov. Murphy must sign Assembly Bill 4328. This legislation creates more opportunities for the state’s municipalities and other governmental entities to save money on electric costs through a remote net-metering program. The legislation revised certain components of the prior remote net-metering program and would make the program more accessible and productive.
The Senate must pass, and Gov. Murphy must sign Senate Bill 2372 (Assembly Bill 4089). This legislation extends the construction timeline applicable to 377 MW dc of currently pending “subsection (t)” (landfill and brownfield) utility-scale projects. These projects all face unanticipated delays due to an interconnection moratorium at PJM Interconnection, LLC, the operator of the regional electric grid. With extended construction timelines, these projects can continue to be developed and ultimately interconnect to the grid. These large projects will employ thousands of union workers and will help the state achieve its clean-energy goals.
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