At the top of yesterday’s Senate Environment and Energy Committee meeting addressing a bill to rescue New Jersey’s collapsing solar energy industry, committee chairman (and bill sponsor) Bob Smith explained:

“We are a victim of our own success. We’ve had so much solar built in New Jersey and so many SRECs available that the market for these Solar Renewable Energy Credits (once selling at $600 and now  under $100 per credit) has crashed and there are lots of unintended consequences.”

Among those unintended consequences:

1. Public entities caught in a squeeze – Counties and municipalities contracting for the installation of solar energy projects are finding that the SREC prices are not high enough to repay the public bonds floated to finance the projects. If a project already is under way, taxpayers are stuck with the bill for the shortfall. If a project has not yet started, it likely will never get off the ground.

2. Negative future for private projects – Bankers often look at SRECs as collateral, providing them with the confidence to lend money for construction. If the fluctuating value of the solar credit cannot be relied upon to remain sufficiently high over the life of the loan, banks won’t take the risk.

The bottom line is what Smith describes as a “crisis.”  Without a prompt legislative solution to stabilize solar credits, the market will dry up and scores of solar-installation companies will fail and jobs will be lost.

That point was underscored yesterday by the attendance of dozens of solar employees who jammed the hearing room and listened throughout three hours of testimony.

Rescue bill gets general support from solar industry participants
Industry members, unions, and businesses that have saved energy costs through solar systems (including the North Jersey Media Group, news publisher of The Record) were supportive of the legislation (S-1925), although numerous changes were recommended.

The legislation seeks to bolster the value of solar energy credits by requiring utilities to obtain more
of the power they sell to customers from solar sources, capping the size of large-scale solar farm developments, and giving the state Board of Public Utilities review authority over large projects.

Major business organizations worried about costs
Representatives of  general business organizations, however, like the NJ Business and Industry Association, NJ Chamber of Commerce, and the Chemistry Council of NJ, cautioned against additional government mandates that would drive New Jersey’s already high energy prices even higher.

Noting that the program will reach $190 million by 2016–and that the state’s largest employers will bear 60 percent of that cost–the Chemistry Council’s Hal Bozarth said:

“At some point the Legislature has to say to the solar industry: we’re cutting you loose.”

Bill released from committee but what happens next?
The bill was released, but it’s not clear whether it or a similar measure in the Assembly can be passed and sent to the governor before the Legislature takes its summer recess at the end of June.

One  positive note for solar panel installers is that the Republican governor’s office appears
to be working with the legislature’s Democratic majority on details of the bills as they move along.

At the end of the last session, similar legislation passed both houses only to be vetoed by the governor.  Gov. Christie Proposes Alternative To Solar Energy Legislation In N.J].

Read more details about the legislation in:
Can the State Save New Jersey’s Solar Sector? 
NJ Senate panel OKs solar boost
Solar power industry feeling strain of dramatic fall in energy prices
NJ looking to rescue ailing solar industry
Smith, Sweeney bill to stabilize NJ energy market advances

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