New Jersey bill would phase out SREC program, boost renewables standard
- New Jersey lawmakers are advancing a bill designed to overhaul the state's Solar Renewable Energy Credit program in favor of other measures to accelerate deployment of solar, New Jersey Spotlight reports.
- Senate Bill 2276 would phase out the current SREC program and require regulators to cease accepting applications for the incentive by 2021. The measure would also reduce the length of time new solar system owners could collect the credit, from 15 to 10 years.
- In exchange for phasing out the credit, lawmakers aim to better align state solar incentives with the federal investment tax credit and also propose increasing the amount of solar that utilities must have to meet the state's Renewable Portfolio Standard (RPS) from 4.1% to 5.3% of all electricity sales by 2022.
New Jersey is the latest in a long line of states looking to redesign programs boosting solar energy. While many of these policy debates focus on net metering — a scheme that compensates rooftop solar users for excess energy sent to the grid — other financial incentive programs are facing scrutiny.
New Jersey has had intermittent fits of growth and stagnation in its solar industry over the years. The state was one of the first in the U.S. with a thriving solar market after a boom in 2011, but has since fallen behind after prices for SRECs came tumbling down in the years since. Lawmakers would like to avoid a repeat of that scenario.
The proposed modifications to the state's SREC program appear to have the support of solar interests. NJ Spotlight also noted solar advocates called the bill a "transitional" measure that requires the Board of Public Utilities to study the solar sector in order to compose a new framework supporting solar development by 2021.
The bill's introduction notes the loss of economic development and solar construction from the current design's failure to capitalize on the extended federal Investment Tax Credit. According to the bill, the design of the current SREC program and RPS will "likely result in the loss of more than 120 megawatts of solar energy per year through 2021 if left unsupported by the necessary complement of an accelerated State renewable energy portfolio policy." In terms of dollars and cents, the bill says failing to expand the standard and revise the SREC program could cost New Jersey $240 million annually in lost solar projects, in addition to 5,000 clean energy jobs.
Supporters of the bill hope it will be taken up in the lame duck session after the fall election cycle, but it's unclear if Gov. Chris Christie's administration will support the bill.
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