The New Jersey Legislature passed a compromise “solar fix” bill on June 25, 2012 after intense lobbying by numerous interested parties. The purpose of the legislation is to calm the turmoil that erupted in the solar market in New Jersey with the collapse of SREC prices last year, dropping from over $600 per MWH to less than $100 per MWH at times. Following is a summary of some of the key aspects of the bill:
- The bill approximately doubles the amount of solar capacity that will be subject to the renewable portfolio standard (“RPS”) in New Jersey starting in fiscal year 2014, making additional solar generation projects eligible for solar renewable energy certificates (“SRECs”).
- Solar Alternative Compliance Payments (“SACP”) that are payable by New Jersey electric distribution utilities and other electricity suppliers if they are unable to or do not have sufficient SRECs to satisfy their solar RPS requirements have been reduced substantially. As an example, the SACP payment for energy year 2014 will be reduced from $625 per MWH to $339 per MWH. The dollar amount of the SCAP reduces annually over time until it reaches $239.
- The bill permits what it calls “net metering aggregation” for state and municipal entities, which requires utilities to wheel power generated by a solar plant, which either uses a net metering billing account at one of the customer’s facilities or is owned by the customer, to other buildings or accounts owned by the same entity, so long as the other account is within 5 miles of the plant, in the same utility service territory, served by the same basic generation service provider and in the same rate class under the utility’s applicable tariff. The solar plant may not be located on land that is subject to the Farmland Assessment Act of 1964 and may not be an on-site generation facility. The solar generation plant must be sized so that the output does not exceed the combined metered annual energy use of the facilities that are served by it.
- During energy years 2014, 2015 and 2016, a solar generation project that is certified as being on a brownfield, an area of historic fill or a properly closed landfill may file an application for approval of the Board of Public Utilities (“BPU”) to be designated as connected to the distribution system. SRECs are only available to solar plants that are connected to the distribution system. The solar facility may not be larger than 10 MWs and the total capacity of all such plants eligible for such designation is 80 MWs. The facility has two years from the date of designation to begin construction. The BPU in conjunction with the Department of Environmental Protection (“DEP”) can exempt the owner of such a solar project from clean up of the brownfield if the land was acquired after the hazardous discharge.
- After energy year 2016, all solar projects that are neither net metered nor an on-site generator, as defined by the statute, must be approved by the BPU before being designated as being connected to the distribution system based upon criteria set forth in the bill.