After more than a year of uncertainty, the solar industry sees sunnier skies ahead now that a bill to revive the state's solar market is law.
Gov. Chris Christie today signed S-1925, nearly a month after the bill passed the Legislature with strong bipartisan support.
"All of the legislators standing behind me were from the other party," Christie said of the five legislators who attended the ceremony, adding that the law is "just another of the steps we're taking to have job creation."
Christie highlighted the job creation potential from stabilizing the solar industry, adding that the law fits into the energy master plan developed by the state.
The new law ramps up the state's annual renewable portfolio standards, which mandate that the state's power suppliers incorporate a set amount of renewable power into their portfolios.
That should help the solar industry, because power suppliers can meet those mandates by purchasing credits from homeowners, businesses and investors that own solar installations. Those credits are called solar renewable energy certificates, or SRECs.
The SREC program debuted in 2004. It attracted so much development that last year, the number of SRECs available for sale outpaced demand for the first time. As a result, the solar market came to a standstill in New Jersey, leading some companies to close up shop and others to lay off staffers.
The new legislation increases the renewable portfolio standard for the next 15 years, but also introduces a lower schedule of ceiling prices for SRECs, thus limiting the impact on ratepayers.
Michael Slom, vice president of renewable energy for Philadelphia-based solar developer Pardee Resources Co., said the law averted problems for the solar industry.
"Without it, we were in really grave danger," Slom said. "The biggest challenges are to try to rein in the overbuild that took place."
Christie rejected suggestions that the law doesn't go far enough to support solar.
"No matter what you give them, they'll always want more," Christie said, adding that solar supporters should "sit down and say thank you."
He said the law struck a balance between various interests.
"It's always difficult to balance different interests," Christie said. "That's what the energy master plan is all about."
Gary Weisman, president of the New Jersey Solar Energy Coalition, said the law's success or failure will depend largely on developers.
"The ultimate answer is really up to the industry," he said. "If there is investment without common sense, then it is conceivable that we could get overbuilt again."
Weisman said a number of factors beyond SRECs — including a federal grant program that reimbursed 30 percent of the cost of solar installations — contributed to the overbuilding. The federal grant program expired Dec. 31, so, he said, there's reason to believe the revived solar market will grow at a more sustainable pace.
Some retail energy suppliers opposed the bill, saying it would disproportionately affect businesses that are customers of the suppliers.
Bill sponsor Assemblyman Upendra J. Chivukula (D-Somerset) said legislators worked to mitigate any negative effects that would be felt by any segment of the energy industry.
Chivukula also rejected criticism that the solar industry is too highly subsidized, noting natural gas and nuclear suppliers also receive subsidies, and adding that 1 percent of the state's energy comes from solar sources.
"It just doesn't make sense," that an increase affecting 1 percent of the energy supply would significantly affect energy costs, he said.
In addition to fixing the SREC market, the bill also gives the Board of Public Utilities new authority to review some grid-supply projects, and encourages solar installations on landfills and brownfields. The bill also directs the BPU to set up an aggregated net metering program for local governments.