New Jersey slipped one spot in its nationwide ranking for solar capacity in 2012, as growth cooled amid an expanding national market, a new report shows.
New Jersey’s solar market, still among the most robust in the nation, fell to third in the United States, dropping behind Arizona, according to an annual report compiled by Solar Energy Industries Association and GTM Research. California again ranked first.
The report shows the amount of solar panels installed in the United States grew 76 percent, to 3,313 megawatts, last year, up from 1,887 megawatts in 2011. But at the same time, growth in New Jersey’s solar market is slowing: The Garden State added 415 megawatts of solar power in 2012 — a 32 percent increase from the prior year, down from a 73 percent annual increase reported in 2011.
New Jersey solar executives said the slowdown was inevitable after years of rapid, but unsustainable, growth fueled by an investment frenzy supported by government incentives.
“We saw a huge wave of companies all over the world set up in New Jersey to take advantage of those market conditions,” said Gauriv Naik, co-owner of GeoGenix, an Old Bridge-based solar provider. “Clearly, it was not sustainable.”
New Jersey also fell from first to second place in installed commercial solar panels, according to the report, slipping behind California.
Business people with long-term outlooks still see solid opportunities here, said Naik, whose company formed in 2001 and employs about 15.
Naik said he expects the state’s solar capacity to add 200 to 250 megawatts a year and grow about 20 percent to 30 percent annually, “which is still very impressive growth rates.”
Joe Joyce, senior vice president of sales and marketing at Ray Angelini Inc., a Sewell-based solar company that employs 200, says the state’s industry is reaching a mature phase that favors steadier growth. He noted the state added 35 megawatts of solar power in February, the biggest monthly increase in more than a year.
“The people who are in the business long term are in it because it’s a good business, not just because it’s the flavor of the month,” Joyce said. “The guys who are in it now are guys who should be in it.”
New Jersey’s slowdown was evidenced in the plummeting price of solar energy renewable credits, or SRECs, which providers sell to utilities that are required by government to hold a certain portion of their energy portfolio in solar.
Such credits plunged to about $65 last year after trading above $600 in 2011 as an oversupply of credits stalled new development. Gov. Chris Christie signed legislation last July intended to stabilize the solar market.
Prices have recently recovered to above $100. Naik expects prices to settle around $150, which he described as sufficiently attractive for an investor of solar assets. Naik said as the industry further matures in the next few years, government support won’t be needed.
“We need for policymakers to get out of the way and let us do what we do and let market forces play out,” he said.
Geography also plays a big role. Joyce said Arizona surpassed New Jersey because of its huge advantage in open space that allows for new construction of solar-powered utility stations. Such projects far outsize residential or commercial jobs, he said.
“We don’t have anything in New Jersey that would come close to that,” Joyce said. “We just don’t have land like that.”