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Solar energy bills draw mixed responses

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The proposed legislation awaits action by Gov. Phil Murphy, who has indicated he will sign it.
The proposed legislation awaits action by Gov. Phil Murphy, who has indicated he will sign it. - ()

Some say some proposed energy legislation could raise utility rates for New Jersey businesses, while others expect they will help businesses.

Senate bills S2313 and S2314 would require New Jersey to derive half of its energy from renewable sources by 2030. Approved by the Senate, they also encourage investment in solar energy and establish an energy efficiency program that would decrease harmful emissions from the power sector.

The Assembly last month passed A3723, which would require the Board of Public Utilities to conduct an energy storage analysis. It also would make changes to the solar renewable energy certificate program, adopt energy efficiency and peak demand reduction programs, adopt a Community Solar Energy Pilot Program and provide tax credits for offshore wind energy projects.

Another bill passed by the Assembly was A3724, which would establish a zero-emission certificate for nuclear power plants within the independent system operator grid.

The proposed legislation now awaits action by Gov. Phil Murphy, who has indicated he will sign it.

Murphy campaigned on starting an Energy Master Plan that will set New Jersey on a path to 100 percent clean energy by 2050 and invest in clean energy to create thousands of high-paying jobs.

Within weeks of taking office, Murphy signed an executive order in January to put New Jersey back in the Regional Greenhouse Gas Initiative, a cooperative market-based program among several states to reduce greenhouse gas pollution.

The order reverses a decision by former Gov. Chris Christie and will kick off a negotiating process to determine the best pathway for New Jersey to re-enter the innovative carbon trading program.

Sara Bluhm, vice president of environmental and energy policies at the New Jersey Business and Industry Association, said A3724 would add hundreds of millions of dollars in ratepayer obligations during the next decade. As New Jersey businesses consume 64 percent of the state’s electricity, energy policy is a major factor in the cost of doing business.

Bluhm said NJBIA supports transforming the energy market and keeping a diverse energy portfolio. But she added New Jersey needs to balance policy goals with the affordability and competitiveness of ratepayers.

As a result, she said, with no mitigation, strategy or coordination, these policies will increase costs on the state’s ratepayers.

NJBIA opposes A3723 in its current form on the basis of its unknown costs to ratepayers.

Stefanie Brand, the director of the New Jersey Division of the Rate Counsel, advocates on behalf of New Jersey consumers. She supports the bills for moving the state toward renewable energy, believing they will help many people economically.

“There is a likelihood we would spend more money in the short term through high rates,” Brand said. “If we do it right, it should not cost too much more money. The renewable portfolio will replace the existing portfolio. It will reduce our carbon emissions. Our goal has to be to try to find a way to do it so the costs do not outweigh the benefits.”

A utility cannot increase its rates until the New Jersey Board of Public Utilities approves the change. The board must approve requests by utilities to add or change programs or services.

Stephen Kisker, chairman of the Renewable Energy and Sustainability Group at law firm Chiesa, Shahinian & Giantomasi, said the latest energy bills would grow New Jersey’s economy and solar energy companies by creating jobs, generating tax revenue and granting a 30 percent credit against taxes for a party who builds a solar array.

Kisker represents developers, financiers and all sides of solar energy deals and considers renewable energy a way to stimulate business and conserve the environment.

“If we could switch to renewable energy, it is a limitless source,” Kisker said. “In building a solar project, most expenses are upfront. The operating costs of a solar array are a miniscule fraction of a fossil plant. Your income will come over 15 years to 20 years. You sell electricity. You put your array on someone else’s roof.”

Kisker is also an advocate for solar energy because it lessens American reliance on foreign oil: “It does not feed folks on the other side of the world who want us to be dead.”

New Jersey is currently offering Solar Renewable Energy Certificates to solar project owners who enroll in the SREC Registration Program to establish the project’s eligibility. According to the New Jersey Board of Public Utilities, solar installers or project developers may offer to buy SRECs as part of the project financing. The board advises commercial and residential customers to consider financing options for a solar installation, ask their installer about the value of SRECs and who will have the rights to claim them once the project is completed.

But A3713/S2314 would close the existing SREC program to new projects by June 1, 2021, and direct the Board of Public Utilities to conduct a study that evaluates how to modify or implement a new solar incentive program.

“Other states are revisiting state incentive programs,” Kisker said. “New Jersey had an oversupply program to incent solar installation. But politically I do not think it can continue. There is too much pressure from New Jersey ratepayers paying for the SREC program by paying utilities bills.”

Richard DuBeau, the owner of Mullica Hill-based Kaitanna Solar, thinks A3724 would hurt his business by reducing the value of installing solar panels and ending the SREC program in three years. 

“It might not be advantageous for customers to install solar panels,” DuBeau said. “It would affect residential and commercial customers. It has a wide-reaching effect. A lot of my customers rely on this to pay debt on the system. If that is reduced, it would take longer to pay off so it is not as favorable for the customer.”

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David Hutter

David Hutter


David Hutter grew up in Darien, Conn., and covers higher education, transportation and manufacturing for NJBIZ. He can be reached at dhutter@njbiz.com.

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