Friday, November 11, 2011

Despite Fears of a Crash, Solar Sector Remains White Hot in New Jersey - State fields 700 installation applications a month, even as solar certificates lose half their value

http://www.njspotlight.com/stories/11/1103/0223/ 
New Jersey's solar market is continuing its rapid pace of growth—even amid warnings by some the sector could be headed for a crash.

In October, more than 44 megawatts of new solar systems were installed in the state, bringing the total to more than 447 megawatts of installed capacity, according to information compiled by a state contractor who helps administer the solar program. That amount could be more than doubled (1,017 megawatts) if all of the projects in the pipeline are built.

In fact, so much solar is being built that New Jersey is more than a year ahead of meeting a state-mandated requirement that specifies how much of the its electricity comes from solar energy. For most, that would be viewed as good news, but some say the explosive growth has created an oversupply of solar renewable energy certificates (SRECs), the primary means of financing solar projects.

The result has been prices for the certificates have dropped by more than half since this past June, creating widespread uncertainty among investors as to whether to pump new money into building additional systems in New Jersey. It also has led the state and industry executives to begin looking for ways to stabilize the sector.
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While industry executives are pushing to extend the utility-run programs, the state Division of Rate Counsel, which represents the interests of ratepayers, remains unconvinced it is the best way to go. "I still want to see why it is beneficial to ratepayers to extend this program," said Paul Flanagan, an attorney with the division.

Under New Jersey's system, power suppliers have to buy a certain amount of their electricity from solar systems. The primary means of meeting that requirement, known as the renewable portfolio standard (RPS), is by purchasing the certificates, which are factored into electricity costs.

Those costs have not been cheap. According to data compiled by Honeywell, a contractor for the state to run the program, the cost to ratepayers is approaching $1 billion, with the current spending at about $872 million. Of that, $267 million was spent in meeting the RPS requirements, $272 million on the utility loan programs, and $342 million through rebates.

With the state incentives, combined with a federal tax cash grant of 30 percent, the solar sector has been so inviting to investors that New Jersey ranks second nationwide in the number of solar installations with more than 11,000, behind only California.
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By Tom Johnson
NJ Spotlight www.NJSpotlight.com
FOR FULL STORY GO TO:
http://www.njspotlight.com/stories/11/1103/0223/
November 3, 2011

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