New Jersey BPU releases plan for new solar program after SREC ends

The New Jersey Board of Public Utilities (NJBPU) staff has issued a straw proposal to assist in the transition from the current Solar Renewable Energy Certificate (SREC) Program to a new system. The Clean Energy Act, signed by Governor Phil Murphy in May 2018, required the Board to adopt new rules and regulations closing the SREC program to new applications when 5.1% of the electricity sold in New Jersey by each electric power supplier and each basic generation provider comes from solar electric power generators.

“New Jersey’s solar program has been a great success story,” said NJBPU president Joseph L. Fiordaliso. “Just recently we surpassed 100,000 solar installations, placing us in the nation’s Top 10 for home and business solar installations. It is our goal to create a new system that allows solar to thrive while at the same time protecting New Jersey ratepayers.”

At its December 18 board meeting, the Board adopted a rule beginning the process of phasing out the current SREC program and developing a new cost-effective initiative that will build upon the success of the state’s current solar process.

To help guide the transition process, Board staff has released, as part of the straw proposal, the following key principles:

  • Provide maximum benefit to ratepayers at the lowest cost;
  • Support the continued growth of the solar industry;
  • Ensure that prior investments retain value;
  • Meet the Governor’s commitment of 50% Class I Renewable Energy Certificates (“RECs”) by 2030 and 100% clean energy by 2050;
  • Provide insight and information to stakeholders through a transparent process for developing the Solar Transition and Successor Program;
  • Comply fully with the statute, including the implications of the cost cap; and
  • Provide disclosure and notification to developers that certain projects may not be guaranteed participation in the current SREC program, and continue updates on market conditions via the NJCEP SRP Solar Activity Reports.

The Clean Energy Act defines the transition point as “the attainment of 5.1% of the kilowatt-hours sold in the State by each electric power supplier and each basic generation provider from solar electric power generators connected to the distribution system.” For purposes of the straw proposal, “attainment” means that 5.1% of the actual kilowatt-hours sold in the state are being generated by solar electric power generators. As the transition process unfolds, Board staff is proposing that SRECs be divided into three categories:

  • Legacy SRECs created by projects that filed an SRP Registration and entered into operation prior to the time when the 5.1% threshold is reached;
  • Pipeline SRECs created by projects that filed an SRP Registration, but which have not begun operation prior to the attainment of the 5.1% threshold;
  • The SREC Successor Program for projects that filed an SRP Registration after the 5.1% threshold is reached.

A robust public engagement process will occur as the Board moves toward a new solar program. The Board has released a series of stakeholder questions in the straw proposal and invited interested parties to provide input on the transition and SREC Successor Program. The public stakeholder process will take place in the first half of 2019. The first public stakeholder meeting will take place Friday, January 18, 2019, at Rutgers University, College Avenue Student Center, Multipurpose Room, 2nd Floor, 126 College Avenue, New Brunswick, at 10:00 a.m.

Following is a statement from Sean Gallagher, VP of state affairs for the Solar Energy Industries Association (SEIA):

“The solar industry is pleased with the BPU’s plans for closing the existing SREC market and starting the transition to a successor program. This approach should allow enough time to develop a new program and provide continuity for the New Jersey solar market through 2020. The BPU’s actions this week are positive steps toward meeting the Murphy administration’s clean energy objectives and we look forward to working with them as the transition details are ironed out over the next several months.”

News item from the New Jersey Board of Public Utilities (NJBPU)

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