In an unusual show of bipartisan support, New Jersey Governor Chris Christie signed Democrat-backed legislation intended to spur investment in new solar projects.
The law, S1925/A2966, accelerates the solar portion of NJ's Renewable Portfolio Standard (RPS) by about four years, requiring utilities to get more of their electricity from solar sooner.
Utilities now must get 2.05% of their electricity from solar by 2014, up from less than 0.5% now, and 4.1% by 2028.
The law also promotes solar project development on brownfields and landfills, clarifies eligibility for net metering and authorizes aggregated net metering for certain public entities.
In NJ, utilities have to buy renewable energy credits for every megawatt-hour a solar plant produces. That made it attractive to solar developers to build projects and pushed the state to a solar leader in the US.
But then, with prices for solar dropping so much, utilities started building their own solar plants, dramatically cutting demand for credits and leaving solar developers without a major revenue source. Prices for credits crashed from $500 per megawatt-hour a year ago to less than $100 this year.
Under the new law, utilities need to speed up solar energy purchases by about four years, which means they will have to buy extra solar energy (credits) they can't produce themselves.
The law also lets independent solar developers hold onto credits for five years instead of three, so they can sell them when it makes the most sense for their business.
And it reduces the penalty utilities must pay if they don't meet the RPS, saving customers about $1.1 billion over the next 15 years.
Environmental groups thanked Christie for signing the bill, saying solar projects would have died without it, but note the bill is only a short term fix, since it lasts for just two years.
"We should be increasing the state's overall clean energy requirements and ensuring more of our clean energy goals are carved out for solar specifically. In the short term, however, this bill will ensure that New Jersey continues to be a solar leader," says Matt Elliot from Environment New Jersey.
Christie has been draining the state's clean energy fund and revenue from the northeast cap-and-trade program to close gaps in the general budget. NJ is the second biggest solar market the US, and led in first-quarter installations, with 34% of all solar installed. It has 775 MW of solar capacity, enough to power about 130,000 homes.
Under Christie's directive, the state left the Regional Greenhouse Gas Initiative (RGGI) at the end of 2011.
During the three years New Jersey participated in RGGI, it benefited from over $113 million that supports energy retrofits and solar installations, creating $150 million in economic activity and 1,800 solar jobs, according to Analysis Group.
Christie's Energy Master Plan reduces the state's RPS for 2021 from 30% to 22.5% and puts the energy efficiency goal under review.
More detail on the law: