New Jersey has more than doubled its solar capacity in the first nine months of 2006 and now has more than 1840 solar electric systems across the State with over 26 MW of installed solar capacity, according to the New Jersey Board of Public Utilities. BPU says a combination of state financial incentives with net metering benefits, electric cost savings, federal tax credits and clean energy credits have driven growth.
Based on its financing model, New Jersey has reduced the payback period for solar installation down to ten years or less. Both business and residential customers have taken advantage of state’s Customer Onsite Renewable Energy (CORE) rebates, which reduce the upfront costs for the installation of renewable energy technologies including solar, wind and biomass by as much as fifty percent. During the first nine months in 2006, New Jersey reports over $46 million dollars in rebates to NJ ratepayers for the installation of over 10 MW of solar photovoltaics. An additional $56 million in CORE rebate commitments were made available by the Board in September bringing the final 2006 budget for the rebate program to $147 million. The Office of Clean Energy estimates that an additional 200 installations representing an additional 5 MW of solar capacity will be completed within the fourth quarter. In comparison, New Jersey installed a total of 9.9 MW of solar capacity from 2001 through 2005, representing a total of $43.9 million in rebates.
In addition, Solar Renewable Energy Certificates have provided long term financing for solar systems by compensating the solar generators for each MWh of solar electricity produced. Preliminary reports indicate that more than 1300 eligible solar generators participated in the state’s SREC Program during the most recent trading period and that over 10,700 SRECs were purchased and retired by the regulated utilities who are required to purchase SRECs to comply with the state’s Renewable Portfolio Standards.
Third quarter reports reflect the impact of New Jersey’s Solar Financing Model which relies on solar rebates complemented by the state’s performance-based net metering rules and Renewable Energy Certificate (REC) programs. The use of RECs has been critical to New Jersey and its ability to drive growth and meet its clean energy goals. The state plans to continue to transition away from reliance on rebates towards REC-based financing in order to sustain growth in the market and meet its clean energy goals which call for an estimated 1500 MW of solar capacity by the year 2020. To reach this goal New Jersey will need to install an estimated 110 MW of solar capacity each year.