Solar power in New Jersey
Solar power in New Jersey has grown significantly, increasing from less than 50 megawatts (MW) in 2007 to over 1,600 MW in 2015. This is aided by a Renewable Portfolio Standard which requires that 22.5% of New Jersey's electricity come from renewable resources by 2021, and by one of the most favorable net metering standards in the country, along with Arizona, allowing unlimited customers of any size array to use net metering, although generation may not exceed annual demand. Best practices recommend limiting net metering only to the size of the customer’s service entrance capacity (i.e. no limit). As of 2018, New Jersey has the sixth-largest installed solar capacity of all U.S. states and the largest installed solar capacity of the Northeastern States.
New Jersey has historically been a leader in solar power installation. At one point, it was the second largest solar state in the U.S. with 306.1 megawatts of installed solar power in 2011, which was a 131% increase over the 132.4 megawatts installed in 2010. In 2010, New Jersey became the second state, after California, to install over 100 MW in a single year. As of mid-2018, 94,510 solar photovoltaic systems have been installed, totaling over 2,526 MW. Many of the homes, schools and businesses which have installed solar panels can be monitored online on the internet. Prominent solar contractors in New Jersey include: Trinity Solar, 1st Light Energy, Gehrlicher Solar America Corp, GeoPeak Energy, and Amberjack Solar.
New Jersey is one of five states to receive an A in a comparison of the 38 states plus Washington D.C. which have net metering. Five received an F. New Jersey and Colorado were the only two states to allow unlimited net metering customers, up to 2 megawatts for each customer. In 2010 the limit was removed, and in 2012 connection may be to a 69 kV or lower line voltage, raising the previous requirements. New Jersey is one of three states which have no limit, although generation may not exceed annual demand, and the Board of Public Utilities originally had the option of limiting participation to 2.5% of peak demand, but the cap was raised to 2.9% in August 2015, which was seen as a temporary fix that would cover 3 years.
The federal Residential Energy Efficient Property Credit (income tax credit on IRS Form 5695) for residential PV and solar thermal was extended in December 2015 to remain at 30% of system cost (parts and installation) for systems put into service by the end of 2019, then 26% until the end of 2020, and then 22% until the end of 2021. It applies to a taxpayer's principal and/or second residences, but not to a property that is rented out. There is no maximum cap on the credit, and the credit can be applied toward the Alternative Minimum Tax, and any excess credit (greater than that year's tax liability) can be rolled into the following year.
NJ law provides new solar power installations with exemptions from the 6.875% state sales tax, and from any increase in property assessment (local property tax increases), subject to certain registration requirements.
Renewable Portfolio Standard
New Jersey's renewable portfolio standard (RPS) is one of the most aggressive in the United States and requires each electricity supplier/provider to provide 22.5% from renewable energy sources by 2021. In addition, 2.12% must come from solar electricity, an amount estimated to be 1,500 megawatts (MW). Solar Renewable Energy Certificates (SRECs) must be purchased by electricity suppliers to meet the state targets or else they face a fine known as a Solar Alternative Compliance Payment (SACP) that was $0.691/kWh in 2010. As New Jersey was approaching the minimum requirements, the requirements were accelerated on July 23, 2012, changing the shape of the compliance curve from slowly increasing at first to rapidly increasing at first.
By the end of February 2016, 1,604,180.7 kW of solar had been installed and an additional 392,809.9 kW was planned.
|Year||Total installed solar power (MWp)|
Solar Renewable Energy Certificates
In 2004, New Jersey adopted a program promoting the use of Solar Renewable Energy Certificates (SRECs) to meet the solar energy carve-out of the state RPS. In the 2011 Energy Year, 306,000 SRECs (or MWhs of solar electricity) must be purchased by electricity suppliers in the state in order to meet the state solar requirement. That requirement grows to over 5 million in 2026.
An SREC program is an alternative to the feed-in tariff model popular in Europe. The key difference between the two models is the market-based mechanism that drives the value of the SRECs, and therefore the value of the subsidy for solar. In a feed-in tariff model, the government sets the value for the electricity produced by a solar facility. If the level is too high, too much solar power is built and the program is more costly. If the feed-in tariff is set too low, not enough solar power is built and the program is ineffective.
The SREC program allows for the creation of a certificate with every megawatt-hour (MWh) of electricity produced. The certificate represents the "solar" aspect of the electricity that is produced and can be unbundled and sold separately from the electricity itself. Electricity companies, known as load-serving entities, are required by state RPS laws to procure a certain amount of their electricity from solar. Since it is often more costly for them to build solar farms themselves, the load-serving entities will purchase SRECs from solar generators and use the SRECs to comply with the state laws. With an SREC market, the value of an SREC is determined by supply and demand, subject to certain limitations. If solar is slow to develop, SREC values will remain high, encouraging the development of solar. If too much solar is added, SREC values will decrease, which in turn lowers the attractiveness of the investment. The goal of an SREC market is to find the SREC price that effectively represents the difference between the cost of producing other electricity and the cost of producing solar electricity. As the cost of solar electricity comes down, so will the value needed for SRECs. SRECs in New Jersey have traded as high as $680 per MWh. In comparison, the average sale price for the electricity itself ranges from $50 per MWh to $180 per MWh. The value created from the benefits of selling SRECs dwarf the value created by the actual electricity produced in today's market. This means that SRECs play a major role in the return on investment for solar in New Jersey. The program was modified in the "solar rescue bill" to increase the value of the SRECs, which have declined in value by 92% but cap them at no more than $325.
Solar 4 All project
In 2009, Public Service Enterprise Group, the largest utility company in New Jersey, announced plans to install solar panels on 200,000 utility poles in its service area, the largest such project in the world. The Solar 4 All project intends to increase the capacity for renewable energy in New Jersey by 120 MW and is expected to be completed in 2013. In addition to 40 MW of pole mounted power, PSEG is building four solar farms in Edison, Hamilton, Linden, and Trenton. 40 MW is expected to come from customer installed projects. As of August 2012[update], the 40 MW of solar farms are 90% complete.
|US Grid Connected Photovoltaics Capacity (MWp)|
New Jersey utility scale solar electric generation 
(% of NJ total)
(% of USA Solar)
(*) Preliminary data from Electric Power Monthly.
Beginning with the 2014 data year, Energy Information Administration has estimated distributed solar photovoltaic generation and distributed solar photovoltaic capacity. These non-utility scale estimates project that, New Jersey, generated the following additional solar energy.
|Year||Summer Capacity (MW)||Electric energy (GWh or M kWh)|
In March 2015 Six Flags Great Adventure announced its plans to clear more than 18,000 trees to build a 90-acre solar farm with 21.9 megawatts capable of meeting virtually all of the theme park's electrical needs. Solar facilities are concentrated in the Central Jersey. As of June 2014 the largest solar farms and photovoltaic arrays by megawatts in the state were:
|Tinton Falls Solar Farm||Tinton Falls||2012||19.9 megawatts||
|Zongyi Solar Energy (America)|
|Pilesgrove Solar Farm||Pilesgrove Township||2011||19.9 megawatts||100 acres (40.5 ha)
|Panda Power Funds|
|McGraw-Hill Companies||East Windsor||2012||14.1 megawatts||50 acres (20.2 ha)||private corporate complex|
|Berry Plastics||Phillipsburg||13.15 megawatts||50,688 ground-mounted panels||private manufacturing complex|
|Frenchtown Solar III||Kingwood Township||13.2 megawatts||50 acres (20.2 ha)
33, 300 panels
|French Solar 1 & Fenchtown Solar II nearby|
|New Jersey Oak Solar||Fairfield Township||2012||12.5 megawatts||100 acres (40.5 ha)
Atlantic City Electric (customer)
|Flemington Solar||Raritan Township||9.36 megawatts||33,500 ground-mounted panels||Consolidated Edison|
|Gloucester City||2012||9 megawatt||27,528 panels||Private refrigerated warehouse, one of the largest rooftop solar installations in the US|
|Mercer County Community College||West Windsor||8.25 megawatts||43 acres (17.4 ha)||campus|
|US Foods||Perth Amboy||8.135 megawatts||Private rooftop panels on refrigerated warehouse|
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