Prices for New Jersey solar renewable energy credits reached their highest level in four years this week when prices climbed to $282.81 on Tuesday, surpassing the previous high of $282.58, posted in December 2011. The rise in prices can be attributed to several factors, but Michael Flett, president of Flett Exchange, said the overall reason is the surprisingly low installation rate of solar arrays.
"I'm confused about the build rate," Flett said Thursday in an interview. He said he expected to see greater construction of net-metered projects driven by the 30% increase in SREC prices since July.
Between June 30 and October 31, some 56 MW of solar capacity was installed in New Jersey, according to the state Board of Public Utilities' Office of Clean Energy. The agency expected another 32 MW to 62 MW to be installed by December 31. The total solar installed capacity as of October 31 was 1,556.7 MW.
Power companies that are required to source a portion of their electricity sales from solar projects have been competitively procuring SRECs, which also has pushed up the price, Flett said.
Solar power owners have been actively selling to take advantage of the high prices, Flett said. Flett's company operates an online SREC exchange for six states and manages SRECs for owners.
New Jersey's solar market has had its up and downs and in 2012 the legislature passed a bill meant to stabilize SREC prices that had fallen to less than $200 from a high of more than $600.
The market became overbuilt, with up to 30 MW coming online a month. When installations surpassed the demand created by the state's renewable energy portfolio standard, prices fell dramatically.
The RPS was amended to raise the solar requirement to 2.75% in 2016 and increase each year until it reached 4% in 2027 and every year after.
The Legislature also lowered the alternative compliance payment for utilities that fail to meet the standard and it limited the number of large-scale solar projects that could be installed, both of which helped to stabilize the market, Flett said.
Industry analysts at the time expected the new requirements to raise SREC prices to between $200 and $400.
New Jersey is once again considering a hike in the RPS, and a bill passed the state Senate in December that would require 11% of the energy sold in the state to be from top tier renewables, a figure that would rise to 80% in 2050
Flett said there is no urgency to change the solar requirement as long as prices are high and investors are doing well. "It could be six months or three years before things turn," he said.
New Jersey has taken other actions on the clean energy front. Both houses of the Legislature passed a resolution in December requiring the Department of Environmental Protection to amend or withdraw rules that were used to support Governor Chris Christie's removal of the state from the Regional Greenhouse Gas Initiative.
DEP's rules are not consistent with the intent of the Legislature in 2007 when it passed a law requiring the agency to establish rules and regulations to govern the state's participation in a greenhouse gas cap-and-trade program, the resolution said.
In an order released Tuesday, the BPU approved a renewable electric storage incentive program that will offer incentives for storage systems that are integrated with new or existing net metered renewable sources including wind, solar and sustainable biomass.
Half of the $6 million program budget will be offered through an open enrollment program that begins March 1. A $300/kWh rebate will be based on the energy capacity of the storage equipment. A second incentive offering will be discussed at the BPU's March board meeting.
The Christie administration on Monday released the final update of its 2011 Energy Master Plan. New Jersey remains committed to meeting the renewable energy production target of 22.5% by 2021, which was established by BPU in 2006, the plan said.
New Jersey should continue to pursue measures that will help drive down the price of power, the plan said. Since 2011, the state has dropped from having the fourth highest power costs in the US to having the 10th highest cost.
"This is progress, but it is not enough," the plan said.
