NJ prioritizes community solar, grid-scale solicitation in solar successor proposal

Over the last decade, New Jersey has established itself as a national leader in solar development despite its relatively small size, population density, and lower solar insolation values relative to many western and southern states.

The Garden State has the seventh largest installed solar capacity in the country, with a total of 3,520 MW, and more than 523 MW in the pipeline. And while the economic and environmental benefits of New Jersey’s first 3.5 GW of solar have been significant, the state’s solar successor incentive program is expected to have an even greater impact.

The proposal, recently released by the New Jersey Board of Public Utilities (Board), calls for a bifurcated incentive program structure to incent behind-the-meter, community solar, and grid supply solar development. For behind-the-meter projects of 2 MW or less, as well as all community solar projects, the proposal would roll forward a number of key elements from the state's Transition Incentive Program, established in late 2019.

These include a fixed incentive payment for each megawatt-hour of solar electricity produced, an incentive that varies based on mount type and other project characteristics, and a fixed term for incentive payments to ensure the ability to finance projects.

“They want to get it right--they have to get it right,” Erick Ford, Executive Director at the New Jersey Energy Coalition, told NPM. “There’s a lot at stake. We have to make sure markets don't get the jitters, we have to make sure developers are okay, we have to make sure we have the jobs that are needed to reach the goals in the Energy Master Plan through solar. I can understand the reason they are moving judiciously and methodically on this one. There’s a lot of competing factors and issues involved in it. If you look at the 2050 goals, you're going to need to deploy a lot, so you have to do it the right way. Fundamentally, the idea is the everybody should be able to participate in solar."

The revamp of New Jersey’s solar energy incentive program launched last year, beginning with the closure of the Solar Renewable Energy Certificate (SREC) program upon the state’s attainment of 5.1 percent of kilowatt-hours sold from solar generation facilities. The Board established the interim transition incentive program to serve as a bridge between the SREC program and the forthcoming successor program.

New Jersey's aggressive clean energy policies, which include a solar set-aside in the Renewable Portfolio Standard (RPS), have resulted in more than 1,000 MW of residential solar installations and 1,695 MW of net-metered commercial and industrial generation. Grid supply solar has increased as well, with 736 MW installed as of 31 January 2021.

Community solar

New Jersey's Community Solar Energy Pilot Program, established in 2019, was recently expanded from the 75 MW goal to a target of 150 MW for the program's second year. In the first year of the program, the Board selected 45 projects representing nearly 78 MW out of an application pool of almost 652 MW. Notably, each project selected in the first round of the program has ensured that a majority of its subscribers were low- and moderate-income customers.

“I think people need to remember that the first three years are a pilot program,” Ford said. “Eventually we’re going to have the community solar rules either changed or readopted, and we need to look at how that factors into this successor program. The amount of projects they got from the latest round of solicitations is huge, and it's going to continue to be that way. If you look at what was available versus who applied--it was an astronomical number that applied. So the solar industry in New Jersey is strong.”

The Board recently proposed two amendments to the community solar program. The first would continue the pilot program structure and design, and would maintain an annual competitive solicitation. The second option would eliminate the annual competitive solicitation, instead implementing a first-come, first-served model, which would be subject to the entry requirements under the competitive solicitation model.

Both community solar proposals would favor LMI projects, and would include elements of preferred siting, strong community collaboration, and significant savings and favorable terms to subscribers.

Elena Weissmann, Regional Director, Mid-Atlantic at Vote Solar, told NPM that the successor proposal is a good start to ensuring solar equity across the state.

"BPU must center overburdened and frontline communities in the next phase of solar incentives,” Weissmann said. “Carveouts for low- to moderate-income families in the BPU Solar Succession Program straw proposal--most notably in the community solar program--are a critical first step, and we will be pushing the Board to consider other creative solutions as well. The solar economy we want to see in New Jersey advances equity and justice in overburdened communities, and we're looking forward to participating in the stakeholder process to ensure that is the case."

The Board is currently reviewing public comments on these amendments, and are mandated by the state's Clean Energy Act to establish a permanent community solar program by February 2022.

Competitive solicitation

New Jersey’s Energy Master Plan includes a pathways analysis to reach 100 percent clean energy by 2050, which identified the need for 32 GW of total solar installed by 2050. Modeling suggests that the state should install 5.2 GW of solar by 2025, 12.2 GW by 2030, and 17.2 GW by 2035.

To help meet these goals, the successor proposal calls for the creation of a new competitive solicitation for all grid supply projects and net metered non-residential projects above 2 MW, excluding community solar projects.

The process would establish multiple tranches in each solicitation, including basic grid supply projects; grid supply projects located on targeted desirable land uses like rooftops, landfills, and brownfields; solar + storage projects; and net metered non-residential projects above 2 MW.

Notably, the proposal directs the solicitation to include substantial project maturity requirements to minimize failure rates.

Comments are also being sought on a proposal to allow developers to place offers that aggregate distributed resources into a single virtual power plant bid, which would fall within the tranche that pairs grid supply with energy storage.

“The first round will give everybody an understanding of how it's working,” Ford said. “Maybe it also helps open up where we’re missing in some areas. Maybe there’s a focus on rooftop solar for houses or brownfields or places that probably can’t be used anymore like landfills. I think that's the push that we want to get to. There’s a lot of talk about agricultural solar, which is a unique and interesting concept where something like that can sustain a farm. I know New Jersey and the BPU is open to all and any ideas, and they want to hear them all. The thing that I’ve been saying to people is, ‘if you have an idea, reach out to them,’ and they should.”