Cyclical slowdown may be dimming New Jersey’s solar expansion

Workers install solar panels at  Delaware Valley Regional High School in Frenchtown, New Jersey. (Phil Gregory/WHYY)

Workers install solar panels at Delaware Valley Regional High School in Frenchtown, New Jersey. (Phil Gregory/WHYY)

Nationwide employment in the solar industry increased 25 percent last year, but solar employment in New Jersey fell 15 percent. Although plenty of projects are underway in the Garden State, a slowdown may be on the way.

You can see solar panels on many rooftops, utility poles, and in fields in New Jersey.

There are 66,000 solar installations in the state that generate 2 gigawatts of electricity.

And more are going up.

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A solar field under construction behind the Delaware Valley Regional High School in Frenchtown is expected to provide 80 percent of the school’s energy needs and save the district more than $800,000 over the next 15 years.

Like many solar projects, it’s a leasing arrangement where a company pays for the installation and then sells the power the panels generate to the school, municipality, or homeowner for less than they’d pay a utility company for electricity.

Brick is on board

Some homeowners or local governments fund the installation themselves.

Solar panels that were erected in the Brick Township parking lot and put on the roof of the municipal building several years ago are now saving the town about $5,000 a year, said Mayor John Ducey.

“It saves us actually from having to go out and purchase our power from another source,” he said. “So a third of it is actually generated right here at town hall and it doesn’t have to come out of taxpayers’ pockets.”

The federal Environmental Protection Agency is using another solar project in Brick as a case study in how contaminated sites can be put to productive use.

A 7-megawatt solar field placed above a capped 42-acre landfill has been producing electricity since 2014, according to assistant township planner Tara Paxton.

“Considering it was a Superfund site  — and the potential environmental impacts with the plume that’s in the water table could have had on the rest of the community — we needed to do something,” Paxton said. “Rather than just having it sit there and having it be a capped landfill, it’s at least doing something for the future of the township.”

Balancing solar renewable energy credits

Solar renewable energy credits represent the incentive for for solar developers in New Jersey. Known as SRECs, they are a tradeable commodity whose value is determined by supply and demand.

But that incentive system causes a boom and bust cycle for the industry that may be headed for another collapse, said Lyle Rawlings, the president of Advanced Solar Products who leads the Mid Atlantic Solar Energy Industries Association.

“The demand is set by the Legislature on a year-by-year basis, so that sets how much you can build without crashing this community market, Rawlings said. “Last year, we built more than the Legislature provided for, so we’ve put ourselves on the brink of another bust cycle.”

Legislation passed by the Senate and awaiting action by the Assembly would extend the requirements for utilities in the state to purchase the solar renewable energy credits, said Bob Smith, Senate Environment Committee chairman.

“It advances whatever SREC are left and moves them up to the next two or three years so that we maintain the same level,” said Smith, D-Middlesex. “I think that, by June 30, we will or won’t have a bill — and the solar market may be may not be back into boom and bust.”

New Jersey will study different ways of stimulating solar development, he said.

Other states use a tariff system to set a fixed price for the electricity produced by the solar panels, said Rawlings.

Largely untapped resource

Meanwhile, some are counting on solar development for more than just economic reasons. Environment New Jersey Doug O’Malley said expanding solar installation will also reduce air pollution.

“You know solar isn’t just kind of a nice, gee whiz thing on our homes,” he said. “It can be the way that we’re going to reduce carbon pollution in the state so that we will not have extreme weather events like Hurricane Sandy becoming more and more common here in New Jersey.”

Only about 4 percent of New Jersey’s electricity is now produced by the solar industry. Clean energy advocates want 80 percent of the state’s supply to come from solar and other renewable energy sources by the year 2050.

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