In 2001, New Jersey had a total of six solar electric systems. Today, New Jersey has over 6,500 solar electric systems and is now the second largest market (behind California) for solar power in the United States.
The large growth in solar electric systems has much to do with programs established by the New Jersey Clean Energy Program (NJCEP) and New Jersey Board of Public Utilities (NJBPU). The NJCEP offers commercial, industrial, and municipal customers financial incentives and technical assistance to integrate energy efficiency measures and renewable technologies into building construction and renovation projects.
In 2005, the NJBPU introduced a Renewable Portfolio Standard (RPS) which requires utilities supplying electricity to New Jersey consumers to have a portion of that energy generated from solar systems. To comply with the RPS, utilities have to purchase the solar attributes from solar producers in New Jersey.
Solar attributes are termed Solar Renewable Energy Certificates (SRECs) and are awarded by the NJCEP to the solar system owner for each megawatt hour of electricity produced by the owner's system. Selling SRECs is a major source of revenue for solar system owners and helps to offset the solar system cost.
In October 2008, Governor Jon S. Corzine announced an aggressive Energy Master Plan to ensure that, by 2020, New Jersey will derive 30% of its electricity from renewable energy sources with approximately 3% (2,164 Gigawatt hours) of the state's energy sources coming from solar electricity.
In January 2010, NJ passed "The Solar Energy Advancement and Fair Competition Act," which reaffirmed the state's comittment to solar power by requiring that, by 2026, 7% (5,316 Gigawatt Hours) of electricity will come from solar power.
Because the RPS requirements are based on the goals of the Energy Master Plan, the bar has been set very high. In fact, the amount of solar electric systems installed in NJ are not meeting those annual requirements. This means that SRECs will continue to be highly valuable to utility companies and, in return, be highly profitable to solar energy system owners.
It is anticipated that the incentives derived from the SREC program, plus the anticipated rise in energy costs, will encourage more solar installations throughout the state. The result is a corresponding growth within the solar industry that will satisfy the requirements of the Governor's Energy Master Plan.
