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Legislative Fix Seen As Only Way to Stop Solar Collapse

With prices steeply dropping, experts warn of gloomy future for NJ’s once thriving energy sector.

The sun may be setting on the once thriving solar sector in New Jersey unless lawmakers act soon, according to industry executives.

For the first time last week, the price owners of solar systems get for the electricity their units produced traded for less than $100 in New Jersey, a spectacular drop, considering the solar renewable energy certificates fetched $655 on the spot market at this point last year.

The steep decline is blamed on an oversupply of the certificates because so many solar developers have rushed to take advantage of lucrative state and federal incentives to install the technology. In March alone, 41 megawatts of new solar capacity was installed, adding to the oversupply situation.

With the prices for the so-called SRECs continuing to collapse, industry officials say the market will dry up by this summer, unable to support new solar development that would be profitable. The only projects moving forward now are ones financed by electric utilities under fixed prices in long-term contracts, said Michael Flett, president of the Flett Exchange, a brokerage firm that buys and sells the certificates.

“The only thing that will help this is a legislative fix," Flett said. He argued the state needs to ramp up how much electricity energy suppliers must purchase from solar systems, a step that might help New Jersey achieve its aggressive solar goals more quickly and less cheaply than originally envisioned.

Fred DeSanti, a spokesman for the New Jersey Solar Energy Coalition, agreed.

“Either this is fixed or this is over until 2016," DeSanti predicted. “Everyone will walk away from the state for two to three years. That’s really where we are at."

If so, it would be a tremendous fall for the solar industry, one of the few sectors in New Jersey that has consistently grown despite the slumbering economy. New Jersey is second to only California in the number of solar systems installed, a fact that has led to the hiring of several thousand workers in the sector.

The Christie administration and legislature have both tried to address the problem, but have been unable, to date, to get the deeply divided solar sector to agree on a consensual approach to halt the decline in prices for the solar credits.

For the most part, virtually all of the industry agrees that the state should ramp up its Renewable Portfolio Standard (RPS), which requires electricity suppliers to buy more of the power they supply to customers from solar systems. Most also back an extension of utility-sponsored solar programs that establish fixed prices for the solar credits and generally cost ratepayers, who ultimately bear the cost of these programs less.

The biggest stumbling block revolves around how many huge grid-supply solar projects -- utility-scale projects that supply their power directly to the regional power grid -- to allow in New Jersey. Unions have argued those projects could provide well-paying jobs to their members if the state allows them to proceed.

Others, however, claim if those projects move forward, it will continue the oversupply of the solar credits, harming many small solar firms that have taken root in the New Jersey.

To avert that possibility, DeSanti’s coalition urged the governor’s office last week to impose a three-year moratorium on systems larger than 2 megawatts. “Everyone was taken by surprise by the [amount] of grid supply projects,” he said.

Continue reading this story in NJ Spotlight.

NJ Spotlight is an online news service providing insight and information on issues critical to New Jersey.

Eyeballs April 26, 2012 at 12:27 AM
There is no "real" market for this junk. Let the entire solar industry collapse.
raymond Weis April 26, 2012 at 12:36 AM
I don't know too much about solar energy but I do feel that if it is worth doing it should be able to stand on its own without heavy government subsidies. Maybe low interest loans to install the systems would be in order but after that I would think what you supposedly would save on your electric bill should be sufficient to either make the system worthwhile or not. Any other way would require everyone else to subsidize these systems.
NJ Solar Guy May 02, 2012 at 07:00 AM
The cost of solar has dropped by more than 60%. If we put a floor on the srec market and lower the ceiling, the srec market will self correct. The industry needs 2-3 more years of subsidies for it to become cheap enough to stand alone. Oil and gas are still receiving HUGE subsidies, that solar will not need in a few more years of growth.
MinwooKim May 23, 2012 at 12:20 AM
The World Goes Solar. Japan's FiT in July is among the highest in the world. It's clear that Japan's FiT will shake the solar market. Now, US has the same options. New solar technology will show in Japan. This is it! As you know, earthquake in japan is happening frequently. Floating solar panels installation is one of the best solutions for power crisis in Japan. So you have to reduce the vibration to install Floating solar panels. Because, it makes many kinds of problems! The vibrations caused by wind, waves and external forces. New Floating Body Stabilizer for Floating solar panels installation has been created in South Korea. The Floating Body Stabilizers generate drag force immediately when Floating solar panels are being rolled and pitched on the water. Recently, this Floating Body Stabilizers using to reduce the Vibration of Floating Solar Panels in South Korea. You can see New Floating Body Stabilizer videos in YouTube. http://youtu.be/O2oys_YHhCc, http://www.youtube.com/watch?v=nA_xFp5ktbU&feature=youtu.be.

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