The preeminence of New Jersey as a solar leader was the subject of remarks by Jamie Hahn, managing director of Solis Partners, a leading developer and integrator of commercial solar power systems based in Manasquan, N.J., at a panel discussion on the New Jersey solar market at the recent Distributed Solar Summit 2010 in San Diego, California. New Jersey is second only to California in installed solar capacity.
The program on national distributed solar markets looked at these two leading markets, as well as at emerging markets in the Northeast and West. Panel participants provided insights into and analysis of the forces shaping these markets with the goal of providing the information needed to enable conference participants to make informed evaluations of solar opportunities.
The three-day summit drew participants including commercial, industrial and non-profit solar project developers, investors, lenders, photovoltaic suppliers, utilities, contractors and installers to explore how to take full advantage of the booming solar market. The event also provided opportunities for industry stakeholders to connect, build relationships and discuss deals.
Hahn highlighted the incentives that have helped New Jersey emerge as a solar leader, including the Solar Renewable Energy Certificate (SREC) program, a performance-based incentive. Under the program, utilities purchase SRECS, which are tradable certificates repesenting 1,000 kilowatt-hours of electricity, from solar producers in order to meet state Renewable Portfolio Standard mandates. "In New Jersey, SRECs have been one of the largest drivers in the adoption of solar," Hahn said.
"Because the price of electricity from solar is not yet comparable with that of electricity from traditional sources, we know that the only way to stimulate the the solar market is through policy initiatives that are implemented in the expectation that the industry will eventually stand on its own two legs."
The New Jersey Solar Energy Advancement and Fair Competition Act, signed into law in January, has taken New Jersey a step closer to memorializing the SREC program, Hahn said.
The law, which is a clear demonstration of the states commitment to solar, strengthens and reinforces the SREC program. The law is expected to attract additional solar development and increase investor confidence. Hahn also pointed out the flaws of the incentives and offered some solutions. The problem with relying on policy initiatives is that they typically bring uncertainties to the marketplace that make the financial structuring of solar systems more complicated, Hahn noted. In order to clear up the uncertainties, New Jersey will have to make the incentives more transparent and more long term.
"For solar to reach real scale in New Jersey, policy incentives need to be more transparent and we need long-term certainty in the market," he said. "With certainty you lower the risk profile. Lower risk will reduce the return requirements on the capital invested and lower return requirements will bring more competitive capital into the marketplace, resulting in lower costs for distributed solar power projects."
