The plan, which requires legislative approval, serves as the outline for the state’s energy policy, including the state’s strategy for renewable and clean energy. The final plan follows the release of a draft version in June. Since then, the Board of Public Utilities has held three stakeholder meetings and received comments from 300 companies, associations and individuals, the administration said.
“We think the governor is right on mark with setting realistic goals in the energy master plan, and that it has a little bit of everything in there. It’s a very diversified portfolio that includes renewable, includes natural gas, includes the potential for nuclear and other sources of energy,” said Michael Egenton, senior vice president for the New Jersey State Chamber of Commerce. “We always said everything needs to be on the table if we’re going to meet our energy demands in outlying years.”
The final version has a handful of changes, most notably a plan to moderate solar renewable energy certificate, or SREC, prices.
The plan proposes a temporary acceleration of the state’s renewable portfolio standard, or RPS, moving the schedule of annual renewable energy goals ahead by one to three years. The move is designed to address a precipitous drop in spot market prices for SRECs in recent months.
The SREC program is the state’s chief solar incentive. Under the program, companies or homeowners that build solar installations earn SRECs based on the solar energy they generate.
The RPS mandates the state’s power suppliers include a certain amount of renewable energy in their portfolios. In order to meet those standards, power suppliers must generate their own renewable energy, purchase SRECs, or pay a penalty that essentially acts as a ceiling for SREC prices.
Until this summer, the supply of SRECs in the state was insufficient to meet demand for the credits from power suppliers. As solar development continued to grow at a rapid pace, though, SREC supply caught up with and surpassed demand, causing SREC spot market prices to drop from about $600 to as low as $150.
“We have enough SRECs for the existing RPS requirement to suffice through not only energy year 2012 — which ends May 31 next year — (but) through energy year 2013 and probably entering energy year 2014 … you would really not need to build much more,” said Jamie Hahn, managing partner of Solis Partners, in Manasquan. “You would see a significant amount of job loss in this sector if no legislative measure is put through between now and the beginning of next year.”
“The most important thing is the RPS,” Hahn said. “That’s what is going to drive this market.”
By speeding up the state’s RPS, officials hope to increase demand, thus raising SREC prices to more moderate levels. The plan also calls for reducing the payment schedule for noncompliance penalties, in a bid to prevent SREC prices from getting too high, which Hahn called “a give and take.”
Other proposed changes including redefining the RPS so the benchmarks for power suppliers are based on a percentage of the overall energy consumed, rather than on a set amount of energy.
The plan also aims to give approval priority to projects deemed to have both environmental and economic benefits. It also boosts support for long-term solar contracting programs offered by the state’s utilities, a move that would also help moderate SREC prices.
“The adopted plan supports enhanced reliability, lower energy costs and environmental protection wile aiding the development of clean energy technologies,” said outgoing BPU President Lee A. Solomon.
“Looking just narrowly at a couple issues we weighed in on, we were happy to see the administration is promoting solar most in locations that we think make sense,” said Chris Sturm, senior director of state policy for New Jersey Future. “Not on farmland and open space, but on rooftops, parking structure, brownfield landfills. In those locations, you’re not running into conflict with other state policies.”
While the administration did make some changes since June, one of the most controversial facets of the plan was left unchanged.
The draft master plan set forth a goal of having 22.5 percent of the state’s energy come from renewable sources by the 2021. That goal mirrors the current legislatively enacted goal, but it falls short of the goal of reaching 30 percent by 2020 outlined in the 2008 master plan of Gov. Jon S. Corzine. Christie administration officials have characterized the 30 percent goal as unrealistic.
That rubbed environmentalists the wrong way.
“From the environmental perspective, some of the biggest problems remain,” said Matt Elliott, clean energy advocate for Environmental New Jersey. “What the governor is doing, essentially, is saying he’s going to comply with the law. and not set goals that are more ambitious and more aspirational. … We think an energy master plan should be visionary and ambitious.”