New Jersey Approves Highest per Capita Solar Commitment

Last week, the New Jersey Board of Public Utilities (NJBPU) voted to approve new regulations that expand the State's Renewable Portfolio Standard (RPS) by extending the existing goals out to 2020 and vastly increasing the required amount of renewable energy and solar energy.

Under the newly adopted regulations, 20 percent of New Jersey's electricity must come from renewable sources by 2020. The new regulations also include a 2-percent solar set-aside, which is forecast to require approximately 1500 MW, the nation's largest solar commitment relative to population and electricity consumption. The new goal will continue to spur market development and is considered the largest solar goal in the country on a per capita basis (exceeded only by California, which is four times the size of New Jersey in population and electricity consumption).

The change up to 20 percent reflects an enormous new show of support for renewable energy from the Northeast state. New Jersey, in fact, has had a renewable energy mandate on the books since 1999 when the electricity market was deregulated. At that time, the RPS was set at 4 percent to be reached by 2012, then in 2003 the 4 percent target was changed to be met four years earlier by 2008, according to Suzanne Leta, Energy Advocate for the New Jersey Public Interest Research Group (NJPIRG).

With this latest regulatory move, the NJBPU took a giant leap to a 20 percent standard, the likes of which is only matched by trend-setting California.

"The broader picture here is that the state is doing a really good job trying to create a diverse and competitive renewable energy market," Leta said.

New Jersey is in a unique position with respect to the entities that will be mandated. Since de-regulation, all of the electricity generation is privately operated and managed. The mandate, therefore, will fall upon the companies that control electric transmission and distribution (T&D) in the state, which are largely controlled by large, publicly traded holding companies. If these T&D entities don't meet the mandate for an increasing percentage of the power they carry to come from renewable energy, fines will be imposed.

The next step, says Leta, is for the state to ensure its solar rebate program is adequately funded to keep up with growing demand, either from residents and businesses who elect to install solar photovoltaic (PV) panels, or from extra demand created from the mandate.

And the RPS goes well beyond solar. The two-tiered mandate program will likely be met largely by new wind power developments and biomass incinerators. There's also a likelihood, Leta says, that the state's new policy will be what drives the commercial deployment of ocean energy projects such as wave or tidal power.

To meet the goals, the RPS mandates the use of Renewable Energy Certificates for compliance. The proposed rule change was published in the New Jersey Register on October 17, 2005, accepted written comments for 60 days and received a public hearing on December 6, 2005.

"Strengthening the RPS will ensure the continued transformation of New Jersey's energy market," said NJBPU President Jeanne M. Fox. "Increased use of renewable resources and specifically solar photovoltaics will provide greater fuel diversity for New Jersey, while simultaneously reducing price volatility, strengthening the economy, improving public health and reducing greenhouse gases that threaten our shoreline."