New Jersey has been among the top solar markets in the United States, but until recently, its perch was in doubt. New Jersey Gov. Chris Christie signed a bill on Monday that aims to keep solar energy development booming – and the jobs that come with it.

The new law will require utilities to buy more solar energy in a move to resuscitate a faltering market for solar energy credits, which fetched over $600 each a few years ago but crashed to nearly 25 percent of that value toward the end of 2011. The state requires its utilities to buy an increasing amount of renewable energy, and it includes a specific requirement for solar. Utilities can meet the renewable energy mandate by buying the credits associated with each megawatt-hour of solar electricity from a energy generation project.

With the new law, the utilities will have to speed up their solar energy purchases by about four years, and that requirement should also boost demand for the energy credits. Developers can also hold onto the credits for five years instead of three, a change that will give them more time to sell the credits at an opportune time. On the other hand, it also makes it tougher to forecast the energy credit market, according to the Solar Energy Industries Association.

Developers use the sales of credits to fund their projects. They overbuilt projects in New Jersey when prices were high, and that supply far outstripped demand. The lackluster market for solar energy credits did lead to more fervent efforts by developers to lower the costs of their projects, however. 

New Jersey has consistently been the No. 2 market for photovoltaic installations in the country, behind California. In the first quarter of this year, New Jersey installed more solar energy projects than any other state, however, according to GTM Research. Like California, New Jersey’s renewable energy mandate has played a big role in propelling its solar market growth.

And like California, changes in the New Jersey market could significantly affect the overall growth of the U.S. solar market, which is still on a upswing and attracting investors, manufacturers and project developers from Europe and Asia. Europe, the largest solar energy market for years, is seeing a slower growth in key countries such as Germany and Italy. In fact, Italy is looking at shrinking its budget for feed-in tariffs, which guarantee solar electricity pricing, and could run out of money for the program in 2013, said IMS Research on Monday.

The U.S. is set to add roughly 3.3 GW for a 75 percent increase in new solar panel installations this year from 2011, said GTM.

The legislation does include something favorable for utilities. Utilities historically have had to pay what is called a “solar alternative compliance payment” if they aren’t able to meet the solar energy purchase mandate. The new law reduces the fees and sets a 15-year schedule for payments.

Aside from trying to fix the solar energy credit market, the new law also modifies rules for net metering and includes provisions that should encourage more solar energy development on land that has been used for other developments in the past.