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  • Writer's pictureJulia Koroleva


solar energy

The New Jersey Legislature has passed a bill (A4554) establishing a successor to the State’s original solar renewable energy credit (SREC) program and addressing related incentives to achieving the State’s declared goal of a 50-percent clean energy supply by 2030. The SREC-II program is intended to incentivize development of at least 3.75 gigawatts of new solar power generation by 2026.

The New Jersey Board of Public Utilities (BPU) has already initiated a stakeholder proceeding (BPU Docket No. QO20020184) pursuant to the State’s Clean Energy Act (P.L. 2018 c. 17) for establishing a successor SREC program, which closed to new projects in June 2020. The State is currently issuing transitional renewal energy credits (TRECs) pursuant to rules promulgated by the BPU at N.J.A.C. 14:8-10.1 et seq. until a successor SREC program launches.

The legislation provides incentives for development of a “small solar facilities incentive program” for awarding SREC-IIs, seeking to achieve at least 1,500 megawatts of net-metered solar facilities and 750 megawatts of community solar facilities by 2026. It also provides SREC-II award incentives, through a competitive solicitation, for large-scale (> 5MW) net-metered solar generation facilities and wholesale “grid supply solar facilities” with the goal of incentivizing construction of at least 1,500 megawatts by 2026.

Award of SREC-IIs to competitively selected projects is exempt from the cost-cap established by Section 38(d)(2) of the Clean Energy Act. The cap currently limits the cost to customers for the State’s Class I renewal energy requirement to 7 percent of the total cost paid for electricity by all customers in the State.

Under the bill, all facilities eligible for award of SREC-IIs must be connected to the State’s electric distribution system or transmission system. Selling energy from transmission-connected projects by electric power suppliers and basic generation service providers would count toward meeting their renewable portfolio standards (RPS) requirements.

It addresses environmental mitigation and land use preservation by requiring the BPU, in consultation with the State’s Department of Environmental Protection (DEP) and the Secretary of Agriculture, to develop siting criteria for large-scale solar generation facilities, including special authorization requirements for siting in designated conservation and preservation areas.

A threshold of 2.5 percent of siting on the State’s prime farmland is established, above which special authorization would be required. The bill requires the DEP to establish standards for using pollinator-friendly native plant species and seed mixes in grid supply solar facilities.

The legislation is currently on Governor Murphy’s desk for signature.

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