Will PSE&G’s solar farm plan cause a rate hike?
HACKENSACK -- A plan to build 10 new solar farms on closed landfills and former industrial sites across New Jersey has raised concerns over costs to ratepayers.
The Public Service Electric and Gas Co.'s $275 million plan would add 100 megawatts of solar power to the grid by 2021, enough to serve about 16,000 homes, The Record reported.
Environmentalists have praised the move, saying it will add more renewable energy to the grid.
But officials said that PSE&G's application, filed with the state Board of Public Utilities, includes a guaranteed profit of more than 10 percent. That expense would result in higher utility fees to ratepayers.
"We want more solar-- more solar is good," said Stefanie Brand, director of the state Division of Rate Counsel, which represents utility customers. "But what's the right way to pay for it? PSE&G is asking ratepayers to assume the risk for this solar generation."
PSE&G officials said the utility monitors costs to develop solar farms, and it plans to submit a cost-effectiveness assessment for each project.
"We provide that before we put a shovel in the ground," said Todd Tranicka, PSE&G's director of solar energy projects. "And these projects are all competitively bid."
Another concern is the influx of solar projects could depress solar power credit prices. That would make it harder for homeowners and businesses to pay off the costs of installing solar panels.
Tranicka said that only about 10 percent of residential solar purchasers own solar systems. As a result, few homeowners would feel the pinch should solar credit prices decline, he said.
(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)