Lawmakers look to bolster NJ solar subsidy without costing you more
A Senate panel Monday advanced a bill that bolsters New Jersey’s solar subsidy, though in a way that doesn’t increase overall costs to consumers beyond what’s already in state law.
The bill, S4275/A6088, has a somewhat ominous synopsis, allowing the Board of Public Utilities to “increase cost to customers … for energy years 2022 through 2024, under certain conditions.”
Those conditions basically say that if the industry hasn’t spent all it can in the short term when the subsidy is capped at 9% of energy costs, the subsidy can be higher than the 7% of energy costs it’s currently capped at for the three years that follow.
Barbara Blumenthal, research director for the New Jersey Conservation Foundation, said the bill is a technical fix giving flexibility to the Board of Public Utilities while keeping overall cost within existing legal limits.
“This is urgent. There’s a reason we need to get this done right away in the lame-duck session. The transition program, there’s some uncertainty there and it needs to be cleared up as soon as possible,” Blumenthal said. “… We think that this is an easy way to give flexibility to a program that desperately needs it right now.”
The overall subsidy can’t be bigger, it could just be distributed differently.
Doug O’Malley, director of Environment New Jersey, said the cost caps put on solar energy by state law don’t fully reflect its value.
“We need solar to thrive in the state. The integrated energy plan put forward by the BPU … talks about solar producing more than 30% of clean, renewable energy by 2050. We need to make sure that solar is not going to crash in this state,” O’Malley said.
Lyle Rawlings, president and CEO of Advanced Solar Products, said meeting that goal means building more than 1,000 megawatts of solar power a year.
“That’s a large amount of solar. It’s going to cost a lot of money, and we have to be realistic about the cost,” Rawlings said. “And that’s what this bill is about. It allows us to basically average years when we’re under the cap with years in which we’re over the cap.”
Stefanie Brand, director of the Division of Rate Counsel, didn’t oppose the bill – but cautioned lawmakers not to meddle with the cost caps going forward.
“The reason why rate counsel is not opposing this legislation at this time is because as written, it does not increase ratepayer costs. However, that is only true if the caps are not eliminated or changed between now and 2024,” Brand said.
“We’ve now been through, I don’t know, two or three rounds of solar legislation where the idea is that we provide more money now and we’ll make it up in the later years, etc. But the problem is if the act gets changed before the later years come, the benefits to ratepayers don’t accrue,” she said.
Solar is the source for about 5% of the electricity generated in the state. Brand said that using 2018 sales data, the subsidy amounts to $877 million a year at the 9% cap and $683 million at a 7% cap.
“That’s not small change. It’s a lot of money,” Brand said. “The clean energy act included many laudable goals, many things that we need to do. We need to do solar, we need to do wind, we need to do energy efficiency. We need to do all of these things. But these things will be costly for ratepayers. Your constituents’ bills will go up. For many, these costs will be a hardship.”
Fred DeSanti, executive director of the New Jersey Solar Energy Coalition, said it’s “absolutely true” that’s a lot of money but that a carbon tax on fossil fuels would curb the need for the subsidy.
“I want you to just reflect on a universe that would think about this a little bit differently,” DeSanti said. “I don’t think any of your constituents, all the way down to maybe first graders, wouldn’t tell you that renewable energy is far superior and where we want to go, and we want to get away from fossil fuels. We have to get away from fossil fuels.”