New Jersey Announces Closure of Solar Program Amid Transition to New Incentive Framework

The New Jersey Board of Public Utilities on April 6 ordered the closure of the Solar Renewable Energy Certificate, or SREC, program effective April 30, declaring that the state has attained the milestone set by the 2018 Clean Energy Act to phase out the program. The law directed the board to close the program when 5.1 percent of the electricity sold in New Jersey comes from solar or by June 2021, whichever comes first, and develop a new or modified framework to support solar development. The board is in the process of designing a successor program. A transition incentive, approved last December, will bridge the gap between the legacy and successor programs. Since the launch of the SREC program in 2004, more than 3.25 gigawatts of solar have been installed in the state.

The board intends to provide a smooth transition from the SREC program and develop new incentives that will be less costly to ratepayers. The transition incentive consists of factorized, fixed-price, 15-year Transition Renewable Energy Certificates, or TRECs, available to projects that are in the SREC pipeline after Oct. 29, 2018, but have not yet reached commercial operation at the time the 5.1 percent milestone is reached. The board directed its staff to expedite implementation of the transition program and provide additional guidance about TREC payment schedules and timing.

New Jersey is currently ranked seventh in installed solar capacity, despite having the fifth-smallest land area, and ninth in clean energy jobs with nearly 9,000 solar industry jobs across the state. A report released on March 20 shows that 447 megawatts of solar capacity came online in 2019, setting a new record for solar installation in a single year. This brings the state’s total capacity to 3,190 megawatts, which represents five percent of its energy needs. The previous record was set in 2011, when 446.8 megawatts of solar capacity entered into commercial operations.