Solar power made more expensive by NJ rules; how can we change that?

Environmental and consumer advocates say New Jersey's solar energy price rules, designed to spur solar construction, have long hindered the industry's growth as consumers are being compelled to buy sun-generated electricity at inflated prices.

That might soon change, though exactly how will be tricky.

If you pay an electric bill in New Jersey, you — along with your neighbors and the shop owners on Main Street — are contributing up to $4.8 billion toward what ratepayers could be charged for solar power over the next 10 years.

A megawatt-hour of solar power produced in New Jersey was sold to utilities for $203 in December 2018, according to the state Board of Public Utilities. In Pennsylvania, consumers paid $13 last month, or 15 times less.

“We have to bring these numbers into line," said Stefanie Brand, director of the state Division of the Rate Counsel, a consumer advocate. "We have to find a way to not pay so much for solar or we’re not going to succeed in our goal to reduce greenhouse gas emissions. Sometimes you throw around billions and people lose sight of the fact that it does all come out of people’s utility bills. We have to be smarter about it.”

New Jersey is in the middle of remaking the way we subsidize solar power as the Garden State pushes toward a future with power generation free of the carbon emissions that foul the air and contribute to the existential threat of climate change.

NEW JERSEY NATURAL GAS: Your heating bill is going up

The cost of clean energy

The burning of fossil fuels is propelling the accumulation of carbon in the Earth's atmosphere — along with a litany of other pollutants — which is contributing to the changing climate that we see here in New Jersey, most notably in sea level rise, heat waves and monsoon-like storms.

In response, lawmakers in New Jersey and around the country have sought to incentivize the construction of renewable energy sources, including solar and wind.

The state's Energy Master Plan calls for all electricity created in the state to be sourced from non-carbon sources by 2050. The same executive order requires New Jersey to be halfway there in 11 years.

Just as with any new natural gas-fired power plant or wind turbine, the cost of any solar investment is ultimately passed on to those who buy power in New Jersey.

The market rules created nearly 20 years ago to price New Jersey's solar power — and entice interested parties into building up solar — were too rigid and aggressive, advocates say.

Developers seized on this and quickly built out capacity, which has been locked into bloated rates that are ultimately paid by consumers. This led to a boom in solar initially, but has more recently stunted development in New Jersey as the pool of available money is being sucked up by existing supply, leaving less for new projects.

The Clean Energy Act, which Gov. Phil Murphy signed in May, kills the current funding mechanism for solar power once it is determined that 5.1 percent of all renewable power produced in the state comes from solar. That figure was at about 3.5 percent in October, according to the latest federal data available.

OFFSHORE WIND: NJ, Phil Murphy bet on clean energy, but who will pay?

What comes next for solar

A new method of encouraging solar power is being crafted by state regulators, industry stakeholders and the public, but with certain constraints.

The next solar subsidy must fit under a cost cap, which sets a limit on the total levy passed onto consumers to help solar and certain other renewables, such as onshore wind (but not offshore wind), get a foothold in the energy generation market.

The cap works out to about $910 million per year for the next three years and then about $700 million annually until 2028, according to the Clean Energy Act and figures on retail sales of electricity.

The cap for solar alone is $4.8 billion total through 2028, Brand told the USA TODAY NETWORK New Jersey.

Some of that must be allocated to existing solar projects, whose owners paid for these panels with the expectation that they would be compensated for 10 to 15 years, and the rest of that sum is for new installations, which will be imperative to the state's reaching ambitious clean energy targets.

“The critical issue for the (BPU) going forward is how do they treat these legacy costs while preserving enough money for the continued growth of new renewables?” said Barbara Blumenthal, research director for the New Jersey Conservation Foundation. "There’s one pie and they have to decide how to divide it up.”

A BPU spokeswoman directed the Network to a straw proposal for the new solar program when asked how to balance the new and the old.

"I look forward to building the strong ties we have with the solar industry, the environmental community, and with the environmental justice community to ensure that New Jersey’s solar energy future is sustainable, equitable, and serves the needs of all ratepayers,” said the board's president, Joseph Fiordaliso, on the end of the state's solar credit market in a statement released before Thanksgiving.

WHAT IS THAT SMELL?: Officials pledge to fix Monmouth County dump stink

Solar power in New Jersey

Earlier this month, DSM North America, a vitamin maker, unveiled an expanded solar field near their plant in the tiny Warren County borough of Belvidere. Watch the video at the top to see just how massive this installation is.

The 20.2-megawatt array is the largest in New Jersey. The company says that enough power will be produced to meet the facility's needs, with excess juice left over to satisfy the annual electric demand of 400 typical homes. That surplus will be fed into the grid.

But a setup like that is unusual in New Jersey, where there are roughly 105,000 solar installations, according to the latest figures from the New Jersey Board of Public Utilities' Clean Energy program.

A typical system in New Jersey, according to the BPU data, is 7.8 kilowatts, likely a rooftop project that might cost $20,000 after factoring in a federal tax credit. These systems generally kick small amounts of electricity into the grid during the daytime for which their owners are given a credit on their bills, a process known as net metering.

Indeed, only 150 installations in the state are classified as commercial projects intended solely to supply the grid.

While New Jersey gets 39 percent of its solar power from utility-scale facilities, California and Arizona, the two biggest solar producing states in the nation, both get more than 62 percent from these larger arrays, according to statistics from the U.S. Energy Information Administration.

Of course, New Jersey is more densely populated — leaving developers less affordable space for thousands of solar panels — and the sun is shining more often in Arizona and southern California, making those areas particularly hospitable to solar generation.

TERRORISM IN NJ: What are the top threats to New Jersey in 2019?

Russ Zimmer: 732-557-5748, razimmer@app.com, @russzimmer