A New Jersey solar installation is now a more cost-efficient investment thanks to a law signed on July 23.
Governor Chris Christie signed into law S-1925, which will help stabilize the state's renewable energy credit market and will also boost its total output of solar energy.
The new legislation, according to The Associated Press, will increase the amount of solar energy generated in the state significantly by 2028. Power companies now need to have more than 4 percent of annual output come solar energy by that year, an increase from the current benchmark of about 2 percent.
By stabilizing New Jersey's solar credit market in addition to requiring boosted power output, the law will save rate payers about $1.1 billion over the next 15 years, according to the state Division of Rate Counsel.
Christie praised the law, which had bipartisan political support, saying it would "help maintain New Jersey's position as a national leader in the solar industry." He also cited the industry's job creation in the state.
New Jersey is second in the nation currently in total solar installations, trailing only California, according to the Solar Energy Industries Association.
"We should be increasing the state's overall clean-energy requirements and ensuring more of our clean-energy goals are carved out for solar specifically," Matt Elliott of Environment New Jersey said in a statement. "In the short term, however, this bill will ensure that New Jersey continues to be a solar leader."
How the law affects clean energy credits
One of the main aspects of this law is how it deals with New Jersey's market for renewable energy credits. Utility companies trying to meet state-mandated benchmarks for solar power can buy solar renewable energy credits, or SRECs, that count towards those guidelines. These credits are issued to the owners of any New Jersey solar installation based on output.
The new law seeks to help stabilize the market price for SRECs by creating a ceiling price for credits. Proponents say should this should help prevent the fluctuations in price seen late last year, when the price of credits dropped by about 80 percent, according to Reuters.
In addition, according to Reuters, the new law dictates that utility companies at maximum will receive a $339 fine for every megawatt-hour short they are of renewable energy goals by 2014.
"This legislation addresses the current oversupply of N.J. solar renewable energy credits (SRECs), brings stability back to the N.J. solar market, and keeps the N.J. solar industry growing over the next several years," the SEIA said on its website.
