Navigant Research Blog

A Case Study in Solar Leadership from an Unlikely Source—New Jersey

Michael Kelly — May 11, 2016

Rooftop SolarWhen thinking of solar energy here in the United States, what one place comes to mind? Sun-laden states such as California and Arizona are often conjured up when envisioning solar energy across the country. While countries like Germany have broken this generalization, there’s another case study here in the United States that is proving the viability of solar nationwide—New Jersey. This unexpected leader in solar energy has taken advantage of its open lands, brownfields, and vast amount of rooftop space to spur solar energy generation across the state.

REC Programs

New Jersey’s movement toward the adoption of solar began in 2005 with the initiation of the country’s first solar-exclusive renewable energy certificate (REC) program. Under this system, solar energy generators are allocated credits dubbed SRECs (Solar Renewable Energy Certificates) for every 1,000 kWh of generation. These credits in turn can be bought and sold in an open marketplace. This has led to a mix of utility-scale projects as well as an influx of residential and commercial properties (retailers, self-storage facilities, sports complexes, grocery stores, government buildings, etc.) installing solar. Since the inception of this program, New Jersey businesses and citizens alike have demonstrated the environmental and monetary benefits that come along with the early adoption of solar energy systems.

This isn’t to say that the program hasn’t had its bumps in the road. There was a need for policy adjustment in 2012 after falling technology costs and federal incentives led to a surplus in the supply of solar energy. This outpacing of demand caused SREC prices to plunge, decreasing overall demand for solar energy installations and investment. The state adjusted its strategy with the signing of the solar resurrection bill. This legislation improved marketplace volatility by adjusting the state’s renewable portfolio standard/solar carve-out framework and promoting the development of solar installations at landfills and brownfields.

Expanding Adoption

States with solar carve-outs and SREC markets now include New Jersey, Massachusetts, Pennsylvania, Ohio, Maryland, and the District of Columbia. Expanding beyond this Northeastern territory would greatly improve the potential for solar energy to make its next leap toward wide-scale acceptance. The adoption of solar energy within large corporations should be highlighted, as it not only creates a valuable source of energy but can also provide retailers and their stakeholders with a business case for solar. With companies such as Walmart and Kohl’s prescribing to this solar energy program in New Jersey, it not only proves the viability of solar within these organizations but also enhances the legitimacy of the technology as a whole. Brownfields and landfills are also worth mentioning as they can inject value into otherwise forgotten properties.

While the thought of brownfields and superfund sites often evoke imagery of pollution, outdated technologies, and shameful practices, New Jersey has chosen to redefine these wasteful properties by putting them back to work for their communities rather than detracting from them. The United States has come a long way since the early days of solar but more progress is needed to reach industry maturity. The next big leap may lie in other states looking to New Jersey’s example of how long-term renewable energy planning can provide benefits to its constituents and communities alike. 

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