A bill that would have increased New Jersey's solar energy mandate fell by the wayside when the state Legislature failed to vote on it by the end of the day Monday, the final voting session of the legislative year.
Renewable energy advocates hoped the Legislature would approve the bill (S-2371), which they said was necessary for New Jersey to continue building significant amounts of solar projects.
"I'm not surprised, but upset," said Jeff Tittel, director of the New Jersey chapter of the Sierra Club. "We needed a bill to get passed [Monday] to keep the New Jersey solar market robust."
Another solar bill could be introduced during the new legislative year, which began Tuesday, but a quick outcome was unlikely, he said.
"The Legislature starts slow. I don't think you'll see anything of substance until at least March. We lost some momentum," Tittel said.
Matt Elliott, clean energy advocate for Environment New Jersey, said, "Anybody who supports solar energy in New Jersey realizes we have to do something. But we continue to see the Legislature and governor use the economy to attack clean-energy programs."
The bill, sponsored by Senator Bob Smith, would have escalated the number of solar renewable energy certificates that load-serving entities must purchase each year. A single SREC is created for one MWh of electricity from an eligible solar facility.
Such an increase would be needed to bump up New Jersey's SREC prices, which fell from the mid-$600s about a year ago to as low as $150 in August 2011, on account of excess supply, according to Alex Anich, director of research at Karbone, a New York-based environmental brokerage firm.
Supply is likely to continue exceeding demand in the next compliance period as well, unless lawmakers ratchet up demand further, Anich said. New Jersey's compliance year runs from June to May.
Even if no other solar projects come online, the number of SRECs available in 2012-13 is estimated to surpass 775,000, far greater than the target of 596,000 SRECs, he said.
Under the proposed bill, annual solar requirements would have been pushed up by one year.
Optimism that the Legislature would be able to push through a solar bill helped rally New Jersey SREC prices in recent weeks to a high of $300, Anich said. The failure to get a bill passed sent prices falling Tuesday to a bid-offer range of $200-$240, he said. The main issue causing an impasse appears to be the treatment of grid-connected solar projects, according to a blog posted by Michael Flett, CEO and president of the Flett Exchange, a Jersey City, New Jersey-based environmental market trading platform.
"The Christie administration suggested having all non-net metered projects seek Board of Public Utility approval. These projects would not be approved if they would have a detrimental effect on the SREC market. The issue was too complicated to be resolved in the short amount of time left in the last day of the legislative session," Flett said.
On Sunday, the office of Governor Chris Christie released a mark-up of the bill showing changes he wanted to see before the Legislature voted.
Smith's bill was less restrictive toward large-scale solar projects than Christie's proposal. It required only facilities with a capacity of 10 MW or larger to get BPU approval, and included a "grandfathering" clause.
Christie also amended Smith's bill by switching annual solar requirements from a fixed number of SRECs to a percentage of retail sales. However, when converted to MWh, the two proposals do not appear to be far apart, according to Karbone's calculations.
For example, Christie's solar target works out to an estimated 900,000 SRECs during the 2012-13 compliance year, only about 11% less than the amount proposed in the Smith-sponsored bill.