The New Jersey Board of Public Utilities (NJBPU) today voted unanimously to implement a new solar incentive program that will pave the way for up to 3,750 MW of new solar generation by 2026, doubling the state’s solar capacity. The Successor Solar Incentive (SuSI) Program is the culmination of a nearly three-year Solar Transition process mandated by the Clean Energy Act of 2018 to replace the State’s Solar Renewable Energy Certificate (SREC) program with new incentives that encourage solar development while minimizing ratepayer cost. Solar energy is expected to generate approximately 10% of New Jersey’s total electricity needs once the program is fully implemented.
“In establishing the SuSI Program, we are solidifying New Jersey as a magnet for green jobs and taking yet another step toward Governor Murphy’s goal of 100% clean energy by 2050,” said NJBPU president Joseph L. Fiordaliso. “This tremendous action has taken many perspectives into consideration and ensures the solar industry will remain a vibrant part of our clean energy innovation economy while prioritizing long-term affordability for ratepayers.”
The SuSI Program will take effect beginning at 12:00 a.m. E.T. on August 28, 2021, and contains two sub-programs:
The Administratively Determined Incentive (ADI) — a fixed incentive payment for net-metered solar projects of 5 MW or less — including all residential customers and most commercial and industrial buildings — and all community solar installations. The incentive value will vary based on project type and size, and will be guaranteed for a term of 15 years.
The Competitive Solar Incentive (CSI) — a competitive solicitation designed to incentivize the lowest financial contribution from ratepayers for grid supply projects and net-metered commercial and industrial projects larger than 5 MW. The first competitive process is anticipated to launch in early-to-mid 2022, following additional stakeholder engagement throughout this summer and fall.
The SuSI Program’s two-part hybrid market approach is designed to uplift solar market segments through long-term, tailored incentives for a variety of project types, allowing NJBPU to contain program costs and provide financial certainty for market participants. The program will provide one New Jersey Solar Renewable Energy Certificate-II (NJ SREC–II) for every megawatt-hour of solar electricity produced by a qualifying facility, with an additional $20/MWh adder for public entities — such as school districts, municipalities and public colleges and universities — as well as a temporary incentive for projects built on contaminated lands.
“We’re pleased that the BPU took industry comments into account and responded to several of our major concerns in the final design of the successor program, which consists of fixed incentives for smaller, distributed projects, new incentive levels for public entities like schools and municipalities and incentives based on competitive solicitations for larger projects. The revised incentive levels provide a framework for the solar industry to continue to create jobs and private investment in New Jersey while balancing ratepayer impacts,” said Scott Elias, senior manager of state affairs, mid-Atlantic for SEIA, in a statement. “SEIA will be monitoring the program’s impact across all market segments over the next year and looks forward to working with the BPU to make any necessary adjustments to the program. SEIA will also be engaging with the BPU on a competitive solicitation design for larger projects.”
Incentive levels for the ADI Program, shown below, range from $70-$120/SREC-II, providing continued support for solar development in New Jersey while also offering significant savings over the prior SREC value of approximately $220.
In designing the SuSI Program, NJBPU has relied on extensive modeling and a robust stakeholder engagement process to determine how best to meet the ambitious solar targets identified in Governor Murphy’s Energy Master Plan and recently codified in the Solar Act of 2021. Currently, NJBPU is evaluating 410 applications for Year 2 of its historic Community Solar Energy Pilot Program, and is examining the potential for dual-use solar facilities sited on agricultural lands pursuant to legislation recently signed by Governor Murphy.