Good Day, Sunshine
June 18, 2010
In these oh-so-interesting times, when the economy and the environment often seem to be absorbing one blow after another like exhausted boxers, it’s more important than ever to pay attention to the good news—it often sheds light in the direction of a way forward. And in the past few years, it’s hard to think of a brighter light than the story of the power of New Jersey sunshine.
New Jersey has been second only to California in solar energy production for some time now, and is showing no signs of slowing the pace, either of innovation or of creative financing incentives that encourage the same. And companies large and small, from within and outside the state, are looking to New Jersey’s solar market.
“We’re just starting with the New Jersey market,” says Ron Kamen, vice president of Earthkind Solar, based in New York’s Hudson Valley. “We’ve completed a market analysis, and are now working to develop projects and build our dealer network there. Right now, we have conducted one solar hot water project in the state, and have several others pending. We are looking to New Jersey as the next state for our expansion, as the Jersey market is a key priority for us in photovoltaic installation, with the SREC—solar renewable energy credit—funds providing very attractive incentives.”
It seems that a fortunate convergence of factors is in play. An acclaimed energy master plan put in place in 2008 mandates that New Jersey’s major power producers produce at least 22 percent of their energy from renewable sources by 2021, with at least 2.2 percent of that mandated renewable energy coming from solar sources.
“Right now, the infrastructure is at about .1 percent, despite a 25 percent increase in just the past year,” explains Jeffery Chavkin, co-founder and president of New Jersey-based Geoscape Solar. “So it’s going to need to increase 25-fold over the next 10 years.”
Four years ago, the Board of Public Utilities moved to create solar renewable energy certificates that could be traded between major utilities and solar companies as a way to fulfill their mandated commitments to reducing carbon emissions. Each SREC represents a megawatt hour of clean energy production, and according to a May 9 article in the Star Ledger, the certificates currently trade at more than $670 apiece. Further innovations like Power Purchase Agreements (PPAs), in which the installers own and maintain the solar equipment, have spurred both public and private sector players on to ever greater investments.
Bolstering the state-level measures, Section 1603 of the 2009 federal stimulus bill has converted what had been a tax credit into a cash payment, and the resulting stats are impressive: New Jersey’s solar electric installations grew by 153 percent in 2009, according to a recent study by the Solar Energy Industries Association.
“I’ve had plenty of people ask me, ‘Why New Jersey? Why not Arizona?’” FedEx facilities managing director Paul Vicarro told the Wall Street Journal in July 2009, in an article about the then-largest rooftop solar installation in the U.S. “The answer is that is where the money is. That is where incentives are to make the deal financially viable.”
New Jersey, with its vast acreage of commercial warehouse and manufacturing facilities, is also where the rooftops are—and entrepreneurs are happy to be converting what was formerly wasted space into a literal powerhouse. Everyone agrees that it’s New Jersey’s incentive programs—which were trimmed back as of May 1, but are still generous in comparison with other locales—that are fueling the state’s solar energy boom.
“As a stand-alone, solar doesn’t work,” Chavkin admits. However, he adds, “With the incentives, it becomes a viable proposition—and in New Jersey, it works better than anywhere else.”
Geoscape is currently installing solar panels atop a busy medical facility in Berlin that will generate 120,000 kilowatt hours a year—about a third of the facility’s total usage. “There’s a lot of cash flow created,” says Chavkin. “It will more than pay for all of their electric, between the $21,600 a year in electricity savings and $72,000 a year in solar renewable energy credits.” Geoscape is also pioneering a residential solar leasing program as a way to cut upfront costs for smaller-scale customers.
In Morris County, innovative Power Purchase Agreements between county government, Tioga Energy, and Jersey-based Sundurance Energy will result in solar installations on 19 public buildings, and a collective energy savings of a cool $2 million a year.
“It’s an outstanding example of public/private collaboration,” says Tioga vice president Marc Roper. “Once we were awarded the contract through an arm’s-length bidding process, we rolled up our sleeves and figured out how to make it work for them. Morris County’s triple-A bond rating didn’t hurt any, nor did their attitude of being totally committed to this. As a public entity, they can issue bonds, which we can’t do; as a private company, we’re eligible for federal incentives and tax credits not available to them. It took a great deal of legal research to find out if and how the ends of the circle can touch—but we found a way forward, and everybody wins.”
Stories of solar successes in New Jersey are popping up faster than springtime dandelions. In Eatontown, Anova Energy Solutions and Meridian Solar Partners LLC have joined forces to install panels on four buildings totaling approximately 725 kW and producing over 800,000 kWh of electricity annually.
In South Plainfield, Petra Solar’s manufacturing facility has increased its payroll from 15 to 130 since the beginning of 2009, and projections indicate that even that number may double in the year to come. The company is committed to creating jobs locally and has succeeded in growing its staff thanks to creating its own research and development department as well as its own manufacturing supply chain. Petra’s innovative patented SunWave system mounts solar photovoltaic panels on utility poles, and the company is partnering with Atlantic City Electric to install 10 systems, five in Cape May Point and five in Ocean City. And Petra recently entered into a contract with utility giant PSE&G, which plans to install 200,000 of the company’s SunWave utility pole-mounted systems.
Although Gov. Chris Christie’s austerity budget cuts $158 million from the clean energy fund, and the state incentive rate for solar decreased slightly as of May 1, the governor also boosted the industry by declaring solar panels exempt from impervious surface regulations that would have hampered installation—and the Board of Public Utilities is partnering with the Economic Development Association to create new incentives, arranging bonds and loans for large-scale renewable projects. As far as solar power in New Jersey can go, the sky, it seems, really is the limit.