New Jersey was arguably the strongest major state market in the U.S. in 2010, growing the fastest of the major markets with yearly installations increasing 139 percent to 137 megawatts. Second only to California, New Jersey had a total installed capacity of approximately 260 megawatts, with 112.6 megawatts coming from non-residential installations, 19.7 megawatts from residential, and 4.8 megawatts from utility at year end.
Unlike other major markets, New Jersey’s status in the U.S. PV market is influenced by political will and extensive renewable energy policy rather than abundant solar resources. The solar renewable energy credit (SREC) market in the state drives a significant amount of capacity installation. The credits are created through a renewable portfolio standard (RPS) which requires that a certain amount of energy generated in the state comes from solar. The price of SRECs is determined by the supply of solar generation and the demand to meet New Jersey’s RPS requirements.
In June 2011, the Christie Administration released the Draft 2011 Energy Master Plan for the state. The plan promotes continued support for the development of renewable energy in the state and maintains the existing RPS of 22.5 percent by 2021. However, the plan also recommends a re-evaluation of New Jersey’s solar policies.
While SREC prices are currently high enough to drive attractive project economics for homeowners and businesses, influencing New Jersey’s position in the U.S. PV market, the administration argues that current prices are too high to be sustainable in the long term -- the price is too high for the non-participants who ultimately bear the cost of solar technology. It is unclear how or if New Jersey will revise its renewable energy policy; however, significant changes to the RPS have the ability to drastically affect the momentum of the solar industry in the state.