Wednesday 4 November 2009

New Jersey Completes 100 MW Of Solar Capacity

The New Jersey Board of Public Utilities (BPU) has announced that New Jersey now has over 100 MW of solar capacity with more than 4,340 projects statewide. The ground-breaking achievement is the latest example of New Jersey's renewable energy leadership and commitment to reducing greenhouse gas emissions.

"This monumental achievement only serves to further strengthen New Jersey's position as one of the fastest growing solar energy markets in the United States," said Governor Corzine. "Our leadership is credited to our commitment to environmentally responsible action and a competitive market-based initiative."

New Jersey's solar success is particularly remarkable for the rapid progress it has made in reaching the 100 MW milestone. Seven years ago, the state had only 6 solar installations. Since that time New Jersey has established a model program that incorporates both energy efficiency and renewable energy.

New Jersey's integrated approach to solar development includes a strong Renewable Portfolio Standard (RPS) with a solar electric set aside, excellent interconnection and net metering standards that have made it easier for systems to connect to the distribution system, a Solar Renewable Energy Certificate (SREC) financing model that provides energy credits and additional long term financing for those who invest in solar.

"As we strive to meet Governor Corzine's comprehensive Energy Master Plan goals, the NJBPU is continually looking to efficiently increase our renewable energy generation while reducing New Jersey's greenhouse gas emissions." said Jeanne M. Fox, President of the NJBPU.

"The innovative SREC financing model combined with federal tax credits and New Jersey's Renewable Energy Portfolio requirements provide the incentives needed to continue to spur New Jersey's solar growth."

New Jersey's Solar Renewable Energy Certificate (SREC) financing model is one of the State's newest initiatives to develop a vibrant solar market in the state. Representing all the clean energy benefits of electricity generated from a solar electric system, one SREC is issued for each 1,000 kWh (1MWh) generated.

SRECs are then sold or traded, separately from the power, providing solar system owners a source of revenue to help offset the cost of installation. In most cases, SRECs replace State rebates, which fueled solar growth in the early years of the State's solar program. New Jersey is the first government globally to adopt the use of SRECs to help finance solar projects on a broad scale.

The BPU also recently approved innovative financing programs at three of the State's electric utilities: Jersey Central Power and Light, Atlantic City Electric, and Rockland Electric Company. In addition, earlier this year the Board approved Public Service Electric and Gas's "Solar 4 All Program" to expand solar generation in its service territory. Under these programs, the State's electric utilities may enter into long-term contracts with customers for the purchase of SRECs, which facilitates long-term financing for solar projects.

Clean Energy Cashback will benefit early installers most

Most countries in the EU now use guaranteed price Feed-In Tariffs (FIT) to support renewable energy projects, with different prices being fixed for each type of technology.

The FITs have proved to be very effective at getting capacity installed rapidly at relatively low costs. For example, Germany has installed 25 Gigawatt (GW) of wind generation capacity so far under a FIT scheme , whereas the UK, with its competitive Renewable Obligation Certificate (ROC) trading scheme, has only achieved 4 GW, with some of that actually being supported by grants (for offshore projects). And this in a country with a far better wind regime than Germany.

With the UK committed to getting 15% of is total energy from renewables 2020, which means they would have to supply maybe 30% of its electricity, something had to be done. The UK governments remains wedded to the market-orientated ROC system, and it has made some changes to it – e.g. creating ‘technology bands’ with different numbers of ROCs for each type of technology. That may help to some extent – making it a bit more like a FIT. But the government eventually conceded that a fixed-price FIT system might be better for small-scale projects. There was some debate about how small ‘small’ should be, but a ceiling of 5MW was chosen- large enough to include some small community projects.

The governments proposals were for a fixed ‘Clean Energy Cashback’ payment from the electricity supplier for every kilowatt hour (kWh) generated (the “generation tariff”); i.e. for self-generated power you use, plus a guaranteed minimum payment additional to the generation tariff for every kWh exported to the wider electricity market (the “export tariff”). The export tariff will be market determined – it’s currently at £0.05/kWh, for electricity delivered to the grid. Proposed generation tariff levels were set at 36.5p/kWh for retrofitted PV solar systems up to 4kW; and 28p/kWh for systems up to 10kW, while wind projects would get 30p/kW for turbines below 1.5kW and progressively less for larger units, down to 4.5p/kWh for wind turbines between 500kW and 5MW. Hydro projects would get 4.5-17p/kWh depending on size. Anaerobic digestion and biomass were also eligible (getting up to 9p/kWh), so was AD fired combined heat and power (11p/kWh), but not landfill gas or sewage gas, which are deemed already commercially viable.

As with the German FIT, UK FIT prices will be reduced, or ‘degressed’, in annual stages to reflect expected reductions as the technology develops and the market for it builds. But only for some of the technologies. The annual degression was set at 7% for all solar PV projects, 4% for wind turbines below 1.5kW, 3% for those in the 15-50KW range. The rest would have no price degression.

Source - Environmental Research