New Jersey, one of the nation’s historically healthiest and most active solar markets, has historically been a top 10 state for installed capacity and construction projects. The state’s new stimulus program, passed in July 2021, is expected to bring nearly 3.8 GW of new solar capacity to the state by 2026, but concerns about interconnection delays have some proponents questioning how much of that solar power will actually be built .
Solar Energy in New Jersey
New Jersey currently ranks 8thth total installed solar capacity in the country with nearly 4GW of installed capacity, and solar accounts for 6.66% of the state’s electricity generation.
Unlike other states where capacity numbers can be determined by one type of solar array, New Jersey has a healthy mix of residential, commercial, and industrial (C&I) installations in the utility space. The state also has an emerging community market for solar energy, which is discussed in more detail below.
Over the next five years, the state is expected to bring another 2 GW online, good for 15th in the country during this period.
Incentives and Programs
In July 2021, the New Jersey Board of Public Utilities (BPU) voted unanimously to implement a new solar incentive program that would enable up to 3.75 GW of new solar generation by 2026.
The Successor Solar Incentive Program (SuSI) was part of a nearly three-year process mandated by the Clean Energy Act of 2018 to replace the government’s Solar Renewable Energy Certificate (SREC) program with new incentives that encourage solar development while also improving the… Minimize fee payer costs.
The SuSI program contains two sub-programs:
The Administratively Determined Incentive: A fixed incentive payment for net metered solar projects of 5 MW or less, including all residential customers and most commercial, industrial and all municipal solar installations. The incentive value varies depending on the type and size of the project and is guaranteed for 15 years.
The Competitive Solar Incentive: A competitive tender aimed at attracting the lowest financial contribution from tariff payers for grid utility, commercial and industrial projects with net metering greater than 5MW.
SuSI provides a New Jersey Solar Renewable Energy Certificate-II (NJ SREC-II) for each megawatt hour of solar power produced by a qualifying facility, with an additional $20/MWh for public facilities such as school districts, communities, and the public colleges and universities as well as a temporary incentive for projects built on contaminated land.
Incentive levels for the ADI program range from $70 to $120/SREC-II. Regulators said this would provide continued support for solar development while offering “significant savings” over the previous SREC figure of about $220.
In addition to the state’s net metering program, there are additional incentives and tax exemptions to drive solar adoption.
The state offers a total exemption from state sales tax for all solar power systems that are previously approved by the BPU and that perform one of the following functions: Provide heat, cold, electrical, or mechanical energy by converting solar energy into another usable energy source. This definition also includes energy storage.
In addition to the sales tax exemption, the state passed legislation in 2008 that exempts renewable energy systems used to meet on-site electricity, heating, cooling, or general energy needs from local property taxes. This exemption extends to solar, wind, fuel cell and sustainable biomass systems, as well as other more niche generation systems.
In October 2021, state regulators announced that New Jersey would transition its two-year pilot community solar program to permanent status. The decision to move to a permanent program now, rather than waiting for the start of the third year of the pilot program, was driven by the success of the pilot program to date.
In two years of the pilot program, a total of 242 MW was awarded to developers by the BPU. The pilot required that at least 40% of all approved projects reserve at least 51% of their capacity for low- and middle-income households, and all approved projects met this goal.
Scott Elias, senior manager of state affairs, Mid-Atlantic for SEIA, said the trade group is working with the state to develop a program that will add at least 150 MW of solar power capacity each year.
“We are pleased that each of the 105 approved community solar projects in New Jersey will provide clean, affordable energy to low- to middle-income communities,” Elias said in a statement. He said regulatory changes to the community solar program, including improvements to verification rules for low- and middle-income subscribers, are “another positive step in improving access to the benefits of clean electricity for lower-income and communities of color.”
Incentives for the electrification of electric vehicles and fleets
New Jersey has also taken a leading role in developing incentives aimed at increasing electric vehicle (EV) adoption among both general consumers and fleet operators.
The main consumer incentive is that people who sell, rent or lease a new or used zero-emission vehicle are exempt from sales and use taxes on that vehicle. The state is also home to the Charge Up New Jersey program, which incentivizes residents to purchase or lease new battery electric or plug-in hybrid vehicles with an MSRP of less than $55,000.
New Jersey residents are also eligible for the state plug-in electric drive vehicle tax credit, which provides a base credit of $2,500 for the purchase of an electric vehicle and an additional $417 for each kWh of EV battery capacity greater than 4 kWh.
On the fleet side, New Jersey has its It Pay$ to Plug In program, which provides grants to offset the cost of purchasing and installing electric vehicle charging stations for businesses, governments, educational institutions, multi-family homes, and nonprofit organizations. The program covers up to 100% of the cost of state public charging stations, 80% of the cost of private public charging stations and up to 60% of the cost of workplace charging stations and apartment building charging stations.
The maximum incentive for a Tier 1 EV charging station is up to $750, with the incentive increasing to up to $4,000 for Tier 2 charging and up to $200,000 per site for installing at least two DC fast charging ports is increasing.
In addition to charging infrastructure incentives, the New Jersey Zero Emission Incentive Program is a $15 million pilot coupon program that offers incentives to businesses and other similar entities that purchase new, zero-emission, mid-size vehicles deployed in the Camden Newark area .
For vehicles £8,501-10,000 the voucher is $25,000, which increases to $55,000 for vehicles £10,001-14,000; $75,000 for vehicles from 14,001 to 16,000 lbs; $85,000 for vehicles from 16,001 to 19,500 lbs; and $100,000 for vehicles from 19,501 to 26,000 lbs. Women-owned, minority and veteran-owned businesses are eligible for a $4,000 bonus per vehicle, while small businesses are eligible for a 25 percent increase in the base coupon amount per vehicle and $2,000 per vehicle scrapped and replaced.
In addition to these existing incentives, in February 2021 Governor Phil Murphy announced $100 million for the following clean transportation projects:
- $9 million in grants for local government electrification projects that will help improve air quality in green communities through the use of electric garbage trucks and delivery trucks;
- $13 million in grants to help low- and middle-income communities reduce emissions that affect children’s air quality through the use of electric school buses and shuttle buses;
- $5 million in grants for Equitable Mobility projects that will bring EV ride-hailing and charging stations to four New Jersey cities;
- $5 million in grants to build fast-charging infrastructure at 27 locations statewide;
- $36 million to reduce diesel and black carbon emissions in green communities through electrification of port, cargo handling and other medium- and heavy-duty equipment in port and industrial areas;
- $15 million for electrification of NJ TRANSIT buses; and
- $15 million in Flex funding to further support the above initiatives.
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