Residents and businesses in New Jersey have paid $2.8 billion in subsidies to companies that install solar energy panels. Thanks to that money, from substantial monthly fees charged on electric and natural gas bills, the companies have installed more than 100,000 solar arrays in the state — enough to make tiny and not especially sunny New Jersey fifth among states for solar energy capacity.
It was time for New Jersey to declare victory and pursue other goals. These clean energy charges had surpassed $500 million a year on ratepayers’ bills, and other more effective goals beckoned. So last year the Legislature and Gov. Phil Murphy wisely enacted a law to end the existing subsidies and cap the future costs to ratepayers of government help for solar companies.
Solar companies said the government should still find a way to maintain subsidies at existing levels or expect to lose thousands of industry employees to more supportive states. When the N.J. Board of Public Utilities in the summer floated the idea of reducing incentives to a small fraction of what they had been, companies said they would be too low to attract investment in solar projects.
Yet at nearly the same time, solar companies have expressed strong interest in participating in a new program to develop community solar projects that would bring the benefits of this renewable energy to low- and moderate-income communities.
Even with billions in subsidies, past solar projects overwhelmingly went to residents and businesses that could afford the significant upfront costs of installation. That left the lower and middle classes helping pay for sweet solar energy deals benefiting the affluent.
The Murphy administration sees community solar as a way to bring its benefits to those left out of the state’s solar boom. Murphy said he was “extremely pleased at the overwhelming response to the first year of the program,” which will “expand renewable energy for low- and moderate-income communities who have been previously unable to enjoy the benefits of solar.”
The BPU has received 252 applications to participate in the first year of the pilot community solar program, according to NJ Spotlight, more than 90% of them where most of the residents would be low- or moderate-income. The agency expects the three-year program to provide enough electricity to supply the needs of 45,000 homes.
Since the level of incentives for community solar projects hasn’t been set, the amount of industry interest that will become actual development is uncertain.
As we’ve said before, general solar subsidies aren’t needed and can even hurt consumers and other forms of clean energy, but community solar is the exception. Its narrowly targeted and limited incentives should help people shut out of past solar opportunities while adding a bit to New Jersey’s already impressive solar capacity.