Two bills that would replace solar renewable energy certificates with a new program of fixed-rate incentives have been introduced in Trenton.
The legislation’s supporters say its purpose is to lower utility bills by lowering the price that generators pay for solar energy purchases. Those who argue for changing the system say it leads to unnecessary profits for utilities.
Assemblyman Avi Schnall (D-30) says his proposed legislation is “about fairness.” He adds: “Lowering these costs should mean lower bills for New Jersey residents – not bigger profits for utility companies.”
Solar renewable energy certificates are part of an incentive program that their supporters say helps defer the cost of solar installation.
The legislation would reduce the value of the solar alternative compliance payment, which sets costs paid by electricity suppliers to satisfy their renewable energy supply requirements. These payments are in lieu of purchasing certificates that have been earned by solar energy system owners each time a solar installation generates 1,000 kilowatts of electricity. The customers who have earned certificates can trade or sell them at a market rate.
But reducing the compliance payment, those opposed to the bill argue, reduces the market value of the certificates. Thousands of New Jersey homes, they say, signed up for the program because their contracts with providers would continue to use cdertificate rates.
The legislation would reduce the value of the compliance payment to $50 in energy year 2026 rather than the current value of $196. Thereafter the rate would gradually decline until 2030.
Such a change, the opposition says, would lower the value of the underlying certificates, which would not be purchased at a rate higher that the prevailing compliance payment. Certificates are traded at market value.
The argument for the legislation is that the current mandated prices contribute to rising consumer costs. Savings would be passed on to all ratepayers. The state Board of Public Utilities would then be directed to establish a new solar incentive program at a fixed rate.
Complicating matters is the fact that certificates could come from a legacy program that will sunset in 2033. Those opposed to the bill say there are thousands of legacy projects that will, under current law continue to earn certificates for the next several years.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
