Solis Partners Addresses N. J. Clean Tech Conference
Calls for Policy Measures Promoting Certainty As Key to a Strong Solar Market
ISELIN, N.J. (October 31, 2011) — While the rich brew of state and federal incentives that has propelled New Jersey to a position of national leadership in solar is threatened with dilution, New Jersey’s solar market can still remain strong provided that state policy initiatives create an environment of certainty that will result in a reduction in the cost of capital, thus lowering the cost of solar over the long term.
That was the conclusion offered by Jamie Hahn, managing director of Manasquan, N.J.-based Solis Partners, a leading New Jersey developer and integrator of commercial solar power systems, on a panel entitled “New Jersey’s Dynamic Renewable Energy Future” at CLEANTECH NJ 2011, New Jersey’s first business- and investor-focused clean tech conference, which was held Oct. 25 at the Woodbridge Hilton in Iselin, N J.
The future of New Jersey’s solar industry, which has recently suffered a setback due to the decline in the price of SRECs, or Solar Renewable Energy Certificates, a state financial incentive, was a subject of major concern to the panel, which stressed the importance of state policy in effecting a “soft landing” for the solar market in making the transition from an subsidized market to one that stands on its own.
An SREC, which is the equivalent of 1,000 kilowatt-hours of electricity, is a financial instrument representing the environmental benefits of solar. Utilities buy SRECs from solar producers such as homeowners and businesses in order to meet a state-mandated requirement for the generation of electricity from solar sources.
As a result of the replacement of a solar rebate with the production-based SREC incentive in 2007, New Jersey has made enormous progress in solar, having installed more than 400 megawatts of capacity. But the rapid proliferation of solar has created an oversupply of SRECs that has led to a reduction in SREC prices. Rather than viewing this as a negative, however, the panelists viewed it as a sign of a maturing market.
“We’ve gone from zero to sixty very rapidly,” Hahn said. “The overlapping of federal and state subsidy sets has created the best of all possible worlds for New Jersey solar. But we are now witnessing the evolution of an industry as the market mechanism has taken hold and the SRECs have decoupled from the SACP or Solar Alternative Compliance Payment. Although we won’t see the same rapid growth, we can look forward to higher quality projects and sustainable growth as long as legislation ensures certainty in the marketplace.”
In addition to the drop in SREC prices, Hahn expressed concern about the effect on the market of a reduction in federal incentives, particularly the pending expiration of the Section 1603 Treasury Grant Program, which covers 30 percent of the upfront cost of solar, and the scaling back of the federal bonus depreciation allowance, which allows owners of solar systems to depreciate 100 percent of the cost in the first year.
In particular, Hahn called for limiting the size of projects eligible for state incentives to 5 megawatts or less, which would discourage large direct-grid feed solar farms on scarce open space and promote the installation of behind the meter solar installations on commercial properties, thus taking advantage of underutilized assets, mitigating disruption to the SREC markets and promoting energy security by generating power where it is most needed.
The conference was sponsored by Antenna Group Inc., a subsidiary of Hackensack, N.J.-based Beckerman and a nationally recognized strategic communications firm specializing in clean technology and sustainability. The goal of the conference was to garner recognition for New Jersey’s role as a national clean tech leader and to create a platform for expanding upon the state’s clean energy achievements.
The conference drew about 200 members of the clean energy business community, including executives of clean technology companies, government policymakers and regulators, institutional and “angel” investors, professional services firms and thought leaders.
The other panelists on the solar panel included Neil Cooper, co-founding and co-managing partner of SORINROYERCOOPER, a law firm active in the solar sector; Richard F.X. Johnson, senior vice president of Matrix Development Group, a privately held, full service real estate investment and development company; and Gaurav Naik, a partner in GeoGenix, an industry leader in commercial and residential solar.
The panel was moderated by Tom Johnson, co-founder of njspotlight.com.
About Solis Partners
Solis Partners is a leading developer and integrator of solar power systems for commercial, industrial and utility clients. Solis Partners designs, engineers and constructs leading-edge, optimized solar power systems, enabling customers to meet their long-term energy needs while reducing operating costs and addressing their carbon liabilities. Solis is a comprehensive partner, offering the complete solution for both solar and roofing. Solis Partners is headquartered in Manasquan, N.J. For more information, please call (732) 800-0052.