Over the past three years, the development of solar energy projects deploying photovoltaic (PV) panels on rooftops, parking lots and open land has emerged as an important source of energy savings for a multitude of municipal, school, county and private-sector facilities across the state of New Jersey. State PV projects provide the second largest amount of solar energy generation in the nation (over 600 megawatts (MW) of solar capacity at over 13,400 sites across the state). In addition to the environmental benefits of clean, renewable energy, solar development has been one of the leading economic drivers in the state in recent years, both in development and construction jobs created (or saved), and in electricity savings achieved for energy users.
As the tax benefits of installing PV projects are available across the country (chiefly the 30 percent investment tax credit under Section 48 of the Internal Revenue Code of 1986, as amended, plus depreciation under the Modified Accelerated Cost Recovery System), the primary driver of this successful state policy has been the establishment of a substantial renewable portfolio standard (RPS) enacted as part of the state’s energy deregulation law, the Electric Discount and Energy Competition Act (EDECA, P.L. 1999, c. 23, codified at N.J.S.A. 48:3-49 et seq.). The RPS requires all electric power suppliers to include a specified amount of solar energy (designated as solar renewable energy certificates or SRECs) in their supply mix. This creates a demand for the SRECs of solar projects, and solar developers and other SREC owners compete to sell their SRECs in a tradable-commodity marketplace.
