Setting the Stage: The History of NJ's Solar Programs - May 21, 2021
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Setting the Stage: The History of NJ’s Solar Programs May 21, 2021 1 | 5/21/2021 | proprietary and confidential
Historical Development and Major Program Changes
500,000
Clean Energy Act
Solar Advancement Act
450,000 Transition from
SREC to TREC
400,000
350,000
300,000
250,000
200,000
150,000 Transition from
rebate to SREC
100,000
program
50,000
0
00 - 06 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Resi SRP Resi TREC Non-Resi SRP Non-Resi TREC Grid SRP Grid TREC Community TREC
2 | 5/21/2021 | proprietary and confidentialOverview: The New Jersey Solar Transition
• Governor Murphy signed into Law the Clean Energy Act of 2018 on
May 23, 2018
• Directed the Board to conduct a comprehensive revision of NJ’s solar
incentive program, known as the 2019/2020 Solar Transition
• Close the Legacy SREC Program
• Complete a study that evaluates how to modify or replace the SREC program
• Design and implement the Transition Incentive Program
• Design and implement the Solar Successor Program
May 2021
www.seia.orgNJ’s Solar Successor Program Straw Proposal • On April 8th, NJBPU Staff released the New Jersey Solar Successor Program Straw Proposal, Staff’s recommendations for the design and implementation of the Solar Successor Program • Staff Hosted five topic-specific stakeholder virtual workshops and is accepting written comments, which are due by 5:00 pm on Thursday May 27th, 2021 May 2021 www.seia.org
BPU’s Solar Transition Principles
1. Provide maximum benefit to ratepayers at the lowest cost
2. Support the continued growth of the solar industry
3. Meet the Governor’s commitment to 50% Class I RECs by 2030 and
100% clean energy by 2050
4. Provide insight and information to stakeholders through a
transparent process for developing the Solar Transition and Successor
Program
5. Comply fully with the statute, including the implications of the Cost
Cap
May 2021
www.seia.orgSummary of the Successor Straw Proposal
• Staff’s Straw Proposal recommendations include:
• Incentives open to new solar resources
• Incentives as fixed payments per MWh produced for the clean energy attribute
over a predetermined period of years
• The value of the incentive would be determined based on project type
• Administratively Determined incentives for residential projects, net metered
non-residential projects of 5 MW or less, and all community solar projects; and
• Competitively Determined incentives for grid supply projects and net metered
non-residential projects above 5 MW.
May 2021
www.seia.orgAdministratively-Determined Incentive Program
• Eligibility: net metered residential; net metered non-residential at or under 5MW;
Community Solar
• Incentive Type: Differentiated, administratively fixed incentive in $/MWh (reset every
three years via public proceedings)
• Qualification Life: Projects will receive the same fixed incentive on a $/MWh basis for
15 years, starting from the date the project receives permission to operate from the
relevant Electric Distribution Company
• At the end of qualification life, projects would be eligible to receive Class I RECs
• **Availability of incentive is subject to availability of budget dollars assigned for each
market segment target in the assigned Energy Year**
May 2021
www.seia.orgAdministratively-Determined Incentive Program
(Continued)
• Project Qualification and Maturity Requirements:
• Registration requires minimum project maturity standards to discourage non-viable “ghost” projects entering the
queue
• Completion Deadlines:
• All projects, except community Solar: 12 months from issuance of a conditional registration acceptance letter +
the possibility of one 6-month extension
• Community Solar Projects: 18 months from the date they are conditionally approved + the possibility of one 6-
month extension
• BPU proposes quarterly first come, first served “windows” to allocate available capacity
• Based on budget dollars assigned for the market segment in the assigned Energy Year
• If a window is filled, no additional applications will be accepted until the next quarter
• Each quarter will be assigned 25% of the total annual capacity
• Administration:
• Similar to TI Program, with each MWh produced during the project’s qualification life leading to the creation of a
Successor Program REC
May 2021
www.seia.orgPermanent Community Solar Program
• Staff intends to develop the Permanent Program in conjunction with the
Successor Program, assumes a 150 MW/year capacity cap, and proposes two
potential options:
• Option 1: Rollover and continue the Pilot Program structure and design
• Maintain the annual competitive solicitation in which projects are scored according to a
qualitative evaluation rubric set by the Board, and selected in order of highest score within each
EDC territory until a pre-determined MW cap is reached
• Option 2: Eliminate the annual competitive solicitation and instead implement a first-
come, first-served model, subject to an annual MW- or cost-based cap, but with very
high requirements for entry
• Only open to LMI projects located on preferred siting (rooftops, parking canopies, landfills, and
contaminated lands), which provide at least 10% savings to subscribers, and have written evidence
of support from the local community.
May 2021
www.seia.orgReminder of Pilot Program Siting Preferences
• The Pilot Program Rules state that projects are not permitted on
preserved farmland, land designed as Green Acres open space or on
land owned by NJDEP
• All other siting criteria are via the evaluation criteria with higher scores
assigned to projects on “high preference sites, including
• Rooftops
• Brownfields
• Parking canopies/carports
• Landfills
May 2021
www.seia.orgCompetitive Solicitation Program
• Eligibility: All grid supply projects and net metered non-residential projects above 5 MW
• Incentive Type: A fixed incentive in $/MWh based on a competitive solicitation
• Qualification Life: Projects will receive the same fixed incentive on a $/MWh basis for 15 years,
starting from the date the project receives permission to operate from the relevant Electric
Distribution Company
• At the end of qualification life, projects would be eligible to receive Class I RECs
• **Availability of incentive is subject to availability of budget dollars assigned for each market
segment target in the assigned Energy Year, but is intended to achieve Staff’s proposed 300 MW
annual target**
May 2021
www.seia.orgCompetitive Solicitation Program (Continued)
• Staff proposes the following market segments, each with separate
solicitation and clearing prices:
• Basic grid supply;
• Grid supply on desirable land uses (rooftops, the built environment)
• Projects on Contaminated Lands
• Grid supply projects paired with storage; and
• Net Metered non-residential above 5 MW
May 2021
www.seia.orgCompetitive Solicitation Program (Continued)
• Solicitations would be conducted annually by an independent solicitation
administrator
• Staff proposes that the Board set a budget-based cap for each segment
• Developers/Owners would bid in an incentive value and MW capacity for
the project within a given market segment and offers would be ranked
from least to most expensive and selected until the budget-based cap is
reached
• Selected projects would have a completion deadline of 24 months
May 2021
www.seia.orgCompetitive Solicitation Program (Continued)
• An additional stakeholder process will be established to further refine the competitive
solicitation design, with the aim of holding the first competitive solicitation late
2021/early 2022
• Collaborative design process will address:
• When in the development process incentives are assigned;
• Project maturity requirements
• Market segment size targets to ensure the addressable market is sufficient or whether to seek
fewer MWs in early years
• Whether to utilize a declining block, paid-as-bid, or single clearing price market design
• How energy storage + solar hybrid projects should be evaluated, including the format of bids,
standard block sizes, and performance/availability requirements
• Whether the BPU should consider “pricing guardrails” in early years to minimize the risks
associated with a new market design
May 2021
www.seia.orgBPU’s Proposed Incentive Values
Market Segment Current TREC Value Proposed Initial Successor Incentive
Net Metered Residential (All Sizes) $91.20 $85.00
Net Metered Non-Residential 1 MW or less $152.00 $85.00
(rooftop, carport, Canopy)
Net Metered Non-Residential 1MW or less $91.20 $85.00
(ground mount)
Net Metered Non-Residential over 1MW and $152.00 $70.00*
up to 5MW (rooftop, carport, canopy)
Net Metered Non-Residential over 1MW and $91.29 $75.00*
up to 5MW (ground mount)
Community Solar non-LMI $129.20 $70.00
Community Solar LMI $129.20 $90.00
May 2021
www.seia.orgBPU’s Proposed MW Targets Values
Project Type Year 1 Capacity Budget Cap ($ Millions)
Target (MW)
Net Metered Residential (All Sizes) 150 MW $15 million
Net Metered Non-Residential 2 MW or less (rooftop, 110 MW $11 million
carport, Canopy)
Net Metered Non-Resi 2 MW or less (ground mount) 40 MW $4 million
Community Solar 150 MW $16 million
Non-Residential Net Metered > 5 MW 40 MW $4 million
Basic Grid Supply 130 MW $6 million
Desired Land Use Grid Supply 130 MW $12 million
TOTAL 750 MW $67 Million
May 2021
www.seia.orgMarket Check-Up After 1 Year • Staff proposes to conduct a review 12 months after the administratively-determined incentive program goes into effect. • Staff would review how various market segments are performing, and may recommend changes to ensure the effective running of the program. • Recommended changes could include increases or decreases to the proposed incentive levels, realignment of market segments, or other changes designed to meet the State’s clean energy targets at a lower total cost to consumers. • Staff commits to a comparable one-year review after the commencement of the competitive solicitation process May 2021 www.seia.org
Energy Storage
• Staff is proposing an energy storage program that would be developed
and implemented in two phases:
• Phase 1 is exclusively in the competitive solicitation program, which includes a
tranche for grid supply solar + storage projects (envisions separate incentive for
storage component of system)
• Phase 2 is separate from the Successor Program and will further investigate
where storage can provide the most benefit to the transmission and
distribution system at least cost to ratepayers
• Anticipate an Energy Storage straw proposal in mid-2021, with
stakeholder meetings and technical conferences towards the end of
2021
May 2021
www.seia.orgSiting Requirements
• Staff, in consultation with the Department of Environmental Protection (DEP), the
Department of Agriculture (NJDA), and the State Agriculture Development Committee
(SADC) will adopt rules and regulations establishing siting criteria and preferences for
competitive solicitation eligible projects, as well as community solar projects
• Siting would NOT be permitted on parcels of land within the following categories:
• Preserved farmland;
• Land preserved under the Green Acres Program;
• Land located within the preservation area of the Pinelands area;
• Land designated as forest area in the Pinelands comprehensive management plan;
• Land designated as freshwater wetlands, coastal wetlands, or forested lands;
May 2021
www.seia.orgSiting Requirements (continued) • There will be a petition process to site a solar facility on land that is otherwise not permitted, but BPU intends to allow no more than 5% of the grid supply solar facilities planned on unpreserved farmland to be located within any county’s designated Agricultural Development Area and consisting of prime agricultural soils and soils of statewide importance. • As a condition of participating in the competitive solicitation, a solar facility project shall utilize native plant species and seed mixes in accordance with standards to be established by the Department of Environmental Protection May 2021 www.seia.org
Dual-Use Solar
• Staff proposes to establish a pilot program to test the development of grid supply
solar projects that are compatible with ongoing agricultural or horticultural use
• Staff defines dual use solar energy as a facility:
• (i) that allows the use of the land below the panels to simultaneously be used for agricultural
or horticultural use; and
• (ii) for which productive agricultural or horticultural use continues, as a condition for receiving
incentives as a dual-use project
• BPU would collaborate with the NJ Department of Environmental Protection, the NJ
Department of Agricultural, and the State Agricultural Development Committee to
establish the parameters for accepting dual-use projects into the competitive
solicitation
May 2021
www.seia.orgTI Program Closing and Successor Opening • Staff is currently engaging with Stakeholders and taking feedback on the Straw to provide recommendations to the Board; • Staff will recommend that the Board issue an Order directing staff close the TI program with 30 day’s notice • The Board will issue an Order establishing the incentives and other program criteria to initiate the Successor Program; and • The Board will propose rules for the Successor Program May 2021 www.seia.org
Closure of the Transition Incentive Program
• Staff will close the TI program to new registrations following directive by the
Board. Staff will recommend that the board give 30 day’s notice of the close of
the program
• No new TI registrations will be accepted after the 30th day (i.e. new registrations will
be accepted until midnight of the 30th day)
• Projects will remain eligible for the TI program if they meet one of the following
criteria:
• Projects with existing registrations
• Projects registered before the date of the TI Program closure;
• Subsection (t) projects with applications submitted before the date of the TI program
closure
• PY1 and PY2 Community Solar projects
May 2021
www.seia.orgClosure of the Transition Incentive Program
• Projects will remain eligible to remain in the TI program so long as they
remain in compliance with their TI registration, i.e. that their
registration period has not expired.
• Extension Requests
• Staff is hesitant to endorse extensions, but sensitive to the need for regulatory
certainty for projects currently under development
• Failure to Meet TI Dates
• Regardless of extensions, TI projects that fail to meet in-service date requires
would NOT forfeit the right to incentives, but transition into a comparable
segment in the Successor Program
May 2021
www.seia.orgSuccessor Opening
• The administratively-determined program will open immediately upon close of
the TI program
• The competitive solicitation design work will commence summer-fall 2021,
with a subsequent BPU order announcing the creation of the competitive
solicitation
• Staff is recommending a temporary administratively-determined incentive
program for ex-subsection T projects (i.e., located on contaminated lands), to
be open post-day 30 for approximately 3 months from the day of the close of
the TI program
• The proposed incentive value for this interim program is intended to be lower than
what is currently available in the TI program (i.e., < $152)
May 2021
www.seia.orgSummary of Successor Program May 2021 www.seia.org
Want to submit written comments?
• Written comments must be submitted electronically either:
1. To Board Secretary Aida Camacho at board.secretary@bpu.nj.gov; or
2. Through the Board’s External Access Portal upon obtaining a MyNewJersey Portal ID. Once you
establish a MyNewJersey account, an authorization code is required which you can request by
emailing the NJBPU’s IT Helpdesk at BPUITHELPDESK@bpu.nj.gov.
• Comments must be in either Word or PDF format and should include in the subject line
“Comments regarding Docket No. QO20020184, Solar Successor Program,” along with the last
name of the author and the name of their company or organization.
• All written Comments are due by 5:00 PM on Thursday May 27, 2021
• Feel free to Contact Scott Elias @ Selias@seia.org to echo SEIA comments
May 2021
www.seia.orgQuestions? May 2021 www.seia.org
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