August 7, 2012
New Jersey

State agency proposes new rules for renewable energy

By Tom Johnson | 7 August 2012

The state has proposed new rules aimed at increasing investments in renewable energy systems in New Jersey.

The regulations, proposed in the New Jersey Register issued yesterday, deal with how owners of solar systems, wind turbines, and other renewable sources of energy connect with the regional power grid and get credit for the electricity their systems produce.

Beyond encouraging new investments in renewable energy, the rules should avert the need to build new power plants powered by fossil fuels and alleviate the demand for new spending on huge transmission projects, according to the rules proposed by the New Jersey Board of Public Utilities.

The state has been aggressive in promoting cleaner sources of energy, so much so that New Jersey is second only to California in the number of solar installations. The rules should spur development of renewable energy systems by expanding the definition of projects eligible for net metering.

In addition to providing cleaner ways of producing electricity, onsite renewable energy projects reduce congestion on the power grid, a step that reduces the potential for power outages and improves the reliability of the electric system, the rules claimed.

Net metering programs serve as an important incentive for consumer investment in onsite renewable energy generation, according to the U.S. Department of Energy.

Net metering enables customers to use their own generation from onsite renewable energy systems to offset consumption over a billing period by allowing meters to turn backwards when they generate electricity in excess of demand, making the arrays more affordable to owners, according to the federal agency.

The state agency said increased net metering also means a greater reduction in electricity costs in the long term by promoting the development of renewable energy in New Jersey.

“In the long term, the board’s program for developing renewable energy and generation can act as a spur to development of renewable energy markets, thus reducing use of environmentally damaging fossil fuels and decreasing U.S. dependence on foreign fuel imports. Ultimately, this will have an important beneficial economic impact on the country as a whole,” the rules claimed.

The proposal of the rules comes at a time when the Christie administration is tweaking various renewable energy programs in an effort to promote investment in clean energy projects.

Late last month, Gov. Chris Christie signed a bill that aims to revive the state’s solar sector, which has seen prices for the electricity the systems produce fall dramatically during the past year. The bill ramps up how much power suppliers must buy from solar systems, a move some believe will help stabilize the sector.

Also last month, the BPU readopted rules that set up a framework for reviewing offshore wind projects along the Jersey coast. The Christie administration has aggressively pushed the development of more than 1,000 megawatts of offshore wind farms, but efforts have lagged in recent months.

The hurdle has been fears that revenues targeted to projects generating electricity may be diverted to cope with New Jersey’s budget problems. Unless the problem is resolved, no banks would be willing to provide the financing to build the wind farms, which cost more than $1 billion, according to people involved in the effort.

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