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Energy burst Solar industry is starting to show some spark, but it’s too soon to say it has a bright future

Lyle Rawlings, the president and CEO of Advanced Solar Products, is pictured on the roof of Kooltronic in Pennington.

It was just two years ago that New Jersey’s solar industry seemed headed for ruin, only to be saved by legislation that helped create new demand for an oversupplied market.

But that was just a temporary fix, experts say, and advocates are now searching for a long-term solution for creating a sector that won’t be prone to the boom-and-bust cycle seen over the past several years.

The 2012 law rescued what had become a volatile market for solar panel projects — fueled by a state mandate that power suppliers increase their use of renewable energy each year and development subsidies that became too generous. When supply outstripped demand — causing the market to slide — lawmakers stepped in to speed up those requirements through 2018 and place restrictions on future installations.

Lyle Rawlings, co-founder of the Mid-Atlantic Solar Energy Industries Association, said the legislation “seems to have been pretty well-calibrated to balance the market out in the short term.” The result has been enough demand to stabilize the price of SRECs, or solar renewable energy certificates, which utilities can buy from the owners of power-generating solar arrays to help satisfy their obligations.

SREC prices have steadied at around $160 to $175 after peaking at more than $600 in 2011 and falling to below $100 last year.

But Rawlings said his association is concerned that stability won’t last, largely because of a “steep decline” in renewable energy requirements that will take hold in 2019. He also noted that SREC prices are still well above the cost of producing solar arrays — possibly even double — meaning utilities may be paying too much for the credits.

“Either the solar industry will come to a screeching halt … as it would have back then, or we’ll have to do something to alter the schedule for developing solar and reverse that decline,” said Rawlings, CEO of Advanced Solar Products in Flemington. “What we think is really necessary is to redefine the program so that it’s not a boom-and-bust cycle, and so that ratepayers are not paying substantially more than the real cost of the production of solar.”

Those discussions have started in recent months among lawmakers, industry leaders and other stakeholders. Rawlings’ group is touting a draft law called the Renewable Energy Transition Act, which outlines New Jersey’s goals for green energy and energy efficiency for decades. The state now aims to have 22.5 percent of its energy come from renewable sources by 2021, as outlined by a three-year-old Energy Master Plan, but the proposal would set a target of 80 percent by 2050.

“Defining what our destination is, I think, the most important part of this bill,” Rawlings said, acknowledging that such a plan would have implications for New Jersey’s grid infrastructure and how utility companies would operate in the future. But setting the goal now would give stakeholders time to prepare, he said, and he believes it’s attainable.

Plans for the measure have changed since the draft was circulated in March, and it’s not likely to go without debate. Its lead sponsor, Sen. Bob Smith (D-Middlesex), said stakeholder talks evolved from a focus on renewable energy to an all-inclusive look at the state’s energy landscape, touching on areas such as reducing greenhouse gas emissions and utility companies’ profit models.

That has resulted in the formation of four stakeholder groups, each made up of about two dozen people, that Smith said will come up with policy recommendations and report back in early July.

Joshua Burd

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