On July 28, 2021, the New Jersey Board of Public Utilities (NJBPU) voted unanimously to implement the Successor Solar Incentive (SuSI) Program, the state’s new solar incentive program required by the New Jersey Clean Energy Act of 2018 and the Solar Act of 2021.1 The SuSI Program will allow New Jersey to increase its solar generation by up to 3,750 MW by 2026. The SuSI Program replaces the Transition Incentive Renewable Energy Certificate (TREC) and the Solar Renewable Energy Certificate (SREC) programs. Like the TREC, the renewable energy certificates to be issued under the SuSI Program are fixed-value credits, although the SuSI credits are of a lower value than the current TREC credits. However, the NJBPU believes that the SuSI Program incentives, along with the continuing decrease in solar installation and development costs, are adequate to support the continued development of solar energy projects in New Jersey. Despite the challenges of the past year due to the COVID-19 pandemic and the decrease in solar incentive levels, New Jersey has more solar generation scheduled to come online in the next 12 months than in almost any previous year. The NJPBU’s belief that this trend will continue with the support of the SuSI Program is reflected in the SuSI Program’s annual goal of installing 750 MW of new solar capacity.
The SuSI Program’s incentives will support the achievement of the New Jersey Energy Master Plan (EMP) goal for the state to achieve 100 percent renewable energy by 2050, 34 percent of which will come from solar projects. Currently, 5 percent of the state’s energy comes from solar generation, and the NJBPU projects that upon full implementation of the SuSI Program, approximately 10 percent of the state’s electricity will be supplied by solar generation. To achieve these goals, 5.2 GW of solar will need to be installed by 2025, 12.2 GW by 2030, and 17.2 GW by 2035.
The SuSI Program, which takes effect on August 28, 2021, consists of two sub-parts: 1) the Administratively Determined Incentive (ADI), and 2) the Competitive Solar Incentive (CSI).
The ADI is a fixed incentive payment for net metered solar projects of 5 MW or less and includes net metered projects serving residential customers; net metered projects serving commercial and industrial projects of 5 MW or less; all community solar projects; and, on an interim basis, grid supply projects located on properly closed sanitary landfills, brownfields, and areas of historic fill. The program will provide one New Jersey Solar Renewable Energy Certificate-II (NJ SREC-II) for every megawatt-hour (MWh) of solar electricity produced by a qualifying facility, with an additional $20 per MWh adder for public entities – such as school districts, municipalities, and public colleges and universities – as well as a temporary incentive for projects built on contaminated lands. The NJ SREC-II value will vary based on the market segment (i.e., project type, size, and classification) and will have a term of 15 years. As noted below, the corresponding value of the incentives for each project type is based on the expected development and construction costs for these projects and public policy preferences for projects on already developed sites, such as rooftops and parking lots, and for contaminated sites and landfills (subsection (t)). The corresponding values per market segment are shown in the table below: