While the debate continues on legislative and regulatory measures to incentivize the continued growth of solar energy in New Jersey, Gaurav Naik, a partner at GeoGenix, an established industry leader in residential and commercial solar installations in the mid-Atlantic region, believes that scale is critical to achieving grid parity, the point at which the cost of solar is competitive with that of energy from traditional sources without subsidies.
Speaking at a panel entitled "New Jersey's Dynamic Renewable Energy Future" at the CLEANTECH NJ 2011 conference held Oct. 25 at the Woodbridge Hilton in Iselin, N.J., Naik predicted that grid parity would be achieved in New Jersey in four or five years. Although policy measures can promote this goal — particularly those that attract private funding by ensuring market certainty — the achievement of grid parity is inevitable given increasing demand and rising electricity prices, he said.
Naik recommended continuing the policies that have propelled New Jersey to a position of national leadership in solar (the state is now second only to California in installed capacity) while developing new policies that promote the development of utility-scale projects that will benefit electricity ratepayers as a whole. He noted that the recently released draft of the state's 2011 Energy Master Plan serves as a reminder of New Jersey's extraordinary solar accomplishments.
"When you consider the energy master plan, what stands out is our accomplishments," Naik said. "We have installed nearly half a gigawatt of solar in the last 10 years as a result of the transition from a rebate to a performance-based incentive. As a result, we have created thousands of jobs. The accomplishments cited in the plan remind us to continue to focus on what is working today. In doing that, we will gain the momentum to create a market for larger solar systems."
Naik stressed the importance of the "behind-the-meter" application, in which the system is uniquely designed and built for a single building or facility. Behind-the-meter market segments should be an important element in the 2011 Energy Master Plan, he said.
"It is imperative that we provide short-term incentives for behind-the-meter distributed generation systems for all market segments – residential, commercial and industrial," said Naik. "In my opinion, utility scale solar does not make competitive economic sense in New Jersey and won't for a while. Hence incentives for the short term — until we reach grid parity — should be focused on behind-the-meter applications."
In 2007, New Jersey replaced a solar rebate with a performance-based financial incentive called an SREC or Solar Renewable Energy Certificate. An SREC, each of which is the equivalent of 1,000 kilowatt-hours of electricity, represents the environmental benefits of solar. SRECs are financial instruments that are purchased by utilities from solar producers such as homeowners and businesses in order to meet a state-mandated requirement for the generation of electricity from solar sources.
New Jersey's SREC program, the first such incentive for solar in the world, is credited with creating the state's booming solar market. The SREC program has now been widely imitated by other states throughout the region and the nation.
The CLEANTECH NJ 2011 conference was sponsored by Antenna Group Inc., a subsidiary of Hackensack, N.J.-based Beckerman and a nationally recognized strategic communications firm specializing in clean technology and sustainability. The goal of the conference was to garner recognition for New Jersey's role as a national clean tech leader and to create a platform for expanding upon the state's clean energy achievements.
The conference drew about 200 members of the clean energy business community, including executives of clean technology companies, government policymakers and regulators, institutional and "angel" investors, professional services firms and thought leaders.
The other panelists on the solar panel included Neil Cooper, co-founding and co-managing partner of SORINROYERCOOPER, a law firm active in the solar sector; Jamie Hahn, co-founder and managing director of Solis Partners, a leading provider of distributed solar energy systems; and Richard F.X. Johnson, senior vice president of Matrix Development Group, a privately held, full service real estate investment and development company.
The panel was moderated by Tom Johnson, co-founder of njspotlight.com.
