July 23 (Bloomberg) -- New Jersey utilities will be required to buy more solar energy under legislation signed today by Governor Chris Christie.
Utilities including Public Service Electric & Gas and Jersey Central Power & Light will need to get 2.05 percent of their electricity from solar projects in 2014, up from less than 0.5 percent now.
New Jersey developers added 174 megawatts of photovoltaic panels in the first quarter, surpassing California as the largest solar state with 34 percent of all U.S. installations, according to the Solar Energy Industries Association. The legislation will spur additional solar development, Christie said at a press conference in Trenton today.
“Renewable energy not only helps meet our goals of increasing sustainability and protecting the environment, but can be an engine for economic growth,” he said in an e-mailed statement. The law “will help us remain a national leader in the solar-energy industry.”
Solar plants in New Jersey earn renewable-energy credits for each megawatt-hour they produce that utilities must buy. That incentive helped drive up installations in the state, and the boom led to an oversupply of credits that threatened to stall new development.
Prices for the credits sank to less than $100 a megawatt-hour this year from more than $500 a year ago because installed plants were producing twice the amount that utilities needed, according to Flett Exchange LLC, an environmental broker.
The state’s solar requirement will increase to 4.1 percent by 2028. The penalty for utilities that fail to meet the increasing percentage will be $339 for each megawatt-hour short of the goal in 2014, declining annually to $239 a megawatt-hour in 2028. Reducing the penalty will save utility customers about $1.1 billion over the next 15 years, according to the statement.
JCP&L is a unit of Akron, Ohio-based FirstEnergy Corp. and PSE&G is owned by Newark, New Jersey-based Public Service Enterprise Group Inc.
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