It’s no secret that New Jersey has become a leader in the development of solar energy due to its significant incentives, including the once-lucrative solar renewable energy certificate (SREC) market and other credits. The Garden State lags only behind California in the number of installations, and in the second quarter of 2011 more photovoltaics were installed on New Jersey commercial buildings than in the Golden State.
But recently some developers have indicated challenges to further expansion. SRECs had been major sources of financing for arrays, with developers selling the certificates to pay for the installation. That was all well and good when they were trading at $650 each. But last year saw that market plunge, with SRECS now trading at about $225 each.
In September, Avi Avidan, the state’s biggest solar developer, said that the payback period on an array had doubled, leaving “very little incentive for people to build projects.” And just this week, Kimco Realty noted that it was looking to other states to grow its solar program, until now exclusively in the Garden State.
There is hope: the state has accelerated the Renewable Portfolio Standard schedule to allow the SREC market to stabilize. And that would be very good news.