NJ2012 Capacity Update
The New Jersey Office of Clean Energy (NJ OCE) published an updated installed solar projects list as of September 30, 2011. According to the NJ OCE, as of 9/30/11 the Garden State installed 447.7 MW of solar capacity. This equates to more than 20 MW added in the month of September, putting the state at an average of 27.1 MW per month and a total of 108.2 MW installed for the 2012 compliance year to date. NJ OCE estimates for October 2012 expect 44 MW of additional capacity to be installed, bringing total installed capacity to over 491 MW.
Although the NJ OCE reports 447.7 MW installed as of September 30, 2011, PJM GATS currently shows 431.2 MW registered to produce SRECs as of 11/26/11. It is common to see a difference in registered projects between the NJ OCE and PJM GATS reported figures as there is typically a delay from when systems are interconnected and installed to when they receive their NJ state certification number and become registered in GATS.
New Jersey’s 2012 reporting year solar requirement is currently set at 442,000 MWhs. Assuming a production factor 1.2 MWh per installed kW per year, the state needs approximately 370 MW operational all year long. As of 11/26/11, GATS has reported 163,507 SRECs issued through September 2011 generation. October 2011 generation will be issued on November 30, 2011. Given the volume issued through September 2011, approximately 37% of the required volume has been generated. This leaves a need of approximately 278,500 SRECs to meet the 442,000 MWh RY2012 target.
Assuming all NJ solar facilities produce at a 1.2 MWh production factor per kW per year, and all systems noted as installed on the NJ OCE installed project list received generation credit from their first full month of operation, the existing installed capacity of 447.7 MW will produce approximately 338,400* SRECs between October 2011 and May 2012. This additional generation will bring the NJ2012 SREC issuance total to approximately 501,900 SRECs, an excess of 60,000 MWhs. Assuming the October 2012 estimates are accurate, the additional of 44 MW in October creates additional oversupply, equating to a forecast of almost 530,600* NJ2012 SRECs minted and an excess of 88,600 MWh. Both of these scenarios only account for the existing installed capacity through September 2011 and estimates through October 2011. Additional supply will continue to come online through the remaining months of NJ2012, with more capacity anticipated to be pushed through at the end of the 2011 calendar year due to the expected expiration of the federal grant incentive. The additional supply coming online throughout the remaining months of NJ2012 will further impact the long SREC market NJ is facing and have an effect on the 2013 market.
NJ2013 SREC Market
As it currently stands, the NJ2013 (June 2012 – May 2013) Renewable Portfolio Standard (RPS) requires 596,000 MWhs of solar generation. This Solar REC requirement equals approximately 496.7 MW to be operational all year long, assuming the NJ2013 requirements are met only using 2013 vintage SRECs. Given the current market, and expected oversupply, the NJ2013 market will start off the year with between 60,000 – 88,600 MWhs already issued and eligible to meet the 2013 requirements. Note, this assumes the September figures and October estimates provided by the NJ OCE are accurate and do not take into consideration any additional capacity to be installed in the remaining months of the 2012 compliance period.
Assembly Bill 4226
Introduced on November 10, 2011, Assembly Bill 4226, sponsored by Assemblyman Upendra Chivakula (District 17), and Assemblyman Daniel Benson (District 14), would implement changes to the current solar RPS requirements. Under the current RPS, the SREC requirements are subject to a 20% increase per year through 2027 should the state meet or exceed its solar requirements three years in a row, while also experiencing a decline in SREC pricing in those same three consecutive periods. The final paragraph of the current format of 4226, states that the 3 year time period would be reduced to 1 year and be applied beginning in the 2013 compliance period.
Should this bill be signed into law, the 20% increase would take effect in 2013. Currently, RY2013 has a requirement of 596,000 MWhs. A 20% increase would adjust the 2013 requirement to 715,200 MWh; equal to an additional 119,200 SRECs required or approximately 99.3 MW operational all year long.
Other solar trade and advocacy groups have actively suggested alternative proposals to the legislation, some of which include a revised SREC requirement schedule as well as a fixed SACP schedule through 2027. We will continue to keep a close eye on the legislative process and provide updates as more information is known and how it will impact RY2013 and future NJ compliance periods.
*This figure uses a PVWatts calculation assuming 1.2 MWh/kW/Year and takes into consideration seasonality for the remaining months left in the compliance period.