Since the New Jersey Legislature passed a bill that would increase solar incentives in the Garden State, we have been waiting patiently for an update from Gov. Chris Christie. On Aug. 10, he finally signed the bill into law.
The bill is designed to further encourage New Jersey residents and small businesses to investment in solar energy, which will help the state achieve its goal of having 22.5% of power come from renewable sources by 2020.
To understand the new bill and the effects that it will have on solar in New Jersey, you have to understand a key concept called net metering. Currently used in 44 states including New Jersey, net metering is the system that allows those who generate their own electricity with solar panels to feed excess energy back into the grid. Then the utility company pays that customer for that energy.
But when there is a “cap” on net metering, the amount of energy customers can sell back to the utility company is limited. Under the previous New Jersey law, “utilities do not have to offer net metering when generating capacity by net-metered customers equals 2.5 percent of the state’s peak demand for electricity, a level already exceeded.” The new law increased the cap on net metering to 2.9 percent, which is still far from the initial goal of the Senate bill, which was 4 percent. According to advocates, the increase on the cap should allow New Jersey to install an additional 700 MW over the next three years, until a more permanent fix can be established.
So obviously those who already have solar panels providing energy to their home or business will reap the benefits, but residents across the state can benefit from this system as well. By allowing net metering and encouraging residential and commercial solar growth, utility companies can avoid costly investment in large-scale solar projects. And because the utilities are able to avoid the costs of generating and distributing the excess energy produced by solar panels, those additional costs are not projected onto the customers receiving that energy. This means savings for solar owners, utility companies, and everyone else connected to the energy grid.
If you are a resident of New Jersey or Pennsylvania looking to take advantage of solar, contact Exact Solar for more information.