State Solar Debate: Will SRECs Create Unhealthy Market Concentration? (NJ)

[jpak]

http://www.renewableenergyworld.com/rea/news/story?id=52339

A growing divide is occurring within the solar industry over how best to incentivize state-level solar programs. At issue is the role that solar renewable energy certificates (SRECs) should play in each market and what their impact will be on how -- and perhaps how many -- companies operate in states such as New Jersey, Maryland and Florida. There are also fears within the industry that SREC programs are benefiting a few large companies at the expense of many smaller companies.

"I commend the New Jersey Board of Public Utilities (BPU) for the steps they are taking. But the market, without some way to securitize the RECs, is fundamentally flawed. It's like setting off Wall Street without the SEC . That's what they're in the process of doing."
-- Bill Hoey, President, NJ Solar Power, a commercial and residential installation company based in Beachwood, New Jersey.

On the surface, developments for solar on the state level are relatively positive: California is moving ahead with its solar initiative after a rocky start; New Jersey is restructuring solar incentives to encourage new market activity after a long slowdown; and states such as New York, Arizona and Ohio are developing Renewable Portfolio Standards (RPS) with significant solar “carve-outs” that require a portion of the RPS to come from solar.

But just beneath the encouraging headlines is a growing philosophical battle over where to take these up-and-coming solar markets: Should the industry rely on a floating market-based mechanism to incentivize projects? Or should states implement a long-term incentive that looks something like a feed-in tariff? While the answer isn't clear cut, it will surely have wide-reaching implications for the future of solar in the U.S.

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