JERSEY SHINES (OR HOW TO BE A SUN KING WITHOUT KINGLY SUN)

NJ to more than double solar power generation
Victor Epstein, July 29, 2009 (AP)
and
New Jersey Outshines 48 of Its Peers in Solar Power; Lacking California's Sunshine and Deserts, State Capitalizes on Utility Poles and Flat Industrial Roofs to Claim No. 2 Spot
Rebecca Smith and Russell Gold, August 3, 2009 (Wall Street Journal)

SUMMARY
The state of New Jersey intends to get 30% of its power from New Energy sources by 2020, including 3% from solar energy and 12% from offshore wind energy.

To that end, the state Board of Public Utilities (BPU), as part of its Clean Energy Program, approved a ratepayer investment of $515 million to double the state’s solar capacity to 160 megawatts by 2013. The investment, involving 4 utility companies, will eventually bring New Jersey’s installed solar capacity to 232 megawatts.

Currently second in the nation to California in installed solar energy capacity, New Jersey will reap a financial reward of ~$1 million a year from a recently passed 30% federal tax credit for its investment. It will also use a solar renewable energy certificates (SREC) marketing plan to help allay costs. In August, the federal government’s stimulus plan will allow the investment tax credit to be exchanged for a federal grant equal to 30% of the cost of the project, making New Jersey’s commitment to solar a potential source of vitally needed capital.

Everybody has better sun than Germany but Germany leads the world in solar incentives and solar capacity. (click to enlarge)

There is also likely to be an economically significant return, not readily calculable at present, when either the federal government or the Regional Greenhouse Gas Initiative (RGGI) imposes a price on greenhouse gas emissions (GhGs).

In a larger sense, the state will benefit by freeing itself from the hidden cost burdens of coal-generated electricity.

Unlike sun-rich California’s million solar roofs program (California Solar Initiative, SB1), the New Jersey Solar 4 All plan is to plant solar panels throughout public spaces to benefit the public at large. PSE&G will put 200,000 panels atop utility poles.

PSE&G will be putting solar panels and the beginnings of a Smart Grid on utility poles. (click to enlarge)

The plan will also build ground mounted solar in presently unused publicly-owned spaces.

The state’s utilities are also partnering with businesses to take advantage of big empty flat roofs.

The FedEx Corp. distribution hub in Woodbridge, for instance, will have a 2.42-megawatt, 3-acre installation on its roof, the largest rooftop solar facility in the U.S., supplying 30% of its electricity.

PSE&G will be building on empty lots. (click to enlarge)

Perhaps the cleverest and most aggressive aspect of the plan is that it requires no new transmission. While other states formulate mega-solar plant ambitions but await grid connections to complete them, Nerw Jersey will be delivering solar energy-generated electricity to its customers from urban locations already connected to the transmission system.

It is a stirring example of how a state can take advantage of the resources it has to achieve higher and higher levels of New Energy capacity instead of bemoaning its lack of resources.

PSE&G will be building on empty rooftops. (click to enlarge)

COMMENTARY
The New Jersey Board of Public Utilities (BPU) approved a progressively increasing power rate through which consumers will begin paying $1.28 per year to fund the solar buildup and eventually pay as much as $4.08 per year by 2028.

The Solar 4 All project is expected to create ~200 New Jersey jobs. South Plainfield-based Petra Solar will make the solar panels for PSE&G. It will hire 100 people to do the work.

The PSE&G approval will allow for 40 megawatts on utility poles and 40 megawatts in commercial ground spaces and on large rooftops.

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The New Jersey BPU also approved proposals from Jersey Central Power & Light to build 42 megawatts of distributed solar capacity through 2012, from Atlantic City Electric Company for 19 megawatts and from Rockland Electric Company for 3.8 megawatts.

Solar energy is currently estimated to cost, in New Jersey, $6-to-$8 per watt, more than power generated by traditional grid power supplies such as coal, natural gas and nuclear energy. Experts in the solar energy industry expect solar to achieve grid parity in 7-to-10 years.

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The falling cost of silicon has allowed solar panel costs to drop in recent months. Also, the worldwide economic downturn has reduced demand for solar panels, allowing supply to build up and, again, allowing the cost to drop. But experts warn grid parity may be less a function of the falling cost of solar energy and more a product of the rising cost of fossil fuel-generated and nuclear energy-generated electricity. Old Energies will become expensive as more and more of the world imposes a price on GhGs and the dangerous pollution from them becomes more and more objectionable.

Until solar energy costs match those of other power sources, incentives for building solar \will continue to generate more capacity growth than other states’ insolation (solar energy per square meter).

A strong incentive program and not great sun explain Germany’s world-leading 3,000+ megawatts of solar energy capacity. The U.S., which has great sun but only late in 2008 established a high-qualtiy, long term investment tax credit, languishes with a mere 791 megawatts of installed capacity.

New Jersey cannot match California’s combination of both incentives and insolation or California’s U.S.-leading 530-megawatts of installed solar energy capacity. But Jersey’s commitment to solar, as reflected by its strong incentives, explains the fact that it is the second biggest U.S. solar energy producer.

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California is spending $3.3 billion on subsidies, hoping to get 3,000 megawatts installed by 2020. 158+ megawatts of solar capacity were installed in California in 2008, twice what was installed in 2007.

A couple of observations:

Solar energy may be a slightly better deal than the per-watt numbers indicate. Solar energy is strongest at just that time of day when the grid’s demand is greatest so it is producing when power is selling at its highest price. This means that grid parity might be more accurately calculated against peak demand price, not average price.

PSE&G will use the opportunity of doing the utility pole-mounted solar panel installations (which will cost about $1,000 each) to also install an element of a Smart Grid system. Each solar unit will have a 2-way communication with the utility’s control center, allowing for immeditate notification in the event of an outage. The control center will have the ability to continuously evaluate incoming grid data and instantaneously respond to it.

Qday, the theoretical daily-average insolation at the top of the atmosphere. The calculation assumed conditions appropriate for 2000 A.D.: a solar constant of S0=1367 W m-2, obliquity of ε=23.4398°, longitude of perihelion of ϖ=282.895°, eccentricity e=.016704. Contour labels (green) are in units of W m-2. (From Wikipedia, don't know what it means. - click to enlarge)

QUOTES
- Ralph Izzo, chief executive, Public Service Enterprise Group Inc., parent of PSE&G: "We don't have the land to do big, grid-connected, utility-scale solar projects, so we've had to think more creatively…We need to break away from the mindset of putting solar energy where there's lots of land but no people [and]…We've got to stop pretending solar power will lower the cost of energy. It's going to increase the cost, and people have got to understand why it's worth more…"

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- Paul Vicarro, facilities managing director, FedEx: "I've had plenty of people ask me, 'Why New Jersey? Why not Arizona?' … The answer is: That is where the money is, that is where incentives are to make the deal financially viable."
- Shihab Kuran, chief executive, Petra Solar: "As they deploy these systems, they get a smart grid network…"
- Jeanne Fox, President, New Jersey Board of Public Utilities: "[New Jersey has] more [solar installations] per square mile than California…[but] ratepayers can't afford to have solar everywhere, even though the cost is dropping…[It’s important to build New Energy, however, because]… We're all in this climate change boat together, and we're all going to sink or swim together…"