As distorting subsidy regimes are reduced or withdrawn and even with the collapse of prices for solar pv modules, solar power shows that it is still a long way from being commercially viable. This report is on the unhealthy and distorted situation in New Jersey where even more “artificial” legislation is planned to keep this non-viable industry alive. It would be far healthier to allow solar power plants to find their natural – unsubsidised – commercial niches. And there are commercially viable niches in industry and in domestic use for solar power – albeit only as an auxiliary energy source (pv) or in support of domestic heating or of conventional thermal power plants (solar thermal).
The prices that power companies pay for solar power have all but collapsed, curtailing future development and leaving those who installed systems struggling to repay their loans. A glut of power has meant that prices have fallen by more than 80 percent in the span of a year.
In response, solar power advocates are pushing for state legislation that would limit the amount of solar power that can be produced by large companies, while mandating that power companies buy more solar power. …..
The solar power market in New Jersey has been driven in part by the mandate that utility companies derive an ever-increasing percentage of their energy from renewable sources — or face penalties. For the first 15 years of a solar project, the power they generate is sold as credits, in 1,000-kilowatt blocks, on the utilities market to the highest bidder up to three years after they are generated.
Fueled by state and federal incentives, prices for these credits passed $600 in 2008, eventually nearly reaching $700. But the credits’ high prices attracted investors and others, dramatically expanding the volume of solar power available and flooding the market with credits. The prices of those credits began sliding last year, finally bottoming out about May 19, when they were sold for $88.94 on the Flett Exchange, a popular trading site for the certificates. Prices rose on talk of state legislation, and now trade at about $122. …
“We’ve been too successful,” said state Sen. Bob Smith, D-Mercer, Middlesex, who chairs the Senate’s Environment and Energy Committee. He sponsored introduced legislation that would increase the amount of solar credits that utility companies would be obligated to buy, while requiring the BPU to sign off on solar credits. While private investors have been instrumental, Smith said, “We’d like to have an industry that is not a boom-and-bust industry.”
Tags: New Jersey, price collapse, Solar power, subsidies
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