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The renewable energy industry in New Jersey is booming thanks to financial incentives the government offers and the lack of state regulations regarding the industry. There are 52 proposed renewable energy projects in the state, 24 of which are located south of Trenton.
While this sounds great in theory, closer inspection shows that companies involved in these renewable energy project often have little or no background in the sector. Industry experts say that most of these new companies don’t know what they’re doing and are in the business primarily for the incentives involved.
It’s no surprise that New Jersey’s financial incentives entice many companies since the state is regarded as extending the most generous financial incentives for solar power across the United States. The state offers Solar Renewable Energy Certificates that resulted in the quick growth of its solar power industry and made generating solar power in the state profitable.
No matter how big or small the solar power installation might be or whether they’re in homes or large commercial establishments, owners earn RECs for every 1000 kilowatt hours of electricity produced. The RECs can be sold to other energy companies trying to meet their renewable energy quota.
The average rate for RECs is at 60 cents per kilowatt hour, compared to the traditional wholesale energy rate of six cents per kilowatt. Based on current market rates, a residential solar installation can earn a maximum of $8160 a year, while commercial solar installations don’t have a limit.
This solar rush in New Jersey has led to the forming of new companies wanting a share of the market; however, most of these companies lack experience in the field. Further, the state remains unprepared to address this, and some say that regulation of the industry is lacking.
Take, for instance, the requirements for someone wanting to go into the solar installation business include nothing more than getting a home improvement contractor’s license from the state. This alone doesn’t ensure the person installing your solar panels has prior experience in the field, nor does the New Jersey Board of Public Utilities have a list of home improvement contractors on its web site. To be listed, a contractor must have installed at least three solar installations that have passed state inspection.
The hype regarding renewable energy will eventually die down, but the state must act immediately to protect its residents. This phenomenon is seen not just in New Jersey, but indeed is happening across the country. If authorities don’t act quickly enough, financial incentives might just go to waste.
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