New Jersey Will Expand its Energy Efficiency and Renewable Generation Programs

Michael Tobias
4 Minutes Read
  • Home
  • Blog
  • New Jersey Will Expand its Energy Efficiency and Renewable Generation Programs

    New Jersey’s incentive programs for energy efficiency and renewable generation are getting a significant upgrade through the NJ Senate Bill 2314. Existing incentive programs will be enhanced or redesigned to drive greater investment in clean energy technologies, while the statewide renewable energy target is being raised. In addition, an energy storage target is introduced, bringing the benefits of this emerging technology to NJ.

    The S2314 bill also has the general goals of improving power grid resilience in New Jersey, while decarbonizing transportation. Grid resilience can be improved with microgrids and smart grid technologies, and transportation currently represents around 40% of emissions in NJ.

    Enhanced Clean Energy Target and New Energy Storage Target

    The renewable generation target in New Jersey is established by a law called the Renewable Portfolio Standard (RPS). The RPS requires all investor-owned utilities to obtain 24.39% of their energy from renewable sources by 2028, where 4.1% must come from solar power. Similar RPS laws have been adopted in many other states, with varying clean energy targets and deadlines. New Jersey is also rejoining the Regional Greenhouse Gas Initiative (RGGI), which limits GHG emissions from power plants, but also rewards states that reduce emissions.


    Identify the best clean energy measures for your building.

    Contact Us


    With the new legislation, the renewable generation target in the RPS is upgraded to 50% by 2030, with a long-term goal of 100% renewable generation by 2050. This will establish New Jersey among the leading states in renewable energy generation. The new target includes the installation of 3,500 MW of offshore wind power by 2030, enough to power 1.5 million homes. Once all that capacity is brought online, NJ is likely to become the leading state in offshore wind power deployment.

    As stated above, the S2314 also introduces an energy storage target: the proposed target is 600 MW by 2021 and 2000 MW by 2030. With energy storage, the energy generated from variable output sources such as solar panels and wind turbines can be accumulated, and then used as a dispatchable source just like natural gas. This way, New Jersey can become less reliant on fossil fuels. A similar program has been introduced for New York City.

    Redesigned Incentive Program for Solar Power

    New Jersey currently has a Solar Renewable Energy Credit (SREC) program, which provides additional income for homes and businesses with eligible solar power systems. For every 1,000 kWh generated, the PV system owner gets a SREC. In simple terms, you can imagine each SREC as a tradeable document that says “the holder generated 1,000 kWh of electricity with a solar power system”. When utility companies subject to the RPS law purchase SRECs, it counts towards their renewable energy targets, so there is significant demand for them.

    On the other hand, New Jersey has no solar rebate program as of early 2018. This approach has been very successful in the nearby states of New York and Massachusetts, since rebates have two significant advantages over SRECs:

    • Rebate programs provide a cash incentive upfront, which makes solar power much easier to afford. On the other hand, SRECs provide a benefit that is distributed throughout the project lifetime, but they don’t help you cover the upfront cost.
    • Rebates programs provide a predictable cash benefit, while the value of SRECs is determined by the market - just like the price of stock from public companies.

    The S2314 bill aims to replace the SREC program partially or completely with a rebate program, which will be subdivided by project scale and client type - residential or business. Similar programs have been deployed in NY and Massachusetts with great success.

    Outlook for Energy Efficiency Measures in NJ Buildings

    The NJ Clean Energy Program has both residential and commercial energy efficiency programs, and they are being upgraded just like the solar incentives. Energy efficiency is economically viable for building owners while reducing their environmental footprint, and so far it has created over 30,000 jobs in New Jersey.

    The S2314 bill requires utility companies to develop energy efficiency programs for their customers, and the potential energy savings are estimated at above $200 million per year. Energy efficiency jobs are expected to triple as the new programs are introduced, and they include technical fields such as mechanical systems, electrical installations and plumbing.

    Final Recommendations

    The outlook for building energy efficiency and renewable generation is improving dramatically in New Jersey, as existing incentive programs are enhanced or redesigned. However, keep in mind that program operators perform due diligence to protect their funds; and your installation must meet certain performance requirements to be eligible. By working with qualified engineering professionals from the design phase, you can ensure your project is both code-compliant and eligible for incentives.

    Contact Us

    Tags : renewable energy Energy Efficiency New Jersey Incentive Programs NJ Clean Energy Program
    Linkedin

    Join 15,000+ Fellow Architects and Contractors

    Get expert engineering tips straight to your inbox. Subscribe to the NY Engineers Blog below.

    Have a project in mind?
    Request a proposal