DG+Design’s latest New Jersey Solar Market Report shows that the state installed a record 3.8 gigawatts (GW) of new capacity during 2021. Despite overcoming challenges from the Covid-19 pandemic, including supply chain issues, New Jersey now faces a significant grid interconnection backlog and incentive uncertainty. The state saw a massive spike of new solar projects in Q3 2021, followed by a dropoff of installed capacity during Q4.
At a January meeting of the New Jersey Board of Public Utilities, members discussed reducing state incentives for solar development, despite the rocky road ahead as the state works to hit 37% solar power by 2050. New Jersey’s strong incentives have made it a leader in solar development over the last ten years, with an extraordinary track record of rooftop community solar development.
While decisions about state incentives will be determined within state borders, the looming danger of grid interconnection delays threatens projects in New Jersey and beyond. PJM Interconnection (PJM), the nation’s largest power grid stretching along the Eastern United States, is facing an interconnection backlog of over 1,200 projects, many in New Jersey. In light of the massive backlog, PJM is seeking a two year pause on reviewing projects in the queue, with new projects likely to face even longer wait times. Such delays stand to substantially threaten the development of solar in New Jersey.
However, there are hopeful signs, particularly for the state’s commercial solar sector. In July of this year, a New Jersey law will go into effect requiring newly constructed warehouses over 100,000 square feet to be “solar-ready,” with measures like reserving roof space for solar panels and utilizing solar water heating systems.
Additionally, due to the success of New Jersey’s community solar pilot program first launched in 2019, Governor Murphy has instructed the NJBPU to make the program permanent. The release of a stakeholder input process is expected in February of 2022.
Kathleen Gill, Director of Clean Energy at DG+Design, remarked, “Interconnection queue delays produce extended project timelines and greater financial risks, which in turn can cause a further hesitation to invest in new solar projects. Given the extended backlog of PJM’s queue, it is unclear if New Jersey will be able to maintain its high rate of solar development in 2022, which could impact its ability to reach its long-term renewable energy targets.”
In Q4 2021, commercial sector installation capacity dwarfed residential installation capacity by a ratio of 3 to 1, with solar development especially concentrated in PSEG territory. For the calendar year 2021, New Jersey’s largest residential solar developers were Vivint Solar (acquired by Sunrun), Trinity Solar, and Vision Solar. In the commercial sector, EnterSolar led the pack, followed by Distributed Solar Operations and Smart Citizens LLC. Community solar development was led by Solar Landscape, Altus Power, and CEP Renewables.
David Ganske, CEO of DG+Design and veteran of the clean energy industry remarked, “Consistent incentive offerings have been key to ongoing growth of solar in New Jersey, allowing it to outpace many surrounding states. As state incentives decline in the coming years, it will serve as a test of New Jersey’s solar sector, and perhaps as a harbinger of what’s to come as other states consider cutting incentives.”
For a more detailed analysis of the New Jersey solar market including pricing, policy details, and market share data, check out the 2022 Q1 New Jersey Solar Market Report from DG+Design.
DG+Design is a marketing and creative agency with a focus on clean energy and sustainable brands. Our work is founded on the passion to uniquely combine clean energy expertise, creative skill, and marketing strategy to provide unrivaled value. From market research and energy marketing to documentary filmmaking, DG+Design is focused on empowering others to grow the clean energy economy. Work includes projects with utilities, electric vehicle companies, solar and wind developers, non-profits, international organizations, and more. For more information on DG+ and available market reports, visit the company's research page.
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