newjerseynewsroom.com

BY KATE ROA

New Jersey’s solar businesses are planning to make 2012 a strong earnings year. Despite the expiration of the federal cash grant, transitioning utility finance program, long SREC markets and stagnant legislation, industry leaders are ready to build more projects.

Their optimism is grounded and tethered to long-view business plans and risk-analyses. If their numbers are right and elected officials connect with and promote a tax equity narrative, this sector of New Jersey’s economy can continue to prosper.

While investor-owned PSE&G has created an estimated 1000 solar-related jobs since 2008, profit margins and jobs for twenty-plus New Jersey vendors that install the energy distributor’s solar assets are at risk.

“In order to extend Solar 4 All we would need to file a request with the Board of Public Utilities seeking regulatory approval. We have said in the past that we would like the opportunity to build more solar projects that align with the state’s new Energy Master Plan,” commented PSE&G spokesperson Francis Sullivan.

PSE&G decided early on to invest in their own factors of solar production.

“We didn’t want the liability on our books,” commented Al Matos, VP of PSE&G Renewables and Energy Solutions

The distribution company has 24 solar installations. They’re in favor of a long SREC market and would like to continue investing. The other three distribution companies were mandated by the Board of Utilities to participate in long-term SREC contracts to foster stability.

PSE&G expects to reach an agreed upon eighty megawatt goal by early 2013. They have expressed interest in building more systems on brown fields and landfills. To date, the Board has not endorsed another program.

According to Jamie Hahn, co-founder and managing director of Solis Partners in Manasquan, N.J., financing for the distributed solar sector will look quite different in 2012 compared to the past three years now that the Treasury Grant is gone, but different does not mean dead. The sun setting of the grant should not impede development said Hahn. He thinks the next viable round of development will be funded through tax equity investments from corporate America, high net worth individuals and institutional funds.

“Think about it. With the expiration of the cash grant, you’re going to need to monetize approximately twice the amount on a given project with tax equity. You have 30 percent in the form of an investment tax credit and approximately 28 percent from depreciation benefits. You’re going to have to have the tax appetite to monetize this, otherwise it’s not going to do you any good,” said Hahn.