New Jersey residents already have paid $3 billion to subsidize firms installing solar panels.
All residents paid for the subsidies through added charges on their monthly utility bills, making it a regressive tax that falls hardest on those least able to afford it. Worse yet, the benefits went overwhelmingly to affluent homeowners and businesses who could afford the subsidized solar panel systems. The working poor and disadvantaged minorities were compelled to pay for a lucrative energy benefit for others.
Two years ago the Legislature and Gov. Phil Murphy enacted a law to rein in the excessive solar subsidies. Under that, one form of the subsidies ended in April when the state reached a benchmark of 5.1% of its retail electricity from solar.
Yet the state is planning to provide new subsidies to the solar industry that will cost utility customers an estimated $800 million annually starting next year and $1.4 billion a year by 2030, according to a report by its consultant, Cadmus Group.
Subsidies aren’t needed and don’t make sense for solar power in small and not very sunny New Jersey. The state already has 129,000 solar installations, giving it more solar capacity than 45 other much larger and generally better situated states. If there’s a renewable energy advantage to New Jersey’s location, it’s the wind energy in the adjacent ocean.
Even the utility-scale projects the state envisions — presumably including neighborhood solar that could at least in small part address the disparities of past solar subsidies — shouldn’t need to be subsidized. The Delaware River Port Authority just broke ground on a solar project to supply power to its PATCO rail operations, paying nothing up front and simply agreeing to buy electricity from the solar developer for 20 years — while saving an estimated $12 million over regular utility prices.
The clean energy reforms a couple of years ago supposedly capped the increased costs to consumers at a hefty 7% to 9%.
But the promised analysis of the costs to ratepayers of the Murphy administration forcing the energy markets to switch to clean energy is nowhere to be seen.
New Jersey could be following California down the path of foolishly implemented clean energy mandates. There this summer the state has ordered rolling blackouts because switching too much of its energy to renewables has left it with too little energy at crucial times. When the sun sinks lower, solar output drops and winds tend to diminish. But that’s exactly when most people get home from work and crank up the air conditioning, which has required California to overpay for out-of-state power in the spot market and bill it to customers enduring rolling blackouts.
Murphy and legislative leaders need to make their case, if they have one, why paying much more for electricity that won’t be as reliable is in the interests of New Jersey residents and businesses. It better be more than just setting a costly and ineffective climate example for other states, throwing public money to connected people and supporters, or burnishing Murphy’s progressive credentials with a scheme that’s actually biased against working families and disadvantaged minorities.