Recently New Jersey and California took monumental steps to remain nationwide leaders in clean energy. New Jersey increased its Renewable Energy Standard to make it one of the most aggressive standards in the nation while at the same time supporting its nuclear industry and seeking to diversify its energy sources. California implemented a first of its kind rule, requiring all newly built residences to have solar energy. Both of the states continue their track record of being leaders in clean energy.
On May 23, 2018, New Jersey Governor Phil Murphy signed into law Assembly Bill 3723 (the “Renewable Energy Law”). This law reaffirms New Jersey’s commitment to being a leader in clean energy. The Renewable Energy Law increases New Jersey’s renewable portfolio standard from 20.38% by 2021 to 50% by 2030 aligning with the standards in California and New York (and only surpassed by the 75% standard in Vermont and the 100% standard in Hawaii). Further, the Renewable Energy Law provides for a wind down of the New Jersey Solar Renewable Energy Credit program (“SREC Program”) by 2021 and requires the Board of Public Utilities to study how best to replace the SREC Program. Additionally, the Renewable Energy Law reduces the amount of energy required to come from solar technologies from 5.1% at the solar carve out’s peak in 2023 down to 1.1% by 2033.
In addition to the changes to the renewable portfolio standard, the Renewable Energy Law seeks to further diversify the state’s energy portfolio. To accomplish this, the Renewable Energy Law targets offshore wind and storage capacity as areas of growth over the next decade by increasing the state’s offshore wind requirement from 1,100 megawatts to 3,500 megawatts and setting, for the first time, an energy storage goal of 2,000 megawatts by 2030. The renewed commitment to offshore wind can already be seen in the Fisherman’s Energy wind project, which is a 24-megawatt project off the coast of Atlantic City that has been stalled for years, but New Jersey Assembly Bill 2485 is currently working its way through the legislative process, which would allow construction to begin on the project. Finally, the Renewable Energy Law allows for additional avenues for individuals and communities to access renewable resources by creating a community solar program and doubling the state’s net metering cap.
In conjunction with the Renewable Energy Law, Governor Murphy also signed into law Senate Bill 2313 (the “Nuclear Law”) which provides $300 million in subsidies to New Jersey’s nuclear power industry. The Nuclear Law was passed and signed, in part, due to a report from Public Service Electric & Gas (“PSEG”) warning that without receiving additional government subsidies, PSEG would have to close both the Salem nuclear power plant and the Hope Creek nuclear power plant, which combined provide approximately 36% of New Jersey’s energy. In supporting New Jersey’s nuclear industry and reaffirming its commitment to renewable energy, New Jersey has recommitted to being a nationwide leader in clean energy.
Not to be outdone by New Jersey, the California Energy Commission (“CEC”) adopted its tri-annual new building standards (the “Standards”) on May 9, 2018. The Standards which will take effect on January 1, 2020, require all newly built residences to include solar systems (the “Solar Standards”). Additionally, the Standards update the required thermal envelope standards (i.e. the standards that govern the roof and walls of a building), ventilation requirements and nonresidential lighting requirements. The CEC anticipates that the greenhouse gas emission reductions attributable to the Standards will be equivalent to taking 115,000 fossil fuel cars off the road. Additionally, the CEC estimates that the Standards will cost the average homeowner an additional $40 per month on a typical 30-year mortgage, but will save families on average $80 per month on electric bills.
While the CEC trumpets the Standards, there are concerns that the added capacity will exacerbate the state’s “duck curve” – a reference to the steep drop in net load during midday hours, followed by a sharp ramp-up at dusk as solar generation fades and electricity consumption spikes. California ISO predicted (prior to the Solar Standards passing) that in 2020 an approximately 13,000-megawatt daily ramp-up will be required to offset the lost energy from solar panels as the sun sets. With the Standards, the CEC included a compliance credit for energy storage which can be used to offset the amount of solar PV required by up to 25%. It appears this storage option is intended to help mitigate the steep ramp-up otherwise required at the end of each day.
Previously several states and cities have thought about and even implemented solar requirements for newly constructed buildings. The cities of Sebastopol, Santa Monica and San Francisco in California, as well as South Miami in Florida, have all required solar systems on newly built homes. Washington D.C. and states such as New Jersey and Massachusetts have considered legislation requiring buildings to be solar-ready, but have not taken the step of mandating solar on buildings. However, California is taking a historic first in requiring newly built residences to include solar systems.
The Standards require all new residences (which includes major renovations on buildings under three stories) to include a solar-power system of a minimum of 2 to 3 kilowatts, depending on the size of the structure. Such solar systems can be provided either on each home individually or, if a home cannot support solar, through a larger community solar garden that serves multiple residences.
So far this year, New Jersey pulled its renewable energy standard in line with other clean energy leading states while seeking to expand wind and solar technologies and California created a first of its kind law, requiring solar on all residences starting in 2020. What city or state will pass the next law to become a leader in clean energy?