The ignominy! New Jersey commercial solar tops California

The Solar Energy Industries Association has just rained on California’s renewable energy photo voltaic (PV) parade with the distressing news (PDF) that New Jersey’s commercial PV projects now exceed California’s, and that they are now the hottest and biggest market in the US for commercial PV.

Yes. You read that right. New Jersey is not only smoking hot when it comes to solar installations, it may well pass California soon in total installations if we don’t get organized and stop these pretenders from the East Coast from stealing our solar crown.  This is made even more upsetting when you realize New Jersey is a dinky 7,790 sq. miles compared to California’s 158,874. I mean, New Jersey is smaller than Inyo County! Yet here they are, sneaking up on our solar dominance.  Grr.

Seriously though, New Jersey did this by being smart and looking ahead. They spurred adoption of rooftop solar with generous subsidies. The result was solar PV installations on many rooftops, especially on commercial buildings. Germany did the same type of thing some years back, with the result that they now are a world leader in installed solar. They began to cut back on the subsidies so the number of new installations dropped. But, by then, they had massive amounts of installed PV. New Jersey may (or may not, time will tell) be about to reduce the subsidies. If so, new installations will drop too.

Their plan uses a fairly complicated system of solar credits which can be resold for profit. The price of the credits has dropped 66%, which currently means a much longer payback period. Holders of the credits hope prices will rise again. By contrast, the German plan is straightforward. Owners got a subsidy to install solar. All generated power goes directly into the grid and the owner then gets a deeply reduced price for the power they use. This plan doesn’t rely on market mechanisms for a payback and seems better structured to me.

However, solar power is ramping up hugely in the US, aided by a 30% drop in costs for PV components. By all accounts, the industry is booming. Yet there is still a long way to go. The SEIA notes that “Cumulative grid-connected PV in the U.S. has now reached 2.7 gigawatts (GW).” Ok, that’s nice and certainly way more than a few years ago, but by contrast, there are individual coal and nuclear plants that generate more than 2.7 GW. They add, “Grid-connected PV installations in Q2 2011 grew 69% over Q2 2010 and 17% over Q1 2011 to reach 314 MW.” Again, while this certainly shows signs of big growth, 314 MW is still quite tiny.

Another trend worth nothing is that Concentrated Solar Power (CSP) continues to lose out to PV, mostly due to the drop in PV module prices and the expense of building CSP plants. Indeed, many proposed CSP plants in California are now switching or considering switching to PV.

Distantly following California and New Jersey in new installed PV are Pennsylvania and Arizona, with other states far behind them. So, solar is booming, but it’s still a tiny boom.