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May 15, 2025 Assembly State and Local Government Committee Meeting Recap
RE: FOR DISCUSSION ONLY: A5460 (Schnall/Abdelaziz/McCoy) - Revises value of solar alternative compliance payment.
On May 15, 2025 in meeting room 16 in the Annex at the New Jersey State Capital the Assembly State and Local Government Committee heard A-5460 FOR DISCUSSION ONLY (this means that it was not up for a vote at this time).
If passed, A-5460 would lower the SACP or ceiling for New JERSEY SRECs by 75% from $198 to $50 starting June 1, 2025. Here is the change that is proposed:
The board shall [determine an appropriate level of solar 34 alternative compliance payment, and] permit each supplier or 35 provider to submit an SACP to comply with the solar electric 36 generation requirements of paragraph (3) of subsection d. of this 37 section.
The value of the SACP for each Energy Year, for Energy 38 Years 2014 through 2033 per megawatt hour from solar electric 39 generation required pursuant to this section, shall be:
EY 2025 $208
EY 2026 [$198] $50
EY 2027 [$188] $40
EY 2028 [$178] $30
EY 2029 [$168] $20
EY 2030 [$158] $10
EY 2031 [$148] $10
EY 2032 [$138] $10
EY 2033 [$128] $10.
Over a dozen representatives from various companies and organizations commented. Only one, the NJ Division of Rate Council, was in favor. (see #8 below for the $550 million ratepayer increase caused by this bill)
The major points brought up in opposition to A-5460 were:
The New Jersey state legislature has for decades encouraged residents and businesses to invest in solar. There were clear incentives laid out that supported long-term investment in solar. A-5460 changes these incentives after people have invested.
A-5460 will financially harm over 50,000 residents who installed solar on their homes between 2012 and 2020.
Thousands of low and moderate income homeowners rely on SRECs to pay for solar leases. Cutting SRECs by 75% to 95% will be devastating to them.
Over 5,000 schools, businesses and non-profits will be adversely affected
Schools with PPA’s will lose SREC payments. Schools with PPA’s will be forced into litigation with solar owners due to legislative outs in the contracts.
Companies who have invested in solar in New Jersey will view the state as “un-bankable” and will not be able to invest in energy projects in the future in New Jersey.
A-5460 was a surprise in that it was always expected the payments to out-of-state windfarm corporate owners for Class 1 recs would be cut – not cuts to New Jersey homeowners who rely on SRECs for their solar financing.
A-5460 will not save the ratepayers money. As written, A-5460 will increase ratepayer costs by $550 million in the next three years.
The following entities commented in opposition to A-5460.
Flett Exchange, LLC. (audio of comment at 1:18:25)
NJSEC – New Jersey Solar Energy Coalition
SEIA – Solar Electric Industries Association
MN8 Energy
NJR Renewables
CS Energy
Gabel Associates
IGS
PosiGen
SREC Trade
Sol Systems
(Dozens of letters from residential solar owners in opposition were emailed directly to the committee members and referred to by Flett Exchange and SREC Trade)
Since this was “for discussion only” the result of this hearing is that there is significant opposition to this bill. It was also a good exercise to reinforce the history of investing in solar in New Jersey and how the existing law encouraged and set long term expectations for residential and commercial solar investment. The backers of this bill are the Governors office and the BPU. The authors and the backers of the bill did not testify. It is rumored that the Governors office and BPU are not supportive of this Assembly bill and are supportive of the Senate bill S-4300. S-4300 is equally as damaging as A-5460 reputationally for the State of New Jersey as a safe place to invest in energy infrastructure.
The Assembly members were all very attentive to the testimony. In our opinion, if there was a vote on A-5460 this bill would have failed by a wide margin.
We should expect the BPU and governors’ office to continue to pursue changing the rules of the game and reduce the value of the SRECs of solar owners in New Jersey. If they succeed, it is now expected that REC prices under the transition REC (TREC) and Successor Solar Incentive Program (SUSI) RECs will be targeted next. There are no explicit contracts guaranteeing the fixed TREC and SUSI RECs. A 7% legislative cap on the cost of Solar in New Jersey was passed in 2018 to protect the ratepayer. Later in 2021 a new law passed in New Jersey allows the BPU to take into consideration the savings in energy and the social cost of carbon. The social cost of carbon SCC varies widely from $7 a ton to over $300 a ton based on who is calculating it. The BPU uses $62 per ton which enabled them to exceed the 7% cap by $353 million in 2023 increasing to $586 million estimate in 2025. Without the energy savings and SCC calculations the real out of pocket cost to ratepayers in New Jersey for solar is over 12% according to the 2025 BPU estimate. Recent public outcry over the cost of electricity has put the Governors office and BPU in a position where they need to cut expenditures to keep approving new solar programs. This is most likely the reason for A-5460 and S-5400 and the future possibility of them targeting TREC and SUSI payments. Each year the BPU conducts a cost cap analysis and issues a certification.The BPU is fast tracking the approval of new solar programs at this time.
An audio of the hearing can be heard here.
Here is a memorandum sent to the committee members prior to the meeting:
To: Assembly State and Local Government Committee Members
From: Fred DeSanti, Executive Director, NJSEC
Leah Meredith, Senior Manager Mid-Atlantic Region SEIA
Date: May 12, 2025
Subject: A-5460-Hearing for Discussion Purposes Only
On behalf of the New Jersey Solar Energy Coalition (NJSEC) and the Solar
Energy Industries Association (SEIA), we respectfully urge the Committee to fully
consider the far-reaching and damaging consequences of Assembly Bill A-5460.
NJSEC represents approximately 35 companies actively operating across every
segment of New Jersey’s solar market. SEIA is the national trade association for
the solar and storage industries, representing over 1,200 member companies.
Collectively, our members employ the vast majority of the 7,000 New Jerseyans
working in the state’s solar industry.
Over the past two decades, our members have invested more than $18 billion to
develop over 5 GW of clean, reliable solar energy across New Jersey—making
the Garden State a national leader in solar deployment. This success has been
built not only on innovation and private capital but on the State of New Jersey
honoring its policy commitments.
A-5460 undermines those commitments.
By dramatically reducing the solar alternative compliance payments (SACPs) for
Energy Years 2026 through 2033 and thus decreasing the value of solar
renewable energy credit (SREC) payments—from roughly $1,800 per year to
$450—the bill severs the financial lifeline for more than 49,000 residential solar
owners who trusted the state’s promise. These New Jersey homeowners—many
of whom used personal loans to finance their solar systems—will face annual
shortfalls of up to $1,350, potentially putting them at risk of default.
But the harm doesn’t stop at the household level. Public schools, houses of
worship, and municipal buildings that rely on SREC revenue to meet debt service
will be forced to cut programs, defer maintenance, or raise tax revenues. This
legislation jeopardizes the fiscal stability of communities across all 40 legislative
districts.
Moreover, by signaling to investors and developers that the state may walk back
its statutory commitments, A-5460 sends a chilling message to the clean energy
market. Confidence in long-term projects will falter. Capital will potentially dry up.
And New Jersey’s clean energy goals will become harder and costlier to achieve.
To date we have received no financial analysis whatsoever to substantiate the
claims being made to support this legislation, likely because there are none.
NJSEC and SEIA have prepared detailed, district-by-district impact summaries
that we are ready to share with you. These documents underscore a simple truth:
this legislation does not just revise a policy—it breaks a promise made to New
Jerseyans who decided to invest in solar.
We strongly encourage you to hear the testimony of the many stakeholders
whose lives and livelihoods will be affected by this bill. We are committed to
working with you to find constructive solutions that preserve the integrity of New
Jersey’s clean energy commitments by addressing legitimate policy concerns,
but this is clearly not one of them.
Thank you for your time and consideration. Please do not hesitate to reach out
for additional information or documentation.