Bill Text: NJ S691 | 2026-2027 | Regular Session | Introduced
Bill Title: Increases solar development goals of SREC-II program and extends certain target dates of program to 2035.
Sponsorship: Partisan Bill (Democrat 2)
Status: (Introduced) 2026-01-13 - Introduced in the Senate, Referred to Senate Environment and Energy Committee [S691 Detail]
Download: New_Jersey-2026-S691-Introduced.html
STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Senator BOB SMITH
District 17 (Middlesex and Somerset)
SYNOPSIS
Increases solar development goals of SREC-II program and extends certain target dates of program to 2035.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning certain solar power generation incentives and amending P.L.2021, c.169.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.2021, c.169 (C.48:3-115) is amended to read as follows:
2. a. There is established in the Board of Public Utilities a program to be known as the SREC-II program, which shall serve as the successor program to the SREC program established pursuant to section 38 of P.L.1999, c.23 (C.48:3-87). The goal of the program shall be to provide incentives for the development of at least [3,750] 750 megawatts per year of new residential, commercial, industrial, and grid-scale solar power generation [by] until [2026, although this goal may be extended or revised by the board] 2035. The board may extend the program or increase the generation goal as necessary to conform to the State's solar energy policies.
b. The board shall develop, as part of the SREC-II program, a process for the creation and distribution of renewable energy certificates, to be known as "SREC-IIs," for each megawatt hour of energy produced by a qualifying solar electric power generation facility for a duration established by the board. The board shall also establish a system by which to distribute a renewable energy incentive payment, to be known as the "SREC-II value per megawatt-hour," to the owner of an eligible solar electric power generation facility, which shall be measured in dollars-per-megawatt-hour of solar power generation, and which shall represent the value of the environmental attribute produced by the solar electric power generation facility. SREC-IIs shall be transferable and capable of being used by an electric power supplier or basic generation service provider to satisfy the State's renewable portfolio standards established pursuant to section 38 of P.L.1999, c.23 (C.48:3-87). SREC-IIs shall be eligible for use in renewable energy portfolio standards compliance in the energy year in which they are generated, and for the following energy year.
c. No later than one year after the effective date of P.L.2021, c.169 (C.48:3-114 et al.), the board shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations establishing the SREC-II program in accordance with the provisions of P.L.2021, c.169 (C.48:3-114 et al.).
d. The board is authorized to establish, impose, and collect fees, escrows, and other charges the board deems necessary and proper to implement the provisions of P.L.2021, c.169 (C.48:3-114 et al.).
e. The costs of the SREC-II program shall be apportioned to ratepayers using a methodology approved by the board. Except as provided in subsection h. of section 4 of P.L.2021, c.169 (C.48:3-117), the methodology shall be similar to that by which the board apportions the costs of SRECs and other renewable energy certificates pursuant to section 38 of P.L.1999, c.23 (C.48:3-87) and consistent with the competitive retail market established by the "Energy Discount and Energy Competition Act," P.L.1999, c.23 (C.48:3-49 et al.).
(cf: P.L.2021, c.169, s.2)
2. Section 3 of P.L.2021, c.169 (C.48:3-116) is amended to read as follows:
3. a. The board shall develop, as part of the SREC-II program, a small solar facilities incentive program to award SREC-IIs to the owners of community solar facilities, solar facilities up to five megawatts in size that participate in the remote net metering program established pursuant to section 6 of P.L.2018, c.17 (C.48:3-87.12), and net metered solar facilities less than five megawatts in size, as measured in direct current, or another size specified by the board. The small solar facilities incentive program shall aim to provide SREC-IIs for the generation of at least 300 megawatts of net-metered solar facilities per year, 3,000 megawatts of community solar facilities between October 1, 2025 and December 31, 2029, and at least 150 megawatts of community solar facilities per year thereafter, and 50 megawatts of solar facilities in the remote net metering program, for [each of the five years after the establishment] the duration of the SREC-II program.
b. The board shall establish eligibility criteria and an application process by which an owner of a solar electric power generation facility may apply to receive SREC-IIs pursuant to this section, until the program reaches the energy generation target established by subsection a. of this section, as determined by the board. Only solar electric power generation facilities that receive permission to operate from the appropriate regional grid operator after the effective date of P.L.2021, c.169 (C.48:3-114 et al.), shall be eligible to receive SREC-IIs pursuant to this section, unless otherwise specified by the board. A facility shall be eligible to receive SREC-IIs pursuant to this section for a duration established by the board if it is connected to the distribution or transmission system owned or operated by a New Jersey public utility or local government unit.
c. The small solar facilities incentive program shall include criteria by which to assign an SREC-II value per megawatt-hour to a solar electric power generation facility. The criteria shall be designed by the board to incentivize the development of new solar power projects sufficiently so that the goals for solar power development in the State's Energy Master Plan are met, to further other State goals, and to incentivize projects that are especially in the public interest. The SREC-II value per megawatt-hour may include the value of the environmental and other benefits to the State provided by the facility, as determined by the board. The criteria may include, but is not limited to, consideration of the following factors:
(1) the size of the facility;
(2) the costs and revenues associated with representative facilities;
(3) for community solar facilities, the economic and demographic characteristics of the area served by the facility, including whether it is located in an overburdened community, as that term is defined in section 2 of P.L.2020, c.92 (C.13:1D-158);
(4) whether the facility is located on already developed land or the built environment;
(5) the facility's eligibility for net metering pursuant to subsection e. of section 38 of P.L.1999, c.23 (C.48:3-87) or participation in the community solar program established pursuant to subsection f. of section 5 of P.L.2018, c.17 (C.48:3-87.11); and
(6) the rate class of the facility, as determined by the appropriate New Jersey electric public utility or local government unit.
(cf: P.L.2023, c.190, s.2)
3. Section 4 of P.L.2021, c.169 (C.48:3-117) is amended to read as follows:
4. a. The board shall develop and administer, as part of the SREC-II program, a transparent, fair, and competitive solicitation process for awarding SREC-II contracts to promote the construction of solar electric power generation facilities.
(1) In order to be eligible to participate in the solicitation process, a solar electric power generation facility shall be:
(a) a grid supply solar facility or net metered solar facility greater than five megawatts in size, as measured in direct current, or another size specified by the board;
(b) constructed after the effective date of P.L.2021, c.169 (C.48:3-114 et al.);
(c) interconnected to a distribution or transmission system operated by a New Jersey electric public utility or local government unit; and
(d) sited in conformance with the siting criteria established by the board pursuant to section 6 of P.L.2021, c.169 (C.48:3-119).
(2) The board shall develop additional eligibility criteria and application processes for participation in the solicitation process.
b. The board may establish a system of distinct bidding categories within the competitive solicitation process set forth in this section, such that only bids from the same category compete with one another. The category system may take into account the size of the facility, location of the facility on a contaminated site or landfill, as determined by the board in consultation with the Department of Environmental Protection, or any other feature of a facility, provided that the category system enhances the continued diversification of the energy resources used to meet consumer demand in this State and results in environmental and public health benefits to New Jersey residents, as determined by the board. The board may revise the category system as it deems appropriate after each solicitation round.
c. Solicitation rounds shall occur at least as frequently as once every 18 months, beginning on the effective date of P.L.2021, c.169 (C.48:3-114 et al.) and ending no earlier than January 1, [2026] 2035. The solicitation process shall:
(1) be open on a non-discriminatory basis to any entity seeking to construct a solar electric power generation facility that complies with the provisions of subsection a. of this section;
(2) be carried out in accordance with criteria developed by the board and applied equally to all responses to the solicitation;
(3) award contracts for SREC-IIs to promote the construction of solar electric power generation facilities for no less than an average of 300 megawatts per year, for [five years] the duration of the program, with the first awards made no later than 18 months after the effective date of P.L.2021, c.169 (C.48:3-114 et al.);
(4) award projects selected as part of the competitive solicitation process the right to receive a renewable energy incentive payment, in the form of an SREC-II value per megawatt-hour established by the board, for the environmental attribute produced by the solar electric power generation facility, for a duration to be established by the board. The SREC-II value per megawatt-hour may include the value of the environmental and other benefits to the State provided by the facility, as determined by the board;
(5) ensure that the length of any award is sufficient to encourage low financing rates, reasonable risks to ratepayers, and to enable the development of affordable renewable energy resources;
(6) mitigate price and delivery risks for consumers;
(7) include requirements designed to ensure successful completion of projects, including, but not limited to, the imposition of appropriate escrow fees, bid maturity requirements, required interconnection milestones, and conditions on when a project must achieve commercial operation; and
(8) ensure that the environmental and public health benefits of solar electric power generation facilities on contaminated sites or landfills are recognized, including accommodating the long development timescale for these projects.
d. The board may establish [confidential] high and low bid thresholds, which may be confidential, or other cost containment measures, prior to conducting a competitive solicitation pursuant to this section, provided that the [thresholds] cost containment measures promote fiscal responsibility for the State and the likelihood of successful bids, as determined by the board. The [thresholds] cost containment measures may include a cap on the renewable energy incentive payments required pursuant to paragraph (4) of subsection c. of this section. The board may also procure more than the minimum quantity of solar power required by this section if bids are below the predetermined bid threshold.
e. The board shall determine, in consultation with the Department of Environmental Protection, if a solar electric power generation facility may be sited on a contaminated site or landfill for the purposes of this section. If the board authorizes a facility to be sited on a contaminated site or landfill, the facility shall be afforded the protections provided in paragraph (2) of subsection t. of section 38 of P.L.1999, c.23 (C.48:3-87).
f. At the end of each bidding round, the board shall:
(1) rank all bids received based on the bid price, or, pursuant to subsection b. of this section, based on the bid price within each category;
(2) select bids in ranked order, up to the procurement budget set by the board, or, pursuant to subsection b. of this section, the procurement budget of each category; and
(3) adjust quantities awarded [if prices are above or below any confidential pre-determined thresholds] based on the bid thresholds or cost containment measures established pursuant to subsection d. of this section.
g. Any moneys placed in escrow by an applicant as part of the competitive solicitation process shall be reimbursed to the applicant in full or in part upon meeting the conditions set forth by the board when the board established the escrow requirement, including, but not limited to, selection in the competitive solicitation or commencement of commercial operation of the solar electric power generation facility. The escrow amount shall be forfeited to the General Fund if the facility does not meet the conditions set forth by the board when the board established the escrow requirement, including, but not limited to, commencing commercial operation within the term specified by the board's requirements established pursuant to paragraph (7) of subsection c. of this section, including any extensions as may be granted pursuant to procedures established by the board.
h. The costs of the competitive solicitation process, including the issuance of renewable energy incentive payments pursuant to paragraph (4) of subsection c. of this section, shall not be subject to the Class I renewable energy requirement cost cap established by paragraph (2) of subsection d. of section 38 of P.L.1999, c.23 (C.48:3-87).
(cf: P.L.2021, c.169, s.4)
4. This act shall take effect immediately.
STATEMENT
This bill would extend to 2035 the date by which the SREC-II program is to meet its new goal of incentivizing the development of at least 750 megawatts of new solar power generation per year. Under current law, the program's goal is to incentivize the development of 3,750 megawatts of solar generation by 2026.
The SREC-II program includes a small solar facilities incentive program. This incentive would award SREC-IIs to community solar facilities and net metered solar facilities less than five megawatts in size. This bill expands the goal of the small solar facilities incentive program to provide SREC-IIs for the development of at least 3,000 megawatts of net-metered solar facilities per year, 3,000 megawatts of net-metered solar facilities between October 1, 2025 and December 31, 2029, at least 150 megawatts of community solar facilities per year thereafter, and 50 megawatts of solar facilities in the remote net metering program, for the duration of the SREC-II program.
The bill also modifies the SREC-II program's competitive solicitation process for the award of SREC-IIs to net meter solar facilities greater than five megawatts in size and to grid supply solar facilities by permitting the Board of Public Utilties to establish cost containment measures when conducting competitive solicitation. Finally, the bill would extend the minimum duration of the competitive solicitation process until 2035.
