When Gov. Phil Murphy announced his Energy Master Plan, he charted a path to make New Jersey a national leader in solar energy development. The plan calls for 750 megawatts of solar each year to meet the state’s clean-energy target by 2035. But the question is how can you build and connect such ambitious amounts of solar if you can’t connect it to the aging electric grid?

The standards for connecting solar projects to the grid have not been updated in over a decade and there are a growing number of areas where solar projects cannot be built. That deprives New Jersey businesses and residents of being able to power their homes and operations with clean, resilient energy. In southern New Jersey alone, over 50 areas are shuttered to connecting solar projects — even a small one on a rooftop. Back in 2020, Gov. Murphy acknowledged this problem in his master plan. Two years later, no significant progress has been made.

Current policies say any new solar project that wants to connect to the grid within these challenging areas must pay full upgrade costs, which immediately disincentivizes any developer or homeowner from investing in solar. No single project can afford these costs and consequently, New Jersey continues to fall far behind its ambitious renewable energy goals. This is not a forward-thinking policy and will continue to impede any progress toward upgrading the grid unless new, more equitable policies are proposed.

The Smith solution

Sen. Bob Smith has introduced a bill that would provide an equitable solution to this problem so that we can both modernize our electric grid and enable the level of in-state solar development needed to meet the state’s climate goals. It would ensure that everyone contributes to these necessary grid upgrades through what is called cost sharing.

The Board of Public Utilities would be able to set grid modernization fees based on the size of the solar project to help cover costs to upgrade the grid. Should there be upgrade costs above what is collected from the grid modernization fee, that portion would be rate-based by the utilities because these upgrades will benefit all residents. Importantly, the bill would also require utilities to make the necessary upgrades to open the closed areas so that residents in those areas can benefit.

This pragmatic approach would eliminate the time-consuming estimating process that utilities must use just to figure out the interconnection fee for a single solar project and create a predictable framework for businesses to invest in New Jersey. For a residential project, this fee would only be a few hundred dollars at most (a small percentage of a system’s costs) and would ensure the ability to install solar regardless of where on the grid they are.

The electric grid must be modernized one way or another. Sen. Smith’s bill helps create a foundation that ensures that solar projects can help fund those upgrades rather than the status quo where development just isn’t possible. The stakes are too high to just continue the ineffective path we’re on, merely treating the symptoms of climate change. It’s time to rebuild the very foundation of what powers our state and only that will help us do our part in fighting the climate crisis.