Credit: (AP Photo/Michael Conroy)

The Legislature is pushing for new incentives to advance a range of clean-energy initiatives that include expanding reliance on solar power, electrifying commercial fleets and creating a market for systems to store energy. 

All are key components of the Murphy administration’s transition to a clean-energy economy, but most have either failed to meet targeted goals set in the state’s Energy Master Plan or have lagged behind what other states have achieved in developing more robust markets. 

The Senate Environment and Energy Committee approved the package of bills last week with broad backing from advocates, including many business groups, despite concerns raised by the New Jersey Division of Rate Counsel, which fears the incentives could cause spikes in energy bills for customers. 

Most of the bills had been considered in the last legislative session, but none made it to Gov. Phil Murphy’s desk. The committee also adopted another bill that aims to require more clean-energy initiatives be targeted to low-income households, including solar energy and energy storage systems. 

Energy storage 

Energy storage is viewed as an integral part of the clean-energy economy, allowing electricity to be stored from intermittent sources of renewable energy, such as offshore wind and solar systems. The master plan set a goal of developing 600 megawatts of energy storage by 2021, a goal not yet achieved by the state. 

“This is hugely important,’’ Doug O’Malley, director of Environment New Jersey, told the committee, noting the goal ramps up to 2,000 MW by 2030. “We are not on track to meet that goal.’’ 

The storage bill would require the Board of Public Utilities to allocate $60 million from a ratepayer-subsidized clean-energy fund to pay for upfront incentives to owners of new energy storage systems. The bill does not specify the size of the incentives, leaving it up to the state agency to determine.  

In a letter to the committee, Brian Lipman, director of the Division of Rate Counsel, argued the program would cause significant costs for utility customers as well as impair the state’s ability to leverage other funding sources for energy storage systems, including federal dollars. 

Energy storage is viewed as an integral part of the clean-energy economy, allowing electricity to be stored from intermittent sources of renewable energy, such as offshore wind and solar systems.

But Evan Vaughan, director of the Mid-Atlantic Renewable Energy Coalition, argued the bill would create a market that would really take off in the state, calling it necessary to boost energy storage in New Jersey. “It won’t happen without incentives,’’ he said. 

Corporate tax credits 

Utility customers have been one of the primary sources of funding for the state’s clean-energy efforts. In fiscal year 2022, a surcharge on customers’ gas and electric bills raised $344 million for the fund, Lipman noted. By allocating $60 million for a new energy storage incentive, the bill would reduce funding for other clean-energy issues, he added. 

The other clean-energy programs adopted by the committee do not rely on ratepayers to provide incentives to convince owners of commercial trucks to convert to electrical vehicles and put solar systems in existing warehouses. Instead, the bills would rely on corporate tax credits to incentivize owners of commercial fleets and warehouses to take advantage of the subsidy. 

Committee chairman Sen. Bob Smith (D-Middlesex) touted the warehouse proposal, saying with the number of such facilities around the state, New Jersey could become the headquarters of solar energy. The Murphy administration’s Energy Master Plan envisions solar energy providing roughly one-third of the state’s electricity by mid-century. 

The warehouse solar bill won support from environmentalists and business groups, but opposition from the League of Conservation Voters of New Jersey. Allison McLeod, senior policy manager, argued solar is already economical and many corporations can afford to put the systems in warehouses. The group also opposed the corporate tax credit to spur owners of commercial fleets to install charging facilities at their locations. 

Smith argued it is fair to allow corporations to get a tax credit since they are the ones that pay the corporate-business tax. In the case of the tax credit for solar on warehouses, the bill would cap the credit at 50% of the cost to retrofit a warehouse for a solar-ready zone or $250,000. To incentivize the conversion of fleets, the bill also would provide a 50% credit for purchase and installation of a charging station.