Solar developers are urging the New Jersey Board of Public Utilities to extend the completion timelines in the agency’s proposed storage development plan, saying that 550 days to complete a project and secure connection through PJM is too short.

The board’s draft proposal requires grid supply or distributed projects approved under the program to be commercially operating within 550 days of getting the agency award. If they are not, “the capacity they reserved would be returned to the market” and be available for other projects, the proposal says.

The timeline was the most salient concern at a Nov. 20 hearing, in which other speakers — while generally supporting the proposal — called for the BPU to address a range of issues, among them accelerating the start of the program segment focused on distributed storage and strengthening it to make it more attractive to developers.

The proposal, the New Jersey Storage Incentive Program (NJ SIP), sets out the guidelines for two sectors: a program for behind-the-meter, distributed projects that is expected to launch in 2026 and one for in-front-of-the-meter projects, including grid supply projects, that will begin in early 2025.

At least six of the more than two dozen speakers said they believe the project completion deadline — known as a maturity requirement — is too restrictive.

Dan Watson, director of development at Jupiter Power, a large-scale energy storage developer, said construction alone can take three years on a large project.

“It can be a long time with the PJM related upgrades as well,” he said. “So, the 550-day timeline is in obvious need of correction and consideration for larger projects.”

Fred DeSanti, executive director of the New Jersey Solar Energy Coalition, said a grid supply project in front of the meter would “be applying as a wholesale generator in order to do a front-of-the-meter project,” and the current proposed timeline would be tough to meet.

“That’s a process that could take as long as two years or more,” he said. “I know you want to get started on that program in 2025. But it’s unlikely that we can even get approvals until 2027.”

PJM is working through a major backlog of resources and not accepting any new project requests until 2026.

The proposal says the intention of the requirements “is to eliminate projects that cannot be expected to reach commercial operation within a reasonable time frame.” The proposal explains that a project is considered to have reached commercial operation if “it is fully constructed and has completed the full interconnection process, either at PJM or with a New Jersey jurisdictional [electric delivery company], including construction of any required interconnection upgrades.”

A BPU representative at the meeting said the BPU’s consultant on the project suggested the 550-day timeline. He added that several speakers expressing concern about the requirements “gets our attention,” and the BPU staff would consider the issue.

Launch Date Controversy

The NJ SIP proposal is a revised version of a draft proposal first released in September 2022, with changes made in response to stakeholder input. The state aims to install 2,000 MW of total capacity by 2030, but progress has been slow. A BPU spokesperson said the state currently has 560 MW of installed storage, but that capacity will not be counted toward the 2,000-MW goal.

Several speakers said there is significant interest in developing storage in the state. Diane Cherry, deputy director of the Mid-Atlantic Renewable Energy Coalition, said there are 3,700 MW of storage projects in the PJM queue. Noting the state’s 2,000-MW goal, she urged the BPU to focus on grid-supply project incentives and said, “we can easily meet and exceed this goal with the appropriate regulatory direction.”

Joshua Lewin, president of Helios Solar Energy of Somerville, N.J., encouraged the board to consider launching both the distributed and grid supply segments in 2025, rather than delay the distributed project launch by a year — an opinion also voiced by other speakers.

“This continued delay in the program rollout is unhelpful in gaining customer willingness to enter a new and unfamiliar market,” he said.

The revised NJ SIP includes a competitive solicitation to determine the incentive level for grid supply projects, which was not in the original plan. Also new is an option under which the BPU will accept applications from solar-plus-storage projects, rather than standalone storage projects. That will allow the program to accept projects that are not eligible to receive storage incentives from the Competitive Solar Incentive part of the Successor Solar Incentive program, which encompasses solar-plus-storage projects. (See NJ BPU Updates Proposal for Storage Incentives.)

The revised proposal also makes the bid-participation fee of $1,000/MW refundable to unsuccessful bidders, instead of nonrefundable. BPU said the shift stems from the addition to the plan of a “pre-development security” of up to $100,000/MW, to be paid upon application approval.

The security is designed to ensure the project is carried out as planned, allowing the BPU to impose penalties that will be deducted from the security if the project misses the Planned Commercial Operation Date or the Guaranteed Commercial Operation Date.

The storage proposal also has deferred implementation of a distributed pay-for-performance incentive on projects to give utilities time to develop the mechanism to calculate it.

Prioritizing Segments

Lyle Rawlings, president of the Mid-Atlantic Solar & Storage Industries Association, urged the BPU to focus the program resources on distributed storage rather than grid-scale storage projects. He said the association’s recent member survey showed many already are engaged in the sector.

“There’s a lot of development going on anywhere from less than 10 KWh to tens of megawatt hours in the behind-the-meter storage field,” he said. One reason, he said, is that “behind-the-meter revenue is substantially more than the grid supply revenue.”

“Behind-the-meter storage is going to be for the foreseeable future more economic, and that means long term a better ability to reduce the incentives from the program and save ratepayers money,” he said. Other speakers said distributed projects, because they are smaller, may get up and running and contribute to the state’s need for storage more quickly.

Addressing the ratepayer impact, Megan Lupo, assistant deputy ratepayer advocate for the New Jersey Division of Rate Counsel, took issue with a new element in the proposal that directs the BPU to pay developers or owners the full project incentive upfront, rather than over 10 to 15 years.

She said the board staff concluded the new system would reduce the level of risk and so bolster program incentives.

“However, it is not clear that any additional incentives are needed for New Jersey to achieve its statewide goals,” she said. “An increase in incentives should be supported by evidence that proves the current incentives are insufficient to meet statewide targets. If not, New Jersey risks over-incentivizing energy storage.”

Lupo also expressed concern about making the fees refundable.

“This change would risk making the bidding process less meaningful and may cause an increase in the number of bids that are speculative in nature,” she said, adding that $1,000/MWh is low compared to other states.

“There is no reason to believe these current nonrefundable fees are overly burdensome to bidders,” she said.