The New Jersey Board of Public Utilities (BPU) is studying whether sending two separate bills or one “consolidated” bill to community solar subscribers is the most effective and user-friendly way to attract and keep customers signed on to projects in the fast-growing sector.

The state’s first community solar project began operating in January, and three more have since come online, for a combined capacity of 9 MW. With more than 40 projects in the pipeline, the BPU is midway through a public comment process to determine which billing system would work best for utilities, community solar program developers and consumers.

With a two-bill option, consumers receive their regular utility bill, plus a separate bill for their community solar subscription. The other option, a consolidated bill, provides a single accounting, compiled by the utility or energy supplier, that includes the cost of the community solar energy and all other electricity or power costs.

The March 25 hearing on the issue drew a range of stakeholders, including representatives of PSE&G, Atlantic City Electric, solar developers and advocacy groups. Most, but not all, favored a consolidated bill.

“A dual bill is really going to confuse retail customers,” said Jacob Sussman, COO of Evergreen Energy, a community solar project developer, adding that it would be harder to sign up consumers if they were going to receive two bills. “What potentially could happen is that people feel that community solar is a scam. They are going to lose faith in the system.”

Sussman and other speakers believe the BPU’s decision could determine whether community solar projects are successful in New Jersey. Potential subscribers receiving two separate bills would have to calculate the combined total and compare it to past bills to see if they have saved money, they said.

But Jake Springer, senior policy associate for Nexamp, a developer, owner and operator of solar projects, said the idea that consolidated billing is a “panacea” for marketing community solar is wrong. A well-designed consolidated billing system could be viable, but is not the only option, he said.

“Dual billing exists today in other markets that are farther along than New Jersey is right now,” he said.

The BPU is scheduled to release a report on the issue on May 28.

Growing Interest in Community Solar

New Jersey is one of about 20 states that have recognized the benefits of shared renewables by encouraging their growth through policy and programs, according to the Solar Energy Industries Association.  Others include Massachusetts, Nevada, New York, Minnesota, New Mexico, Maine and Maryland. The New York City Housing Authority, with its vast customer base in public housing, is aiming to generate 25 MW of renewable energy by 2025 through community solar projects. (See Community Shared Solar Grows in NYC.)

Community solar projects are targeted at consumers — whether homeowners or small businesses — who either cannot or do not want to have solar on their roofs. In many instances, developers start enrolling subscribers before they begin building a project or look for a business to be an “anchor” subscriber by committing to buying a certain percentage of the power from the project.

In return for subscribing, the consumer receives a credit on their utility bill, reducing the electricity cost by a set percentage. The solar project operator then supplies the electricity generated in the project to a utility company, which provides power to the consumer in the same way the utility did before opting into community solar.

New Jersey Governor Phil Murphy is pushing community solar in the state’s effort to reach 100% clean energy by 2050. Murphy wants the state to have 32 GW of solar by then, about nine times the capacity online today.

Community solar also supports Murphy’s commitment to environmental justice and helping low- and moderate-income residents lower their electricity bills. Consumers generally pay little or no money upfront to subscribe to a project and, depending on the developer, can lock in savings of a certain percentage, typically 5% to 20%, on their monthly electric bills. Forty percent of the capacity in the BPU’s community solar program is reserved for low- and moderate-income residents.

Rising Consumer Interest

Shaun Keegan, CEO of Solar Landscape of Asbury Park, which developed the first two community solar projects in New Jersey, said that public interest in the projects is notable.

“It doesn’t cost anything to enroll. You can cancel at any time,” he said, adding that he believes the sector is growing steadily. “It checks all the boxes, triple bottom line: People. Planet. Profit.”

In 2019, the BPU approved 45 community solar projects totaling 78 MW. The Solar Landscape projects, on the rooftops of two Perth Amboy warehouses, began operating in January, and two smaller projects have since come online in Secaucus and Pennsauken. The BPU is considering proposals for a second phase of solar community projects, which together will generate 150 MW of electricity.

Lawrence Garb, executive vice president of Hartz Mountain Industries, which developed the Secaucus community solar project, said the company will have three more community solar projects online by the end of April, generating about 6.5 MW. Garb said the company, which mainly manages real estate, has been installing solar on company warehouses for more than a decade. But state regulations allowed the electricity from those projects to be used only in the buildings, while the community solar energy can be sold to the public.

Solar Landscape had about half the project target of 1,200 subscribers signed up when it launched the Perth Amboy projects, Keegan said. Now, the projects, which give participants a 10 to 20% savings on their bill, is about 75% subscribed, he said.

Solar Landscape uses a two-bill system but favors consolidated billing, as does Hartz Mountain, and several other developers.

“Having to explain to a customer that they will get two bills is definitely the biggest bottleneck,” said Nicholas Minekime, managing director of solar developer Altus Power America, “People already have enough difficulty understanding how community solar works in the first place.”

A Deeper Connection

Community solar subscribers in Massachusetts and Minnesota, states with established community solar markets, receive two bills, said Allan Telio, senior vice-president for Nexamp, a developer with projects in several states. The key to success in dual billing is to ensure transparency and understandability in both bills so that consumers can easily see what they are paying for and getting in return, he said.

A separate bill for the cost of the community solar can even make consumers feel more involved with the clean energy project, he said. “From a psychological perspective there’s a deeper connection,” he said.

If New Jersey were to opt for consolidated billing, many details would have to be worked out. The BPU is gathering information on topics including stakeholders’ experience of consolidated billing in other states and the potential challenges facing a consolidated billing system implemented in New Jersey.

In New York, the state Public Service Commission requires community solar projects that participate in its program to use a consolidated system, with subscribers given a credit on their utility bills, said Kristen Barone of Orange and Rockland Utilities. Subscribers are guaranteed at least 5 percent savings on their electricity bills, and the utility takes an administration fee for compiling the consolidated bill, she said.

Steve Sunderhauf from the Atlantic City Electric Company, said consolidated billing would provide consumers with a single electric bill that would include distribution, transmission and generation charges, all surcharges on taxes and all other items currently on utility bills. Its success could depend on acceptance by solar developers and consumers and a clear framework as to how the cost of developing the consolidated system would be recovered, he said.

Randi Orlow, solar program director for Neighborhood Sun Benefit Corp, a subscriber organization, said the group favors a consolidated bill; clarity and transparency are key.

“We want the subscriber to be able to easily identify who their community solar provider is, exactly what the charges are, what the discount is, and who they should reach out to if a concern needs resolution,” she said.