Heated hearing on retroactive cuts to solar compliance payments; industry, advocates, and rate counsel clash

Assembly Bill A5460, a proposal to reduce the Solar Alternative Compliance Payment (SACP) used in New Jersey’s legacy SREC program, produced prolonged, contentious testimony and was not advanced at Thursday’s committee meeting.

Brian Lipman, representing Rate Counsel, urged the committee to adopt the change to provide ratepayer relief, saying the bill would ‘‘dramatically reduce’’ SACP levels and could lower costs borne by electric customers. He and Rate Counsel estimated significant savings and framed the bill as an affordability measure.

Speakers across the solar industry, trade associations, school boards, consumer advocates, and community groups strongly opposed retroactive reductions. Fred DeSanti of the New Jersey Solar Energy Coalition said the proposal "scares the hell out of us" and warned that large investors and homeowners could see projects go underwater, chilling future investment. Leah Meredith of SEIA, Robert Pullman of NJR Clean Energy Ventures and numerous developers warned that retroactive changes would undermine investor confidence and could cause operating projects to fail. David and industry witnesses repeatedly said the mechanics of New Jersey’s procurement (BGS auctions) mean short‑term savings would largely not flow quickly to consumers and that utilities could realize windfalls before rate relief reached customers.

Community and consumer witnesses said thousands of homeowners, schools and non‑profits rely on SREC revenues to service loans and maintain projects. Ali Nafakis of SREC Trade recounted clients—retirees and fixed‑income homeowners—who said SREC revenue is necessary to meet loan payments. School‑district and municipal representatives warned the bill could force added costs onto local taxpayers or result in litigation under change‑of‑law contract clauses.

Environmental and clean‑energy groups argued that solar installations already in operation are reducing auction prices and helping keep bills lower, and that reducing SACP risks removing those benefits over the medium term. Doug O’Malley of Environment New Jersey said a cut of the magnitude discussed would be a "75% decrease" and called it "a very big haircut." Industry groups offered data on investment, jobs and megawatts deployed and requested negotiations and safeguards for current projects; many said they are willing to work with the sponsor but that retroactive cuts are a dangerous precedent.

Chair Karabinchak closed the hearing after hearing many speakers, noting that the prime sponsor would review comments; the measure remained in discussion only at the close of the meeting.