Avidan: There are two different groups of people right now who are creating this split market. The first is people who built solar projects, invested their own money, in order to provide solar capacity based on certain assumptions and certain prices that were in effect at the time. When we went and looked at our projects, we were estimating SREC prices were going to be trading at, say, $500 or $400 an SREC. At that time our cost reflected a payback of seven to eight years.

SREC prices plummeted to about $150 each, which is going to be a very painful process to go through--my original estimates of seven to eight years payback are now going to be 15 years. That’s going to be a very risky industry to go into, not knowing what the prices are going to be from one month to another. There is going to be a lot of uncertainty going forward.

The second group of people who are pushing for future solar projects are the solar integrators, and what they are currently advocating for is a structured SREC market, similar to what you find in the JCP&L [Jersey Central Power & Light], ACE [Atlantic City Electric] and REC [Rockland Energy Company] territory. Projects located in these territories can enter into a 10-year contract at a fixed price. If this change to a structured market is approved in the State of New Jersey to include all territories, and if it is to exclude already existing installations, it will put companies such as us, who have invested hundreds of millions of dollars, at a great disadvantage. We predicted the SREC market to fluctuate based on a free market supply and demand within the solar alternative compliance payment (SACP) of the New Jersey Clean Energy Program.

The reason we have seen prices plummeting is that there is an oversupply. This is the way the free market is supposed to work. But with a structured market, there will be very little incentive for people to build projects other than the installers, who only care about the last project they built.

GlobeSt.com: Does that affect what sectors you or other developers will choose to utilize solar? Shopping centers, for example, have not embraced it to the same degree.

Avidan: I really don’t think there is much of a difference between the industries. Anyone who consumes electricity, at the end of the day, would have the same benefit. As long as you’re paying electric, and you’re subject to the utility company rate, you should have the incentive to build solar, whether it be on shopping centers or office buildings. The only constraint on office buildings or shopping centers is the footprint of the roof is much smaller normally, and therefore it does not make as much economic sense as an industrial building. We have large roofs that are pretty much open. But again, anyone is who is a consumer of electricity would benefit from solar. The question is how to build it on a shopping center roof, which is somewhat restrictive in that there is a lot of equipment on the roof--air conditioners and other equipment, which doesn’t make it ideal for solar installation.

GlobeSt.com: Does this mean New Jersey is less likely to use land that could be developed for other uses for solar farms, as has been feared?

Avidan: There are still quite a few large projects in the queue or that have gotten approvals. I have not seen too many that have gotten built to date. There was a rush at one point to try to secure leases with farmers by promising them somewhat of a high rent on their land because of SREC prices being as high as they were. Somehow, it made sense. But now that prices have gone down, those projects might be hard to finance and some of them may not be built. It depends on the economics.

GlobeSt.com: Are you implementing any new technologies to make this more financially feasible throughout the state?

Avidan: The improvement in technology is very small. As we build our projects, we use the 240-watt panels. The fastest today is maybe 280 to 300 watts, so incrementally the new panels on the market are maybe a little more efficient, but not enough to make a big difference. I’m not really aware of new technology that could take over what solar was providing.

GlobeSt.com: As a property owner and manager who has invested in this technology, is this the beginning of the end of the solar boom?

Avidan: I’m not sure I’d call it the beginning of the end, but there is going to be a period of consolidation, and right now I think it is a very foggy and uncertain environment as to which direction we go in. There are numerous bills and advocate groups that are pitching opposite sides of what has been the law and what has been driving the market. Until those two sides come up with some answers, or legislators come up with some solutions, we’re not going to see too much new development going on because there is so much uncertainty. For myself, I don’t see doing too much development in this type of environment, not knowing what direction we’ll be heading.