Solar investor sues PSE&G over power’s value

Posted: January 24, 2013

A Cinnaminson solar investor has sued Public Service Electric & Gas Co. in New Jersey over its much-ballyhooed program to install 200,000 photovoltaic panels on utility poles, claiming that PSE&G drove down the value of solar power by producing so much of it.

Mark Napier, a solar entrepreneur, alleges the utility is unable to measure precisely how much power it generates from the solar panels. PSE&G's method of estimating its solar production "is inaccurate at best and fraudulent at worst," according to the lawsuit.

"It's inconceivable that they produce as much power as they say," said John J. Coughlin, a Moorestown lawyer who filed the suit in Burlington County Superior Court last week. He is seeking class-action status, contending that anybody who installed solar panels was harmed by PSE&G's action.

PSEG says its pole-mounted program produced 34,000 megawatt hours last year, or about 15.7 percent of the total solar renewable-energy credits (SRECs) in the state.

The quantity of power generated is critical because producers can sell SRECs for every 1,000 kilowatt hours of electricity produced. Those credits provide a significant income stream for solar producers, above the price they get for selling the electricity itself.

But so much solar power has been produced in recent years that the price of the credits has plunged by more than 75 percent, making some solar projects unprofitable. At current prices, the SREC market in New Jersey is worth about $20 million. It was worth four times that much two years ago.

Napier is an investor who has built several solar projects that supply Burlington County schools.

PSE&G generated much fanfare in 2010 with its Solar 4 All program, which budgeted $515 million to produce 80 megawatts of solar power, half of it from modules mounted on utility poles that feed directly into the grid. The program is known colloquially as "solar on a stick."

Coughlin said that PSE&G, as both a producer and buyer of SRECs, is in an unusual position because New Jersey regulators allow it to charge its customers for the cost of the solar program. So, unlike private solar producers, PSE&G is unharmed by the falling price of SRECs.

"They don't have any economic incentive to stop doing what they're doing," Coughlin said.

The lawsuit alleges that PSE&G engaged in unfair competition and unjust enrichment.

Fran Sullivan, a utility spokesman, declined to comment on the suit.

"However, I can tell you that we have a remote monitoring system in place for the pole-attached solar units," Sullivan said. "It is through that monitoring system that we measure the output of each unit so we know the amount of electricity that they are producing."


Contact Andrew Maykuth at 215-854-2947, @Maykuth on Twitter or amaykuth@phillynews.com

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