(New Jersey solar story updated with comments from SunPower) TRENTON, N.J. ( TheStreet) -- New Jersey Governor Chris Christie pictured below is not proving to be the biggest fan of clean energy.
With all eyes in the solar sector focused on solar growth in Europe and China, as well as large-scale solar projects in the desert Southwest, it might seems insignificant to chart the alternative energy attitude of the New Jersey governor. Here's a a solar trivia question that would indicate otherwise: Which U.S. state has the largest solar market? If you think the correct answer is California, you'd be wrong, at least, when ranking U.S. solar growth by per-square mile of installed solar capacity. New Jersey, because of its population density and small size relative to Western states, is the fastest-growing solar market in the U.S. A more important question for solar investors about New Jersey's solar profile today, however, is whether the state's solar renewable energy credit program (SREC) may be a model for the growth of U.S. market-based incentives. The SRECs can be purchased by electricity suppliers to meet the state's renewable portfolio standard requirement. Last week, New Jersey Governor Chris Christie unveiled his budget plan for 2011, and it is not an understatement to say that New Jersey's solar market could have died if not for the SREC program. At a time when lessening solar support from European governments in the form of feed-in tariff programs, led by Germany, has dominated the performance of solar stocks, the development of market-based incentives to shelter solar from political storms could not be more important. How bad is the clean energy budgetary blood-letting in New Jersey? Governor Christie's new fiscal plan not only slashes support levels for clean energy rebates, but is diverting revenues generated from clean energy programs like the Regional Greenhouse Gas Initiative to patch New Jersey's general budget cracks -- in effect, using clean energy revenues as a "cash cow" for New Jersey's bleak economic situation. "Every source of clean energy money in the state is being raided, but it also shows that we were smart to move to a market-based system for solar," said Matt Elliott, clean energy advocate at Environment New Jersey. An SREC works in contrast to the rebate system in New Jersey that depends entirely on government budgetary appropriations for rebate payments to be made to solar project installers. Each time an SREC-only system generates 1,000 kilowatt hours of electricity, an SREC is earned and placed in the customer's electronic account. SRECs can then be sold on the SREC tracking system, providing revenue for the first 15 years of the system's life.