For millions of New Jersey residents, solar power is coming soon to their neighborhoods - even to the utility poles in their backyards.
In a move both bold and expensive, state regulators yesterday approved a plan for Public Service Electric & Gas Co., the state's largest utility, to install solar panels on 200,000 utility poles in its service territory.
The project will make New Jersey the nation's second-most solar-fueled state, according to the state Board of Public Utilities, trailing only California.
PSE&G will spend $515 million to install 80 megawatts of solar power through the end of 2013, doubling the state's solar capacity. Half the new production will be derived from individual solar modules mounted on about a quarter of PSE&G's 900,000 utility poles.
The other 40 megawatts of production will be generated by centralized solar arrays, including one at PSE&G's Cox's Corner Switching Station in Evesham Township, Burlington County.
The 80-megawatt PSE&G project amounts to a tenth of the nation's current total grid-connected photovoltaic capacity, according to the Interstate Renewable Energy Council.
"We think it's a good program to get solar started in the state," said Stefanie Brand, director of the N.J. Division of Rate Counsel, the state's consumer advocate. Her office supported PSE&G's proposal, which she said had a "very minor impact" on rates - adding about 10 cents per month for a residential customer in the first year, a 0.13 percent increase.
But the PSE&G project still amounts to only about 4.4 percent of the ambitious goal the state has set for power generated from renewable energy sources by 2020.
Unlike most solar projects, which supply individual customers with electricity, the PSE&G plan has attracted attention because its panels will feed directly into the electrical grid. PSE&G is calling the project "Solar 4 All" to drive home the point that all customers will benefit from solar, not just those who can afford to mount the heavily subsidized panels on their rooftops.
"This will give impetus for other projects to move forward," said Jeff Tittel, director of the New Jersey Sierra Club, which also supported the plan.
The environmental group says the project reinforces its argument that clean energy can benefit the local economy.
A New Jersey company, Petra Solar Inc., of South Plainfield, will provide the utility-pole modules under a $200 million contract, its first large commercial project. The three-year-old company plans to add 100 employees, more than tripling its current workforce, said Shihab Kuran, Petra's chief executive officer.
Ralph Izzo, chief executive of Public Service Enterprise Group Inc., the regulated utility's parent, said the solar project would also demonstrate the effectiveness of distributed-power schemes that use electricity generated from multiple sources inside the existing distribution system, reducing the dependence on distant power generators that require expensive transmission systems.
"One of the things I think will be essential for renewables in the future is that we can demonstrate that they make economic sense being built where there are people to use the electricity," he said.
"This fantasy that some people still subscribe to, that we can build all renewable sources of energy in these places where the wind and sun are abundant . . . is just not economically efficient."
PSE&G said the utility expected to receive federal tax credits and income from selling state renewable-energy credits, which will reduce the cost of the project. The total cost of the panels is about $6.44 for each watt produced, expensive by conventional power standards, but less than solar projects in the past.
In Camden and in Secaucus yesterday, PSE&G work crews installed several of the utility-pole solar systems.
Individually, the panels are unimpressive: Each one measures about 21/2 by 5 feet and produces about 200 watts. The output of 200,000 panels is 40 megawatts, enough to power 40,000 homes.
Petra's technology combines a conventional crystalline silicon photovoltaic panel with a microinverter, which converts the direct-current electricity produced by the solar panels into alternating current that is distributed on the grid.
Each unit also incorporates wireless "smart-grid" communications devices so that the utility can monitor the output remotely.
Kuran, Petra's chief executive, said that each unit was designed to be installed and wired into the grid in less than 30 minutes.
"The reduction in costs comes from the simplicity in installation and design," he said. The units will be assembled at Petra's New Jersey factory and delivered, ready for installation by PSE&G crews. The hardware is about 10 percent more expensive than conventional rooftop systems, he said, but the total installed cost is about 10 percent to 20 percent less than rooftop models.
Kuran said the company would buy its photovoltaic cells from several vendors. Petra's chief supplier is Suntech Power Holdings Co. Ltd., one of the world's largest producers of solar panels. Suntech and Petra announced an alliance last month to produce the utility-grade systems.
Suntech is a Chinese company whose shares are traded on the New York Stock Exchange. It announced in May that it was scouting U.S. locations to open manufacturing facilities to produce solar panels, and Suntech's promise to open domestic manufacturing facilities was a critical reason Petra agreed to the alliance, Kuran said.
If successful, the PSE&G contract is likely to generate more business for the closely held Petra.
Petra is in talks with other utilities about installing its proprietary technology, said David Lincoln, managing director of Element Partners L.L.C., a Radnor clean-technology private-equity firm that provided Petra with an initial investment of $14 million in 2007. He is on Petra's board of directors.
"This is really a major breakthrough, getting consumer validation of the technology," Lincoln said.