New Jersey/EZ Policies

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EZ Policies for New Jersey

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Download EZ Policies for New Jersey CSV (rows 1 - 45)

PolicyPlacePolicy TypeActiveImplementing SectorSummary
Ambient Air Quality Standards (New Jersey)New Jersey: Energy ResourcesSiting and PermittingYesState/ProvinceThis article lists specific standards for ambient air quality standards for particulate matter, sulfur dioxide, carbon monoxide, ozone, lead and nitrogen dioxide.
Assessment of Farmland Hosting Renewable Energy Systems (New Jersey)New Jersey: Energy ResourcesProperty Tax IncentiveYesState/TerritoryIn New Jersey, under the Farmland Assessment Act, farmland actively devoted to an agricultural or horticultural use is assessed at its productivity value. This practice generally results in a lower tax burden for farmland owners compared to residential or commercial land owners. In January 2010 New Jersey enacted legislation (S.B. 1538), which among other things clarifies how farmland used for biomass, solar, and wind energy generation should be treated under the Farmland Assessment Act. Ultimately, the law states that the addition of a biomass, solar, or wind energy generating system to land that was assessed and taxed as farmland during the prior tax year does not automatically preclude the land from continuing to qualify for this treatment. Instead, the law sets a series of conditions that must be met in order for the land to continue to be assessed as farmland, as follows:*

  • The land must be part operating farm for the current year and have been part of an operating farm during the preceding year.
  • The power and heat generated by the system must generally, but not exclusively, be used to serve farm energy needs.
  • A conservation plan must be filed with and approved by the conservation district.
  • For solar energy systems, the property under the panels must be used to the greatest extent practical for shade crops, pasture, or grazing.
  • The ratio land devoted to energy production to land devoted to agricultural operations may not exceed 1:5 acres (i.e., maximum 1 acre devoted to energy production for every 5 acres devoted to agricultural operations).
  • Facilities are limited in size to the lesser of 10 acres or 2 megawatts (MW) of generating capacity.
  • For biomass generation, the property owner must obtain approval from the New Jersey Department of Agriculture.

Income generated from the sale of heat or power generated by solar, wind, biomass facilities is not considered income for the purposes of meeting eligibility requirements for assessment, valuation, and taxation under the Farmland Assessment Act. However, there is no income requirement for land assessed according to the terms described in the law. Any qualifying generation equipment installed in pinelands remains subject to the Pinelands Protection Act.

For the purposes of this law, the definition of land used for energy production does not include land devoted to the production of biomass fuels used in a biomass energy generation facility. Biomass is defined as "an agricultural crop, crop residue, or agricultural byproduct that is cultivated, harvested, or produced on the farm, or directly obtained from a farm where it was cultivated, harvested, or produced, and which can be used to generate energy in a sustainable manner." Any farmland used for solar, wind, or biomass energy generation that does not meet the criteria defined in the law may not be assessed as land devoted to agricultural or horticultural use under the Farmland Assessment Act.

*It is also important to note that S.B. 1538 prescribes several other criteria for determining whether it is permissible to construct energy generation facilities on preserved farmland. Among these criteria are requirements that energy production facilities not interfere with farm production; be limited in size to that needed to meet no more than 110% of on-site energy needs; and not occupy more than 1% of the total area of the farm, including both preserved and non-preserved portions.
Atlantic Interstate Low-Level Radioactive Waste Management Compact (Multiple States)South Carolina: Energy Resources
Connecticut: Energy Resources
New Jersey: Energy Resources
Environmental Regulations
Siting and Permitting
YesState/ProvinceThe Atlantic (Northeast) Interstate Low-Level Radioactive Waste Management Compact is a cooperative effort to plan, regulate, and administer the disposal of low-level radioactive waste in the region. The states of Connecticut, New Jersey, and South Carolina are party to this compact.
Bond Financing (New Jersey)New Jersey: Energy ResourcesBond ProgramYesState/ProvinceBond financing is available to eligible businesses through the New Jersey Economic Development Authority, in the amount of $500,000 to $10 million. The bonds can be used to finance capital improvements and expansions, equipment and machinery, construction, and renovations. Taxable bonds can be used for debt refinancing.
Business Employment Incentive Program (BEIP) (New Jersey)New Jersey: Energy ResourcesGrant ProgramYesState/ProvinceEconomically viable expanding or relocating businesses that create jobs in New Jersey are eligible to secure annual incentive grants via the Business Employment Incentive Program (BEIP) of up to 80% of the total amount of employees' state income taxes withheld by the company during the calendar year from the new employees hired, awarded for up to 10 years, to a maximum of $50,000 per employee over the course of the grant. Approved businesses receive annual cash grants based on the number of new jobs they have created in the State of New Jersey.
Business Retention and Relocation Assistance Grant (BRRAG) (New Jersey)New Jersey: Energy ResourcesCorporate Tax IncentiveYesState/ProvinceA business relocating operations within New Jersey and retaining jobs, or a business maintaining jobs at a current location and making a qualified capital investment is eligible for corporate business tax credits through the Business Retention and Relocation Assistance Grant (BRRAG) program. Eligible businesses can receive credits up to $2,250 per year for up to six years, per job retained in the State.
Climate Action Plan (New Jersey)New Jersey: Energy ResourcesClimate PoliciesYesState/ProvinceThe NJDEP Office of Sustainability and Green Energy coordinates programs that reduce greenhouse gas emissions that cause climate change, as well as programs designed to help New Jersey become resilient to climate impacts and adapt to those impacts that are unavoidable.
Coastal Permit Program Rules (New Jersey)New Jersey: Energy ResourcesSiting and PermittingYesState/ProvinceThe Coastal Permit Program Rules provide the processes for permit reviews. They include details on what activities need permits; the qualifications for general permits or permits-by-rule; the details for pre-application meetings, contents and fees; review procedures and deadlines; permit appeals; and enforcement of the coastal laws and rules. The Coastal Zone Management Rules (CZM Rules) define Special Areas of environmental interest, details requirements for development projects and sets forth the compliance criteria for permit approval. Certain general permits require compliance of specific sections of the CZM Rule, for example “dunes” or “shellfish habitat.” Individual Permit applications must address and demonstrate compliance with each applicable component of the CZM rules for the specific site and regulated activity to be approved.
Community Development Block Grant/Economic Development Infrastructure Financing (United States)United States: Energy ResourcesGrant Program
Loan Program
YesFederalCommunity Development Block Grant/Economic Development Infrastructure Financing (CDBG/EDIF) provides public infrastructure financing to help communities grow jobs, enable new business startups and expansions for existing businesses. State programs help achieve the national objective of CDBG by funding projects in which at least 51 percent of the new jobs created are made available to low and moderate income individuals. The maximum amounts awarded under the program are $1 million for new businesses locating to the state and $500,000 for existing businesses expanding in the state.
Dam Safety Standards (New Jersey)New Jersey: Energy ResourcesSafety and Operational GuidelinesYesState/ProvinceThese rules set forth procedures for application to construct, repair or modify a dam and set standards for design and maintenance of dams. These rules also establish a dam inspection procedure. The requirements in this subchapter shall not affect or relate to a dam or reservoir in the pinelands area, which will raise the waters of any river or stream less than eight feet above the surface of the ground where the drainage area above the same is less than one square mile in extent and where the water surface created by the dam or reservoir is less than 100 acres in extent except that the commissioner may investigate and take appropriate action regarding any dam or reservoir about which he has a security or safety concern.
Delaware River Basin Commission (Multiple States)Delaware: Energy Resources
New Jersey: Energy Resources
Pennsylvania: Energy Resources
New York: Energy Resources
Environmental Regulations
Siting and Permitting
YesState/ProvinceThe Delaware River Basin Commission (DRBC) is a federal-interstate compact government agency that was formed by concurrent legislation enacted in 1961 by the United States and the four basin states (Pennsylvania, New York, New Jersey, and Delaware). Its five members include the basin state governors and the Division Engineer, North Atlantic Division, U.S. Army Corps of Engineers, who serves as the federal representative. The commission has legal authority over both water quality and water quantity-related issues throughout the basin.

Much of the new drilling interest taking place in northeastern Pennsylvania and southern New York is targeted at reaching the natural gas found in the Marcellus Shale formation, which underlies about 36 percent of the Delaware River Basin.

In connection with natural gas drilling, the commission has identified three major areas of concern:

1) Gas drilling projects in the Marcellus Shale or other formations may have a substantial effect on the water resources of the basin by reducing the flow in streams and/or aquifers used to supply the significant amounts of fresh water needed in the natural gas mining process. 2) On-site drilling operations may potentially add, discharge or cause the release of pollutants into the ground water or surface water. 3) The recovered "frac water" must be treated and disposed of properly.

While the Delaware River itself is un-dammed, there are 13 dams within the basin that feed into the river. The Commission holds authority to approve any project that will have a substantial effect on the water resources of the basin.

The Commission also has approval authority over energy projects that need to draw water from the basin, including coal plants, biomass plants, and natural gas extraction and power plants.
Economic Redevelopment & Growth Program (New Jersey)New Jersey: Energy ResourcesGrant ProgramYesState/ProvinceEconomic Redevelopment and Growth program (ERG) is an incentive for real estate development projects that have a financing gap, defined as having insufficient revenues to support the project debt service under a standard financing scenario. It can also apply to projects that have a below market development margin or rate of return. The grant is not meant to be a substitute for conventional debt and equity financing, and applicants should generally have their primary debt financing in place before applying. In order for a project to be approved, it needs to undergo a rigorous analysis of the sources and uses of funds, construction costs and projected revenues.

Approved developers/owners are eligible to receive up to 75% of the incremental increase in approved State revenues that are directly realized from the businesses operating in the

redevelopment project premises.
Edison Innovation Clean Energy Manufacturing Fund - Grants and Loans (New Jersey)New Jersey: Energy ResourcesIndustry Recruitment/SupportYesState/TerritoryThe Edison Innovation Clean Energy Manufacturing Fund (CEMF) is intended to provide assistance for the manufacturing of energy efficient and renewable energy products that will assist Class I renewable energy and energy efficiency technologies in becoming competitive with traditional sources of electric generation. The CEMF is administered by the New Jersey Economic Development Authority (EDA) and is structured to provide grants (Tranche I) and loans (Tranche II) for certain business development activities that further these goals within the State of New Jersey. Applicants may apply for both tranches together or separately apply for Tranche II funds, but Tranche I applicants must also apply for Tranche II funding. The program first opened early 2009, but the most recent solicitation was issued in May 2011. The program is currently accepting applications on an open, rolling basis.

The total amount of available funding is capped at a maximum of $3.3 million per project. A minimum 50% cash match of total project costs is required to be from non-state derived matching funds. This incentive program is directed at commercial manufacturing; prototype development projects are not eligible. Further details of each Tranche are provided below:

Project Assessment and Design Grants (Tranche I)
The CEMF will provide a grant of up to $300,000 for costs associated with site assessment, procurement, and design of an eligible facility. Qualified Tranche I costs may include identifying and securing a project site and obtaining the necessary permits and regulatory approvals. The grant may not exceed 10% of the total amount of funding requested for the project as a whole. Twenty percent of the grant is available up front at the time of closing.

Project Construction and Operation Loan (Tranche II)
A maximum $3 million is available in the form of a ten-year loan at an interest rate of 2% to support site improvements, equipment purchases, facility construction and completion. Repayments begin at the start of the fourth year following the close of the loan. Projects that meet certain milestones may be eligible to convert up to $1 million of the loan into a performance grant.

The CEMF is funded by the state societal benefits charge (SBC), thus proposed projects in municipalities that do not pay into the SBC will not be eligible for funding under this program. The 2012 Board of Public Utilities Clean Energy Budget Order specifies new 2012 funding of $2 million for the program. The overall program budget for 2012 is somewhat larger because it contains unused funds from prior years. In order to be considered for funding, applicants must submit an Eligibility Intake Form. For additional details please see the program web site, which contains the program solicitation, application information, and FAQs.
Edison Innovation Green Growth Fund (New Jersey)New Jersey: Energy ResourcesLoan ProgramYesState/ProvinceThe EIGGF offers loans up to $2 million with a performance grant component to support technology companies with Class I renewable energy or energy efficiency products or systems that have achieved "proof of concept" and successful independent beta results, have begun generating commercial revenues, and will receive 1:1 match funding by time of loan closing. Photovoltaic, solar, wind energy, renewably fueled fuel cells, wave, tidal, sustainable harvested biomass, and methane gas from landfills qualify, as well as other technologies or equipment that can demonstrate their integral nature to the development of Class I renewable energy technologies, including technologies that produce or support the production of renewable or clean electricity generation.
Edison Innovation Green Growth Fund Loans (New Jersey)New Jersey: Energy ResourcesIndustry Recruitment/SupportYesState/Territory
Note: The energy efficiency technologies indicated as "eligible" above are examples of possible eligible technologies listed on the program web site. Other products that conserve electricity or natural gas may also be eligible. The renewable energy technologies listed above are those deemed "Class I Renewable Energy" under the New Jersey renewables portfolio standard (RPS). For more detailed definitions please see the program web site.

The Edison Innovation Green Growth Fund (EIGGF), administered by the New Jersey Economic Development Authority, offers loans to for-profit companies developing Class I renewable energy (as defined under state renewables portfolio standard) and energy efficiency products. In order to qualify for a loan, the product in question must have already achieved "proof of concept" and have begun to generate commercial revenues.

Eligible energy efficiency products must conserve the end use of natural gas or electricity. Energy efficiency products which improve the efficiency of electricity or gas generation, transmission or distribution are not eligible. Renewable energy products or equipment must be demonstrably integral to the development of Class I renewable energy resources. A company receiving loan funds must, among other requirements, employ 75% of it's W-2 employees within New Jersey or commit to growing 10 high-paying jobs with a minimum salary of $75,000 over two years, and have management with equity in the company (see program web site for further eligibility details).

Loans from $250,000 to $2 million are available under the program, with a fixed five-year term and 2% interest rate. Borrowers must be able to supply a 1:1 cash match to the loan from non-state grants, deeply subordinated debt or equity. Up to 50% of the loan may be converted to a performance grant at the end of the five-year term based on the borrower's successful achievement of specific business milestones. Such milestones may include revenue, employment, or other targets established prior to the close of the loan.

The EIGGF is funded by the state societal benefits charge (SBC), thus proposed projects in municipalities that do not pay into the SBC are not be eligible for funding under this program. The 2012 Board of Public Utilities Clean Energy Budget Order specified total 2012 funding of $3.94 million for the program.

In order to be considered for funding, applicants must submit an Eligibility Intake Form. For additional details please see the program website, which contains the program solicitation, application information, and FAQs.
Emission Statements (New Jersey)New Jersey: Energy ResourcesSafety and Operational GuidelinesYesState/ProvinceThis rule applies to a facility if the facility emits or has the potential to emit, directly or indirectly to the outdoor atmosphere, any air contaminant at a rate greater than or equal to the applicable reporting threshold. The owner or operator of such a facility shall submit to the Department of Environmental Protection an Emission Statement for each reporting year in accordance with the stated rules. The Emission Statement shall report the actual air contaminant emissions released from the facility directly or indirectly into the outdoor atmosphere during the year.
Environmental Information Disclosure (New Jersey)New Jersey: Energy ResourcesGeneration DisclosureYesState/TerritoryNew Jersey’s 1999 electric utility restructuring law requires electricity suppliers to disclose to customers details regarding the fuel mix and emissions of the supplier’s electric generation. Utilities are required to report fuel mix under the categories of coal, gas, hydroelectric, nuclear, oil, solar, hydroelectric, wind, and biomass. Emissions of sulfur dioxide, carbon dioxide, and oxides of nitrogen must be reported in pounds per megawatt-hour. The disclosures must be made in a graphic, uniform format that can be easily understood by the customer.
Forestry Policies (New Jersey)New Jersey: Energy ResourcesEnvironmental RegulationsYesState/ProvinceNew Jersey Forests are managed by the Department of Environmental Protection, Division of Parks and Forestry, New Jersey Forestry Services. In 2010 the State issued its Forest Action Plan, including some mention of forestry residues as biomass fuel:

In 2011 The New Jersey Board of Public Utilities commissioned a report by the Biomass Work Group (BWG) titled "Biomass Resources for Producing Renewable Power and Fuels in the State of New Jersey and Incentives to Promote Their Development":

The BWG document makes several recommendations to promote a biomass industry in the State, including performing "study of energy yields of forestry residues to establish economic incentives for utilizing these plentiful resources."

In 2007, Rutgers University completed its "Assessment of Biomass Energy Potential in New Jersey," an inventory of biomass resources in the State. The majority of the estimated available resource was in the form of municipal solid waste, with the balance coming from forest and agricultural residues:

The NJDEP is authorized to determine the sustainability of biomass feedstock, and requires forest residues to be "harvested or collected in a manner not to create adverse ecological impacts":

The State Department of Environmental Protection's Sustainability and Green Energy Division has led efforts to complete a guidance document for the development of biomass resources and technologies in the state:
Grid-Connected Renewables Program (New Jersey)New Jersey: Energy ResourcesPerformance-Based IncentiveNoState/TerritoryNote: The deadline for the most recent solicitation has passed and the information in this summary is specific to this closed program solicitation. The New Jersey Office of Clean Energy 2013-2014 Budget indicates additional solicitations are planned for 2013. This summary will be updated if and when a new solicitation is issued.

The New Jersey Grid-Connected Renewables Program offers competitive incentives for onshore wind and biomass electricity generation projects larger than 1 Megawatt (MW) connected to the electric distribution system serving New Jersey. Offshore wind, solar, and hydrokinetic projects are not eligible for the current solicitation, nor are landfill gas projects that inject gas into a natural gas pipeline (as opposed to generating electricity). Both publicly- and privately-owned projects are eligible for assistance under this solicitation. The application deadline for the most recent solicitation was January 8, 2010, although the program is expected to continue, so additional Requests for Proposals (RFPs) may be forthcoming.

Facilities that use emerging, commercially available technologies that maximize power production during peak demand periods, address load pocket of congestion problems with the distribution grid serving New Jersey, and are expected to begin generating electricity during 2010 will be given preference for grants. However, projects that propose new or innovative onshore wind or biomass technologies, energy storage in conjunction with currently operating Class I renewable energy facilities, or the development of bio-power feed-stocks may also apply for support. There is no minimum cost-sharing required as part of the grant as the incentive is only designed to cover a portion of the total project cost, but higher levels of cost sharing will be given preference in the evaluation process.

The bulk of the incentive offered under this program will take the form of a payment for energy production ($/Megawatt-hour) once the project is operating. The actual amount of the payment will vary by project as applicants must propose an appropriate incentive payment as part of the proposal. The program solicitation contains a schedule of recommended incentive payments based on the technology being employed and whether the project will be undertaken by a public or private entity. The recommended incentives range from $3.74/MWh for privately-owned landfill gas combustion projects to $58.49/MWh for publicly-owned wastewater biogas projects. Incentives for other eligible projects (e.g., bio-power feedstocks without associated Class I electric generation equipment, energy storage technology, or innovative technologies) will be considered on a competitive basis. The suggested incentives for public projects are 20% higher based on the inability of public entities to take advantage of tax incentives.

Generally, up to 10% of total incentive may be requested in the form of a lump grant to cover up-front costs such as financing fees, interconnection fees, project design, permitting, and construction costs. For innovative, less mature, technologies, this up-front payment may be increased to up to 20% of the total incentive. A total of roughly $6 million was available for incentives under the initial solicitation. Please see the program solicitation for additional information on program requirements, application details, and proposal evaluation criteria.
Groundwater Quality Rules (New Jersey)New Jersey: Energy ResourcesSiting and PermittingYesState/ProvinceThe protection of ambient ground water quality through the establishment of constituent standards for ground water pollutants is the subject of this chapter. These constituent standards are applicable to the development of:

(a) ground water protection standards pursuant to the New Jersey Pollutant Discharge Elimination System; (b) ground water remediation standards; (c) and other requirements and regulatory actions applicable to discharges that cause or may cause pollutants to enter the ground waters of the State, including non-point and diffuse sources regulated by the Department.

This chapter constitutes the Department's primary basis for setting numerical criteria for limits on discharges to ground water and standards for ground water remediation.
Grow NJ (New Jersey)New Jersey: Energy ResourcesGrant ProgramYesState/ProvinceA business creating or retaining jobs in New Jersey and making a qualified capital investment at a qualified business facility can apply for grants of corporate business tax credits for job creation/retention in the amount of up to $8,000 per each new or retained full time job per year up to 10 years. Qualified eligible businesses may receive tax credits of $5,000 per year for a period of ten years for each new or retained full-time job to be located at the qualified business facility as long as the number of full-time jobs meets or exceeds the minimum requirement. In addition, a bonus award of up to $3,000 per job per year for a period of ten years may be awarded for each new or retained full-time job if the qualified eligible business meets additional criteria.
Interconnection Standards (New Jersey)New Jersey: Energy ResourcesInterconnectionYesState/TerritoryNew Jersey's interconnection standards apply statewide to all electric distribution utilities, but not to the small number of municipal utilities and electric cooperatives in the state. The rules, first adopted in 2001, have been revised several times since their inception, most recently in May 2012. The current standards include the following basic provisions:
  • Systems powered by Class I renewable energy resources are eligible. This includes solar, wind, fuel cells powered by renewable fuels, geothermal technologies, wave or tidal action, landfill gas, anaerobic digester gas, and sustainable biomass.
  • There are three different levels of review procedures for applications, depending on size and certification. Level 1 applies to inverter-based systems with a capacity rating of 10 kilowatts (kW) or less. Level 2 applies to systems with a maximum capacity of 2 MW that are certified by a nationally-recognized testing and certification laboratory as meeting IEEE 1547 and UL 1741 compliance standards. Level 3 applies to systems that do not qualify for either the Level 1 or Level 2 interconnection review procedures.
  • Fees vary by level. There is no fee for Level 1 interconnection. Level 2 interconnection may include a fee of $50 plus $1 per kW of capacity, as well as the costs of minor system modifications and additional review (subject to BPU approval). Level 3 may include a fee of $100 plus $2 per kW of capacity, as well as charges for actual time spent on any impact and/or facilities studies required by the standard. Charges for additional review under Level 2 or impact or facilities studies under Level 3 may not exceed $100 per hour.
  • Utilities may not require Level 1 and Level 2 customer-generators to install additional controls or external disconnect switches not included in the equipment package, to perform or pay for additional tests, or to purchase additional liability insurance.
  • Interconnection to networks is permitted.
  • Utilities must file interconnections reports with the BPU twice annually. Reports must list, by Class I technology type, the total number of interconnected customers, the total generating capacity of interconnected customers, and the total number of customers interconnected since June 15, 2001.

Interconnection contacts for the state's electric distribution utilities -- Atlantic City Electric, Rockland Electric, PSE&G, and Jersey Central Power and Light -- are available on the program web site listed at the top of this page. The program web site also contains an on-line form for making complaints to the New Jersey Board of Public Utilities (BPU) in the event that a dispute cannot be resolved directly with the utility. Separate standardized interconnection agreements are used for systems of 10 kW or less and systems larger than 10 kW. These agreements are available on the interconnection web sites of the individual utilities.


Legislation enacted by New Jersey in February 1999 required electric distribution companies to offer net metering to residential and small commercial customers with photovoltaic and wind-energy systems. To implement net metering the New Jersey Board of Public Utilities (BPU) adopted interim standards in 2001. In September 2004, the BPU adopted final rules that substantially increased the types and size of systems eligible for interconnection. The final rules clarified and simplified interconnection for most residential and small commercial facilities.

In January 2008, S.B. 2936 made substantial amendments to the net metering law (and interconnection law by extension), most notably extending net metering to large commercial and industrial customers and expanding the list of eligible technologies to include all "Class I" renewable energy resources. The interconnection rule revisions adopted in January 2010 implicitly incorporated these changes by using the definition of "customer-generator" contained in the net metering rules. Other major changes made by the January 2010 adoption include: (1) separating the interconnection rules from the net metering rules and relocating them to a separate section of the administrative code, (2) removing prior language that appeared to limit the standards to systems of 2 MW or less; and (3) adding new interconnection reporting requirements for utilities. The May 2012 adoption made a variety of clarifying changes focused primarily on procedural matters such as timelines, deadlines, and notification requirements.
Local Option - Property Assessed Clean Energy Financing (New Jersey)New Jersey: Energy ResourcesPACE FinancingYesState/TerritoryNote: The Federal Housing Financing Agency (FHFA) issued a statement in July 2010 concerning the senior lien status associated with most PACE programs. In response to the FHFA statement, most local PACE programs have been suspended until further clarification is provided.

Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money from the local government to pay for energy improvements. The amount borrowed is typically repaid via a special assessment on the property over a period of years. New Jersey has authorized local governments to establish such programs, as described below. (Not all local governments in New Jersey offer PACE financing; contact your local government to find out if it has established a PACE financing program.)

New Jersey enacted legislation (S.B. 1406) in January of 2012 authorizing municipalities to develop local renewable energy and energy efficiency financing programs for property owners, upon approval to do so by the Director of Local Government Services within the New Jersey Department of Community Affairs (DCA). The municipality may adopt by ordinance provisions creating a "clean energy special assessment" to be imposed on properties that elect to participate in the program and collected on a quarterly basis. The municipality may also issue bonds to fund the program, or apply to a county improvement authority that issues bonds to do so. The proceeds from the special assessment must be used to repay the bond obligations.

The law generally seems to place the details of a specific local program in the hands of local officials, although as noted above the DCA must approve the individual programs offered by municipalities. There are no specific property owner eligibility limits defined in the law, so presumably a municipality has leeway to limit or not limit the a local program to specific types of properties (e.g., residential, commercial) as it sees fit. Likewise, no specific limits are placed on eligible renewable energy or energy efficiency improvements. However, the law does note that for solar or other renewable energy improvements, the property owner may assign renewable energy credits (RECs) or solar renewable energy credits (SRECs) to the municipality or improvement authority to repay the loan. The DCA is directed to coordinate with the New Jersey Board of Public Utilities (BPU) to ensure that financing made available through the programs furthers the goals of the BPU Office of Clean Energy. The law takes effect 120 days after the enactment (January 17, 2012) but the DCA is permitted to take anticipatory action to implement the law in advance of this date.
Net Metering (New Jersey)New Jersey: Energy ResourcesNet MeteringYesState/TerritoryNew Jersey's net-metering rules apply to all residential, commercial and industrial customers of the state's investor-owned utilities and energy suppliers (and certain competitive municipal utilities and electric cooperatives). Systems that generate electricity using solar, wind, geothermal, wave, tidal, landfill gas or sustainable biomass resources, including fuel cells (all "Class I" technologies under the state RPS), are eligible. In January 2010 A.B. 3520 removed the individual system size cap of 2 MW formerly contained on the Board of Public Utilities (BPU) rules, and the necessary rule changes were made effective in July 2010. However, while no specific system size cap exists, system size remains limited to that needed to meet annual on-site electric demand. There is no firm aggregate limit on net metering, although the BPU is permitted to allow utilities to cease offering net metering if statewide enrolled capacity exceeds 2.5% of peak electric demand. A single metering arrangement is preferred. According to the statute, customer-generators have several compensation options for net excess generation (NEG), as listed below. The latter two options were added by S.B. 2936 in January 2008.
  • Customer-generator receives month-to-month credit for NEG at the full retail rate and is compensated for remaining NEG at the avoided-cost of wholesale power at the end of an annualized period.
  • Customer-generator is compensated for all NEG on a real-time basis according to the PJM power pool real-time locational marginal pricing rate, adjusted for losses by the respective zone in the PJM.
  • Customer generator may enter into a bilateral agreement with their electric supplier or service provider for the sale and purchase of NEG. Real-time crediting is permitted, subject to the applicable PJM rules.

In addition to the real-time crediting options described above, S.B. 2936 also: (1) expanded the list of eligible customers to include industrial and large commercial customers; (2) extended net metering to all systems that generate electricity using "Class I" renewable-energy resources; and (3) allowed utilities to recover the costs of "any new net meters, upgraded net meters, system reinforcements or upgrades, and interconnection costs" either through their regulated rates or from net-metered customers.

A separate rule making proceeding completed in March 2009 allows customer-generators to select any month of the year to begin their annualized period. This rule applies to all net metering customers, regardless of whether they began net metering prior to March 2, 2009 when the rule took effect. The choice of an annualized period is generally permanent unless the utility voluntarily accepts the customer's choice of a new annualized period.

Customers eligible for net metering retain ownership of all renewable-energy credits (RECs) associated with the electricity they generate. Utilities are required to report net metering enrollment reports to the BPU twice annually, one covering January - June and other covering July - December. The reports must contain information detailing estimated customer generation supplied to the distribution grid, estimated grid electricity supplied to net metered customers, the number of customer that received payments for annual NEG, and the total dollar amount paid to net metering customers for annual NEG by month. In July 2012, New Jersey enacted legislation (S.B. 1925) requiring electric utilities to allow public entities such as state and local governments, local agencies and school districts to engage in "net metering aggregation" of solar facilities. However, the rules implemented do not meet the defintiion of aggregate net metering as typically defined. In order to qualify for net metering aggregation, the solar facility must be on property owned by the customer, be owned and operated by the single customer, and with the exception of state entities, be located within the customer's territorial jurisdiction. For state entity projects, all facilities must be located within 5 miles of one another. In addition, for all customers all facilities must be located within the territory of the same electric utility, be served by the same basic generation service provider or electric power supplier, and all facilities must be within the same customer class of the applicable electric utility tariff. The customer-generator (or host meter) receives credit for excess generation at the retail rate; meters other than the host customer are credited at the wholesale rate at the end of a designated annualized period.

For further information, please contact the New Jersey Office of Clean Energy or consult the program website for the appropriate contact person at your utility.
New Jersey Business Growth Fund (New Jersey)New Jersey: Energy ResourcesLoan ProgramYesState/ProvinceCreditworthy small or mid-sized companies that are creating or retaining jobs in New Jersey can apply for financing through the New Jersey Business Growth Fund, a joint program of the EDA and PNC Bank. Eligible companies can borrow up to $3 million with a 25% or 50% EDA guarantee. The maximum EDA guarantee is $1.5 million. The funding of can be used to purchase real estate or equipment.
New Jersey Renewable Energy Incentive Program (Sustainable Biopower) (New Jersey)New Jersey: Energy ResourcesState Rebate ProgramYesState/TerritoryNOTE: The Biopower program is no longer accepting new applications for FY2014; next round of solicitations will be available on FY2015. The Energy storage program is also under development, and will be available in FY2015.

New Jersey's 1999 electric restructuring legislation provides for investments in energy efficiency and renewable energy through a "Societal Benefits Charge" (SBC) collected from all customers of electric public utilities. In March 2001, the New Jersey Board of Public Utilities (BPU) approved funding for renewable-energy programs, including a customer-sited renewables rebate program for homes, businesses, institutions and non-profits. The program is currently managed by Honeywell under supervision of NJ BPU.

Currently, incentives are only available for sustainable biomass energy technologies. Energy Storage portion of the program is currently under development, and will be open for solicitations on FY2015.

The wind energy portion of the program has been on hold and is not accepting any new applications. The rebates for the photovoltaic (PV) installations are no longer offered through this program. PV systems remain eligible to generate Solar Renewable Energy Certificates (SRECs) and may be eligible for specialized programs based in the SREC market. Click here for further details on the individual utility programs.

Program Description

Sustainable biomass projects are categorized in New Jersey as Class I renewable energy resource under its Renewable Portfolio Standard (RPS). Incentives for biomass projects are available under Biopower program offered as part of Renewable Energy Incentive Program (REIP). Financial incentives for the program are offered through competitive solicitations.

There is no limit to the system size of the project, however maximum incentive per project is capped at $750,000 or 30% of the project costs, whichever is less. Maximum incentive per entity is capped at $1,125,000- this does not apply to project developers. Any new equipment purchased for enhancing the performance of an existing biomass plant also qualify for the incentive.

To encourage rapid completion of projects, additional bonus incentive of 10% is provided to projects that are completed within 12 month after the approval date. Projects that take 12-18 months are eligible for 100% of the incentive. Any projects that require extension beyond the 18 month period only obtain 90% of the total approved incentive.


Any sustainable biopower projects that convert biomass into energy that can fuel either fuel cells, micro-turbines, spark ignition engines, and combustion turbines for generating electricity are eligible for the program. Any technology such as anaerobic digestion, gasification, combustion and pyrolysis can be used to convert biomass into energy. Examples of eligible facilities include

  • Digestion of Sewage Sludge
  • Landfill Gas Facilities
  • Combustion of wood wastes to steam turbine
  • Gasification of wood wastes to reciprocating engine
  • Gasification or pyrolysis of biosolid wastes to generation equipment

Municipal solid waste incinerators, mass incinerators, sludge incinerators and combustion of adulterated wood are not eligible for the program.

The applicants must demonstrate that energy crop or waste is available on a sustainable basis and the combustion of biomass must pass NJ’s regulatory emission standard.

The New Jersey Clean Energy Program web site provides all application materials, complete funding schedules and information about current incentive levels.
Operating Permits (New Jersey)New Jersey: Energy ResourcesSiting and PermittingYesState/ProvinceThe owner or operator of a facility subject to this article shall obtain and maintain an operating permit for the facility. The owner or operator of a facility subject to this article shall ensure that no person shall use or operate any significant source operation at the facility without a valid operating permit for the facility, which covers the source operation. The owner or operator shall also ensure that no air contaminant is emitted from any significant source operation at a rate, calculated as the potential to emit, that exceeds the applicable threshold for reporting emissions. The criteria for applicable facilities are listed in the article.
PJM Interconnection (Multiple States)Delaware: Energy Resources
Illinois: Energy Resources
Indiana: Energy Resources
Kentucky: Energy Resources
Maryland: Energy Resources
Michigan: Energy Resources
New Jersey: Energy Resources
North Carolina: Energy Resources
Ohio: Energy Resources
Pennsylvania: Energy Resources
Tennessee: Energy Resources
Virginia: Energy Resources
West Virginia: Energy Resources
District of Columbia: Energy Resources
InterconnectionYesNon-ProfitPJM (originally Pennsylvania, Jersey, Maryland) Interconnection is a Regional Transmission Organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. The PJM region has an area of 214,000 square miles, a population of about 60 million and a peak demand of 163,848 megawatts.
PSE&G - Solar Loan Program (New Jersey)New Jersey: Energy ResourcesOther IncentiveYesUtilityNote: This program is currently closed. PSE&G received approval for an extension of this program in July, 2013. PSE&G expects to start accepting applications for the new program, termed Solar Loan III, in fall 2013. The summary presented here discusses the program as it previously existed as Solar Loan II. Click here or refer to the web site above for more information about the Solar Loan III program.

Public Service Electric and Gas (PSE&G) of New Jersey offers loans for "behind the meter" photovoltaic (PV) systems to all customer classes in its electric service territory. The program opened in April 2008 with a goal of installing 30 megawatts (MW) of customer-sited PV through the issuance of loans totaling $105 million. The initial program, termed Solar Loan I, was operating with a waiting list by July 2009 and a new program (Solar Loan II) was opened in December 2009 to provide additional loans of $143 million with an initial goal of supporting a further 51 MW of capacity (see details of capacity allocation below, which has changed since the original program approval).

The program will provide loans covering 40-60% of the cost of PV systems with the remainder to be financed separately by the customer. A loan term of 15 years is available to non-residential customers at an interest rate of 11.3092%. Residential customers are eligible for a loan term of 10 years at a 6.5% interest rate. The actual maximum loan amount is based on how much energy they system is expected to produce over the term of the loan. The program website contains a loan calculator tool for this purpose. Loans are only available to systems of 2,000 kW DC or less that are eligible for net metering and to generate Solar Renewable Energy Certificates (SRECs) under state rules.

Customers may repay the loan through cash payments or by signing their SRECs over to PSE&G. An SREC is equivalent to 1 megawatt-hour (MWh) of solar electric generation under the state trading system. The value of an SREC will vary according to market conditions, but may not fall below a basement price which varies by sector and system size, and declines over time. The basement price is currently (as of January 2011) set at $420 per SREC for residential systems; $380 per SREC for non-residential systems up to 150 kW; $350 per SREC for non-residential systems from 150+ kW up to 500 kW; and $340 per SREC for systems from 500+ kW up to the maximum size of 2 MW. The floor prices are scheduled to decline every two quarters (semi-annually) to ultimate levels of between $325 and $400 per SREC for different sectors and system sizes. The segment for the largest projects also contains an accelerated schedule of floor price reductions which will take effect if this segment becomes oversubscribed.

Thus, under current terms residential applicants will receive at least $420 per credit in the repayment of loan principal and interest, but may receive more if trading prices for SRECs are higher. The floor price determined for a loan remains in effect for the duration of the loan. For the purposes of loan repayment the market value of SRECs will be determined using the average monthly cumulative weighted price of SRECs published by the New Jersey Office of Clean Energy. Higher SREC prices will reduce the time period over which the loan is paid off. In the event that the loan is repaid prior to the expiration of the loan term, PSE&G retains the right to purchase SRECs generated by the system at 75% of the market price through the original term of the loan. The customer will own all SRECs generated subsequent to the end of the loan term, although according to state law solar facilities only remain eligible to generate SRECs for 15 years after they are placed in service.

Participants in this program remain eligible for benefits offered by PSE&G or New Jersey Board of Public Utilities (BPU) renewable energy programs, including net metering, as well as other forms of assistance (e.g., federal tax credits). Solar panels must be covered by a 20-year warranty and the customer is responsible for having a system maintenance agreement in place to ensure system performance. In addition, the customer must currently have a PSE&G account in good standing, and meet minimum credit rating and insurance requirements determined by the utility. The program has an application fee of $10 per kilowatt (kW) up to a maximum of $2,500.

Loan applications are scheduled to be accepted on a quarterly basis for 2 years with a current total program target of 56.5 MW of installed capacity. Loan availability is divided into three segments, with each segment allocated a portion of the overall target. Allocations as of January 2011 are as follows:

  • Residential: 10.3 MW
  • Non-residential, up to 150 kW: 16.0 MW
  • Non-residential, 150+ - 500 kW: 10.2 MW
  • Non-residential, 500+ - 2,000 kW: 19.8 MW

For each quarterly application period, each sector is allocated a certain amount of capacity to serve eligible applicants on a first-come, first-served basis. Excess capacity that exists in one quarter may be carried forward to the following quarter, while applications in excess of the available quarterly allocation will be put on a waiting list for the next quarter. The size of the waiting list is limited to the amount of capacity that will be available during the next quarter for that sector. While the sector and quarterly allocations are pre-determined by a schedule, the Board of Public Utilities (BPU) has permitted a certain amount of flexibility to adjust the program to market demands. The first quarter officially began January 1, 2010.

It is expected that the Solar Loan II program will issue $143 million in loans over two years with costs to be recouped by PSE&G through the Regional Greenhouse Gas Initiative (RGGI) recovery charge (RRC) on all PSE&G New Jersey electricity customer accounts. The utility will periodically sell the SRECs it acquires through the program in auctions open to all SREC market participants. The proceeds from these auctions will be circulated back into the program cost calculations that will be used to determine the actual charge. For further information on this program please consult the program web page or contact PSE&G.
Property Tax Exemption for Renewable Energy Systems (New Jersey)New Jersey: Energy ResourcesProperty Tax IncentiveYesState/TerritoryIn October 2008, New Jersey enacted legislation exempting renewable energy systems used to meet on-site electricity, heating, cooling, or general energy needs from local property taxes. (There is not a state component to property taxes in New Jersey). Eligible renewable energy systems* include solar PV, wind, fuel cells, sustainable biomass, geothermal electric, landfill gas, hydroelectric, resource recovery, wave, and tidal systems that produce electricity. Systems that produce energy from solar thermal energy (e.g., solar hot water) or geothermal energy (e.g., geothermal heat pumps) are also eligible for the exemption. The exemption may be claimed for all qualified systems installed on residential, commercial, industrial, or mixed use buildings as accessory uses.

In order to claim the exemption, property owners must apply for a certificate from their local assessor which will reduce the assessed value of their property to what it would be without the renewable energy system. Exemptions will take effect for the year after a certification is granted. The New Jersey Department of Treasury, Division of Taxation is required to develop the rules and regulations necessary to implement this law. According to the law, rules relating to the technical qualifications for eligible renewable energy systems will be developed by the New Jersey Board of Public Utilities (BPU) and the Commissioner of Community Affairs. The Department of Community Affairs (DCA) has determined that the existing Uniform Construction Code, which requires compliance with a manufacturer's instructions in cases not specifically covered by the code, is a sufficient basis for determining whether or not a system qualifies for the exemption. Thus, as of this writing detailed technical standards are not expected.

The New Jersey Division of Taxation has developed an Application for Certification of Renewable Energy Systems. Prospective applicants should direct questions about the law to their local assessor.

*Biomass, hydroelectric, and resource recovery facilities must meet environmental standards as defined by the New Jersey Department of Environmental Protection and minimize environmental and community impacts.
Qualifying RPS State Export Markets (New Jersey)New Jersey: Energy ResourcesRenewables Portfolio Standards and GoalsYesState/ProvinceThis entry lists the states with Renewable Portfolio Standard (RPS) policies that accept generation located in New Jersey as eligible sources towards their RPS targets or goals. For specific information with regard to eligible technologies or other restrictions which may vary by state, see the RPS policy entries for the individual states, shown below in the Authority listings. Typically energy must be delivered to an in-state utility or Load Serving Entity, and often only a portion of compliance targets may be met by out-of-state generation. In addition to geographic and energy delivery requirements, ownership, registry, and other requirements may apply, such as resource eligibility, generator vintage and capacity limitations, as well as limits on Renewable Energy Certificate (REC) vintage. The listing applies to RPS Main Tiers only, and excludes solar or distributed generation that may require interconnection only within the RPS state. This assessment is based on energy delivery requirements and reasonable transmission availability. Acceptance of unbundled RECs varies. There may be additional sales opportunities in RPS states outside the Eastern Interconnection. REC prices in markets with voluntary goals (Indiana, North Dakota, South Dakota, Virginia) may be lower.
Renewables Portfolio Standard (New Jersey)New Jersey: Energy ResourcesRenewables Portfolio StandardYesState/TerritoryNote: In July 2012 New Jersey enacted S.B. 1925 substantially revising its solar carve-out. The summary below incorporates information on the changes made to the solar carve-out as well as the qualification of certain hydropower projects under the RPS. While it contains information on many of the most important changes made by the law, it is not exhaustive and lacks some details. Extensive rule making activity will be necessary to implement the various provisions contained in S.B. 1925.

New Jersey's renewable portfolio standard (RPS) -- one of the most aggressive in the United States -- requires each supplier/provider serving retail customers in the state to procure 22.5% of the electricity it sells in New Jersey from qualifying renewables by 2021 (“energy year” 2021 runs from June 2020 – May 2021). In addition, the standard also contains a separate solar specific provision which requires suppliers and providers to procure at least 4.1% of sales from qualifying solar electric generation facilities by Energy Year 2028.

As detailed in the table below, prior to A.B. 3520 enacted in 2010, the solar carve-out was stated as a percentage-based target that, when combined with other resource targets, resulted in a total renewable energy standard of 22.5% by 2021. The January 2010 legislation adjusted the solar portion of the standard to be stated in terms of gigawatt-hours (GWh), resulting in a revised schedule requiring 17.88% from Class I and 2.5% from Class II renewables by EY 2021 (together 20.38% by EY 2021), and an additional 5,316 GWh from solar-electric facilities by EY 2026. In 2012 the solar compliance schedule was reverted back to a percentage-based target of 4.1% by EY 2028 by S.B. 1925. The offshore wind provision added in August 2010 by S.B. 2036 is defined so that it will reduce the percentage of electricity sales that must be provided from other Class I renewable energy sources (see Class I description below). In other words, the addition of the offshore wind resource requirement will not increase the overall renewable energy targets.

The mandate sets different requirements for different types of renewable energy resources, termed “classes”. "Class I" renewable energy is defined as electricity derived from solar energy, wind energy, wave or tidal action, geothermal energy, landfill gas, anaerobic digestion, fuel cells using renewable fuels, and -- with written permission of the New Jersey Department of Environmental Protection (DEP) -- certain other forms of sustainable biomass. As a result of S.B. 1925, Class I renewable energy also includes hydroelectric facilities of 3 MW or less that are: placed in service after July 23, 2012 (the effective date of S.B. 1925); located in the state and connected to the distribution system; and, certified as low-impact by a nationally recognized organization based on a system that includes a variety of minimum criteria.

"Class II" renewable energy is defined as electricity generated by hydropower facilities larger than 3 megawatts (MW) and less than 30 MW*, and resource-recovery facilities (i.e., municipal solid waste or MSW) located in New Jersey approved by the DEP. Electricity generated by a resource-recovery facility outside New Jersey qualifies as "Class II" renewable energy if the facility is located in a state with retail electric competition and the facility is approved by the DEP. Solar energy, while it remains an eligible Class I technology, occupies a special place as the only resource eligible for the solar electric component of the standard. Offshore wind, defined as a wind turbine located in the Atlantic Ocean and connected to the New Jersey electric transmission system, likewise also occupies a special place within the RPS.

The required percentages of each category and the total renewables percentage required are listed in the table below. The term EY refers to compliance period or “energy year” for the standard, which runs from June - May and is defined by the year in which an energy year ends. Note that for Basic Generation Service (BGS) contracts executed prior to July 23, 2012 the supplier's obligation is determined according to the standard in effect at that time (i.e., the A.B. 3520 energy-based standard). However, the ultimate statewide target for any year is determined by the S.B. 1925 targets and does not change regardless of this exemption. Thus any differences (i.e., deficits) arising from the pre-existing BGS contract exemption are distributed evenly across non-exempt sales.

Energy YearSolar Carve-Out (A.B. 3520)**Pre-A.B. 3520/S.B. 1925 Solar Carve-Out**Class IClass II
EY 2005--0.0100% (pre-A.B. 3520)0.740%2.5%
EY 2006--0.0170% (pre-A.B. 3520)0.983%2.5%
EY 2007--0.0393% (pre-A.B. 3520)2.037%2.5%
EY 2008--0.0817% (pre-A.B. 3520)2.924%2.5%
EY 2009--0.1600% (pre-A.B. 3520)3.840%2.5%
EY 2010--0.2210% (pre-A.B. 3520)4.685%2.5%
EY 2011306 GWh0.3050% (pre-A.B. 3520)5.492%2.5%
EY 2012442 GWh0.3940% (pre-A.B. 3520)6.320%2.5%
EY 2013596 GWh--7.143%2.5%
EY 2014772 GWh2.050% (S.B. 1925)7.977%2.5%
EY 2015965 GWh2.450% (S.B. 1925)8.807%2.5%
EY 20161,150 GWh2.750% (S.B. 1925)9.649%2.5%
EY 20171,357 GWh3.000% (S.B. 1925)10.485%2.5%
EY 20181,591 GWh3.200% (S.B. 1925)12.325%2.5%
EY 20191,858 GWh3.290% (S.B. 1925)14.175%2.5%
EY 20202,164 GWh3.380% (S.B. 1925)16.029%2.5%
EY 20212,518 GWh3.470% (S.B. 1925)17.880%2.5%
EY 20222,928 GWh3.560% (S.B. 1925)----
EY 20233,433 GWh3.650% (S.B. 1925)----
EY 20243,989 GWh3.740% (S.B. 1925)----
EY 20254,610 GWh3.830% (S.B. 1925)----
EY 20265,316 GWh3.920% (S.B. 1925)----
EY 20275,316 GWh4.010% (S.B. 1925)----
EY 2028 +5,316 GWh4.100% (S.B. 1925)----

As shown above, the general compliance schedule ends in 2021; however, the BPU will adopt rules to determine the minimum percentages for energy year 2022 and beyond. The revised solar schedule is similarly intended to extend beyond the 2028 target “to reflect an increasing number of kilowatt-hours to be purchased by suppliers or providers from solar electric power generators” in the state.

Because of the unique nature of offshore wind, a time line has not been established for the offshore wind carve-out. The BPU's adopted rules define a system where the standard for any given year is based on projected energy production from operating, eligible offshore wind facilities. In order to qualify as an eligible offshore wind facility, an applicant must submit a detailed project analysis to the BPU for approval. Among other things, the application must contain a proposal for pricing Offshore Wind Renewable Energy Credits (ORECs) as a fixed, flat rate or as a fixed price for every contract year. Suppliers will be required to purchase ORECs at a price and time period defined by the BPU.

Suppliers/providers may meet these requirements by submitting "Class I" renewable-energy certificates (Class I RECs), "Class II" RECs, Solar RECs (SRECs), and ORECs, all of which represent the environmental attributes of one megawatt-hour (MWh) of generation from an eligible facility. All RPS compliance must be submitted in the form of RECs, which will be issued by the PJM-Environmental Information Services (EIS), through PJM's Generation Attribute Tracking System (GATS). Both RECs and ORECs may be used for compliance during energy year in which they were generated or the following two compliance years. As a result of S.B. 1925, the lifetime for SRECs has been extended by an additional two years, so SRECs may be used for compliance during the year in which they were generated or the following four years. This extension of SREC lifetime applies only to SRECs created on or after July 23, 2012, the effective date of S.B. 1925.

Additional solar electricity may be used to fulfill any of the three required categories, while additional "Class I" electricity may be used to fulfill the "Class II" requirement. To qualify as "Class I" or "Class II" renewable energy, electricity must be generated within or delivered into the PJM region. "Class I" or "Class II" renewable energy delivered into the PJM region must be generated at a facility that began construction on or after January 1, 2003, in order to qualify. Solar facilities are eligible to produce SRECs for 15 years, termed the “qualification life”, and thereafter may be issued Class I RECs, but not SRECs. Under the former rules suppliers/providers could not use RECs or SRECs associated with electricity generated at a customer-generator's premises unless the facility was eligible for net metering. However, S.B. 2936 (2007) amended the law to allow all facilities "connected to the distribution system in [New Jersey]", including but not limited to solar facilities, to generate RPS-eligible RECs or SRECs.

Prior to the adoption of S.B. 1925 in 2012, there was no explicit definition for "connected to the distribution system". With respect to solar-electric systems, S.B. 1925 defines the term to include: (1) net metered facilities, (2) facilities that meet the definition of "on-site generation"; (3) facilities eligible for aggregated net metering; (4) facilities owned or operated by a public utility approved by the BPU; (5) facilities connected to the distribution system at 69 kilovolts (kV) or less and approved by the BPU; and (6) facilities certified by the BPU and DEP as being located on a brownfield, an area of historic fill, or a closed landfill. The definition does not include any facility connected to the grid at a voltage of higher than 69 kV, unless the facility is a net metering facility.

Under (5) above, from EY 2014 - 2016, the BPU is generally only permitted to approve 80 MW of capacity in aggregate each year, and is not permitted to approve any single project with a capacity in excess of 10 MW. The law outlines a variety of parameters for BPU approval of grid-supply systems both before and after EY 2016. It also contains a slightly different path to approval for new grid-supply projects on agricultural land for which a PJM issued a System Impact Study on or before June 30, 2011. Finally, the law requires the BPU to consider establishing a program to provide additional support for net metered solar facilities of three MW or larger, including those owned by a public utility. In March 2013 the BPU issued an order concluding its investigation into the matter with a finding that such a program was unnecessary.

If a supplier/provider is not in compliance for an energy year, the supplier/provider must remit an alternative compliance payment (ACP) and/or a solar alternative compliance payment (SACP) for the amount of RECs and solar RECs that were required but not submitted. The BPU determines prices for ACPs and SACPs, and reviews the prices at least once per year. The price of an ACP and an SACP is to be higher than the estimated competitive market cost of (1) the cost of meeting the requirement by purchasing a REC or solar REC, or (2) the cost of meeting the requirement by generating the required renewable energy.

The initial ACP and SACP levels were set by BPU order at $50 per MWh and $300 per MWh respectively in 2004. These levels were subsequently renewed several times without changes. The ACP remains unchanged at $50 per MWh. The modern SACP was established by BPU order in December 2007 as a rolling eight-year schedule beginning in EY 2009 (i.e., one additional year added to the back end of the schedule each year). In July 2012 S.B. 1925 established a 15-year schedule for EY 2014 - EY 2028. The SACP for past years covered under the former BPU schedule and the 15-year schedule as adopted by S.B. 1925 are as follows:
  • EY 2009: $711 per MWh
  • EY 2010: $693 per MWh
  • EY 2011: $675 per MWh
  • EY 2012 :$658 per MWh
  • EY 2013: $641 per MWh
  • EY 2014: $339 per MWh
  • EY 2015: $331 per MWh
  • EY 2016: $323 per MWh
  • EY 2017: $315 per MWh
  • EY 2018: $308 per MWh
  • EY 2019: $300 per MWh
  • EY 2020: $293 per MWh
  • EY 2021: $286 per MWh
  • EY 2022: $279 per MWh
  • EY 2023: $272 per MWh
  • EY 2024: $266 per MWh
  • EY 2025: $260 per MWh
  • EY 2026: $253 per MWh
  • EY 2027: $250 per MWh
  • EY 2028: $239 per MWh

All SACPs and offshore wind ACPs must be refunded directly to ratepayers. However, revenue generated by payment of the Class I and Class II renewable energy ACPs must be used to fund renewable-energy projects through the New Jersey Clean Energy Program. Prior to the enactment of A.B. 3520, SACP revenue was also required to be directed to funding solar projects. In addition, prior to the enactment of the Solar Advancement Act of 2010, the BPU was required to freeze the solar energy requirement if it determined that the total cost of solar incentives during a reporting year exceeded 2% of the total retail price of electricity during that reporting year. This provision has now been removed and is no longer in effect.

Each supplier/provider is required to file an annual report with the BPU by October 1, demonstrating that the requirements for the preceding energy year (ending May 31 of the same calendar year) have been met. The Solar Advancement Act of 2010 also changed the classification of a compliance period from a "reporting year" to "energy year". Failure to comply with any provision of the RPS may result in suspension of the supplier's license, financial penalties, disallowance of recovery of costs in rates, and/or prohibition on accepting new customers.


New Jersey's RPS was originally adopted in 1999 as part of the state's electricity restructuring legislation with initial renewables targets of 4.0% Class I and 2.5% Class I or Class II resources by 2012. In 2004 the BPU amended the standard to require the renewable energy targets be met by May 2008, and to add a requirement that at least 0.16% of sales come from solar electricity as part of the overall Class I target of 4.0%.

The New Jersey Board of Public Utilities (BPU) made even more extensive revisions to the RPS in April 2006, significantly increasing the required percentages of Class I, Class II, and solar resources towards an ultimate requirement of 22.5% renewables, including 2.12% solar, by May 2021. In December 2007 the BPU issued a far-reaching order (BPU Solar Transition Order) directing that further changes be made to many of the details of the RPS in an effort to increase the effectiveness and efficiency of New Jersey's solar energy policies. Formal rule amendments associated with many of these changes became effective in 2009, although the broader renewable energy targets were not affected. As noted above, during 2010 the solar carve-out was redesigned and expanded and the offshore wind requirement was also added, while in 2012 additional substantial changes were made largely affecting the solar carve-out.

*The administrative regulations under N.J.A.C. § 14:8-2.6 restrict the size of eligible Class II hydropower projects to 30 MW or less, though this restriction is not contained within the RPS statute.

**The A.B. 3520 and pre-A.B. 3520 solar targets have been included for informational purposes and historical context. The A.B. 3520 targets continue to have some revelance in that they continue to apply to BGS provider contracts in existence prior to the enactment of S.B. 1925. All BGS contracts under a similar exemption contained in A.B. 3520 expired by May 31, 2012.
Residential Solar Rights (New Jersey)New Jersey: Energy ResourcesSolar/Wind Access PolicyYesState/TerritoryIn 2007, New Jersey enacted legislation preventing homeowners associations from prohibiting the installation of solar collectors on certain types of residential properties. The term "solar collector" is not defined, but would seem to include both solar photovoltaic and solar thermal technologies which use collectors installed on the roof of a dwelling. This law covers only dwellings that are not deemed community property of the association, including townhouses which have at least two sides that are unattached to any other building and for which the owner, rather than the association, is responsible for roof maintenance. In addition, the law applies specifically to systems installed on the roofs of qualifying dwellings. Presumably this means that it does not extend the same protections to ground mounted systems. A homeowners association is permitted to regulate certain aspects of solar collectors, including the qualifications of installation personnel, collector location, concealment and size. However, any regulation that would increase the collectors' installation and maintenance cost by greater than 10%, or would prevent the system from operating at maximum efficiency, may not be enforced.
Sales and Use Tax Exemption (STX) (New Jersey)New Jersey: Energy ResourcesSales Tax IncentiveYesState/ProvinceAny company with 1,000 or more employees that needs to make purchases for construction and renovation of a new business location can apply for a sales tax exemption certificate to purchase machinery, equipment, furniture and furnishings, fixtures and building materials other than tools and supplies for placement at the project location without the imposition of sales and use tax until the new facility is functional.
Small Scale CHP and Fuel Cell Incentive Program (New Jersey)New Jersey: Energy ResourcesState Grant ProgramYesState/TerritoryThe New Jersey Clean Energy Program (NJCEP) offers incentives for several types of small combined heat and power (CHP) and fuel cell systems that have a generating capacity of 1 MW or less and are located behind the meter of an existing electric or natural gas customer that pays the Societal Benefits Charge (SBC). This includes customers of the states investor-owned electric and natural gas utilities, but does not include customers of municipal utilities. A variety of equipment and installation requirements exist for determining eligibility (see details above and on the program web site), but in addition to these limitations the program guidance specifically notes that the following types of systems are not eligible for incentives: renewable source-fueled systems; portable and emergency backup power systems; used, refurbished, temporary, pilot, or demonstration equipment; systems that use diesel fuel, other types of oil or coal for continuous operation. However, systems that use Class I renewable fuels (as defined under the New Jersey RPS) are eligible under the separate Renewable Energy Incentive Program (REIP). The New Jersey Economic Development Authority (EDA) administers New Jersey's Large CHP and Fuel Cell Program, which offers incentives for systems sized greater than 1 megawatt (MW). The EDA also offers low-interest financing for the small CHP program through the Energy Efficiency Revolving Loan Fund.

Projects the meet the minimum program requirements are evaluated for funding based on a variety of criteria, such as system efficiency, environmental performance, and other metrics (i.e., the program is not a first-come, first-served rebate program). The incentive available to an individual project is determined by the project type and size. Maximum incentives in reference to a percentage (%) of project cost also vary by project type. The following table summarizes the basic incentive terms (see the program web site for further details):

Societal Benefits Charge (New Jersey)New Jersey: Energy ResourcesPublic Benefits FundYesState/TerritoryNew Jersey's 1999 electric-utility restructuring legislation created a "societal benefits charge" (SBC) to support investments in energy efficiency and "Class I" renewable energy. The SBC funds New Jersey’s Clean Energy Program (NJCEP), a statewide initiative administered by the New Jersey Board of Public Utilities (BPU). The NJCEP provides technical assistance, financial assistance, information and education for all classes of ratepayers. NJCEP energy-efficiency programs and renewable-energy programs were initially managed and implemented by New Jersey's seven investor-owned electric public utilities and gas public utilities, but on April 1, 2007 management was turned over to third-party program managers Honeywell Utility Solutions and TRC Energy Solutions. The BPU will continue to act as the administrator of the NJCEP, while contracted program managers will be responsible for managing and implementing these programs. The New Jersey Office of Clean Energy (OCE) and market managers submit annual program plans for approval by the BPU (see website for details).

During 2011 and 2012 several minor changes were made to the originally enacted SBC law. In 2011 a section was added prohibiting gas utilities from imposing an SBC charge (or several other types of charge) on natural gas delivery service or a commodity that is used to generate electricity for resale. Also in 2011, legislation was enacted requiring the BPU to provide equal opportunity for businesses in all areas of the state that pay to SBC to apply for and receive incentives funded by the charge. In 2012, legislation was enacted allowing commercial and industrial customers to take a credit against the SBC of up to one half of the cost incurred during the previous calendar year for independent energy efficiency investments and improvements that would have been eligible for SBC funding.

"Class I" renewable energy is defined as electric energy produced from solar technologies, photovoltaic technologies, wind energy, fuel cells, geothermal technologies, wave or tidal action, and methane gas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainable manner. NJCEP funding for renewables includes the state's much publicized customer-sited rebate programs, as well as other initiatives such as offshore wind, large grid-connected renewables, and clean energy systems manufacturing. For energy-efficiency projects, the NJCEP has provided funding for new construction, building retrofits, HVAC systems, Energy Star products (including air conditioners, appliances and lighting), combined heat and power (CHP), energy audits, and energy-efficiency projects for low-income residents.

The SBC is collected as a non-bypassable charge imposed on all customers of New Jersey's seven investor-owned electric public utilities and gas public utilities. The BPU determines the amount that will be collected. A total of $482 million was collected during 2001-2004 and a total of $745 million was collected from 2005-2008. In September 2008 the BPU approved a 2009-2012 budget of $1.213 billion, with approximately 80% ($950 million) of the budget devoted to energy efficiency programs and 20% ($243 million) allocated for renewable energy programs. Any unused funds from previous years are carried into the next year's budget. In November 2012 the BPU approved a six-month extension of funding through June 2013 and is currently considering funding levels for Fiscal Years (FY) 2014 - 2017.

It is important to note that these budget numbers do not account for a variety of factors that may have small or large impacts on the actual annual budget. Such factors include:
  • Interest earned on the balance of funds that have already been collected
  • Budget re-allocations between the energy efficiency and renewable energy
  • Alternative compliance payments (ACPs) made under the state renewable portfolio standard, to be used to support renewable energy projects through the NJCEP. For instance, solar ACPs (or SACPs) totaling $38.9 million were deposited into the fund for RPS shortfalls during the June 2008 - May 2009 compliance year. This portion of the law was amended in 2010 to provide that SACPs must be refunded to ratepayers.
  • Transfers of money out of the fund to serve other state purposes. Examples of this include a $40 million transfer made in June 2009 as part of the state's FY2010 appropriations act, and a further transfer of $158 million from the clean energy fund into a state general fund under the FY2010 Supplemental Appropriations Act in June 2010. The April 2010 Revised 2010 Clean Energy Program Budget contains significant program and funding revisions resulting from this transfer.* According to budget orders for subsequent years, further transfers out of the fund of $77.5 million (FY 2011), $252.5 million (FY 2012), and $131.5 million (FY 2013) have been made.

These and other budget/funding details are available in various market manager and BPU documents on the program web site listed at the top of this page. Further information on historical activities is available in form of quarterly and annual Clean Energy Program reports.

*Notably, this transfer was challenged in court on the basis that it violated New Jersey law defining how funds raised through the SBC may be used. In March 2011 the Superior Court of New Jersey upheld the validity of this transfer, reasoning among other things that as the legislature authorized the collection and purposes of SBC funds, it retains the authority to change those permitted purposes.
Solar Renewable Energy Certificates (SRECs) (New Jersey)New Jersey: Energy ResourcesPerformance-Based IncentiveYesState/TerritoryNOTE: On May, 2014, the Board of Public Utilities (BPU) published a report addressing methods to mitigate SREC price volatility in the market. The report can be accessed here.

New Jersey’s Renewable Portfolio Standard (RPS) includes a carve-out for solar, requiring the each electricity Load Serving Entities (LSEs) to provide at least 4.1% of the electricity through in-state solar installations by 2028. This solar carve-out, in addition to other supporting incentives has established NJ as one of the largest and dynamic solar market in the US.

Solar projects installed in New Jersey that are registered with the SREC Registration Program are qualified to generate Solar Renewable Energy Certificates (SRECs). SRECs represent the renewable attributes of solar generation, bundled in minimum denominations of one megawatt-hour (MWh) of production. New Jersey’s SREC program provides a means for SRECs to be created and verified, and allows electric suppliers to buy and retire these certificates in order to meet their solar RPS requirements. All electric suppliers must use the SREC program to demonstrate compliance with the RPS. New Jersey’s on-line marketplace for trading SRECs, launched in June 2004, is the first such operation in the world. The price of SRECs is determined primarily by their market availability and the price of the Solar Alternative Compliance Payment (SACP) for the state RPS. The SACP is effectively a ceiling on the value of SRECs because it is the per MWh payment that electricity suppliers must make if they fail to obtain enough SRECs to cover their RPS obligation.

Prior to 2008 the SACP was set at $300 per MWh. This was amended in 2007, and an eight-year schedule was established by the BPU for Energy Year (EY) 2009 - 2016. In 2012 S.B. 1925 established a 15-year schedule for EY 2014 - 2028. Past and current SACP levels are as follows:

Solar and Wind Permitting Laws (New Jersey)New Jersey: Energy ResourcesSolar/Wind Permitting StandardsYesState/TerritoryNew Jersey has enacted three separate laws addressing local permitting practices for solar and wind energy facilities. The first deals with solar and wind facilities located in industrial-zoned districts; the second with wind energy devices sited on piers; and the third addresses permitting standards small wind energy devices in general. All three are described below.

Solar and Wind as Permitted Uses in Industrial Zones In March 2009 the state enacted legislation (A.B. 2550) defining facilities engaged in electricity production using solar energy technologies, photovoltaics, and wind energy systems as permitted uses in industrial-zoned parcel(s) of 20 contiguous acres or more. In order for the wind or solar facility to qualify as a permitted use, the parcel(s) must be owned by the same person or entity. This law applies universally in all municipalities in the state.

Wind as a Permitted Use on Piers In February 2011 the state enacted legislation (S.B. 212) stating that wind dependent energy devices located on a pier within 500 feet of the mean high water line of tidal waters may not be prohibited. Facilities must meet other applicable laws and regulations and be an accessory use to other uses or purposes of the pier. The New Jersey Department of Environmental Protection has adopted amendments to the administrative rules governing energy facilities in coastal zones to effectuate this law. The current rules, which have been adopted and re-adopted as special amendments, are set to expire July 7, 2013.

Standards for Municipal Small Wind Regulations Separately, in January 2010, New Jersey enacted legislation designed to prevent municipalities from adopting regulations that place unreasonable limits or hinder the performance of small wind energy systems. Small wind energy devices must be used primarily to produce energy for on-site consumption* and are defined to include the wind turbine, tower, and associated control devices. The law identifies a series of possible restrictions that would be considered unreasonable, as follows:

  • Outright prohibition of small wind energy systems in all districts of a municipality
  • Generic height restrictions that do not specifically address the allowable tower height or system height (tower plus the affixed wind generator) of small wind energy systems
  • Property boundary setback requirements greater than 150% of the system height. Smaller setback requirements are permitted by the adoption of a regulation or through a zoning variance, but the standard setback is set at 150% of the system height if a municipality declines to adopt a specific setback requirement.
  • Setting maximum noise limits lower than 55 decibels at the property line or not allowing the limit to be exceeded during short-term events such as power outages or wind storms.
  • Setting structural or design standards that exceed the State Uniform Construction or technical bulletin(s) to be developed by the Division of Codes and Standards within the New Jersey Department of Community Affairs.

The law requires that wind energy systems comply with all Federal Aviation Administration (FAA) regulations and applicable airport zoning regulations. It also includes rules and processes for the removal of out of service or abandoned wind turbines, to be accomplished at the owner's expense.

As noted above, the Division of Codes and Standards, in consultation with the DEP, is tasked with developing a technical bulletin within 10 months that includes model municipal ordinances for small wind energy systems. The development of the bulletin must include public hearings and comments from interested parties and the final document must be posted on the Department of Community Affairs web site. Notwithstanding this requirement, as of this writing it does not appear that a technical bulletin has been completed.

*While the state law does not include any specific size limitations on individual systems, it does allow for the possibility of system size restrictions as part of State Uniform Construction Code or the technical bulletin to be developed by the Division of Codes and Standards.
Stormwater Management Rules (New Jersey)New Jersey: Energy ResourcesSiting and PermittingYesState/ProvinceThis chapter establishes general requirements for stormwater management plans and stormwater control ordinances as well as content requirements and procedures for the adoption and implementation of regional stormwater management plans and municipal stormwater management plans.
Surface Water Quality Standards (New Jersey)New Jersey: Energy ResourcesSiting and PermittingYesState/ProvinceThese standards establish the designated uses and antidegradation categories of the State's surface waters, classify surface waters based on those uses (i.e., stream classifications), and specify the water quality criteria and other policies and provisions necessary to attain those designated uses. Designated uses include drinking water supply, fish consumption, shellfish resources, propagation of fish and wildlife, recreation, and agricultural and industrial water supplies. In addition, the SWQS specify general, technical, and interstate policies, and policies pertaining to the establishment of water quality-based effluent limitations.
Underground Storage Tanks (New Jersey)New Jersey: Energy ResourcesSafety and Operational GuidelinesYesState/ProvinceThis chapter constitutes rules for all underground storage tank facilities- including registration, reporting, permitting, certification, financial responsibility and to protect human health and the environment.
Urban Enterprise Zone Program (New Jersey)New Jersey: Energy ResourcesEnterprise ZoneYesState/ProvinceNew Jersey's Urban Enterprise (UEZ) Program operates under the Department of Community Affairs. The UEZ Program exists to foster an economic climate that revitalizes designated urban communities and stimulates their growth by encouraging businesses to develop and create private sector jobs through public and private investment. Applicant businesses must be registered, located in one of the designated zones, be in tax compliance with the state, and certified by the Program. Eligible businesses benefit from reduced sales tax, tax-free purchases on some items, subsidized unemployment insurance, energy sales tax exemption, and tax credit options.
Utility Solar Financing Programs (ACE, JCP&L, RECO) (New Jersey)New Jersey: Energy ResourcesOther IncentiveYesState/TerritoryNote: As of this writing there are no further solicitations scheduled under the current program. The summary below describes the program as it existed prior to its suspension and is included for informational purposes only. In May 2012 the New Jersey Board of Public Utilities (BPU) issued an order (see May 23, 2012 BPU Order above) providing for an extension of utility solar programs and allowing utilities a choice on whether to participate or not participate. All four of New Jersey's investor-owned utilities have signaled their intent to participate (see Utility Participation Letters) in extended programs; however, Rockland Electric has stated an intention to develop a solar loan program rather than extend the type of long-term contracting program described below. Utility programs will require BPU approval in order to proceed.

In September 2007 the New Jersey Board of Public Utilities (BPU) began an investigation into ways to develop and support the solar financing mechanisms based on Solar Renewable Energy Certificates (SRECs). An SREC is a tradable commodity equivalent to one megawatt-hour (MWh) of electricity generation from a solar energy resource. Electricity suppliers in New Jersey use SRECs to meet their obligations under the solar carve-out portion of the state's renewable portfolio standard (RPS). Because of this demand, SRECs are potentially valuable to qualifying solar system owners and their sale can result in significant revenue over the life of a solar project. The BPU SREC financing initiative, which ultimately resulted in the utility programs described below, is an attempt to introduce greater price certainty into the SREC system.

After extensive stakeholder consultations, in August 2008 the BPU issued an order requiring Atlantic City Electric (ACE), Jersey Central Power and Light (JCP&L), and Rockland Electric Company (RECO), three of New Jersey's four investor-owned electric distribution companies (EDCs) to offer long-term (10 - 15 year) SREC purchase contracts to solar system owners. The fourth investor-owned EDC in New Jersey, PSE&G, has not thus far been required to develop such a program because its Solar Loan program adopted in April 2008 provides similar benefits. The PSE&G Solar Loan program allows solar system owners within its service territory to finance a portion of the system cost through the utility, and repay the loan with SRECs at a guaranteed minimum SREC price.

Program Participant Information Qualifying solar generation owners can participate in the program by responding to periodic (3 per year), competitive Requests for Proposals (RFPs). The three utilities which offer long-term SREC contracts have all selected NERA Economic Consulting to perform solicitation management functions. Recent solicitations have been open to projects in all three utility service territories as a coordinated program. A number of important restrictions related to project eligibility are included below (see the program web site for a complete description):

  • Projects must be located in the service territories of JCP&L, ACE, or RECO
  • Both residential and non-residential projects are eligible
  • Projects must be 2 MW DC or smaller*, installed on the customer side of the electric meter, and agree to a net metering arrangement with the utility
  • Projects funded or scheduled to be funded by the Customer On-Site Renewable Energy (CORE) rebate program from 2001-2008 are not eligible. Projects that will be funded by the Renewable Energy Incentive Program (REIP)** are eligible
  • Existing projects which are already interconnected to the grid are not eligible
  • Projects must be equipped with a generation meter to measure SREC production.

Prior submitting a long-term contract proposal to a given RFP, a prospective participant must obtain an Application Number through either the REIP** or SREC Registration Program (SRP), and submit an Expression of Interest (EOI) to the solicitation manager. A Pricing Proposal, or bid, must contain several pieces of additional information, including a single, fixed SREC price and contract length from 10 - 15 years. The proposal evaluation process ranks bids based on the net present value (NPV) under the contract for each annually delivered SREC, with the lowest NPVs receiving the highest ranking (discount rates used vary by utility). The solicitation manager provides recommendations to the BPU on the competitiveness of each proposal and the BPU ultimately decides which bids will be awarded contracts.

For solicitation bids from January 1, 2011 - June 10, 2011, residential projects of 10 kW or less and non-profit/public projects of 50 kW or less which that were awarded long-term SREC contracts were eligible for an extra incentive of $0.50/W up to $3,750 for residential projects and $15,000 for public/non-profit projects. This additional incentive has now been discontinued and new applications will not be accepted for subsequent solicitations.

Additional Regulatory Information Through its initial August 2008 order and subsequent follow-up orders (available on the program web site in the Documents section), the BPU has made a series of determinations about the goals and design the EDC Solar Financing Programs in the context of the larger SREC/RPS program. Of note, the programs are not intended to support all new solar projects in New Jersey with long-term SREC contracts. The BPU program authorization is limited to three RPS reporting years ending May 31, 2012 and the program targets are for SREC procurement are set at 60% of each utility's incremental SREC allocation for the first full reporting year, declining to 50% in second reporting year and 40% in the third reporting year. The actual capacity targets for each utility during each reporting year are based on these parameters, as well as any adjustments deemed necessary by the BPU based on market conditions. As listed in the January 2011 RFP, the capacity targets set for the Report Year ending May 31, 2011 (RY 2011) and RY 2012 are as follows:

  • RY 2011: 18 MW for JCP&L, 12.7 MW for ACE, and 2.9 MW for RECO, leading to a total program target of 33.6 MW for RY 2011
  • RY 2012: 9 MW for JCP&L, 4 MW for ACE, and 0.7 MW for RECO, leading to a total program target of 13.7 MW for RY 2012

The first two solicitations for bids during a reporting year are generally designed to each procure half of each annual target for that year, with a potential third solicitation to procure any remaining portion of the reporting year target. The details of each solicitation are ultimately left up to the BPU, although the solicitation manager provides recommendations.

Solicitations include separate segments for small (50 kW and smaller) and large projects. The BPU has set an aspirational goal that 25% of projects be from the small segment for JCP&L and ACE, and 50% of projects be from the small segment for RECO. For JCP&L and ACE territories, there is also a developer cap of 20% of the planned solicitation quantities across all solicitations during a reporting year. Projects in RECO service territory are not subject to this cap, but there is a cap of 50% of the planned solicitation quantity across all solicitations during a reporting year for affiliates of RECO that are not regulated by the BPU.

One further point of note is that the EDCs themselves do not have SREC procurement obligations under the New Jersey RPS (i.e., they are electricity distribution companies, not energy suppliers). The EDC capacity allocations detailed above are based on the incremental SREC obligations borne by energy suppliers providing service within each service territory. The SRECs obtained by the EDCs under the long-term contracts are auctioned off to energy suppliers which do have RPS obligations. The utilities are permitted to recover program costs under the Regional Greenhouse Gas Initiative (RGGI) surcharge. The revenue generated from SREC auctions is used to offset program costs.

*Prior to 2011, eligible project size was capped at 500 kW.

**It is important to note that while REIP projects are eligible for the program, existing projects are not eligible and the REIP no longer offers incentives for solar installations.
Water Pollution Control Act (New Jersey)New Jersey: Energy ResourcesSiting and PermittingYesState/ProvinceThis act states the rules and regulations to prevent and control pollution of waters in the state. It is unlawful for any person to discharge any pollutant unless the discharge conforms with a valid New Jersey Pollutant Discharge Elimination System permit that has been issued by the commissioner. It is also unlawful for any person to build, install, modify or operate any facility for the collection, treatment or discharge of any pollutant, except after approval by the department pursuant to regulations adopted by the commissioner. All permits issued under this act shall be for fixed terms not to exceed five years. Any permittee who wishes to continue discharging after the expiration date of his permit must file for a new permit at least 180 days prior to that date.
Wind Manufacturing Tax Credit (New Jersey)New Jersey: Energy ResourcesIndustry Recruitment/SupportNoState/TerritoryNOTE: As of September 2013, this program is no longer accepting any new applications.

In August 2010 New Jersey enacted legislation (S.B. 2036) creating an offshore wind resource requirement within the state renewables portfolio standard (RPS) and tax incentives for certain businesses engaged in manufacturing wind energy equipment. The term "business" is defined to include corporations subject to the state franchise tax, corporations subject to the state's insurance premiums tax, as well as partnerships, S-corporations, and limited liability corporations. The allowable tax credit is equal to 100% of the qualified capital investment made by a business. The applicant must demonstrate the state's financial support of the facility will yield a net positive benefit for the state. The program is administered by the New Jersey Economic Development Authority (EDA).

In order to qualify for the tax credit, a business must make a minimum capital investment of $50 million in a qualifying wind energy facility which employs at least 300 new full-time employees. A tenant occupying a leased area within a qualifying wind energy facility must meet a minimum investment threshold of $17.5 million. The term qualifying wind energy facilities is defined as "any building, complex of buildings, or structural components of buildings, including water access infrastructure, and all machinery and equipment used in the manufacturing, assembly, development or administration of component parts that support the development and operation of a qualified offshore wind project, or other wind energy project* as determined by the authority, and that are located in a wind energy zone." A "wind energy zone" is defined as property within the South Jersey Port District.

The offshore wind portion of this tax credit operates as an addition to 2007 legislation creating the Urban Transit Hub Tax Credit. Tax credits for qualifying wind facilities are generally limited to $100 million in aggregate, although the EDA has discretion to allocate tax credits that exceed this cap to "meritorious" projects if sufficient tax credit volume is available. In total, the EDA may not allocate Urban Transit Hub Tax Credits exceeding $1.75 billion. Businesses must apply for a tax credit to the EDA by January 13, 2013 (five years after the effective date of the original Urban Transit Hub Tax Credit Act), and submit documentation for approval of the credit amount by January 13, 2016 (eight years after the original effective date).

Businesses may take the tax credit in equal increments over a 10-year period, beginning with the tax period for which the business is first approved as having met the required investment and employment qualifications. In lieu of taking the tax credit, a business may apply to the EDA for a certificate that allows them to transfer the tax credit to another party. Any tax credit sales that take place under this allowance must be for at least 75% of the face value of the credit.

*While most sections of S.B. 2036 apply to specifically to offshore wind energy, it appears that based on this definition, wind energy manufacturing facilities in general qualify for tax credits.