New Jersey Legislature Establishes Community Solar Program

With more than 2,000 megawatts of cumulative solar capacity installed, New Jersey is the nation's fifth-largest solar state, according to the Solar Energy Industries Association (SEIA). New legislation is designed to expand solar power in the state even further.

The New Jersey Legislature passed a bill last week that is expected to "stabilize and expand" New Jersey's solar sector by making solar power more affordable to the state's families and businesses, SEIA said in a statement. 

The bill (A3723/S2314) increases New Jersey’s renewable portfolio standard to 35% by 2025 and 50% by 2030, with an increased solar requirement of 5.1% (instead of 4.1%) by 2021. In addition, the bill establishes a process to deploy 600 megawatts of energy storage by 2021, which is set to increase to 2 gigawatts by 2030.

Most significantly, the bill lays the groundwork for a statewide community solar program and provides for a Community Solar Energy Pilot Program to be established by the end of 2018, with an annual capacity to be determined by the state Board of Public Utilities (BPU). Within three years, the Community Solar Energy Pilot Program will be converted into a permanent program with a minimum annual goal of 50 megawatts.

Solar projects qualified to participate in the initial Community Solar Energy Pilot Program may be no larger than 5 megawatts and may be restricted by the BPU to projects on or in brownfields, landfills, areas designated in need of redevelopment, underserved communities, or commercial rooftops. In addition, the BPU will have discretion to determine, among other things, geographic limitations for projects and customers; the minimum number of customers per project; the value of customer bill credits; preferred program access for low- and moderate-income customers; and interconnection standards.

The bill passed by wide margins in the New Jersey House (50-20) and Senate (29-8) and it is expected that Governor Phil Murphy will sign it into law shortly. In the unlikely case the Governor vetoes the bill, a two-thirds majority of the House and Senate would be required to override. If the bill is signed into law, the BPU will have 210 days to set parameters for the Solar Energy Pilot Program in accordance with the Administrative Procedure Act.

Ballard Spahr is a leading legal adviser to lenders and developers in developing and financing community solar projects. Our lawyers have assisted with the acquisition, development, or financing of community solar portfolios in Colorado, Massachusetts, Minnesota, and Maryland. Our Energy and Project Finance attorneys are active in industry groups helping to develop productive, state-level community solar policies. If you would like to discuss potential projects in emerging or established community solar markets, please contact a member of the Energy and Project Finance Group.

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