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What’s In The Pipeline? Pending New Jersey Legislation Affecting Solar Energy Projects

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Corporate & Finance Alert

September 28, 2010

Several bills pending in the New Jersey legislature for the 2010-2011 session are aimed at the creation of new solar energy projects in the Garden State. Such legislation, if signed into law, would significantly increase demand for solar energy development and project construction. Below is a synopsis of some of the solar energy bills pending in the legislature.

A-2042:

Assembly bill 2042, sponsored by Assemblymen DeAngelo, Milam and Albano would amend and supplement the “Electric Discount and Energy Competition Act” (N.J.S.A. 48:3-49 et seq.) thereby directing the Board of Public Utilities (the “Board”) to increase the amount of credit provided when issuing Solar Renewable Energy Certificates (“SREC”) to owners of solar electric generation systems who use solar generation equipment manufactured in New Jersey. A SREC is a tradable certificate representing the environmental attributes of a particular amount of solar electricity generated in New Jersey.

Currently, under the Solar Energy Renewable Energy Certificate program, the Board issues one SREC for every one megawatt hour of solar electric generated in New Jersey. Under the proposed legislation, the Board would be required to issue one SREC for every 850 kilowatt hours of solar electric generated in New Jersey so long as the equipment used to generate the solar electricity is manufactured in New Jersey. A-2042 is currently in the Assembly Telecommunications and Utilities Committee.

A- 1084:

Assembly bill 1084, sponsored by Assemblymen Gusciora, Barnes and Coutinho, would affect the design and construction of new public schools in New Jersey. The proposed legislation would direct the Commissioner of Education to approve an application for the construction of a new school facility under the provisions of the “Educational Facilities Construction and Financing Act” (N.J.S.A. 18A:7G-1 et seq.), only if the design and construction of the facility incorporates solar panels. The mandate for use of solar panels would apply to a new school facility constructed by either a school district or the New Jersey Schools Development Authority. A-1084 is currently in the Assembly Appropriations Committee.

S-855:

Senate bill 855, sponsored by Senator Bucco, would direct the New Jersey Division of Property Management and Construction in the Department of the Treasury to require that all newly constructed State buildings include the installation and operation of renewable energy systems powered by solar and geothermal energy sources, where feasible. Under the bill, renewable energy systems must be designed to provide all or a portion of the heating, cooling, or general electrical energy needs of new State buildings. The bill defines “geothermal energy” as heat derived from the earth that can be harnessed for electricity production, direct heat, or heat pump use. The bill also defines “solar energy” as energy which has recently originated in the sun, including direct and indirect solar radiation and intermediate solar energy from wind and sea thermal gradients. S-855 is currently in the Senate Environment and Energy Committee.

S-460:

Senate bill 460, sponsored by Senator Smith, would require the Department of Transportation, the New Jersey Turnpike Authority and the South Jersey Transportation Authority (collectively, the “Transportation Authorities”) to permit any persons certified by the Board of Public Utilities as an installer of solar photovoltaic panels and related equipment to install and maintain such panels and equipment on noise barriers erected on roads and highways under the jurisdiction of the respective Transportation Authorities. The bill would also require the respective Transportation Agencies to adopt rules and regulations concerning installation, maintenance, costs and liabilities relating to the solar photovoltaic panels and related equipment. S-460 is currently in the Senate Transportation Committee.

A -2147:

Assembly bill 2147, sponsored by Assemblyman Chivukula, would establish “Solar Roof Installation Warranty Program” (the “Program”) within the New Jersey Economic Development Authority (“NJEDA”). The purpose of the Program is to provide a source of indemnification to owners of commercial, industrial, and institutional buildings located in New Jersey (“Owners”) who install solar photovoltaic equipment on their building roofs but are unable to obtain sufficient warranty coverage against damage to those roofs resulting from such installations.

Under the bill, an Owner may submit an application for payments from a warranty fund established by the NJEDA. The applicant must demonstrate to the NJEDA that the solar photovoltaic equipment installer does not offer a comprehensive 20-year warranty on the roofs upon which the equipment is installed and that the installation of such equipment is not covered by any other insurance policy. The proposed legislation calls for an application fee of $1,000 and the maximum amount to be paid from the warranty fund for any loss to a participant shall be $50,000. A-2147 is currently in the Assembly Commerce and Economic Development Committee.