Solar Panels Not Impervious Cover in New Jersey

Posted on May 3, 2010 by David P. Steinberger

On April 22, 2010, Governor Christie signed a new law that exempts solar panels from the calculation of impervious cover under a number of state laws. The calculation of impervious cover can be a critical factor in development projects in New Jersey, as many state and municipal laws limit the percentage of a property that can be covered by impervious cover. For instance, the Highlands Water Protection and Planning Act limits the size of new developments to 3% impervious cover, while the stormwater management rules are triggered based upon the amount of impervious cover added by a project.

The goal of the new legislation is to remove regulatory obstacles to developing solar power projects. The new legislation amends the Waterfront Development Act, the Pinelands Protection Act, the Coastal Area Facility Review Act, the Highlands Water Protection and Planning Act, the Municipal Land Use Law as well as laws related to county site plan approvals, stormwater management plans and the conversion of age-restricted community developments.

Under the new law, a “Solar Panel” is defined as “an elevated panel or plate, or a canopy or array thereof, that captures and converts solar radiation to produce power, and includes flat plates, focusing solar collectors, or photovoltaic solar cells and excludes the base or foundation of the panel, plate, canopy, or array.” Thus, while the solar panel itself is not impervious, the area where the solar panel attaches to the ground – the base or foundation – is still deemed impervious.

The new law does not, however, change how the calculation of impervious cover is undertaken under the Freshwater Wetlands Protection Act and the Flood Hazard Area Control Act. The legislative history does not indicate whether this was a deliberate or inadvertent omission. However, given the strict development limitations under these two laws, and the large areas covered by them, this omission could be significant.

Any New Jersey developers seeking to build a solar energy project, or include solar power generation as an ancillary feature of a development, will need to consult with their development team professionals to consider how this new legislation might impact their project.

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Can I Use Solar Energy To Save Energy Costs For My Business?

Posted on March 5, 2009 by Catherine E. Bostock

Businesses and property owners can use solar systems to reduce their annual energy costs and even generate income. The cost of installing these systems is significant. However, there are a number of incentives from the federal and state governments that reduce the upfront costs of solar system installation and generate money for many years after the initial repayment period.        

For upfront costs, the Federal Investment Tax Credit (FITC) provides a 30% tax credit for solar energy systems, so that you can take 30% of the cost of the solar system as a credit against taxes you would otherwise have to pay. The tax credit was recently extended for eight years. Front loaded depreciation is another significant tax incentive. In northern New Jersey, PSE&G's solar loan program may provide financing for 40-60% of the cost of installing a solar system which can be repaid in cash or with credits for energy produced.

Government incentives also make the use of solar systems more profitable. New Jersey is transitioning from a system of rebates to encourage solar system installations to a system of “solar renewable energy certificates” (“SRECs”) based on the amount of energy produced by the system, which can be sold, traded and, in some cases, used to repay loans for installation. “Net metering” also creates economic benefit because it allows a solar system owner to earn money for any excess power the system generates and returns to the electrical grid and of course having solar power reduces operating costs by reducing or eliminating the need to buy electricity from the utility.

Businesses can take advantage of these incentives directly or they can lease the solar system from a third party under a power purchase agreement. In that arrangement, the business avoids upfront costs, agrees to buy power at a discounted rate and passes the incentives to the third party. It is advisable for businesses to consult with legal professionals when entering into contracts with installers and power purchase agreements. 

*This article originally ran in the February 17, 2009 issue of NorthJersey.com

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