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Greenbaum, Rowe, Smith & Davis LLP Client Alert

Encourage Solar Development on Brownfields and Former Landfill Sites

New Jersey has renewed its commitment to the continued growth of solar energy development with the bipartisan passage of S-1925/A-2966, which was signed into law by Governor Christie on July 23, 2012. In a nutshell, the new law is intended to increase demand for SRECs, which in turn will hopefully drive up the price of the SREC and bring new stability and vitality to the State’s solar industry.

A dramatic increase in the quantity of installed solar capacity in New Jersey over the past several years brought a flood of SRECs into the market, driving the value of an SREC from a high of nearly $700 to below the $100 mark. This scenario has steadily diminished the financial return-on-investment necessary to drive new solar construction, with many would-be solar developers wary of commencing new projects.

The new law, which amends certain provisions of the 2010 Solar Energy and Fair Competition Act, seeks to “fix” the SREC problem, and as a consequence increase solar development, as follows:

The passage of S-1925/A-2966 into law is welcome news for members of the solar development community, for property owners seeking lower electricity costs, and for landlords who want to obtain rental value from their building roof, provide their tenants with less expensive electricity and make their rental properties more competitive. Solar installation project costs have also decreased significantly in the past couple of years, giving rise to additional cause for optimism.

We will continue to monitor developments in New Jersey’s solar energy sector, and will keep you informed regarding future incentives and strategies for effectively securing these benefits. For more information on solar energy development, please contact Maura Blau (the author of this Alert) or Jack Fersko, co-chair of our Alternative Energy & Sustainable Development Practice Group.