A New Jersey Statute That May Go a Long Way On Your Next Solar or Wind Project!

Experienced New Jersey developers and land use attorneys understand the challenges that face an applicant when the proposed use is not expressly permitted in the municipality’s zoning district where the subject property is located. The challenge is only more complicated if the proposed use involves novel or unfamiliar technology such as renewable energy. However, in New Jersey, the government has been proactive in welcoming renewable energy projects through grants and legislation, making New Jersey definitely the place to be if you want to develop property geared towards the creation of a renewable energy facility powered by solar or wind.

The New Jersey Municipal Land Use Law (“MLUL”) has shed a ray of sunshine onthose developers who wish to construct a solar or wind renewable energy facility. Developers of a solar or wind renewable energy facility must be aware of N.J.S.A. 40:55D-66.11. This section of the MLUL expressly holds that a municipality must permit as-of-right the construction of a renewable energy facility when the subject property is located in one of the municipality’s industrial districts. The only conditions being that the property (or properties) be: (1) comprised of 20 or more contiguous acres; and (2) under common ownership. The statute defines “renewable energy facility” as a “facility that engages in the production of electric energy from solar technologies, photovoltaic technologies, or wind energy.”

Although this statute may seem clear on its face, it does raise some questions for land use attorneys and developers.

  • First, what if a property satisfies the acreage and ownership requirements, does the sole use contemplated for the property need to be a renewable energy facility (i.e. a solar farm)?
  • Second, can a renewable energy facility be deemed an accessory use or structure to a principal use that is pre-existing on the subject property?
  • Third, does the renewable energy facility have to produce energy to a certain amount of users or can it be for a single user?

All of these questions remain unanswered as the development of renewable energy facilities in New Jersey remains in its infancy. This land use attorney foresees litigation over these unanswered questions on the horizon as local land use boards and zoning officials will have to make critical determinations on whether “use variances” are required despite the fact that the MLUL has been amended to facilitate the development of these types of projects.

Land use attorneys should be aware of this recent amendment to the MLUL because it supersedes municipal zoning laws which may not expressly permit renewable energy facilities in the zone where the subject property is located. Developers seeking out properties for their next solar project should always keep in mind that if a property satisfies the criteria set forth in N.J.S.A. 40:55D-66.11, the land use approval process may become a lot easier and possibly more resistant to challenges on an appeal of the approval by a third-party objector.


Jason R. Tuvel is an Associate in the Gibbons Real Property and Environmental Department.

How to Avoid "Sun-block" - New Jersey's Solar Easements Act

As more and more business owners and homeowners in New Jersey take advantage of the incentives available to build and maintain solar energy systems and solar panels, it’s important that such investments be protected from unwanted disputes with neighbors. A little known New Jersey statute may be able to help.

Recent statistics on New Jersey’s Clean Energy Program website indicate that New Jersey is the fastest growing market for solar power in the United States, and has the largest number of solar panel installations, second only to California, where neighborly disputes over trees blocking solar panels, solar panels impairing views, causing glare and other general nuisance claims are becoming more and more common. To avoid the same pitfalls in New Jersey, those installing solar panels should take advantage of New Jersey’s Solar Easements Act (N.J.S.A. 46:3-24, et. seq.), on the books since 1978.

Solar easements prohibit those giving the easement, for example, a neighbor, from obstructing the benefiting property’s access to sunlight. Under a solar easement, the neighbor would be precluded from construction or placement of anything in a specified area described by vertical and horizontal angles, that would block sunlight to the solar panels on the adjacent property. The Act grants formal legal standing to solar easements and sets forth required content for easement instruments. The easement instrument must include:

  • A description of the easement
  • Terms/conditions under which the easement will be granted or terminated
  • Provisions setting forth any compensation to the owner of the property being burdened by the easement in return for maintaining the easement or compensation to the owner of the property benefiting from the easement in the event of interference with the easement

Those looking to obtain a solar easement from their neighbors need to know that granting of such easements is not mandated by the Act, so negotiations with their neighbors will be required. It’s recommended that interested parties work with an attorney to negotiate and draft solar easements. It may be annoying to negotiate such a document prior to installing a solar energy system, but it could avoid future problems from neighbors who have second thoughts after a solar installation is built.


Ivette P. Alvarado is an Associate in the Gibbons Real Property & Environmental Department.

Solar Energy Development in New Jersey: Right Time, Right Place!

All of us are intrigued by the concept of utilizing a clean, renewable energy source to generate abundant and cheap power for our homes and businesses. Some of us have even investigated installing a renewable energy system, but have come away disappointed due to onerous regulatory obstacles and the high cost associated with these installations. That is, unless you are looking into installing a solar energy power facility in New Jersey.

We explored the business case for solar energy in a recent article published by the Association of Corporate Counsel New Jersey Chapter. In addition, on August 19, 2010, Gibbons sponsored a solar energy conference in Woodbridge, NJ, attended by over 500 business owners, senior executives and industry representatives.


Douglas J. Janacek is a Director in the Gibbons Real Property and Environmental Department. Nancy A. Lottinville, Counsel to the Gibbons Real Property & Environmental Department, assisted in the preparation of this post.

Green or Not to Green, That is the Question? Whether it is Nobler to Build a Green Building or Suffer the Ignominy of an Ungreen One

With energy costs high and the focus on combating global warming, there is an impetus toward encouraging the development of Green Buildings. Buildings account for 39% of the total energy usage in the U.S., two thirds of the electricity consumption and 1/8 of the water usage. Building codes, setting minimum standards for construction, now include standards for energy efficiency. Green Codes are creeping in.

New Jersey’s Energy Subcode requires that a building permit applicant show compliance as part of the application. This code applies to low-rise residential and commercial buildings Under the Energy Code Compliance and Residential Prescriptive Packages, see N.J.A.C. 5:23-2.15(f)1.vi and N.J.A.C. 5:23-3.18. Compliance must be with the Energy Subcode and the 2006 International Energy Conservation Code (IECC) plus 20%. These are energy efficient standards for cooling and heating.

New York State has its Energy Conservation Construction Code of 2007 which is based on the 2004 IECC standards. This code becomes effective in December 2010. Pennsylvania has adopted Alternative Residential Energy Provisions 2009 based on 2009 IECC standards.

The traditional way of demonstrating compliance with an applicable energy code is to calculate the “U” (thermal transmittance) value of various building components, such as walls, floors, windows, etc. There are tools that assist a builder to perform these calculations and demonstrate compliance with the applicable energy code.

These tools include:

  1. Guidance on performing calculations in the American Society of Heating, Refrigerating, and Air-Conditioning Engineers, Inc. (ASHRAE) Handbook of Fundamentals,
  2. RESCHECK SOFTWARE (these two apply for compliance for NY, NJ and PA),
  3. NJ Energy Star Homes, which involves registration in the program and inspection by the utility company, and
  4. Prescriptive packages for wooden constructed homes.

The first two tools are acceptable in New York, New Jersey, and Pennsylvania. The last two relate to New Jersey alone.

In general, building codes have focused on energy efficiency alone, because lower energy usage is seen as the key to controlling carbon emissions as well as reducing costs over time. However, the Green building concept also involves other notions such as green roofs, hydroponics, reuse of water, less use of water, sewage treatment and other sustainable practices. Other trends could impact building codes in the future. The International Accounting Standards Board (IASB) has determined that by 2012 a standard for biodiversity impacts should be adopted. Such new regulations would require companies to publish information concerning the companies’ environmental impacts.

This would require inventorying energy usage, fresh water usage, air emissions, waste practices, habitat destruction, thermal discharges not only for the company but for suppliers to the company. As a result green construction is becoming more than simply getting a handle on energy.

LEED, Leadership in Energy and Environmental Design, is not a building code itself, but a certification process based on building standards set by U.S. Green Building Council. The LEED certifications, which range from Platinum (the highest), to Gold, and Silver, are verified by independent third party verification. LEED points are awarded on a 100 point scale and weighted to reflect potential environmental impacts. The initiative seeks to lower operating costs, reduce waste, conserve water and energy, reduce greenhouse gases in order to qualify for credits, tax rebates and other incentives depending on the certification ranking.

There has been litigation over LEED. In Southern Builders, Inc v. Shaw, No. 19-c_07-11405 (Md. Somerset Co., filed February 7, 2007) a tax credit for a silver LEED certification which the developer claimed was worth $650,000 was at issue. The contractor was alleged to have built a substandard building which did not qualify for the tax credit. The case recently settled. However, it does point to the fact that owners, contractors and others have a lot at stake with such certifications.

Eventually, green codes will be adopted by states and code officials. Although LEED is one of the preeminent building certification systems, it is not officially adopted in the above states. Thus, it behooves the developer to choose a qualified Green Project Manager to insure that all interested parties understand what has to be achieved for the appropriate certification and environmental goals of the project. It is not enough to contract the risk to the contractor or subcontractor. Someone who is qualified should be hired to coordinate all levels of construction to insure that the appropriate tax credit, incentive or certification is achieved.


John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

 

CHeaP Grants Available from NJEDA: Stimulus Funds to Energize Combined Heat and Power Projects

If you are a NJ-based entity, do you have a power plant in the works? Are you thinking about a Combined Heat and Power (CHP) plant? If so, the New Jersey Economic Development Authority (NJEDA) has a grant for you if you act with alacrity. October 4, 2010, at 5:00 pm is the deadline for submitting an online solicitation for the competitive CHP grants. Grants are available for $450 per kW up to a maximum of $5 million per plant. All forms are available online.

It should be noted that grants cannot exceed 50% of the project. Upgrade projects are available for funding. However, the projects cannot come online before January 1, 2011, but must begin before September 30, 2011. And of course, the projects must be located in New Jersey.

The application fee is $500 with a closing fee of 1% of the approved grant. There are other fees and there are numerous eligibility requirements which should be checked carefully.


John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

Douglas Janacek: Panelist at Standing-Room Only "Solar Energy for New Jersey Businesses" Event

A standing-room only audience of more than 500 business owners, senior executives and industry representatives throughout the state attended a conference on August 19, sponsored by Gibbons P.C. and EisnerAmper LLP - Solar Energy for New Jersey Businesses, Developing & Financing Your Own On-Site Solar Facility - at the Woodbridge Hilton in Iselin, NJ.

The program (as covered by NJBIZ) featured elected officials, state representatives, and industry executives, who discussed the state of solar energy projects for business and other organizations in New Jersey - the second most active state for solar power installations and the seventh for venture capital investments in clean energy projects.

Speaking about real estate and development considerations affecting solar facility design and installation, Douglas Janacek, Co-Chair of the Gibbons Real Property & Environmental Department, emphasized the widespread desire of stakeholders to see construction of alternative energy facilities. In New Jersey, Mr. Janacek noted that there are a myriad of opportunities to locate solar facilities not just on new sites, but also existing, developed sites of all types and sizes.

“With millions of dollars available from venture capital funds and other financing sources, together with Federal and State mandates, New Jersey has become the leading marketplace for solar investment in the nation, and this is just the beginning,” said Frank T. Cannone, who leads the Gibbons Corporate Department and its Renewable Energy Finance Team. “This event addressed the unique opportunities available for businesses to get into the forefront in this growing area.”

“The business case for solar projects is a strong one in this state,” said Rich Cleaveland, Partner at EisnerAmper LLP. “This conference drew a standing-room only crowd, with over 700 people requesting to attend, because it provided valuable information on building a successful solar energy project from financing and assembling a team through design, operation and maintenance.”

The Keynote Address was given by New Jersey State Assemblyman Upendra Chivukula, who is the Chairman of New Jersey's Telecommunications and Utilities Committee and the behind-the-scenes author of innovative energy legislation that is fueling New Jersey's unprecedented investment in solar energy. He discussed why New Jersey is an ideal location for solar project development, the state’s creation of incentives for businesses to develop smart grid, net-metering solar electric projects, and the future of continued energy growth within the state.

Mark Kuehn, Counsel in the Gibbons Corporate Department and President of the Association for Corporate Growth, NJ Chapter, welcomed the group and provided an overview of the solar marketplace. Steve Morgan, past Chairman and CEO of JCP&L and current President and CEO of American Clean Energy, a PPA developer, investor, owner and operator of solar electric systems, discussed the history of energy generation in the state and the evolution of the solar market.

Building the Project
The first panel provided insight into “Building the Project,” and covered the Design Phase including choosing the team, location, and system; Construction Phase and how to construct a project without business interruption; and Post-Construction Phase including operating, utilizing and maintaining your system.

Panelists and their topics of discussion included:

  • Accounting topics - Rich Cleaveland, Partner at EisnerAmper (Moderator)
  • Construction of solar energy projects - Al Bucknam, CEO SunDurance Energy
  • Engineering and design of systems - George Cruden, Director of Market Operations, Power & Communications Market Team, Clough Harbor Associates
  • Land use and development law - Douglas Janacek, Co-Chair, Real Property & Environmental Department, Gibbons P.C.
  • Experience as an owner of an existing solar site - Valerie Montecalvo, President, Bayshore Recycling Corp.
  • General contractor insight - Steve Morgan, President and CEO, American Clean Energy, LLC, and past senior executive of First Energy Corporation including CEO and Chairman of Jersey Central Power & Light

Structuring the Project
The second panel discussed “Structuring the Project,” with a focus on ownership, power purchase agreements, financing options, incentives including solar renewable energy credits, and the current regulatory environment.

The panelists and their areas covered included:

  • Corporate structure and project finance - Frank Cannone, Chair, Corporate Department, Gibbons P.C. (Moderator)
  • Financial models, tax and accounting topics - Anthony DiGiacinto, EisnerAmper
  • State incentives - Paula Durand, Senior Venture Officer, Clean Technology, New Jersey Economic Development Authority
  • Solar Renewable Energy Credits (SRECs) - Michael Flett, President and CEO, Flett Exchange LLC
  • Lending and financing opportunities - Kurt Fuoti, TD Bank
  • The regulatory environment and approvals - Ronald Reisman, Manager of Business Outreach, New Jersey Board of Public Utilities
  • Business financing and PPAs - James Rice, CEO, Nautilus Solar Energy, LLC

Finally, a demonstration of the unique software offered to track solar energy projects was offered by Govi Rao, President and Chief Executive Officer of Noveda Technologies, Inc.

The enthusiastic response to the conference, coupled with the State's demonstrated commitment to renewable energy such as solar and wind power indicate that New Jersey is a key location for investment and development.

The Answer is Blowing in the Wind - NJ Governor Signs Offshore Wind Economic Development Act

On August 19, 2010, just over two months after identical bills were introduced in the NJ Assembly and Senate, Governor Chris Christie signed the Offshore Wind Economic Development Act into law. By creating offshore wind renewable energy credits and financial assistance to qualified projects, it is hoped that the new law will spur economic development and job growth in the state.

The new law establishes an offshore wind renewable energy certificate program that will require a percentage of electricity sold in NJ to come from offshore wind energy. The New Jersey Board of Public Utilities will be authorized to accept and approve applications for qualified offshore wind projects. The New Jersey Economic Development Authority will have the authority to provide financial assistance to qualified offshore wind projects and associated equipment manufacturers and assembly facilities in the state.

The new law represents another step in implementing the energy policy outlined by the governor on April 20, 2010, making renewable energy a key component of New Jersey’s strategy for economic recovery and growth.

Commenting on the law, Senate President Stephen M. Sweeney stated,

The disaster in the Gulf of Mexico opened our eyes to the need for clean, sustainable energy that we can produce here at home. Not only will this law make new Jersey even more energy independent, it will also bring vital new jobs to the state at a time when we need them the most.

On June 8, 2010, New Jersey joined the Atlantic Offshore Wind Energy Consortium with nine other east coast states in order to facilitate federal-state cooperation for commercial wind development in the Atlantic Ocean.

Because the components of wind turbines are large and heavy, high transportation costs make local manufacturing more cost competitive, according to the American Wind Energy Association. Currently, 60% of wind energy components are manufactured in the United States. New Jersey is hoping that the cost competitiveness, coupled with tax and financial incentives will make the state a desirable location for investment in and development of such manufacturing and assembly facilities, creating jobs with them.


Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

Here Comes the Sun: New Jersey Exempts Solar Panels from Impervious Coverage Limits

A recently enacted New Jersey law encourages the use of solar energy by allowing solar panels to be excluded from the computation of impervious coverage when determining whether a development project complies with impervious coverage limitations. The new law, P.L.2010, c.4 , amends the Pinelands Protection Act, Coastal Area Facility Review Act, Highlands Water Protection and Planning Act, County Planning Act, Waterfront Development Law, and Municipal Land Use Law, as well as laws pertaining to the conversion of age-restricted community developments.

In each of these laws, the amendment defines a solar panel as “an elevated panel or plate, or a canopy or array thereof, that captures and converts solar radiation to produce power, and includes flat plate, focusing solar collectors, or photovoltaic solar cells and excludes the base or foundation of the panel, plate, canopy, or array.” Any solar panel meeting that definition can be excluded when computing impervious coverage.

The new solar panel law is just one of the initiatives which encourages the use of solar and other green energy sources. As recently reported on this blog in a post titled New Jersey Proposes Addition of Solar Power Facilities to its Green Initiative, identical bills, Senate S2126 and Assembly A3139, are pending before their respective house of the New Jersey’s legislature and would amend the MLUL to provide that Solar and Wind Energy Generation Facilities, when installed on the sites of former landfills, quarries and other extractive industries, are permitted uses. If the proposal is enacted, this status would be equally applicable to both public and private sites where landfills, quarries or other extractive industries are closed or closing.

Clearly, New Jersey is serious about alternative energy and is working legislatively to make it a reality.


Howard D. Geneslaw is a Director in the Gibbons Real Property & Environmental Department.

New Jersey Proposes Addition of Solar Power Facilities to its Green Initiative

Solar and Wind Energy Generation facilities may soon join the category of uses designated as permitted of right by New Jersey statute rather than by individual municipal ordinance, thus preempting municipal zoning powers granted under the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. (MLUL).

Identical Bills, Senate S2126 and Assembly A3139 are pending before their respective house of the New Jersey’s legislature and would amend the MLUL to provide that Solar and or Wind Energy Generation Facilities, when installed on the sites of former landfills, quarries and other extractive industries, are permitted uses. This status would be equally applicable to both public and private sites where landfills, quarries or other extractive industries are closed or closing.

Environmentally sensitive areas remain subject to regulation. Although the Bills specifically permit Solar Facilities in the environmentally sensitive Pinelands Region, per the amendment that cleared the Senate Environment and Energy Committee on July 16, 2010, Wind Generation would not be permitted in the Pinelands. Both Solar and Wind Generation Facilities are permitted in landfills and quarries located elsewhere in the State. Notably, the Bills do not regulate height or size of the Solar or Wind Generation equipment, and size or bulk standards are presumably left to municipal zoning ordinance control.

These Bills would allow such unattractive sites as former landfills be put to productive use and encourage the growth of alternative energy sources in the state. This would be particularly welcome in the Pinelands where it is estimated there are 80 old landfills in towns which do not have the money to properly cap them. Under the proposed Bills, these towns would be able to obtain needed revenues from solar energy developers.


Nancy A. Lottinville is Counsel to the Gibbons Real Property & Environmental Department.

EPA Announces Energy Star Program Available for Data Centers

On June 9, 2010, USEPA announced that data centers will be eligible to earn the Energy Star label. The data center must be in the top 25% of its peers in energy efficiency as measured by EPA’s energy performance scale, the Power Usage Effectiveness metric.

Unlike the Energy Star program for consumer appliances which relies on self-reporting, the Energy Star program for data centers requires a licensed professional to independently verify the energy performance of the building and sign and seal the application document that is sent to EPA for review and approval. Such data centers, which account for approximately 1.5% of electricity consumption, will be able to save money and energy and fight climate change. Moreover, with the increase in demand for “green” vendors by federal, state and local governmental agencies and corporations, a data center with an Energy Star label would have a competitive advantage in seeking such customers.


Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

NJ Passes Bill to Foster Development of OffShore Wind Generation

In less than a month, the New Jersey legislature introduced and passed S-2036, the “Offshore Wind Economic Development Act." Both the NJ Senate and the Assembly passed the Senate version on June 28, 2010. This swift action quickly followed NJ’s joining a 10-state Atlantic OffShore Wind Consortium.

The bill establishes an offshore wind renewable energy certificate program that will require a percentage of electricity sold in NJ to be from offshore wind energy. The New Jersey Board of Public Utilities will be authorized to accept and approve applications for qualified offshore wind projects. The New Jersey Economic Development Authority will have the authority to provide financial assistance to qualified offshore wind projects and associated equipment manufacturers and assembly facilities in the state.

Concerns about potential environmental impacts have been soothed by the conclusions of a two year study led by New Jersey Department of Environmental Protection and announced in draft form on June 18, 2010. The study surveyed bird species, marine mammals, sea turtles and fish off the NJ coast and assessed the likely impact from the construction, operation and decommissioning of an offshore wind farm. The final report will provide the necessary data to screen sites, estimate potential impacts on sea animals and mitigation. NJDEP Commissioner Martin noted, “We now have the science and data needed to take the first steps towards making wind energy projects a reality for New Jersey. It puts us in the forefront environmentally, while also providing New Jersey with a great economic boost from jobs that will be created by this new green industry.” The final report is expected to be released in July.

In testimony before the Senate Budget and Appropriations Committee, on June 23, Commissioner Martin may have dampened NJ’s enthusiasm for such projects when he candidly acknowledged that wind power is expensive compared to the cost of electricity NJ consumers currently pay. Wind power is expected to cost 18 to 24 cents per kilowatt hour, compared to 11 cents. Hal Bozarth, Executive Director of the Chemistry Council of New Jersey, cast more doubt on the promise of wind energy, stating, "The economic studies I’ve seen indicate on the wind farms side of things, you don’t create a lot of jobs."

In spite of some naysayers, Governor Christie is expected to sign the bill.


Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

New Jersey Joins OffShore Wind Consortium

On June 8, 2010, Governor Chris Christie joined nine East Coast state governors in signing a Memorandum of Understanding with the U.S. Department of the Interior, which creates the Atlantic Offshore Wind Energy Consortium. The consortium is intended to foster federal-state cooperation for commercial wind development on the Outer Continental Shelf off the Atlantic coast.

According to U.S. Secretary of the Interior, Ken Salazar, wind could supply 20% of the nation’s electricity needs by 2030 and create a quarter of a million jobs.

New Jersey DEP Commissioner Bob Martin stated, “It opens the door of economic opportunity, allowing us to lure companies that manufacture the components of wind turbines, creating green jobs to harness the power of nature and provide our resident with a renewable energy supply.”

In a May 1, 2010, article, Abby Gruen of the Star Ledger, reports on 3 offshore wind projects currently underway off the coast of New Jersey, including a 20 megawatt project proposed for 3 miles off the coast of N.J. She notes that there is little opposition to wind energy in NJ in contrast to Massachusetts, where local opposition threatens its first offshore project.


Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

U.S. EPA Launches New Climate and Energy Website

On February 16, 2010, U.S. EPA launched a new State and Local Climate and Energy website which provides technical assistance, analytical tools, and outreach support to state, local, and tribal governments.


Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

U.S. Officially Agrees to Copenhagen Accord Target

The United States officially notified the UN that it will abide by the emission reduction goal of the Copenhagen Accords. U.S. climate envoy Todd Stern submitted America's target to the U.N. Framework Convention on climate change as part of a January 31 deadline negotiated in Copenhagen last year. Thus the U.S. promised that it will reduce global warming pollution about 17% below 2005 levels in the next decade. In doing so, Stern made a point of noting that the final figure could change depending on the outcome of U.S. legislation.


Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.