New Jersey continues to explore ways to encourage renewable energy. Since our renewable energy seminar last fall, the Legislature passed and the Governor signed seven renewable energy bills, which we summarize below. All Chapter references are to the Laws of 2009.

Chapter 146 amends the Municipal Land Use Law, specifically by expanding the definition of Inherently Beneficial Use to include a wind, solar or photovoltaic energy facility or structure.

Chapter 213 contains several incentives for renewable energy projects — solar, wind and biomass — on farmland. The new law is notable because it includes biomass energy as a renewable energy type to be encouraged. Biomass is defined as an agricultural crop, crop residue, or agricultural byproduct that is cultivated, harvested or produced on the farm and used to generate energy in a sustainable manner. For preserved farmland, the biomass energy must be produced on the farm where the biomass is produced. Otherwise, biomass energy includes energy produced from biomass material directly from the farm where it was cultivated, harvested or produced. The new law allows the owner of preserved farmland to construct and operate these renewable energy systems on either the preserved or unpreserved portion of the farmland under certain conditions. The conditions include: (1) no interference with the agricultural use of the land; (2) ownership of the system by the landowner; (3) provide energy directly to the farm or reduce energy costs to the farm through net metering; and (4) energy production limited to energy demand for previous calendar year plus 10 percent. Other approvals and conditions are contained in the new law.

Chapter 213 also amends the Right to Farm Act to specify that energy generated from solar, wind or biomass projects is a permissible activity. The State Agriculture Development Committee and BPU are to work together to develop guidelines for biomass energy projects on farms. The new law also contains specific provisions as to how farmland used for, and income generated from, such renewable energy projects can be considered under the Farmland Assessment Act. We can provide more details to those with farmland holdings and specific questions concerning this new law.

Chapter 239 establishes a Solar and Wind Energy Commission to study the feasibility of solar and wind energy projects on state owned property. The Commission is given one year after its formation to submit a report concerning the financial viability of solar or wind projects on state land or buildings, and their impacts on property values, land use, planning and development and environmental factors. While the Commission's investigation is limited to state land, its findings could provide useful information as to the feasibility of these renewable energy projects on private property throughout the state.

Chapter 240 expands the class of "on-site generation facilities". Currently, the facility must be located on the property, or on property contiguous to the property, on which the end user is located, except that the two properties may be separated by an easement, public thoroughfare, transportation, or utility-owned right-of-way. Under the new law, if an end use customer is purchasing thermal energy services produced by a generation facility for use in heating or cooling, or both, the facility shall be considered an on-site generation facility with respect to that customer, regardless of the where the user is located.

The Bill also incorporates a definition of "co-generation," which includes combined heat and power and clarifies that a cogeneration facility is not a public utility. Additional provisions clarify applicability of "line charges" to off-site thermal energy services customers, extend the sales tax exemption for sales of energy by cogeneration facilities and mandate the use of existing distribution network for delivery of co-generation electric power to thermal energy services customers. We can provide more details to those with specific cogeneration issues.

Chapter 244 prohibits municipalities from adopting ordinances that "unreasonably" limit the installation or operation of small wind energy systems. The new law directs the director of the Division of Code Enforcement in the Department of Community Affairs, in consultation with the Department of Environmental Protection, to promulgate a technical bulletin, including model municipal ordinances, regarding the construction of small wind energy systems.

Chapter 289 is the "Solar Energy Advancement and Fair Competition Act." The act codifies the Board of Public Utilities' solar energy portfolio standard by directing the BPU to establish a schedule, beginning with energy year 2011 and continuing through energy year 2026 and beyond, for the minimum purchase requirements for solar power by all energy suppliers. The act decouples these annual energy targets from statewide energy load by expressing the targets in gigawatt hours rather than as a percentage of total load. The act further directs the BPU to adopt a parallel, 15-year schedule for Solar Alternative Compliance Payments (paid by suppliers in the event they do not purchase an adequate amount of solar power). Noncompliance penalties are to be rebated to electric customers.

The act removes so-called "developer caps" and other limits on competition and, moreover, directs the BPU to implement its responsibilities in such a way as to place greater reliance on competitive markets. And the act codifies recent decisions by the BPU by authorizing electric utilities to offer long-term contracts, loans and other forms of financing for the purchase of solar renewable energy certificates.

Chapter 302 authorizes matching grants of up to $5 million to counties and municipalities for the redevelopment of contaminated sites for renewable energy generation. The new law will allocate funds on an annual basis from the Hazardous Discharge Site Remediation Fund for up to 75 percent of the cost of the remedial action.