New Jersey Green Building Legislation

In New Jersey, new construction, additions and certain renovation work are subject to the Uniform Construction Code Act and the regulations promulgated thereunder by the Department of Community Affairs.  The Uniform Construction Code (UCC) is divided into subcodes, which include, for example, a building code, a plumbing code, a fire prevention code, an electrical code and an energy subcode.  The energy subcode shall be based upon certain enumerated model codes or the International Energy Conservation Code (IECC).  In 2009, the UCC was amended to empower the DCA to adopt an energy subcode that exceeds national model code standards.  Specifically, the DCA Commissioner “[s]hall be authorized to amend the energy subcode to establish enhanced energy conservation construction requirements, the added cost of which may reasonably be expected to be recovered through energy conservation over a period of not more than seven years.”

On October 1, 2008, Governor Jon Corzine signed into law Senate bill S241, which creates a property tax exemption for the increase in value to real property that can be attributable to the installation of renewable energy systems.  Under the new law, a “renewable energy system” is defined as “[a]ny equipment that is part of, or added to, a residential, commercial, industrial, or mixed use building as an accessory use, and that produces renewable energy onsite to provide all or a portion of the electrical, heating, cooling, or general energy needs of that building.”  Exemptions from taxation do not become effective until the tax year following the year in which the subject property has been certified by the local enforcing agency (i.e. the building inspector) as a renewable energy system.

On March 31, 2009, Governor Jon S. Corzine signed into law the Residential Development Solar Energy Systems Act, which requires developers of residential developments containing 25 or more single-family dwelling units to disclose in advertising and offer to install solar energy systems.  The act requires the Department of Community Affairs (DCA) in consultation with the Board of Public Utilities to adopt regulations respecting the technical sufficiency of solar energy systems to be installed pursuant to the act and prescribes certain minimum standards.  For example, a solar energy system installed under the act shall have components that are new and shall have a manufacturer’s warranty of not less than 10 years.

On April 22, 2010, Governor Chris Christie signed Senate bill S921 into law, as P.L. 2010, c.4, which amends numerous state laws, including the Municipal Land Use Law which adds a new section that addresses the calculation of impervious coverage (i.e. pavement, buildings and other similar hard-scape surfaces).  Specifically, this new law requires that solar panels be excluded from the calculation of impervious coverage and defines the term “solar panel” to include “an elevated panel or plate, or a canopy or array thereof, that captures and converts solar radiation to produce power, [but] excludes the base or foundation of the panel, plate, canopy or array.”  This new provision will benefit small residential lots that are largely built-out and have maximized the impervious coverage allowed on site by local ordinance.

On May 5, 2010, Governor Chris Christie signed Senate bill S82 into law, as P.L. 2010, c.9, amending the Municipal Land Use Law to require that land development regulations, except those relating to heath and public safety, “[w]hich are in effect on the date of submission of an application for development shall govern the review of that application for development and any decision made with regard to that application for development.”  This new “time of application” rule will have the salutary effect of giving developers a measure of certainty as to the local regulatory landscape at the time they finish their land use planning and file their applications for development approvals and with the expectation that green land development regulations will proliferate now that municipalities have the express authority to include a green building practices and environmental sustainability element in their master plans, N.J.S.A. 40:55D-28b(16), it may save some green developers from having to redesign their projects.

The NJ Legislature is presently considering the creation of a property assessment clean energy (PACE) municipal financing program.  Under the proposed legislation, introduced as Senate bill S1406 on February 11, 2010, the New Jersey Economic Development Authority (EDA) in consultation with the Board of Public Utilities (BPU) is charged with providing money through low-cost sources of financing, such as qualified energy conservation bonds, to municipalities interested in loaning funds to property owners for the purchase of solar equipment.  Under the proposed legislation, property owners would pay back this loan subjecting their properties to a special assessment and transferring to the EDA any solar renewable energy certificates received from the BPU.  A bill identical to S1406 was introduced as A2502 in the NJ State Assembly on March 15, 2010.