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New Jersey Pushes Ahead on Prevailing-Wage Proposal

The Board of Public Utilities proposed a new regulation that would comply with legislation enacted last summer requiring prevailing wages to be paid for any project receiving financial assistance from the agency.

New Jersey is moving ahead to require contractors using state clean energy funds to pay prevailing wage for any projects involving solar and wind energy, a prospect some critics fear could have a chilling effect on efforts to promote renewable energy. It’s one of those rare instances where environmentalists and the business community have become political bedfellows.

The state Board of Public Utilities proposed a new regulation early this year that would comply with legislation enacted last summer requiring prevailing wages to be paid for any project receiving financial assistance from the agency. Proponents say it levels the playing field for companies seeking to get involved in the green economy, particularly for those employing unionized workers.

But foes, including environmental groups and business organizations, worry the requirement could increase the cost of some renewable energy projects by as much as one-third, which could discourage new investments in the sector. Typically, an average solar installer earns $25 to $30 per hour, but with prevailing wage it could run as high as $76 per hour.

The requirement does not apply to projects that rely on developer funding and solar energy renewable certificates. Most of the smaller or residential solar installations in New Jersey are expected to be funded that way because the state has largely abandoned a grant program in favor of a market-based solar program.

Given opposition from business interests, it remains to be seen whether the rule, promoted by the Corzine administration, will survive the 90-day review period for all pending state regulations Gov. Chris Christie promised during the campaign.

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