New warehouses would be required to have roofs ready for solar power generating equipment once Gov. Phil Murphy signs a bill backed by the Legislature, the commercial real estate industry, and even some opponents of New Jersey’s current warehouse boom.
The bill (A-3352) is designed to encourage more solar panels or thermal units on top of the vast warehouses springing up across the state. Supporters of solar see the trend as a golden opportunity for warehouse operators to reduce or eliminate their electricity bills and sell any excess power back to the grid. All solar power generated would also help the state reach Murphy’s goal of 100% clean energy by 2050.
The measure, which would apply to new warehouses of 100,000 square feet or more, was passed in early June by resounding margins of 46-24 in the Assembly and 25-13 in the Senate and will become effective as soon as Murphy signs it.
Assemblyman. James Kennedy (D-Middlesex), the bill’s lead sponsor, said he expected Murphy to sign it but didn’t know when that would happen. He said many lawmakers voted for this because the bill incentivizes emissions-free power and helps the state meet its clean-energy goals. If it becomes law, the measure would generate the energy without being a visual blot on the landscape.
It ‘makes a lot of sense’
“Doing solar on the roofs of these things makes a lot of sense,” Kennedy said. “It’s not invasive as it is in a landscape where you see these solar panels that are out of character for the area. They generate enough power to minimize the cost of electricity in the warehouse, and then the balance of it goes back to the grid, so it’s a win-win.
“There’s a cost to it but you get your money back. In some cases, you can have a $30,000 a month electric bill, and you suddenly don’t have one,” he said.
Mike McGuinness, chief executive of NAIOP New Jersey, a trade association for commercial real estate developers, said his group supports the bill, and noted that some of his members are already building solar-ready warehouses.
McGuinness said warehouses with solar-ready roofs are easier to lease than those without but even the latter kind “would not be a deal breaker” given the current strong demand for warehouse space in New Jersey. A solar roof comes with the infrastructure that allows the tenant to quickly install photovoltaic panels solar-thermal units.
Developers are already being pressed by solar companies and the New Jersey Board of Public Utilities to install solar on their warehouses, McGuinness said. The solar companies are generating revenue for themselves and the warehouse owners who may then be able to pass cost-savings on to tenants, he said. For the BPU’s part, it is encouraging solar generation in pursuit of New Jersey’s clean-energy goals.
Surge in e-commerce drives warehouse development
A surge in e-commerce is driving the scramble for warehouse space to store an avalanche of goods ordered online. Some new warehouses are built on previously undeveloped sites, prompting critics to warn of warehouse “sprawl.”
A survey by the commercial real estate firm Newmark found 11.1 million square feet of warehouse space were leased in northern and central New Jersey in the first quarter of 2021, the strongest growth for 20 years.
Micah Rasmussen, a Rider University professor who led a successful community campaign against a planned warehouse in Upper Freehold, Monmouth County earlier this year, said the bill doesn’t address concerns about sprawl or traffic congestion. But he said the prospect of solar-ready warehouses is more palatable than those that are not.
“A double use of undeveloped land is better than a single use,” he said. “This doesn’t mean every project should be approved simply because it’s solar-ready, but serving a public purpose like increasing our renewable energy production does help.”
If the bill becomes law, developers of solar-ready warehouses will start to argue that approvals should be less rigorous because the new buildings will also serve a public purpose, Rasmussen predicted.
“I wouldn’t go that far — these are not schools or hospitals, after all,” he said. “But for me, getting any public value from the development of undeveloped land is better than none.”