Credit: (AP Photo/J Pat Carter)

New Jersey ’s proliferation of warehouses may help the state meet its clean-energy goals if a bill to incentivize the installation of solar panels on rooftops becomes law. 

The measure would give warehouse owners a credit against their corporation business-tax bill for the cost of fitting buildings with equipment that is ready to take solar panels. The credit would be payable when the panels are installed. 

If it becomes law, the bill would complement an earlier law that required all new warehouses without completed permit approvals by July 1 to be solar-ready. The new measure would encourage the installation of solar panels on existing warehouses that were not covered by the previous law. 

Sen. Bob Smith (D-Middlesex), lead sponsor of the new measure, said it would create revenue for warehouse owners as well as generating emissions-free electricity for the warehouse and, if a surplus is generated, the wider grid. 

“At the end of the day, the solar is going to be a revenue source for the warehouse operator,” Smith  said. “In New Jersey, you are just starting to see solar get seriously involved in warehouses.” 

Smith, who chairs the Senate Environment and Energy Committee, said “hundreds of millions of square feet” of additional rooftop could be covered with additional photovoltaic cells generating free power if the new bill becomes law. 

The plan, Smith said, will help New Jersey become “the Saudi Arabia of solar.”

Warehouse owners are interested 

In an interview with NJ Spotlight News, Smith said his many conversations with warehouse owners and tenants indicate they are interested in the aims of the bill even if some are not immediately ready to install solar panels. 

“Change is hard,” he said. “They are very much interested. The world is changing as we sit on our chairs. Global warming is real. They know that federal and state governments are trying to change where society is. The fact that we are willing to help them get there is a big plus. 

“The tenants and owners don’t want to be behind the curve on this. They want to get into the 22nd century. They also have families that live in homes in New Jersey that they don’t want under water. It’s the right thing to do at the right time.” 

The amount of the proposed tax credit would not exceed $250,000 or half the cost of retrofitting an existing warehouse with a solar-ready zone — whichever is less, the bill says. A taxpayer may claim the credit for up to eight warehouses owned and operated by the same taxpayer. The total value of payable credits would be $25 million. 

Claimants would have to show state revenue officials that the solar panels had been installed before receiving the credit for the cost of the solar-ready zone, the bill says. 

For opponents of New Jersey’s warehouse boom, the potential of more state help for installing solar panels on their roofs may be a silver lining on a trend. Warehouse opponents have been largely powerless to stop the development because of municipal demand for the new tax revenue that comes with warehouses, and the state’s refusal to regulate the industry, given the state’s entrenched tradition of local rule over development. 

Opposition to warehouses

In the fourth quarter of 2022, 9.1 million square feet of warehousing were under construction in north and central New Jersey, adding to the millions of square feet already in operation, according to the latest data from Newmark, a commercial real estate firm. Still, the report said the industry faces a possible future slowdown because of growing opposition by some municipalities that are concerned about new truck traffic and the loss of open space, as well as several bills in the Legislature that would put new requirements on the industry. 

New Jersey requires 35% of energy sold in the state to come from renewable sources by 2025, rising to 50% by 2030, under its Renewable Portfolio Standard. 

In Elizabeth, the logistics company DHL Express recently announced the installation of a rooftop solar system that will generate more than 120% of electricity needs at its center there. The project, in partnership with the building owner, Prologis, consists of 1,194 solar panels, and is the company’s largest in New Jersey, said Bruce Marsh, a spokesman. 

“Elizabeth is an important facility for us, and we have been looking for ways of using more renewable energy,” he said. 

In the Legislature, the measure was unanimously approved by the Senate Environment and Energy Committee on Jan. 30, and now goes before that house’s Budget and Appropriations Committee. In the Assembly, the bill awaits a reading in the Environment and Solid Waste Committee.