Permits dual-use solar energy projects to participate in community solar program.*

S3939 2R

[Second Reprint]

SENATE, No. 3939

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 12, 2026

Sponsored by:

Senator� ANDREW ZWICKER

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Senator� LINDA R. GREENSTEIN

District 14 (Mercer and Middlesex)

Assemblyman� WILLIAM W. SPEARMAN

District 5 (Camden and Gloucester)

Assemblyman� CLINTON CALABRESE

District 36 (Bergen and Passaic)

Assemblywoman� HEATHER SIMMONS

District 3 (Cumberland, Gloucester and Salem)

Co-Sponsored by:

Senator Diegnan, Assemblywoman Katz, Assemblymen
Karabinchak, Kearney, Assemblywomen Brennan and Bagolie

SYNOPSIS

���� Permits dual-use solar energy projects to participate
in community solar program.

CURRENT VERSION OF TEXT

���� As reported by the Senate Budget and Appropriations
Committee on June 28, 2026, with amendments.

��

An Act
concerning the community solar energy program
2
and
dual-use solar energy projects,
2
and amending
P.L.2018, c.17
2
and P.L.2021, c.170
2
.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 5 of P.L.2018,
c.17 (C.48:3-87.11) is amended to read as follows:

���� 5.��� a.� No later than 210
days after the date of enactment of P.L.2018, c.17 (C.48:3-87.8 et al.), the
Board of Public Utilities shall adopt, pursuant to the �Administrative
Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations
establishing a �Community Solar Energy Pilot Program� to permit customers of an
electric public utility to participate in a solar energy project that is
remotely located from their properties but is within their electric public
utility service territory to allow for a credit to the customer's utility bill
equal to the electricity generated that is attributed to the customer's
participation in the solar energy project.

���� b.��� The rules and
regulations developed by the board shall establish:

���� (1)� a capacity limit for
individual solar energy projects to a maximum of five megawatts per project;

���� (2)� an annual capacity limit
for all solar energy projects under the pilot program;

���� (3)� geographic limitations
for solar energy projects and participating customers;

���� (4)� a minimum number of
participating customers for each solar energy project;

���� (5)� the value of the credit
on each participating customer's bill;

���� (6)� standards to limit the
land use impact of a solar energy project as required in subsection r. of
section 38 of P.L.1999, c.23 (C.48:3-87);

���� (7)� the provision of access
to solar energy projects for low and moderate income customers;

���� (8)� standards to ensure the
ability of residential and commercial customers to participate in solar energy
projects, including residential customers in multifamily housing;

���� (9)� standards for connection
to the distribution system of an electric public utility; and

���� (10) provisions to minimize
impacts to the distribution system of an electric public utility.

���� c.��� The board shall make
available on its Internet website information on solar energy projects whose
owners are seeking participants.

���� d.��� The board shall
establish standards and an application process for owners of solar energy
projects who wish to be included in the Community Solar Energy Pilot Program.
The standards for the Community Solar Energy Pilot Program shall include, but
need not be limited to, a verification process to ensure that the solar energy
projects are producing an amount of energy that is greater than or equal to the
amount of energy that is being credited to its participating customer's
electric utility bills pursuant to subsection b. of this section, and consumer
protection measures.� Projects approved by the board shall have at least two
participating customers.

���� The board may restrict
qualified solar energy projects to those located on brownfields, landfills,
areas designated in need of redevelopment, in underserved communities, or on
commercial rooftops.

���� e.��� Subject to review by the
board, an electric public utility shall be entitled to full and timely cost
recovery for all costs incurred in implementation and compliance with this
section.

���� f.���� No later than 36 months
after adoption of the rules and regulations required pursuant to subsection b.
of this section, the board shall adopt rules and regulations, pursuant to the
�Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), to convert
the Community Solar Energy Pilot Program to a permanent program.� The board
shall adopt rules and regulations for the permanent program that set forth
standards for projects owned by special purpose entities and nonprofit
entities.� The rules and regulations shall also:

���� (1)� limit the capacity of
each solar energy project to a maximum of five megawatts;

���� (2) (a) establish a goal for
the conditional registration of 225 megawatts of solar energy projects prior to
June 1, 2024, with an additional 275 megawatts prior to June 1, 2024 if
qualified applications exceed 225 megawatts, and an additional 250 megawatts
prior to June 1, 2025 if qualified applications exceed 500 megawatts; and

���� (b)� stipulate that the board
shall open registration, by October 1, 2025, for 3,000 megawatts of solar
energy projects in addition to the conditional registration goals already
established pursuant to this paragraph.� The board shall accept and approve
registrations pursuant to this subparagraph until the earlier of December 31,
2029 or such time as the 3,000 megawatts of solar energy projects are
completely registered.� The board shall set SREC-II levels and guaranteed bill
credit discount levels as appropriate to enable the complete registration of
3,000 megawatts of solar energy projects by December 31, 2029;

���� (3)� set geographic
limitations for solar energy projects and participating customers;

���� (4)� provide for a minimum
number of participating customers for each solar energy project;

���� (5)� require the provision of
access to solar energy projects for low and moderate income customers;

���� (6)� establish standards to
ensure the ability of residential and commercial customers to participate in
solar energy projects, including residential customers in multifamily housing;

���� (7)� establish a method for
determining the value of the credit on each participating customer's bill;

���� (8)� establish timeframes for
the credit available to the customer;

���� (9)� establish standards and
methods to verify solar electric energy generation on a monthly basis for a
solar energy project;

���� (10)� establish standards
consistent with the land use provisions for solar energy projects as provided
in subsections r., s., and t. of section 38 of P.L.1999, c.23 (C.48:3-87);

���� (11)� establish standards,
fees, and uniform procedures for solar energy projects to be connected to the
distribution system of an electric public utility;

���� (12)� minimize impacts to the
distribution system of an electric public utility;

���� (13)� require monthly
reporting requirements for the operators of solar energy projects to the
electric public utility, project customers, and the board;

���� (14)� require reporting by the
electric public utility to the operator of a solar energy project on the value
of credits to the participating customer's bills;

���� (15)� require transferability,
portability, and buy-out provisions for customers who participate in community
solar energy projects;

���� (16)� establish requirements
and standards that provide for the auditing and enforcement of a solar energy
project's compliance with the provisions of this section and the rules and
regulations adopted pursuant thereto, including the project's compliance with
commitments related to providing access to solar energy projects to low- and
moderate-income customers and bill crediting;
2
[
and
]
2

���� (17)� allow, in a form and
manner to be determined by the board, low- and moderate-income residential
customers to self-attest to the customer's income as an acceptable income
verification method for participation in a solar energy project
2
; and

����
(18) notwithstanding
subsection d. of this section and paragraph (10) of this subsection, after the
effective date of P.L.��� , c.���� (C. )
(pending before the Legislature as this bill) allow the participation of
dual-use solar energy projects with a maximum capacity of five megawatts that
are approved by the board as part of the dual-use solar energy pilot program or
the successor dual-use solar energy permanent program established by the board
pursuant to section 1 of P.L.2021, c.170 (C.48:3-87.13), provided that the
board may specify certain categories or types of dual-use solar energy projects
that are not eligible for participation in the community solar energy program
2
.

���� g.���
2
(1)
Only dual-use solar energy projects that apply after the effective date of
P.L.��� , c.���� (C.������� ) (pending before the Legislature as this bill) for
participation in the dual-use solar energy pilot program or a successor
dual-use solar energy permanent program established by the board pursuant to
section 1 of P.L.2021, c.170 (C.48:3-87.13) and are approved to participate in
either program shall be eligible to participate in the permanent community
solar energy program.

����
(2) A dual-use solar energy
project participating in the community solar energy program shall be required
to comply with all requirements of both the applicable dual-use solar energy
program and the community solar energy program that are in effect at the time
of the dual-use solar energy project�s registration in the respective programs.

����
h.� The board may, in its
discretion, establish different incentive levels within the community solar
energy program for different categories of solar energy projects based on
project characteristics including, but not limited to, the project size and the
pre-existing land use and land cover of the property on which the solar energy project
is sited.

����
i.
2
As used
in this section:

����
�Dual-use

1
[
or
agrivoltaics solar facilities�
]

solar energy project�
1

means

1
[
energy
generation facilities that produce electric power from solar photovoltaic
panels located on unpreserved farmland in agricultural or horticultural
production that ensures the continued simultaneous use of the land below and
adjacent to the panels for agricultural or horticultural production
]

the same
as that term is defined in section 1 of P.L.2021, c.170 (C.48:3-87.13)
1
.

���� �Solar energy project� means a
system containing one or more solar panels and associated equipment.

���� �Solar panel� means an
elevated panel or plate, or a canopy or array thereof, that captures and
converts solar radiation to produce electric power, and is approved by the
board to be included in the Community Solar Energy Pilot Program.

���� �Solar power� includes flat
plate, focusing solar collectors, or photovoltaic solar cells and excludes the
base or foundation of the panel, plate, canopy, or array.

����
2
[
h. Notwithstanding
the provisions of this section or any other law, rule, regulation, or order to
the contrary,

1
a
1

dual-use

1
[
or
agrivoltaics solar facilities
]

solar energy project
1

shall be eligible for participation in the community solar energy program
and shall be admitted, upon registration, into the community solar market

segment of the small solar
facilities incentive program established pursuant to section 3 of P.L.2021,
c.169 (C.48:3-116).
]
2

(cf: P.L.2025, c.135,
1
[
s.5
]

s.1
1
)

����
2
2.�� Section
1 of P.L.2021, c.170 (C.48:3-87.13) is amended to read as follows:

���� 1. a. No later than 180 days
after the date of enactment of P.L.2021, c.170 (C.48:3-87.13 et al.), the Board
of Public Utilities, in consultation with the Secretary of Agriculture, shall
adopt, pursuant to the "Administrative Procedure Act," P.L.1968,
c.410 (C.52:14B-1 et seq.), rules and regulations establishing a "Dual-Use
Solar Energy Pilot Program" to permit the construction, installation, and
operation of dual-use solar energy projects that are connected to the
distribution or transmission system owned or operated by a New Jersey public
utility or local government unit and located on unpreserved farmland, while
maintaining the affected land in active agricultural or horticultural use.

���� b.��� The rules and
regulations developed by the board, in consultation with the Secretary of
Agriculture, for the Dual-Use Solar Energy Pilot Program shall establish:

���� (1)� a 10 megawatt, as
measured in direct current, capacity limit for each individual dual-use solar
energy project;

���� (2)�
[
annual
]

pilot program
application period
capacity targets, such that the total capacity of all
dual-use solar energy projects approved under the pilot program shall not
exceed 200 megawatts, as measured in direct current, for all dual-use solar
energy projects approved under the pilot program, except as otherwise provided
pursuant to subsection e. of this section;

���� (3)� financial incentives
available to dual-use solar energy projects approved pursuant to the pilot
program
, which financial
incentives may be
designed to stack with any incentives available in the board�s other solar
energy programs, provided that any financial incentives designed to stack are
set at a level that takes into account both the additional costs associated
with being a dual-use solar energy project and all the revenue streams
available to the dual-use solar energy project in the board�s other solar
energy programs
;

���� (4)� a prohibition on siting a
dual-use solar energy project on prime agricultural soils and soils of
Statewide importance, as identified by the United States Department of
Agriculture's Natural Resources Conservation Service, which are located in
Agricultural Development Areas certified by the State Agriculture Development
Committee, unless the project is in association with a research study
undertaken in coordination with a New Jersey public research institution of
higher education, as approved by the board in consultation with the Secretary
of Agriculture;

���� (5)� a prohibition on siting a
dual-use solar energy project on any of the following unless the board, in
consultation with the Department of Environmental Protection and the Secretary
of Agriculture, grants a waiver based on unique factors that make the project
consistent with the character of the specific parcel:

���� (a)�� land located within the
preservation area of the pinelands area, as designated in subsection b. of
section 10 of P.L.1979, c.111 (C.13:18A-11);

���� (b)� land designated as forest
area in the pinelands comprehensive management plan adopted pursuant to
P.L.1979, c.111 (C.13:18A-1 et seq.);

���� (c)�� land designated as
freshwater wetlands, as defined pursuant to P.L.1987, c.156 (C.13:9B-1 et
seq.), or coastal wetlands, as defined pursuant to P.L.1970, c.272 (C.13:9A-1
et seq.); or

���� (d)� land located within the
Highlands preservation area as designated in subsection b. of section 7 of
P.L.2004, c.120 (C.13:20-7);

���� (6)� the requirement that the
land on which the dual-use solar energy project is installed continues to be
actively devoted to agricultural or horticultural use;

���� (7)� the requirement that the
project comply with all applicable federal, State, or local laws, rules,
regulations, or ordinances;

���� (8)� an application process
for owners who wish to develop a dual-use solar energy project as part of the
pilot program, including such fees or deposits as shall be determined by the
board; and

���� (9)� criteria, consistent with
the provisions of paragraph (1) of subsection c. of this section, for
evaluating and scoring proposed projects to determine which projects should be
allowed to participate in the pilot program and be awarded incentives pursuant to
paragraph (3) of this subsection.

���� c. (1) An owner proposing a
dual-use solar energy project shall submit an application to the board before
constructing, installing, or operating the project.� The board shall consult
with the Secretary of Agriculture in the review and approval of all dual-use
solar energy projects under the Dual-Use Solar Energy Pilot Program.� In
reviewing and making decisions on dual-use solar energy projects, the board and
secretary shall give consideration to criteria including, but not limited to:

���� (a)�� proposals for monitoring
the quality of agricultural or horticultural use of the land;

���� (b)� the incentive level
sought by the applicant;

���� (c)�� geographic location;

���� (d)� interconnection planning;

���� (e)�� proposals for minimizing
negative impacts to farmland;

���� (f)�� proposals to address
decommissioning;

���� (g)� proposals for addressing
stormwater runoff and other environmental issues;

���� (h)� technical feasibility;

���� (i)�� technical innovation;

���� (j)�� the quality of any
research committed to during the evaluation period; and

���� (k)� any other criteria as may
be deemed advisable by the board.

���� The review shall also consider
whether the selected projects are of varying sizes, and, collectively, involve
diverse types of agricultural and horticultural production.� The board, in
consultation with the Secretary of Agriculture, shall, within 180 days after
receipt, approve, disapprove, or approve with conditions an application
submitted pursuant to this section.

���� (2)� An owner who receives
approval from the board pursuant to this section shall obtain all necessary
permits and other approvals as may be required pursuant to federal, State, or
local law, rule, regulation, or ordinance, prior to the construction of the dual-use
solar energy project.

���� d.��� The Secretary of
Agriculture may request that the board suspend or revoke an approval issued
pursuant to this section for a violation of any term or condition of the
approval or any provision of this section.

���� e.��� The Dual-Use Solar
Energy Pilot Program shall continue for 36 months after the adoption of the
rules and regulations required pursuant to subsection a. of this section,
except that the board may extend the pilot program by no more than two
additional 12-month periods if the board, in consultation with the Secretary of
Agriculture, determines that such extensions are necessary to adequately
evaluate the performance of the projects selected for construction as part of
the Dual-Use Solar Energy Pilot Program.� If the board extends the Dual-Use
Solar Energy Pilot Program, it may increase the total capacity limit of all
projects under the program by no more than 50 megawatts, as measured in direct
current, per additional 12-month period.

���� f.���� Notwithstanding any
law, ordinance, rule, or regulation to the contrary, a dual-use solar energy
project approved pursuant to this section shall be a permitted use within every
municipality.

���� g.��� No later than 36 months,
or no later than 48 or 60 months if applicable due to extensions of the
Dual-Use Solar Energy Pilot Program pursuant to subsection e. of this section,
after adoption of the rules and regulations required pursuant to subsection a.
of this section, the board, in consultation with the Secretary of Agriculture,
shall adopt rules and regulations, pursuant to the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to convert the
Dual-Use Solar Energy Pilot Program to a permanent program as part of the
permanent successor to the solar incentive program established pursuant to
P.L.2021, c.169 (C.48:3-114 et al.).� The rules and regulations for the
permanent program shall set forth standards for dual-use solar energy projects
that take into account the results of the pilot program and any research
studies on the efficacy of dual-use solar energy in New Jersey, and shall
include, but not be limited to:

���� (1)� a capacity limit for
individual dual-use solar energy projects;

���� (2)�
[
a
]
total
[
annual
]
capacity
[
limit
]

limits to
be set on an annual or other periodic basis
;

���� (3)� provisions to protect New
Jersey's prime agricultural soils and soils of Statewide importance, as
identified by the United States Department of Agriculture's Natural Resources
Conservation Service, which are located in Agricultural Development Areas certified
by the State Agriculture Development Committee, and provisions to protect the
State's agricultural and horticultural diversity;

���� (4)� standards for:�
installation and decommissioning techniques that minimize negative impacts to
farmland, which may include the posting of a performance bond for
decommissioning; impervious coverage; and water management, including, but not
limited to, water recapture and filtration;

���� (5)� provisions to ensure the
continued active agricultural or horticultural use of land on which dual-use
solar energy projects are installed;

���� (6)� siting criteria and
restrictions, which may differ from those established pursuant to section 6 of
P.L.2021, c.169 (C.48:3-119) to the extent necessary to accomplish the purposes
of the dual-use solar energy program;
[
and
]

���� (7)� an application process,
including such fees, escrows, or deposits as shall be determined by the board
;
and

����
(8) an incentive structure
designed to support the development of dual-use solar energy projects in New
Jersey, taking into account the benefits and costs to ratepayers and the State�s
electric transmission and distribution system, and the costs and revenue
streams associated with different project types
.

���� h.��� As used in this section:

���� "Dual-use solar energy
project" means the energy generation facilities, structures, and equipment
for the production of electric power from solar photovoltaic panels located on
unpreserved farmland in agricultural or horticultural production that ensures
the continued simultaneous use of the land below and adjacent to the panels for
agricultural or horticultural production.

���� "Owner" means the
owner of the unpreserved farmland, the owner of the dual-use solar energy
project, or a representative duly authorized to act on the owner's behalf.

���� "Preserved farmland"
means the same as the term is defined in section 4 of P.L.2009, c.213
(C.54:4-23.3c).

���� "Unpreserved
farmland" means any land that is valued, assessed, and taxed pursuant to
the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et
seq.), and is not preserved farmland.
2

(cf: P.L.2021, c.170, s.1)

����
2
[
2.
]

3.
2
���� This
act shall take effect immediately.