NJ warehouses being pushed toward solar power

Credit: (AP Photo/J Pat Carter)
File photo: a large number of solar panels are installed on a roof

New warehouses should have roofs ready for solar power equipment once Governor Phil Murphy signs a bill backed by the legislature, the commercial real estate industry and even some opponents of the current warehouse boom in New Jersey.

The bill (A-3352) is designed to encourage more solar panels or thermal units on top of the massive warehouses rising up across the state. Solar proponents see the trend as a golden opportunity for warehouse operators to reduce or eliminate their electricity bills and sell excess power back to the grid. All of the solar energy 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 a resounding margin of 46-24 in the Assembly and 25-13 in the Senate and will go into effect once Murphy signs it.

councilor. 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 encourages zero-emission power and helps the state meet its clean energy goals. If it becomes law, the measure would generate the energy without being a visual blemish on the landscape.

It ‘makes a lot of sense’

“It makes a lot of sense to put solar energy on the roofs of these things,” Kennedy said. “It’s not invasive, because it’s in a landscape where you see these solar panels that don’t fit the area. They generate enough power to minimize electricity costs in the warehouse, and the rest goes back to the grid, so it’s a win-win situation.

“There are costs involved, but you get your money back. In some cases, you can have an electricity bill of $30,000 a month, and suddenly you don’t have one,” he said.

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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 its 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 “wouldn’t 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 pressured by solar companies and the New Jersey Board of Public Utilities to install solar power on their warehouses, McGuinness said. The solar companies generate revenue for themselves and the warehouse owners, who may then be able to pass cost savings on to tenants, he said. On the BPU’s part, it is encouraging solar power generation in pursuit of New Jersey’s clean energy goals.

Peak in e-commerce boosts warehouse development

A wave of e-commerce is fueling the battle for warehouse space to store an avalanche of goods ordered online. Some new warehouses have been built on previously undeveloped sites, prompting critics to warn against “warehouse expansion.”

A survey by commercial real estate company Newmark found that 11.1 million square feet of warehouse space was leased in northern and central New Jersey in the first quarter of 2021, the strongest growth in 20 years.

Micah Rasmussen, a Rider University professor who led a successful community campaign earlier this year against a planned warehouse in Upper Freehold, Monmouth County, said the bill does not address concerns about sprawl or traffic congestion. But he said the prospect of solar-powered warehouses is tastier than those that aren’t.

“Double use of vacant land is better than single use,” he said. “This doesn’t mean that every project has to be approved simply because it’s solar ready, but serving a public purpose, such as increasing our production of renewable energy, does help.”

If the bill becomes law, developers of solar-powered warehouses will argue that approvals should be less stringent because the new buildings will also serve a public purpose, Rasmussen predicted.

“I wouldn’t go that far — after all, these aren’t schools or hospitals,” he said. “But to me it’s better than not getting any public value from developing virgin land.”

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