Unlocking New Revenue Opportunities For Commercial Real Estate Owners: A Beginner’s Guide To Community Solar Rooftop Leasing In New Jersey
If you own or manage buildings in New Jersey with 30,000 sq.ft. or more of rooftop space, you can rent your rooftop space for solar and generate long-term income through New Jersey’s community solar program. Sound too good to be true? It’s not. There are hundreds of property owners leasing their roofs for solar now, with many others eager to participate.
Maybe you’re interested in exploring a rooftop solar lease but are confused about energy acronyms and the maze of state energy program rules and deadlines? If so, you’re not alone. Read on for a beginner’s guide to community solar rooftop leasing in New Jersey.
What is Community Solar?
Community solar is a model that allows multiple individuals or businesses to share the benefits of solar energy without installing panels on their own properties. Instead, solar arrays are installed on a central location, often the rooftop of a commercial/industrial building, and the energy generated is sold to subscribers in the community – including those who rent or do not have a suitable roof for a solar system.
Community solar allows building owners to lease their roofs to solar companies, who then develop, own, and operate a solar energy system on their property. The landlord receives lease payments for 20 to 35 years, and the solar company owns and maintains the solar system. Community solar is a win-win, providing solar benefits to low-income communities while also creating revenue-generating opportunities for property owners.
Community Solar Program in NJ
In New Jersey, the Community Solar Energy Program (CSEP) is administered by the Board of Public Utilities (BPU), with PSEG, JCP&L, ACE, and O&R as participating utilities. This program was made permanent in 2023, after 5 years and nearly 245 megawatts (MW) of installed solar across the state through the successful pilot programs.
The new CSEP program significantly expands the state’s community solar capacity, having already awarded 225 MW in 2023, with an additional 275 MW allocated for Energy Year (EY) 2024 (June 1, 2023 – May 31, 2024), an additional 250 MW announced for Energy Year 2025 (June 1, 2024-May 31, 2025), and 150 MW each year thereafter.
Understanding Program Capacity, Grid Capacity, and Interconnection:
The success of your community solar project hinges on understanding program and electrical grid capacity limitations. Community solar programs often operate under capacity-based systems with program caps limiting the total number of megawatts of solar energy produced by participating projects (aka capacity). New Jersey is one of the states with program caps, and the high demand for community solar is filling these caps rapidly.
Electrical grid capacity is equally crucial. An electrical grid’s capacity is limited and once a utility zone reaches maximum capacity in a specific area, no more solar installations can be added. To know if your solar array can be accommodated, submitting an interconnection application is essential. It’s a critical step in both the solar development and CSEP application process, with New Jersey’s CSEP program requiring an approved interconnection application for projects over 1MW.
Given the overwhelming interest in community solar, it’s essential to submit a project’s interconnection application as soon as possible. Typically, it takes 2-4 months to gain approval from the local utility, and in some cases where a detailed impact study is required (mostly for larger systems), the timeline for approval can be up to 8-10 months.
CSEP application requirements and deadlines
There are many requirements for submission into the CSEP program. Commercial real estate owners must provide property surveys and owner’s consent to the solar developer submitting town permit applications, and to submit their projects into the program.
Signed lease agreements are another important part of the process, allowing the solar developer to obtain “site control” which is required to apply for various permits and interconnection application.
The full CSEP application checklist can be found here. An experienced solar developer will manage the application submission for you.
Bottom Line: If you want to secure a spot in the next application round, the time to act is now.
The New Jersey Community Solar Energy Program is a game-changer for commercial real estate owners. By leveraging your roof space, you not only unlock new revenue streams but also contribute to a sustainable future. With the next application period opening by June 2024, now is the time to partner with an experienced solar developer. With over 400 megawatts of solar energy projects deployed totaling over $1 billion in capital investment and representing over 40 million square feet of roof space, Solar Landscape is the leading commercial rooftop and community solar developer in the U.S.
We have the experience, team, and track record of success to help you transform your roof into profitable tenant space through the community solar program.
