The new laws signed by Gov. Phil Murphy Friday direct regulators to expand community solar generation and offer incentives for large-scale battery storage plants. (Hal Brown for New Jersey Monitor)
Gov. Phil Murphy signed two bills meant to boost renewable energy generation in New Jersey on Friday, as tightening supply and surging demand push electricity prices to record levels with even more hikes on the horizon.
The first bill allows state energy regulators to register an additional 3,000 megawatts of community solar capacity, while the other would create an incentive program to stand up 1,000 megawatts of battery storage by 2030.
“Today, there are roughly 650,000 homes throughout the Garden State that are powered by solar energy. With these bills, we’re going to increase that number to 1 million homes by 2028,” Murphy said during a bill signing at a union hall in Lawrenceville. “That’s an increase of over 50% in just three years. That means cheaper, cleaner energy for tens of thousands of New Jerseyans at a faster pace than ever before.”
Democratic and labor officials praised the expansion of community solar, which allows homeowners and businesses to invest in nearby small-scale solar farms to receive credits on their power bills.
Community solar is meant to provide solar access to individuals and firms that are unable to access rooftop and other solar systems because they rent, occupy a multi-unit building, or lack roofs that can host a solar system.
New Jersey’s solar capacity has more than doubled under Murphy’s two terms as governor, rising from 2.4 gigawatts to 5.2 gigawatts, and its boosters said community solar delivers guaranteed savings for those enrolled.
“Over 28,000 New Jersey residents are subscribed and are saving money through the community solar program due to the guaranteed bill savings of at least 15%,” said Christine Guhl-Sadovy, president of the New Jersey Board of Public Utilities.
The state’s foray into battery storage would be its first, and New Jersey officials are hoping to make the state a leader in the field. Though battery storage plants do not generate electricity themselves, they can store power generated at points of low demand and release it when demand is high, easing price peaks.
To apply for the incentives, storage projects must have a completed interconnection agreement, or developers must have conducted certain interconnection studies with PJM, the states’ grid operator, and be expected to be operational by Dec. 31, 2030.
Eligible plants could receive up to $10 million in incentives, at a rate of $100,000 per megawatt. Those awards would be paid over 15 years, with the first payment due only after a project becomes operational.
Some experts have urged the state to pursue storage projects because they come online faster than other types of generation. Nuclear plants, for example, can take a decade to build. Some storage projects have been stood up in less than two years.
Incentives would initially be funded by $60 million in revenue from the state’s societal benefits charge, a roughly 3% surcharge on energy bills used to fund energy assistance, clean energy, and social programs, among other things.
Sen. Bob Smith (D-Middlesex) on the Senate floor on June 30, 2025. (Dana DiFilippo | New Jersey Monitor)
“This money is not money that’s being added to the rates of ratepayers. You don’t want the solution to be part of the aggravation to our citizens,” said Sen. Bob Smith (D-Middlesex), the storage bill’s prime Senate sponsor.
The push for new generation comes as New Jersey and the 12 other states on PJM’s grid, along with others throughout the country, see surges in electricity prices driven mostly by artificial intelligence data centers’ mammoth electricity demands. Officials have approved bill credits and deferred a portion of some electricity bills to ease the impact of rate hikes.
Democratic officials have blamed PJM for being too slow to connect renewable projects to its grid, while Republicans have charged Murphy’s wind-heavy energy agenda is to blame.
Among other things, PJM’s rules prioritize projects with higher effective load-carrying capacity, a generation type’s ability to produce electricity at times of peak demand. Because they cannot operate at night and in adverse weather conditions, solar projects have by far the lowest rating on that scale — 8% for fixed-tilt and 11% for tracking solar, compared to 50% to 70% for storage projects and 60% to 78% for various gas types of plants.
The state’s offshore wind projects are stalled or abandoned after adverse economic conditions and a hostile regulatory posture at the federal level that has seen offshore wind leases and permits paused or withdrawn.
The federal government’s resistance to renewables could stall the investments officials hope the bills signed Friday would spur.
Provisions in the federal One Big Beautiful Bill Act require renewable projects to begin construction by July 4, 2026, or be in service by Dec. 31, 2027, to be eligible for two types of tax credits, one that pays a fixed amount for electricity generated and another that offsets capital investments for some projects.
The federal bill also made changes to program rules that will make it more difficult for projects that meet the time bar to qualify for credits.