New Jersey Gov. Phil Murphy signed legislation Thursday that will allow the state’s first offshore wind project to benefit from federal tax credits.

Murphy signed the bill, A5651, in a press conference at a new factory built by German manufacturer EEW to build monopiles for use in the foundations of offshore wind turbines. The Senate and the General Assembly passed the bill 21-14 and 46-30, respectively, on June 30 in the last session before the legislature recessed for the summer. The legislature will not return until after the November elections.

Unlike other states, New Jersey doesn’t allow wind developers to receive the benefits of tax credits awarded under federal laws such as the Inflation Reduction Act. Instead, the state receives the benefits for use to help ratepayers.

The new law allows the state’s first OSW project, Ocean Wind 1, to receive the tax credit benefits, but it does not allow other wind projects in the state to get the same benefits. (See NJ Lawmakers Back Ørsted’s Tax Credit Plea.)

Murphy hailed the bill as “absolutely critical to moving our entire offshore wind industry forward and cementing our leadership in this new industry.”

“I cannot emphasize this enough: We have a once-in-a-generation opportunity right now to bring tens of thousands of overwhelmingly union jobs and billions of dollars of investment to our state with offshore wind,” he said at the conference at the Port of Paulsboro, flanked by massive monopiles under preparation for eventual use in the foundations of a wind turbine. He said they were the first ever monopiles built on U.S. soil.

“New Jersey is literally building the foundation for our nation’s entire wind industry, and this bill will allow these projects to expand and create even more jobs,” he said.

The New Jersey Board of Public Utilities approved Ocean Wind 1, from Danish developer Ørsted, in 2019. The BPU also has approved the 1,148-MW Ocean Wind 2 and 1,510-MW Atlantic Shores. The state’s third solicitation, launched by the BPU in March, could result in the award of capacity totaling 4 GW or more. (See NJ Opens Third OSW Solicitation Seeking 4 GW+.)

A think-tank report published June 5 on the state’s rapidly growing OSW sector said the construction of a second phase of the EEW factory was “more than a year behind schedule” because of funding issues, in large part because Ørsted could not access the federal tax credits. Speaking before the legislature’s votes last month, the developer said federal tax credits were intended to advance industry development. The company said it already has invested $160 million in the EEW factory and “is poised to increase this investment.” (See NJ OSW Projects Face Public Funding Scrutiny.)

After the bill was passed, Atlantic Shores CEO Joris Veldhoven said in a statement that the approval “reaffirms the state’s commitment to offshore wind” and called on it to enact an “industry-wide solution, one that stabilizes all current projects including Atlantic Shores … the largest offshore wind project in the state of New Jersey.”

“We need immediate action that also supports the Atlantic Shores project,” he said.

Budget Signed, but Other Bills Remain

The OSW tax credit bill was one of several clean energy-related bills advanced by the legislature on June 30.

Murphy also last week signed a bill, S2024, that enacts a $54.3 billion state budget that includes a $40 million Green Fund that the governor said would “leverage both private capital and federal funds.” The governor announced the fund in February but since has said little about it; nor has the New Jersey Economic Development Authority (EDA), which will administer it. Murphy’s budget book at that time said the fund was designed to “attract up to $280 million in private capital to advance projects to advance the state’s new and bold environmental goals.” (See NJ Launches $80M Clean Energy Loan Fund for Small Business.)

The signed budget also contains an additional $10 million “to support the continued installation of EV charging infrastructure throughout the state,” according to a statement put out by Murphy’s office.

The legislature also sent to Murphy a bill, S3044, that would put in place the funding for the first year of a three-year, $45-million pilot program enacted in 2022 that will be the state’s most aggressive move into replacing diesel buses with electric-powered buses. The bill passed the Assembly with a 49-27 vote and the Senate by 26-9.

The 2022 bill, A1282, required the New Jersey Department of Environmental Protection (DEP) to create a program under which six districts or contractors each year would take students to school with electric buses to assess the reliability and effectiveness of using them in place of diesel-powered vehicles. The performance of the buses would be evaluated on factors such as costs, maintenance, fuel use and speed, and data would be collected and submitted to the DEP. (See Electric School Bus Pilot Awaits NJ Governor’s Signature.)

In a less divisive vote, the Senate on June 30 passed 37-0 a bill, S427, that would provide corporate business tax credits to incentivize building owners to retrofit their warehouses to be solar ready. The bill now is before the Assembly Environment and Solid Waste Committee.

Buildings must be at least 100,000 square feet in size and create a “solar-ready zone” that accounts for at least 40% of the space. The credit, which would be available once solar panels are installed on the roof, would be at maximum the lesser of two options: 50% of the cost incurred in retrofitting the building for solar or $250,000.

The Senate also voted 27-13 to pass a bill, S2185, that would require the BPU to develop a pilot program to provide incentives to developers and others that install energy storage systems, and then create regulations for a permanent program. The program would seek to help develop a range of storage, from customer-sited energy storage systems to larger systems connected to the grid. (See Clean Energy Bills Stack up in NJ Legislature.) The bill now will be heard by the Assembly Appropriations Committee.

The Assembly advanced a bill, A5442, that would direct the BPU to study how best to market and promote large-scale geothermal heat pump systems and look at the feasibility and benefits of mounting such a campaign. After the 76-1 vote, the bill now is before the Senate Environment and Energy Committee.