A bill that would require New Jersey utilities to offer building electrification incentive programs sparked more than two hours of heated debate June 10 as supporters cast it as a way to give consumers the option to embrace electric appliances and opponents questioned whether it would really cut emissions. 

Sen. Bob Smith, chair of the Senate Environment and Energy Committee, opened the hearing by saying the bill, S249, would be discussed but not voted on to solicit input on additional changes. He sought to head off anticipated misrepresentation of the bill by some of the witnesses. 

“Let me tell you what it is not,” he said. “The bill is not a law that’s going to mandate that tomorrow you change your electric system. Because you’re going to hear that nonsense today. … It is important to note the bill does not mandate electrification in any way.” 

The bill would direct the New Jersey Board of Public Utilities to establish a program that requires utilities to prepare and implement multiyear “beneficial” electrification plans to assist ratepayers with the transition from non-electric water heating, space heating, industrial processes or transportation equipment. The program would provide assistance if the change “reduces cost from a societal perspective, reduces greenhouse gas emissions or promotes the increased use of the electric grid in off peak hours.” 

Once the bill is enacted, the BPU would have a year to adopt program rules and regulations and set greenhouse gas emission-reductions targets. The rules would also “establish a cost recovery and performance incentive mechanism” and “develop and provide direct incentives for the installation of electric heat pumps.” 

Eric DeGesero, representing the Fuel Merchants Association of New Jersey and the New Jersey Propane Gas Association, said one problem with the bill is the phrase “beneficial electrification.” 

“Why isn’t the goal decarbonization?” he said. “Because if the goal is decarbonization, then renewable natural gas, hydrogen, renewable diesel — i.e., heating oil — [and] renewable propane would be included. They’re not. 

“It’s far more cost effective to use existing infrastructure than it is to have to retrofit. This bill doesn’t really put a thumb on the scale for electrification; it puts a whole hand on it.” 

Loose Definition

Nicholas Kikis, representing the New Jersey Apartment Association, also questioned the bill’s focus on electrification, “with this kind of very loose definition of what is beneficial, rather than focusing on those projects that would have the greatest impact, and therefore not negatively impact either housing affordability or, ultimately, our utility rates.” 

But a majority of the two-dozen speakers at the hearing backed the legislation. 

Anjuli Ramos-Busot, director of the Sierra Club’s state chapter, said that “fossil fuel equipment, such as boilers and gas furnaces inside New Jersey homes, [emits] a dangerous cocktail of harmful pollutants” and more carbon pollution than power plants in the state. The bill, by creating “effective building electrification programs, would provide a sure passage away from that,” she said. 

“It is clear that a transition from fossil fuels will save lives and protect residents’ health and wellbeing,” she said. “I’m just going to leave a very simple question to those opposed to this bill: What is so bad about more consumer choice?” 

Out-of-state Emissions

Building emissions are the second-largest source of greenhouse gases in New Jersey, after transportation, and Gov. Phil Murphy’s administration has developed a portfolio of measures to assist in the transition toward electrification. 

Murphy signed an executive order in 2023 calling for the electrification of 400,000 homes by December 2030, and more recently, the BPU on April 30 approved a package of new construction incentives worth up to $5.25 per square foot. (See NJ Enacts New Construction Electrification Incentives.) 

But the plans have faced vigorous opposition from business groups and fossil fuel representatives, who express concerns about the cost of the transition and urge the state to consider other alternative fuels, such as hydrogen and renewable natural gas, saying the existing natural gas infrastructure could be used. 

Bob Kettig, manager of corporate strategy at New Jersey Resources — which operates natural gas transportation and distribution infrastructure, as well as solar projects — said the bill focuses too narrowly on reducing “on-site emissions” and does not account for the fact that the electricity that powers the new appliances used will be generated out of state. 

The New Jersey Division of Rate Counsel urged the committee not to back S249, saying “electric utility ratepayers will shoulder the entire cost of the program.” 

“Electric distribution companies do not require any incentive to carry out electrification projects,” Director Brian Lipman wrote in a June 7 letter to the committee. “Electrification will necessarily increase electric load and therefore very likely increase revenue and profits for the EDCs.” 

Sen. Smith said he expects to amend the bill based on the points raised and will put it on the agenda for the committee’s June 20 meeting. 

Solar Recycling

The committee also considered, but eventually held, a bill, S3399, that would require end-of-life recycling of solar and photovoltaic energy generation facilities and structures. 

The legislation was one of two solar-focused bills addressed by the legislature June 10. The Senate Economic Growth Committee heard a bill, S2427, that would create a warranty program to protect solar panels erected on warehouses and other roofs. 

The recycling bill would require the owner of solar projects to remove and recycle the structure and any related equipment after its use. It would also require the New Jersey Department of Environmental Protection to set rules and standards for the program and allow fines of up to $1,000 if they were not adhered to. 

Glenn Laga, of Commercial Solar Panel Recycling, which has a solar recycling facility in California and is trying to set one up in New Jersey, said the company uses a simple recycling process. The panels are inspected and removed from the aluminum frame, and the electric boxes stripped off, before all the components go for recycling. 

Lyle Rawlings, president of the Mid-Atlantic Solar & Storage Industries Association, who said he served on the New Jersey Solar Panel Recycling Commission, said the bill should encourage operators to keep the panels for the full 35-year life. 

“We need regulations or incentives that will encourage people not to end their [facilities’] lives after 15 years or 20 years, when they still have plenty of life left,” he said, adding that the bill should also advocate for older panels to be repurposed and reused. 

Rawlings also expressed concern that when solar panels are crushed and ground down in the recycling process, they could release lead into the environment. 

Smith said he would incorporate the insights heard by the committee into the bill. 

Solar Roof Damage

The Economic Growth Committee voted 3-2 to approve S2427 over objections from two Republican senators and the Division of Rate Counsel. 

Smith, who sponsored the bill, said it addresses a “big hurdle” that is preventing more of the state’s numerous warehouse roofs from hosting solar panels: Because flat roofs are prone to leaking once a solar panel is mounted, the owners lose their insurance. 

“You lose your insurance the minute you put something on top of that roof,” he said. The bill would create a warranty program that would reimburse building owners if the property was damaged because of panels, he said. 

Sen. Joseph Pennacchio (R) questioned why the bill made the state responsible for the payments. 

“You’re talking about groups like Amazon. Why should we ask the ratepayers to foot the bill for something that, quite frankly, maybe they could do by themselves?” he said. 

Lipman said in a June letter to the committee that the bill “unfairly forces New Jersey’s ratepayers to pay for insurance that covers any mishaps in the work of solar contractors.” This “removes important incentives for those contractors to operate without causing damage,” he said. 

The bill will now be heard by the Senate Budget and Appropriations Committee.