On January 16, 2010, the New Jersey legislature adopted a bundle of laws to promote renewable energy development in New Jersey. Among the laws adopted was an amendment to the Agricultural Retention and Development Act (the “Act”) to permit the installation and operation of biomass, solar or wind energy generation facilities on preserved farmland. A preserved farmland is a farm in which the landowner has conveyed a development easement to the State Agricultural Development Committee (“SADC”) or other governmental instrumentality, such as a county, or to a private not-for-profit entity, such as a land trust. By conveying a development easement to the SADC or such other entity, the landowner covenants that the preserved farm will only be used for agricultural purposes. This restriction runs with the land and is binding on all future owners of the property.
The form of development easement is prescribed by regulations adopted by the SADC. As set forth in the development easement, “agricultural uses” mean “the use of the premises for common farmsite activities, including, but not limited to: production, harvesting, storage, grading, packaging, processing and the wholesale and retail marketing of crops, plants, animals and other related commodities and the use of and application of techniques and methods of soil preparation and management, fertilization, weed, disease and pest control, disposal of farm waste, irrigation, drainage and water management, and grazing.” NJAC 2:76-6.15(a).
The revision to the Act permits the owner of a preserved farm, in addition to using the property for agricultural purposes, to install and operate biomass, solar or wind energy generation structures or equipment on the preserved portion or the non-preserved portion of the farm or on any building located on the farm provided that such structures or equipment:
- Do not “substantially interfere” with the agricultural use of the property;
- Are owned by the landowner, or will be owned by the landowner upon the conclusion of an agreement with the installer pursuant to which the landowner uses the income or credits realized from the energy generation to purchase the facilities, structures or equipment;
- Are used to provide heat or energy to the farm or to reduce energy costs to the farm; and
- Are limited, at the option of the landowner, (a) in annual energy generation capacity to the previous calendar year’s energy demand plus ten percent (10%) or (b) to occupying no more than one percent (1%) of the area of the entire farm, including both the preserved farm and any portions of the farm excluded from preservation.
The limitation regarding energy generation set forth in 4(a) above does not apply to any energy generation structures or facilities located on the roofs of buildings or on other structures that exist on the farm as of January 16, 2010. The overall intent of the four conditions is to ensure that the preserved farm remains primarily dedicated to agricultural production and not to energy production. Specifically, the requirement that the heat or energy be used in connection with farming activities prevents the landowner from operating a solar farm and selling energy back to the grid.
If the owner of a preserved farm desires to install energy generation facilities on its land, it must first apply to, and obtain approval from, the SADC. The SADC is required to approve or disapprove of the application within ninety (90) days after its receipt. If the holder of the development easement is an entity other than the SADC, then the SADC must provide a copy of the application to the holder of the easement, and the holder of the easement has thirty (30) days to provide any comments to the application. The decision of the SADC must be based solely on the conditions set forth above and on any comments provided by the holder of the easement. The SADC may not charge a fee for review of the application.
Finally, the statute authorizes the SADC, in consultation with the Department of Agriculture and the Department of Environmental Protection, to adopt rules and regulations necessary for the implementation of the act. To date, those rules have not been published.
Condition 4(b) is curious in that it limits the energy generation facilities and structures to no more than “one percent of the entire farm including both the preserved portion and any portion excluded from preservation”. A development easement does not restrict the landowner’s ability to use the portion of its property that is excluded from preservation (provided that such use of the non-preserved portion does not interfere with the agricultural use of the preserved portion). Accordingly, it is unclear why the SADC has an interest in restricting the use of renewable energy generation facilities on the portion of the land that is not preserved. If the SADC is concerned that the use of the non-preserved land for energy generation will interfere with the agricultural use on the preserved land, the form of development easement already prohibits use of the property in any manner that interferes with the agricultural use of the preserved farm. Additionally, when reviewing the application for the installation of renewable energy facilities, condition 1 prohibits any “substantial interference” with the agricultural use of the property. These factors should be sufficient to ensure the integrity of the farm without limiting the owner’s use of the non-preserved portion. Hopefully, the regulations will provide some clarity with respect to this issue.
A copy of the law can be found here.