Legislation and Energy Policy: Federal and State Incentives and Mandates

NJ-PA Sustainability Symposium Rutgers-Camden March 31, 2011

 Last Congress  Rebates: Cash for Clunkers, Building STAR  New Congress  Tax Reform  Commercial Buildings Deduction, IRCode §179D  Improve from 2005 Energy Policy Act  ASHRAE Baseline; Designs vs. Performance  Sliding Scale; 20% - 50%, in 5% increments  REITS  “Defined Spaces” The Real Estate Roundtable

 Financial Incentives  179D Tax Re-Design  Loan Guarantees for Building Retrofits  “Scoring”  Jobs Creation  Challenge to Building Owners  Grants to State and Local Governments The Real Estate Roundtable

 Federal Building Codes  For new construction and substantial rehab  Proposed standards not cost feasible  Don’t consider tenant behaviors  Focus instead on Energy Dept’s role in codes- setting process, not fed regs.  GSA Requirements The Real Estate Roundtable

 Stormwater  “Retrofits” of existing properties  Enhanced municipal requirements  Lead Paint Renovation and Repair  Pre-1978 target housing  Expand to commercial buildings  Impact on energy retrofits The Real Estate Roundtable

 NJ Master Plan  Wind and solar and quick update

State Legislation

 NJEDA Programs  Clean Tech/Energy  HUB; BEIP; BRAG; ERG; Green Growth Fund; Edison Innovation Fund

12 EDA - Who We Are State financing and economic development agency dedicated to serving as New Jersey’s “bank for business” by offering: Financing Assistance Tax Incentives Real Estate and Redevelopment Assistance Access to Small Business Services

13 EDA Resources Traditional Lending Expansion/ Relocation Incentives Real Estate & Redevelopment Assistance Small Business Services Technology/ Clean Energy Support

14 Clean Energy Manufacturing Fund (CEMF) Designed to support companies looking to site a Class I renewable energy or energy efficiency product manufacturing facility in New Jersey. New Jersey clean technology manufacturers can receive funding under two separate components: project assessment and design, and project construction and operation. In total, up to $3.3 million in grants and interest-free loans available. - Up to $300,000 for predevelopment - Up to $3 million as a low-interest, 10-year loan to support site improvements, equipment purchases, and facility construction and completion.

15 Petra Solar, Inc. Awarded $3.3 million through CEMF to support the purchase of equipment and machinery and the company’s planning/design process.  Project will result in total public/private investment of over $7.6 million.  Petra expects to create more than 164 new jobs over two years. Received a $200 million contract from PSE&G to install 200,000 solar panels on utility poles and street lamps following BPU approval of PSE&G’s Solar 4 All program.

16 Clean Energy Solutions Capital Investment Grant/Loan With the goal of reducing the amount of greenhouse gases produced in New Jersey, the Clean Energy Solutions Capital Investment Grant/Loan Program provided loans and grants to support commercial, institutional, and industrial entity end-use energy efficiency projects, CHP production facilities, and new state-of- the- art efficient electric generation facilities, including renewable energy applications. Nautilus Solar received $5 million to build the largest solar energy facility at a university in the U.S. The 3.5 MW system will save William Paterson University $4.3 million in energy costs over the next 15 years.

17 Clean Energy Solutions ARRA Combined Heat and Power (CHP) Program In 2010, the EDA and BPU also launched the Clean Energy Solutions ARRA CHP Program, a competitive solicitation that made project based grants available to commercial, institutional or industrial entities (including public and not-for-profit entities) in New Jersey with a CHP project. The federally allocated funding was available in an amount of $450 per kW of installed electric generation. NRG Thermal Energy was approved for a $1.9 million grant to establish a 4.6MW cogeneration facility that will serve the new University Medical Center of Princeton at Plainsboro.

18 Offshore Renewable Energy Certificate (OREC) Program that calls for a percent of electricity sold in the state to be from offshore wind energy to support at least 1,100 MWs of generation from qualified offshore wind projects. o BPU will administer credits to wind energy producers for each MW of electricity generated by offshore wind farms. Producers can sell the credits to offset production costs of offshore wind projects. Tax credits through the EDA for businesses that construct manufacturing, assemblage and water access facilities to support the development of offshore wind projects. o Businesses may be eligible for a credit up to 100% of its capital investment in a qualified wind energy facility located within the South Jersey Port District. o The value of credits approved by the EDA may be up to $100 million. Offshore Wind Economic Development Act

19 New Green Programs Expected to Launch May 2011 Edison Innovation Green Growth Fund Loans of up to $1 million to Class I renewable or energy efficient clean technology companies that are seeking funding to grow and support their technology business. May convert to a 50 performance grant. Companies must have commercial revenues. Energy Efficiency Revolving Loan Fund Loans of up to $2.5 million to support 100% of the eligible project costs of commercial or industrial entities that received funding under BPU’s Pay for Performance program or the Large Energy Users Programs, which became available in The loan can be used for energy efficiency whole building C&I projects (retrofit and new construction).

20 Business Employment Incentive Program (BEIP) Annual incentive grants to businesses moving to or expanding in New Jersey. Eligible companies must meet minimum job creation requirements and prove financial viability to qualify for cash grants. Business Retention and Relocation Assistance Grant (BRRAG) Provides grants of corporate business tax credits to companies that are relocating operations within New Jersey and retaining jobs. Expansion/Relocation Incentives Redevelopment Assistance Economic Redevelopment and Growth (ERG) Grant Incentive grants to developers, businesses, and owners to address redevelopment project financing gaps. The program utilizes up to 75% of the incremental increase in certain state and local revenue sources attributed to the project to provide gap financing of up to 20% of the total project cost, paid out over a period of up to 20 years. Urban Transit Hub Tax Credit Program Qualified businesses located in Urban Transit Hubs may qualify for tax credits equal to 100% of the qualified capital investment that may be applied against corporation business tax, insurance premiums tax or gross income tax liability.

21 NJ BPU – Office of Clean Energy - NJ DEP – Office of Economic Growth & Green Energy NJ Utilities (e.g. PSE&G Solar Loan Program) Banks and other Commercial Lending Partners Angel Investors & Venture Capital Strategic Partners Foundations & Non-Profits Additional Sources of Financing, Capital & Assistance

22 Michael A. Wiley Sr. Venture Officer – Technology & Life Sciences Division New Jersey Economic Development Authority Business Action Center : (866)

 Measurement Mandates  NYC, DC, Seattle, San Francisco, Austin, Los Angeles, CA (state)  USGBC  What is LEED and is it Law  ASHRAE 189  What is it and how might it effect you