NJ grants waiver for floating solar project on Wanaque Reservoir. What’s next?

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State officials have granted a long-sought waiver for a floating solar project on the Wanaque Reservoir, clearing the way for developers to reapply for New Jersey’s incentive program for large-scale renewable energy.

This month’s approval comes more than a year and a half after the floating solar plan was rejected for not meeting environmental review standards.

The decision by the state Board of Public Utilities, effective July 23, followed new filings from the North Jersey District Water Supply Commission and its private partner Nexamp Solar, as well as a February 2025 meeting with officials from the state Department of Environmental Protection and the Highlands Council.

The proposed system would place two solar panel arrays on floating platforms near the commission’s water treatment plant in Wanaque: a 10-megawatt net-metered system and a 5-megawatt community solar system, combining to cover roughly 20 acres of the reservoir’s surface. Once operational, the systems are expected to supply most of the commission’s annual electricity use and feed hundreds of local homes.

The project’s waiver was initially denied in part because the reservoir is in the strictly regulated Highlands Preservation Area, where a public-interest waiver is required to qualify for New Jersey’s Competitive Solar Incentive Program. In January 2024, the board rejected the commission’s waiver application, citing unresolved concerns from the Department of Environmental Protection and the Highlands Council regarding the environmental impact, board records show. The board also requested additional documentation to evaluate land use and permitting impacts.

After the denial, the commission and Nexamp worked with state officials to update their plans and submitted new permit information, board records show. Both the DEP and the Highlands Council ultimately provided new recommendations to the board, granting conditional support.

According to the Highlands Council, its earlier conditional approval from 2021 remains valid as long as the commission submits all required supporting documents or explains why some conditions no longer apply.

DEP officials said the waiver does not guarantee full regulatory approval and permits are still needed, but it added that the project’s inclusion of a community solar component to help reduce drinking water costs is in the public interest.

The Board of Public Utilities found that the project meets the state’s standards for a waiver and recommended that it move forward in the third round of the solar incentive program. If the project qualifies, it could earn renewable energy credits designed to help New Jersey reach its goal of 3,750 megawatts of new solar capacity by 2026.

Floating solar remains a relatively new technology in New Jersey. The state’s first floating array opened in Sayreville in 2020, and a larger installation followed in 2023 at the Canoe Brook Reservoir in Millburn to do the same job proposed for the Wanaque project: power a water treatment plant.

Popular in Asia, floating solar has grown stateside in recent years to help preserve farmland and open space, which has been a high priority in New Jersey. Though they come with higher upfront costs and potential ecological concerns, floating solar panels can benefit from the cooling effect of water, improving their efficiency compared with traditional ground-mounted systems. They can also reduce water evaporation and limit algae growth, offering environmental benefits beyond clean energy generation, while making use of man-made water bodies that have little or no boat activity or recreation.

Fenced in and off limits to the public, Wanaque Reservoir was built in the late 1920s to create a regional water supply for a growing population. Once home to dozens of buildings, the flooded valley now serves roughly 3.5 million people with drinking water.

The proposed net-metered system in the southern half of the reservoir is expected to produce over 13,450 megawatt-hours annually, offsetting about 90% of the commission’s electricity, the commission’s proposal says. The community solar system, on the other hand, is set to generate roughly 6,725 megawatt-hours yearly. It is designed to support up to 1,000 residential subscribers, with at least 51% qualifying as low- or moderate-income households, providing guaranteed energy discounts and increasing access to renewable energy locally, records show.

State officials stressed that the waiver does not exempt the project from meeting all environmental and permitting requirements. The commission must still secure permits for flood hazard and wetland impacts, along with plans for replanting and habitat restoration for the limited on-land infrastructure.