Financial Assurance
Municipal Bond Requirements
Understanding performance bond requirements for solar installations in New Jersey municipalities.
Solar Decommissioning Bond Requirements in New Jersey
Bond Requirements Vary by Municipality
While S3399 establishes statewide recycling requirements, individual municipalities set their own performance bond requirements as a condition of permitting.
125%
Typical Bond Amount
Of estimated decommissioning cost
Pre-Permit
When Required
Before construction approval
20-25 yrs
Typical Duration
Full operational life
When Bonds Are Required
Most New Jersey municipalities now require performance bonds as part of the solar installation permitting process.
Typically Required For:
- Ground-mounted solar farms (any size)
- Commercial rooftop installations over 100kW
- Community solar projects
- Installations on leased agricultural land
- Projects requiring site plan approval
May Not Be Required For:
- • Small residential rooftop systems
- • Installations under certain size thresholds (varies by municipality)
- • Projects on owner-occupied commercial properties (some jurisdictions)
Calculating Decommissioning Costs
Bond amounts are based on certified estimates of complete decommissioning and site restoration costs.
Cost Estimate Components:
Typical Range: Commercial decommissioning estimates typically range from $15,000–$50,000 per MW, depending on site complexity, accessibility, and restoration requirements.
Worked Example
A 250kW ground-mount system with a $30,000 decommissioning cost estimate requires a $37,500 bond (125% × $30,000). PE certification of the estimate is required in most NJ municipalities.
Working with Professional Engineers
Most municipalities require decommissioning cost estimates to be certified by a licensed Professional Engineer (PE).
PE Certification Requirements:
- Licensed Professional Engineer in New Jersey
- Detailed breakdown of all removal and disposal costs
- Current market rates for labor and materials
- Site-specific conditions and access considerations
- Inflation adjustment methodology (for long-term bonds)
Bond Amount Updates
Some municipalities require periodic updates to cost estimates (typically every 5 years) with corresponding bond adjustments to account for inflation.