A provision in S4162 extends renewable energy contracts to 30 years without rebidding—potentially locking your facility into long-term payment terms.
Most child care owners in New Jersey don't realize that a recent change to state law could affect how long they're committed to a solar or renewable energy contract—and at what cost.
The provision is buried in S4162, the "Affordable Power Purchase Agreements Extension Act," which primarily addresses public entity energy contracts. But one section has real implications for small businesses like child care centers that may be considering or already holding power purchase agreements (PPAs) with solar developers or renewable energy installers.
Under Section 6 of S4162, which amends the Public Contracts Law (C.40A:11-15, subsection 45(b)), renewable energy developers and installers can now extend power purchase agreements with public entities—including school districts and municipal governments—for up to 30 years total, without requiring competitive rebidding. Previously, the cap was 15 years.
This means if your child care center is operated by or affiliated with a public entity, or if you're negotiating with one, a solar company can lock in a 30-year contract with capped energy rates. From the developer's perspective, this creates a stable, long-term revenue stream. From your facility's perspective, it means a predictable energy cost—but also a three-decade commitment.
This provision primarily impacts:
Child care operators at public facilities: If your center operates within a school building, municipal property, or other public entity location, you may encounter PPAs structured under this new framework. The public entity (your landlord or partner) can now commit to longer payment obligations at fixed rates.
Private child care centers considering solar: If you're a private operator and a renewable energy company approaches you about a PPA, understand that the legal environment now supports 30-year contracts. While this isn't mandatory, it signals the market direction.
Before signing or renewing any power purchase agreement:
• Read the term carefully. A 30-year contract is a significant commitment. Confirm whether the rate is truly fixed for the full term and whether there are escalation clauses.
• Understand exit costs. If your facility relocates, closes, or your needs change, what are the penalties or buyout terms?
• Compare alternatives. Get quotes from multiple solar providers and compare ownership models (lease, PPA, or purchase) before committing.
• Consult your landlord or board. If you're at a public facility, the decision may not be yours alone—but you should understand the terms affecting your operating costs.
The law took effect immediately upon enactment (Section 7), with no specific application window or transition period noted. This means contracts signed after the bill's passage can use the 30-year framework.
If your child care center operates at a public facility or you're actively evaluating renewable energy options, it's worth reviewing your current or proposed contracts in light of this change. Your state trade association or a business attorney familiar with energy contracts can provide facility-specific guidance.
For more detail on how this law affects your specific situation, contact your local child care business association or a New Jersey energy law specialist.