Why developers come here
New Jersey is not a cheap-power, cheap-land state, and developers do not pretend it is. The draw is location: the state sits between the New York City and Philadelphia metros, on the transatlantic fiber landings and the financial-services latency corridors that made Secaucus and Piscataway colocation hubs long before AI. Industrial electricity averaged 15.10 cents per kWh in the first half of 2026 (EIA), the highest of the five states in this group and more than double Oklahoma’s.
What has arrived since 2025 is a different kind of project: AI compute buildings that need 100 MW to 300 MW and can tolerate a suburban office or lab site. CoreWeave leased an entire building at the former Merck campus in Kenilworth (Union County) for a roughly 250 MW conversion due in 2027, and Nebius is building up to 300 MW in Vineland (Cumberland County) with Microsoft as the anchor customer, reportedly powered largely by on-site fuel cells.
The state government’s posture has shifted quickly from courting to conditioning. Governor Mikie Sherrill’s administration wants data centers to bring their own generation and pay their own grid costs, and the legislature has moved to cut the one incentive that existed.
Incentives
- No sales tax exemption. New Jersey has no data center sales and use tax exemption on equipment or electricity. The standard 6.625 percent sales tax applies, with limited relief in Urban Enterprise Zones and Salem County.
- Next New Jersey Program, AI. A 2024 corporate tax credit administered by the New Jersey Economic Development Authority for AI data centers and related projects: at least 100 new full-time jobs paid at least 120 percent of the county median, at least $100 million capital investment, and a collaboration with a New Jersey research institution. Awards are the lesser of several formulas and cap at $250 million per project, paid over five years, from a $500 million pool. NJEDA awarded $250 million to CoreWeave’s Kenilworth project. In June 2026 the legislature passed S4390 to cut the pool to $250 million, effectively closing the program; NJEDA paused new applications on July 17, 2026. The bill awaited the governor’s signature as of this writing.
- Property tax. Municipalities can grant payments in lieu of taxes (PILOTs) under the Long Term Tax Exemption Law for up to 30 years for redevelopment projects, and shorter abatements under the Five-Year Exemption and Abatement Law. Vineland approved a five-year PILOT for the Nebius building owner in January 2026.
- Data Center Fair Share Act (P.L. 2026, c.32, S731/A796). Signed July 7, 2026. Requires every electric utility to file a large-load data center tariff with the Board of Public Utilities; applies to new and existing data centers with peak demand of 50 MW or more (lowered from 100 MW in earlier drafts), or lower if the BPU chooses; requires financial guarantees that the customer will take at least 85 percent of requested service for at least 10 years; puts data centers first in line for curtailment in emergencies; and lets large loads offset capacity obligations by funding demand reduction elsewhere. Utilities must apply tariffs within a year.
- Pending. S3379/A4096 (semi-annual energy and water reporting for three years) passed and awaited signature. S680 would require new AI data centers to run on new renewables or new nuclear.
Power
New Jersey is entirely within PJM. PSE&G serves the north-central spine and Kenilworth; Jersey Central Power & Light (FirstEnergy) serves the northwest and shore; Atlantic City Electric (Exelon) serves the south including Vineland; Rockland Electric serves a corner of Bergen County. Large loads interconnect through the utility, with PJM studying transmission impacts.
The political context is the PJM capacity market. The BPU projected residential bill increases of 17 to 20 percent starting June 1, 2025, tied to record capacity prices that PJM attributed mainly to data center demand growth; average residential bills rose from about $108 a month in May 2024 to about $140 in May 2026. That is why the Fair Share law passed with little utility pushback and why Governor Sherrill’s May 27, 2026 four-part plan asks data centers to bring their own generation, sign community agreements on noise and pollution, report energy and water use, and use union labor at prevailing wage. Nebius’s reliance on fuel cells at Vineland is the model the administration points to.
Water has come up in South Jersey, where several sites sit over the Pinelands aquifer and the Pinelands Commission has jurisdiction.
Where the projects are
Northern colocation clusters in Secaucus, Piscataway, and Parsippany continue to grow incrementally. The new AI campuses are in Union County (CoreWeave, Kenilworth) and Cumberland County (Nebius, Vineland, tracked on this site). Redevelopment of former pharmaceutical and lab campuses is the common pattern, since greenfield industrial land is scarce and municipalities can use redevelopment law to approve them.
Local politics
Municipal bans spread faster in New Jersey than anywhere else in 2026. East Greenwich (Gloucester County) prohibited data centers after American Tower withdrew a proposal; Pemberton, Monroe Township, Millville, and Andover followed; in June 2026 Red Bank and Warren Township banned them, Sayreville introduced an 18-month moratorium, and Asbury Park called for a statewide pause. Stated reasons were electricity demand and bills, water, round-the-clock noise near homes, and the sense that redevelopment approvals moved without public input. The Pinelands Alliance has argued that developers use redevelopment designations as a loophole.
Kenilworth approved CoreWeave’s $1.8 billion conversion and it is under construction, but more than 100 residents protested. Vineland’s council backed Nebius for roughly 1,000 construction and 200 permanent jobs and for its on-site power. The state legislature’s tone is captured by Senator Joseph Cryan’s explanation for ending the tax credit: people were “outraged over the amount of money CoreWeave got.”
What a landowner should know
Greenfield hyperscale campuses of 500 acres or more are unlikely here. The realistic New Jersey deal is a 20 to 100 acre former corporate, pharmaceutical, or industrial site with an existing PSE&G or ACE substation and a municipality willing to designate it a redevelopment area. Option agreements are common, but redevelopment law means the municipal governing body, not just the zoning board, controls the outcome.
Before signing, check whether the town has adopted or introduced a ban or moratorium, whether the site is in the Pinelands or Highlands regulatory areas, and which utility serves it. Any project over 50 MW will fall under the new BPU tariffs with 10-year, 85 percent take-or-pay guarantees.
The state agency is the New Jersey Economic Development Authority, with the Choose New Jersey partnership handling site inquiries. Tariff dockets are at the Board of Public Utilities.