If you live in New Jersey and are considering solar panels for your home, you might have an even better reason now. For one, you’ll likely enjoy energy bill savings, thanks to state incentives and a valuable net metering program. Solar already generates over 7% of New Jersey’s energy needs.
Plus, New Jersey has decided to make renewable energy a priority. The state’s renewable portfolio standards require that 35% of the energy sold statewide originates from qualifying renewable energy sources by 2025. By 2030, that percentage increases to 50%.
New Jersey has a handful of tax incentives, an SREC market, solar energy programs and more incentives designed to entice residents to go solar. In turn, you’ll reduce your carbon footprint and save money. Here’s what you need to know about solar incentives in the state.
Comparing New Jersey incentives for solar panels
| New Jersey incentive | Description | Eligibility | Estimated value* |
|---|---|---|---|
| Sales tax exemption | You won’t pay sales tax on solar equipment. | New Jersey residents | Depends on size and cost of solar system |
| Property tax exemption | You won’t pay property tax on any increased home value after adding solar panels. | New Jersey residents | Varies |
| Successor Solar Incentive Program | Sell solar renewable energy certificates generated by your solar system. | Owners of residential solar systems of all sizes | $85 per megawatt hour produced |
| Net metering | Receive credits on your bill for the solar electricity you return to the grid. | Owners of solar arrays connected to the grid | The cash value of remaining credits at the end of your contract year is determined by the market |
| Federal solar tax credit | Reduce your income taxes by 30% of the cost of your solar system. Incentive reduces to 26% in 2033 and 22% in 2034. | Any taxpayer who installs a solar system between 2023 and 2034 | About $7,200, based on the national average cost of an 8 kW solar array |
*Estimated value calculated by using a national average of $24,000 for installing solar panels, a national average cost of $3 per watt.
CNET recently ranked states based on their residential solar policies: the laws and regulations affecting consumer-level solar panel installation and adoption. These policies play a major role in determining how accessible and affordable a solar panel system is to the average resident.
Each state was evaluated through a methodology and scored based on eight categories. The final score was converted to a letter grade.
The interactive map below provides a breakdown of solar incentives for residential installation across all 50 states, including New Jersey. You can use the map to find out how the incentives in your state hold up when compared to the rest of the US legislative environment.
New Jersey state solar tax exemptions
There are state property and tax deductions for homeowners in New Jersey, which can help you save some money.
Solar Sales Tax Exemption
If you live in New Jersey, you can avoid paying sales taxes on solar energy devices and systems such as home solar batteries and solar panels. All you need to do is fill out the applicable form.
Renewable Energy System Property Tax Exemption
Homeowners in New Jersey who install a renewable energy system can receive a property tax exemption on the difference between the total assessed home value before and after the solar panels are installed.
If your home’s value went up after you installed a solar system, you’re exempt from property taxes on that additional value. To qualify, you’ll need to apply for a certification with your tax assessor.
Local solar panel incentives in New Jersey
New Jersey lets you sell the environmental benefits of your solar panels.
Successor Solar Incentive Program
This is New Jersey’s solar renewable energy certificate program. For each megawatt-hour you generate, you receive an SREC-II certificate.
For residential solar arrays you can get $85 per megawatt hour. If you have a system that generates 6 megawatt hours annually, that’s an extra $510 in your pocket from selling your certificates.
Federal solar tax credits and incentives for New Jersey residents
Officially known as the residential clean energy credit, you can receive a 30% tax credit on renewable energy projects through 2032, before it tapers off and expires in 2034. This includes solar panels, geothermal heat pumps, solar water heaters, fuel cells and solar batteries. There is no cap on the amount you can claim.
New Jersey net metering rules for solar energy
New Jersey has a net metering program. Utility customers enrolled in the program can get full retail value credit on their utility bill that exceeds their usage.
You can use the credits toward your energy bill throughout the year. You’ll receive payment for whatever excess remains at the end of a 12-month contract year. This “true up” occurs once a year, at the end of your contract year.
Whether you’re a PSE&G, Atlantic City Electric, Jersey Central Power and Light or Rockland Electric customer, the market price will determine the rate you’re paid for excess credit.
Community solar projects in New Jersey
Low- to moderate-income residents in New Jersey can benefit from the cost savings of going solar without installing a home system. In return for their participation, subscribers to community solar projects receive a credit on their energy bill. This can mean 15% to 25% in savings on their electricity.
Currently, 6,000 households in the state participate in the community solar program, subscribing to one of 29 projects. Another 97 projects are expected to come online in the last few months of 2023, according to the governor’s office.
Source: CNET
