Solar Incentives in New Jersey (2023 Guide)
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New Jersey has been committed to growing its renewable energy sources since 2012. According to the Solar Energy Industries Association (SEIA), the Garden State ranks No. 8 in the country for total installed solar panel capacity. The New Jersey government’s Renewable Portfolio Standard (RPS) includes a commitment to move to 50% renewable energy by 2030.
Installing a solar panel system in New Jersey costs an average of $13,750–$22,000. Though this is a big financial investment, the state offers several solar incentives to make the transition more affordable for New Jersey residents. This guide details available solar incentives in New Jersey and highlights some of the state’s top solar companies.
New Jersey Solar Tax Credits and Rebates
New Jersey solar incentives support clean energy growth by encouraging homeowners to convert to solar power. You can take advantage of both federal and state programs to reduce your solar panel costs. The state also offers additional programs that provide payouts for your solar energy generation.
Your financing choice affects which solar incentive programs you’re eligible for. Buying your solar system outright or taking out a solar loan makes you the system’s legal owner. Only owners can apply for solar incentives, credits, and rebates. Selecting a solar lease or power purchase agreement (PPA) disqualifies you from incentives because the solar company retains system ownership, reducing your potential savings. Keep this in mind when selecting a finance option.
Below is an overview of New Jersey’s available solar incentives and programs.
Successor Solar Incentive (SuSI) Program
The SuSI program functions similarly to renewable energy credit (REC) programs in other locations. A REC represents the amount of renewable energy a resident’s system produces. Homeowners can sell RECs for monetary payment based on market value. Solar renewable energy certificates (SRECs) provide a payout for each megawatt-hour (mWh) of electricity generated.
New Jersey’s current SuSI Program, also known as SREC-II, offers one energy credit for every mWh generated by your solar system. While other SREC programs have fluctuating payout rates, the New Jersey program is fixed at $90 per credit. The SuSI program accepts a limited number of applications, so apply as soon as your solar installation is complete.
More resources: Visit New Jersey’s Clean Energy Program website for more information.
Solar Energy Sales Tax Exemption
High-performing solar panels are expensive, but the New Jersey government’s sales tax exemption helps to lower installation costs. Residents that buy a solar energy system won’t have to pay the 6.625% New Jersey state sales tax on their purchase. For example, if your solar energy system costs $21,000 total, you’ll save $1,391. This policy applies to ground-mount and rooftop solar installations.
More resources: Check the Database of State Incentives for Renewables and Efficiency (DSIRE) for more details on New Jersey’s sales tax exemption.
Property Tax Exemption for Renewable Energy Systems
Installing a solar panel system increases your home’s value because it makes your home more energy-efficient. The National Renewable Energy Laboratory (NREL) reports that your property value increases by $20 for every $1 that your monthly energy bills decrease. Typically, you’d have to pay more property tax for this additional home value, but several states, including New Jersey, have property tax exemptions. This means homeowners benefit from the increased property value without having to pay additional taxes.
More resources: Read more about New Jersey’s property tax exemption on the DSIRE website.
High-performing solar energy systems often generate more power than your home needs. Net-metering programs allow homeowners to sell this excess energy to the grid in exchange for credits on their electric bills. Depending on the program, you may receive an end-of-year payout for any remaining credits.
The New Jersey Board of Public Utilities (NJ-BPU) requires net-metering for all utility companies. Per NJ-BPU regulation, New Jersey residents will receive a credit equal to one kilowatt-hour (kWh) of electricity at the full retail rate for every kWh of excess solar energy generated. These policies apply to individual solar panel installations and community solar projects.
More resources: The Board of Public Utilities provides net-metering details on its website.
Federal Solar Tax Credit
New Jersey homeowners can use the federal solar credit for additional savings. Formerly known as the Solar Investment Tax Credit (ITC), this program was extended in 2022 and renamed the Residential Clean Energy Credit. This incentive program allows homeowners to claim up to 30% of their solar installation costs on their federal taxes.
This is not a refund or a cash back payment. Instead, you’ll receive a tax credit that reduces or eliminates your federal tax liability. If you have little to no owed taxes, you can apply the credit balance to the next tax year. You can claim costs for solar panels, inverters, solar batteries, electric vehicle (EV) chargers, and mounting equipment.
New Jersey offers excellent solar incentives and programs to make going solar more affordable for residents. It has net-metering, SRECs, tax exemptions, and other programs to help homeowners benefit from long-term savings and additional money-earning opportunities. Your selected financing option affects your eligibility for these incentives, so consider your options carefully before deciding.
We recommend requesting quotes from at least three solar companies. Here are some of New Jersey’s best solar companies:
- Momentum Solar: Momentum offers the most user-friendly, guided installation experience.
- Palmetto Solar: Palmetto provides concierge-style support and additional system coverage.
- Sunrun: Sunrun offers four financing options to meet customers’ needs and budgets.
FAQ About Solar Tax Incentives in New Jersey
What is the cost of solar panels in New Jersey?
A solar system in New Jersey costs $13,750–$22,000 on average. These costs vary based on your energy needs, system size, chosen solar provider, and local solar rates. Homeowners should consider using federal and state solar incentives to reduce installation costs and make going solar more affordable.
What is the NJ solar tax credit for 2023?
New Jersey residents qualify for up to 30% of their installation costs with the federal solar tax credit. This credit applies toward your federal tax liability at tax time to help reduce or eliminate your owed taxes.
Does New Jersey have solar incentives?
Yes, New Jersey has several solar incentives, such as SRECs, net-metering, and tax exemptions for energy system purchases. Homeowners must legally own their solar system to qualify for most incentives.
Does New Jersey offer free solar panels?
No, New Jersey does not offer free solar panels. However, several solar incentives and tax credits are available to reduce your investment costs.
Our Rating Methodology
The This Old House Reviews Team is committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:
- Solar equipment, installation, and services (25%)
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- Experience (10%)
- Availability (10%)
Total scores are divided by 20 for a final 5-point rating scale.
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