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.
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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.