Unlock Affordable Solar Power with New Jersey’s Generous Incentives and Rebates
New Jersey is rapidly emerging as one of the nation’s fastest-growing solar markets. With electricity costs ranking among the highest in the country (7th for residential and 9th for commercial rates), and the state receiving ample sunshine 70.48% of the year, it’s no surprise that property owners are increasingly investing in solar energy systems.
Fortunately, the Garden State offers a wealth of federal, state, and local solar incentives, making solar installations a reliable and rewarding venture for homeowners and businesses alike.
New Jersey’s Solar Incentives, Rebates, and Benefits at a Glance
Renewable Portfolio Standard (RPS)
New Jersey’s Renewable Portfolio Standard is an ambitious and evolving policy aimed at increasing the state’s renewable energy production from sources like wind, solar, biomass, and geothermal. The RPS mandates that utilities derive 35% of their electricity from renewable sources by 2025 and 50% by 2030, supporting innovative clean energy technologies while reducing reliance on coal and combating climate change.
Solar Carve-Out
Within the RPS, New Jersey has established a “solar carve-out” – a specific portion of energy that must come from solar power by set dates. The solar carve-out aims to drive down costs and incentivize the deployment of solar technologies. By Energy Year 2027, the solar carve-out target is 4.35%, rising to 2.21% by 2030.
Net Metering
New Jersey’s net metering law allows solar system owners to sell excess electricity back to the grid at the retail rate – significantly higher than the wholesale rates paid to large power plants. This enables homeowners to balance their energy consumption and production, avoiding waste while earning credits for their surplus solar power. The state’s four major utilities (Rockland Electric, JCP&L, Atlantic City Electric, and PSE&G) offer annual net metering credit payments based on the retail rate.
Transition Renewable Energy Certificates (TRECs)
Replacing the previous Solar Renewable Energy Certificate (SREC) program, TRECs are a byproduct of New Jersey’s excellent net metering policies. For every megawatt-hour (MWh) of solar energy generated, homeowners can earn one TREC, which can then be sold to utilities to help them meet the state’s Renewable Portfolio Standard. TREC values vary, but residential rooftop or ground-mounted systems can earn around $91.20 per TREC. A typical 7-kilowatt (kW) system generating 7 MWh annually could yield up to $638 in TREC sales.
Interconnection Standards
New Jersey’s clear and robust interconnection standards streamline the process of connecting solar systems to the grid, reducing costs and complexity. Small solar installations under 10kW qualify for simplified procedures with no application fees, providing a significant advantage in bringing systems online smoothly.
Performance-Based Incentives (PBIs)
Through the Performance-Based Incentives program, New Jersey homeowners can receive monetary rewards based on their solar system’s actual energy production. Payments are calculated by the system’s metered output in kilowatt-hours (kWh) or BTUs, with the electricity generated earning valuable Solar Renewable Energy Credits (SRECs) that fluctuate in value based on supply and demand – an effective way to help offset the system’s cost over time.
Sales Tax Exemption
When purchasing a residential solar system in New Jersey, homeowners enjoy a 100% exemption from sales tax – an immediate 7% savings on the total cost, including installations for solar pools and water heaters.
Property Tax Exemption
Installing solar panels won’t increase your property taxes in New Jersey. The state exempts any increase in a property’s assessed value resulting from the addition of a solar energy system, allowing you to continue paying your previous property tax rate.
Inflation Reduction Act (IRA)
Eligible New Jersey property owners with solar panel systems may qualify for a 30% tax credit against the system’s cost under the federal Inflation Reduction Act.
Successor Solar Incentive (SuSI) Program
Building on the success of its Solar Renewable Energy Certificates (SRECs) initiative, New Jersey has launched the Successor Solar Incentive (SuSI) or SREC-II program. Each time a solar energy system generates one megawatt-hour of electricity, an SREC-II is created. Residential system owners can earn $90 per SREC-II for 15 years.
Federal Investment Tax Credit
In addition to New Jersey’s incentives, homeowners who go solar can take advantage of the Federal Investment Tax Credit, allowing them to deduct 26% of their solar system’s cost from their federal taxes. However, this percentage is set to decrease over time, so act now to maximize your savings!
While New Jersey may not be the sunniest state, it ranks among the top 10 in solar metrics like installed capacity per capita (5th), total installed solar capacity (9th), and solar jobs (9th). By leveraging these generous solar incentives, rebates, and benefits, Garden State residents can embrace affordable clean energy and a sustainable future.
