New Jersey Solar Incentives & Tax Credits
With a wide range of state and federal incentives and tax credits available in New Jersey, solar energy is more affordable than ever in the Garden State. By harnessing the power of the sun for your home or business, you can put money back in your own pocket while gaining energy independence and making a positive environmental impact. It's a win-win-win situation for you, New Jersey, and the world.
Federal Solar Panel Tax Credit
New Jersey homeowners who purchase a solar energy system and have sufficient taxable income can benefit from the Residential Clean Energy Credit (formerly known as the Investment Tax Credit (ITC)).
This federal tax credit equates to a $6,000 saving on a $20,000 system. That’s a 30% reduction in your systems costs during the first year it’s installed, resulting in an initial net cost of only $14,000.
The Residential Clean Energy Credit covers solar panels, inverters, solar batteries, electric vehicle chargers, and mounting equipment expenses. The Inflation Reduction Act will ensure the credit remains at 30% until 2032 and applies to solar battery storage systems from January 1, 2023.
New Jersey Net Energy Metering
The Net Energy Metering incentive allows homeowners and businesses with solar panels to sell excess electricity back to the grid. Every utility must provide customers with credits at the total retail rate for all the excess energy generated from their solar system.
NJ solar tax credits can be rolled over monthly, and any remaining credits at the end of the year are paid out. This policy helps homeowners optimize the worth of their solar energy system and is an exceptional opportunity to save money on their electric bills and recoup their systems initial costs.
New Jersey Successor Solar Incentive Program (SuSI)
The New Jersey government's SuSI initiative replaces the SRECs and TRECs programs as the latest incentive for solar owners.
Residential solar owners who apply for the Administratively Determined Incentive (ADI) program can earn credits worth $85 for every 1,000kWh of electricity their system generates for 15 years, which they can sell to utility providers for cash.
If your solar system generates 8,000 kWh per year, that could add up to $680.
Projected earnings over 15 years would look like this:
We advise applying swiftly following your solar panel setup in order to take full advantage of the available solar panel incentives in New Jersey, as this program accepts a finite number of applicants.
Sales & Property Tax Exemptions
The New Jersey government offers two tax exemptions: the Solar Energy Sales Tax Exemption and the Property Tax Exemption. When purchasing a solar system, residents will not have to pay the 6.625% state sales tax, resulting in significant savings that make installations more affordable.
Furthermore, homeowners will not have to pay additional property taxes even if their property value increases due to the solar panels. According to the National Renewable Energy Laboratory, every $1 saved on energy bills could increase property value by $20. This can result in long-term financial benefits for homeowners.
FAQ About NJ Solar Incentives
Can I sell excess energy back to the grid in New Jersey?
You can receive credits on your electric bill to lower your electricity cost with New Jersey's Net Energy Metering. These credits may be used during times when your solar panels aren't producing enough electricity, such as at night, and any remaining credits can be applied to the next month's bill or received annually.
How long does it take for solar panels to pay for themselves in New Jersey?
The payback period of solar panels in New Jersey ranges from 5 to 8 years, depending on factors such as the size of your installation, electricity rates, and the amount of sunlight your property receives. These numbers take into account the savings on electricity bills, the federal tax credit, and any other NJ solar panel incentives or NJ solar rebates.
Do solar panels add value to the property?
Yes, installing solar panels can significantly increase the value of a property. Not only do the panels improve energy efficiency, they also reduce electricity bills, which can be a major draw for buyers. Furthermore, in New Jersey, property owners don't have to worry about a tax increase due to the installed solar panels since there is a property tax exemption.
How much does the solar system cost in New Jersey?
In New Jersey, solar system installation can range from approximately $15,000 to $25,000 before solar incentives in NJ are applied. Thanks to federal tax credits and state incentives, however, the net cost is usually much less.
Does the state of New Jersey offer solar panels for free?
No, New Jersey does not provide free solar panels. However, the different NJ solar incentives in 2023 from the federal government, the state, and energy providers significantly reduce the cost of a solar panel set-up.
