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How to Get “Free” Solar Panels in New Jersey (No Bullsh*t Guide)

Updated May 21, 2024

Does New Jersey offer free solar panels? The short answer is: No, the State of New Jersey does not offer free solar panels to residents.

If you see offers for 'free' solar panels in New Jersey it is usually referring to a solar lease or Power Purchase Agreement (PPA) offered by local installers, rather than a government-sponsored program.

The following guide covers everything you need to know about 'free' solar panels in New Jersey and the best options for going solar in the Garden State.

How to get free solar panels in New Jersey

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You may have heard about “free solar” somewhere and raised an eyebrow, rightfully so. Almost everyone agrees that nothing is ever “free”, but having your money reimbursed or using something for no cost is just as good!

For the last several years, the US federal, state, and local governments have successfully deployed historic tax breaks and subsidies for solar to support the clean energy transition across America. Now the recently launched $7 Billion Solar for All landmark initiative makes the dream of “free solar” more of a reality than ever before.

Currently, there are 3 ways to get essentially “free” solar in New Jersey. So what’s the catch? This no bullsh*t guide breaks down each option for you below…

Option 1: Reimbursements

The majority of subsidies for solar systems are provided as reimbursements. These can be in the form of tax credits or exemptions, installation rebates, or even “renewable energy credits” paid to you each and every month.

We know this doesn’t sound exactly like “free”, but the combination of reimbursements available significantly offset the cost of solar, often entirely.

We’ve identified the best programs and incentives for you below…

State Programs: The NJ SUN program was created in December 2022 by the New Jersey Board of Public Utilities to support the effort of adding 300 Megawatts of solar to the power grid every year. The program offers free solar panel installations directly to both residents and business owners throughout the state who meet certain eligibility requirements.

While NJ SUN is the leading state program, many local counties offer their own rebate programs as well, each with unique eligibility requirements. Considering how specific each program is to the details of your home, we strongly suggest you speak with a local solar energy advisor to review all of your best options.

Federal Tax Credit: Formerly known as the Solar Investment Tax Credit (ITC), this program was extended in 2022 and renamed the Residential Clean Energy Credit. Homeowners who install solar panels can claim a massive federal tax credit worth 30% of the gross system cost (including panels, related equipment, wiring, installation, permits, and fees). That means that if the gross system cost is $15,000, your federal tax credit would be $4,500!

Solar Renewable Energy Credits ($RECs): SRECs are financial credits with a cash value that you receive every month automatically for the excess energy your solar system produces and distributes back to the grid. These credits can come in the form of deductions from your bills or even be sold for monetary payment. This is a great way to passively make continuous returns from your solar panels.

Multiple Tax Exemptions: Homeowners with solar can receive a property tax exemption for the value of their system. This allows homeowners to increase their property values without increasing their tax obligations. The state also applies a Sales Tax Exemption to the purchase of the system, so residents won't have to pay the 6.625% NJ state sales tax. So if your solar energy system costs $15,000 total, you’ll save an additional $994 off taxes!

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Option 2: Don’t Buy, Borrow

A common method to get solar for “free” is by not purchasing the system, but borrowing one from a local solar installer through what’s called a “Power Purchase Agreement” or PPA.

With a PPA, solar panels will be on the roof of your home, but the solar company absorbs the full cost of the solar panel equipment and installation for you. They’re also responsible for any continued maintenance or repairs the solar system may require.

Sounds too good to be true, doesn’t it? Here’s how it works…

The solar company is technically the owner of the equipment, but is responsible for providing your home with the electricity produced from your panels. As the homeowner, you agree to purchase the power from the solar company at a guaranteed rate, which is much better than the unpredictable and rising cost of traditional electricity.

Unfortunately, since you don’t technically own the system, you’re unable to claim any tax credits or exemptions. Regardless, you’ll still be saving money month-to-month on your electric bill while also reducing your carbon footprint.

Option 3: No Money Down

This is often the most common term used to describe “free solar” because it applies to almost every method of acquiring solar energy. Whether buying your own system, borrowing one via a PPA, or even signing up for community solar, there is almost always a $0 down option available. Here’s why…

If you're buying a solar system, there are a plethora of financing options that will be offered to you that eliminate the upfront cost. Considering a solar system is often over $10,000, most people opt to finance it while they recoup their reimbursements and other financial benefits along the way. The monthly financing cost for a solar system + the energy derived from it should be drastically less than your current electric bill, which is why some people call it a “bill swap”. So you’re able to get solar with $0 upfront while reducing your monthly cost for energy, call it a win-win.

If you’re borrowing a system via a Power Purchase Agreement, then there is also no money down for the homeowner since the solar installation company owns, manages, and installs the equipment at their expense.

How to Get Started

If you’re a New Jersey resident and lowering your electric bill and carbon footprint for “free” sounds too good to be true, we encourage you to take the next step and find out for yourself!

The first thing you need to do is figure out which programs you (and your home) qualify for. Depending on where you live, your home may qualify for several different solar savings programs, each with unique advantages. We strongly recommended you speak with one of our local solar energy advisors to review your options. If you begin an installation without applying for the right programs, you may lose out on massive savings!

Lastly, it’s important you work with a state-licensed installer to ensure your solar system is installed safely and legally. This is also the best way to ensure your system is installed adequately to avoid any reason for disqualification from programs and incentives available to you and your home. Setting up a cutting-edge solar system and connecting it with your utility company’s grid is no simple DIY project. Be sure only to evaluate options provided from licensed and insured solar panel installers.

Contact a local NJ Energy Advisor to walk you through the whole process, from qualification to installation!

Key Takeaways:

  • No State-Sponsored Free Panels: New Jersey does not provide free solar panels through any government-sponsored programs.
  • "Free" Panels through PPAs and Leases: Offers for 'free' solar panels typically involve Power Purchase Agreements (PPAs) or solar leases, where the solar provider installs panels at no upfront cost, and you pay for the electricity they generate.
  • Popular Programs: The NJ SUN Solar Program and various local initiatives offer solar panel installations for eligible residents and businesses, contributing to the state’s goal of increasing solar capacity.
  • Federal and State Incentives: Homeowners can benefit from the 30% federal tax credit, Solar Renewable Energy Credits (SRECs), and property and sales tax exemptions, significantly reducing the overall cost of solar installations.
  • Qualification Steps: Review your options, determine if your home qualifies for savings programs, and ensure a state-licensed installer handles the installation for legal and safety reasons.
  • Expert Consultation: Consulting with local solar experts is recommended to navigate eligibility, maximize savings, and ensure proper installation.
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Author & Solar Energy Expert

James Kahle, a revered voice in the energy domain, enlightens homeowners about the benefits of solar. Catch James soaking up the sun while playing basketball or immersed in the pages of a book.

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