How to Get Free Solar Panels in New Jersey (No Bullsh*t Guide)
Updated October 18, 2024 | 17 min read
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.
Find out if you qualify for New Jersey savings programs!
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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
Source: njcleanenergy.com
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 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 panels in NJ, often entirely.
We’ve identified the best programs and solar 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 NJ SUN program is a key initiative for making solar energy accessible to New Jersey residents. Administered by the New Jersey Board of Public Utilities (NJBPU), this program aims to increase solar capacity across the state by providing free solar panel installations to eligible homeowners and businesses. Here's a closer look at the NJ SUN program.
Eligibility Requirements
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- Income Limits: NJ SUN is designed to assist low- to moderate-income households. Specific income thresholds vary, so it's important to check the program guidelines for the most up-to-date information.
- Homeownership: You must own the home where the solar panels will be installed.
- Other Factors: Additional eligibility criteria may apply, such as property tax status and energy usage history.
Application Process
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- Visit the NJ Clean Energy Website: The official website (insert hyperlink to NJ Clean Energy website here) provides detailed information about the program and the application process.
- Complete the Application: You'll need to provide information about your household income, energy usage, and property.
- Get Approved: If you meet the eligibility requirements, you'll be approved for a free solar panel installation.
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Benefits of NJ SUN
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- No Upfront Costs: Eligible participants receive a free solar panel system, covering equipment and installation.
- Reduced Energy Bills: Generate your own clean energy and significantly lower your monthly electricity costs.
- Environmental Impact: Contribute to a cleaner environment by reducing your reliance on fossil fuels.
Important Note: While NJ SUN offers a fantastic opportunity, funding is limited, and the application process can be competitive. It's highly recommended to apply early and explore other solar incentives that may be available to you.
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 Solar Tax Credit
Formerly known as the Solar Investment Tax Credit (ITC), this program was extended in 2022 and renamed the Residential Clean Energy Credit.
Here's How it Benefits You
- 30% Credit: You can claim a 30% tax credit on the total expenses related to your solar panel system. This includes:
- Core Components: The solar panels themselves, inverters (which convert the DC power from your panels to usable AC power), and racking systems for mounting the panels.
- Installation Essentials: All the wiring, conduit, and labor costs associated with getting your system up and running.
- Permitting and Fees: Any necessary permits and inspection fees required by your local municipality.
- Solar Batteries: If you choose to include a battery system to store excess solar energy, that's also eligible for the credit.
- Real-World Example: Let's say your complete solar installation comes to $25,000. With the 30% tax credit, you'd receive a $7,500 credit towards your federal taxes, directly reducing what you owe.
- Claiming the Credit: You'll claim this credit when you file your annual federal income taxes using IRS Form 5695.
Source: seia.org
Solar Renewable Energy Credit ($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 solar incentives to make continuous returns from your solar panels.
Here's How SRECs Work
- Generating SRECs: For every megawatt-hour (MWh) of electricity your solar system produces, you earn one SREC. Think of it as a certificate representing the environmental benefits of that clean energy.
- New Jersey's Renewable Portfolio Standard (RPS): New Jersey, like many states, has an RPS requiring electricity suppliers to get a certain percentage of their power from renewable sources.
- SRECs as Compliance Tools: Utilities can meet their RPS obligations by purchasing SRECs from solar system owners like you. This creates a market where you can sell your SRECs.
- Turning SRECs into Cash: You have two main options for profiting from your SRECs:
- Sell them on the SREC market: Several platforms facilitate the trading of SRECs. Prices fluctuate based on supply and demand, but they can provide a significant revenue stream.
- Use them for bill credits: Some utilities may allow you to use SRECs as a credit towards your electricity bill.
Important Considerations
- SREC Value: The value of SRECs varies depending on market conditions. It's essential to stay informed about current SREC prices in New Jersey.
- Tracking and Registration: You'll need to properly register your solar system and track your SREC generation to participate in the market.
Considering solar panels for your New Jersey home? Wondering if they're truly worth the investment? Our comprehensive guide dives deep into the benefits and considerations of going solar in the Garden State
Find out if you qualify for New Jersey savings programs!
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Option 2: Power Purchase Agreements (PPAs): Solar with No Upfront Cost
source: betterbuildingssolutioncenter.energy.gov
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 solars panel cost 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 PPAs Work
- Installer Ownership: A solar company installs a system on your roof at no cost to you. They own and maintain the equipment throughout the agreement.
- You Buy the Power: You agree to purchase the electricity generated by the solar panels at a fixed rate, typically lower than your utility's rate.
- Contract Terms: PPAs usually last 20-25 years. At the end of the contract, you can often renew the PPA, purchase the system, or have it removed.
Benefits of PPAs
- No Upfront Cost: This is the biggest advantage. You can enjoy solar energy without any initial investment.
- Lower Electricity Bills: The fixed rate for solar power is often lower than your utility's rates, leading to immediate savings.
- Maintenance-Free: The solar company handles all maintenance and repairs, saving you time and potential expenses.
Important Considerations
- No Tax Credits: Since you don't own the system, you can't claim the federal solar tax credit or other ownership-based incentives.
- Long-Term Commitment: PPAs are long-term contracts. Make sure you understand the terms and are comfortable with the commitment.
- Potential for Lower Savings: While you'll save on electricity, your overall savings might be less compared to owning a system and benefiting from tax credits and incentives.
- Impact on Home Sale: If you sell your home during the PPA term, you'll need to transfer the agreement to the new owner or buy out the PPA.
Is a PPA Right for You?
PPAs can be a good option if you want to go solar with no upfront cost and minimal hassle. However, weigh the potential drawbacks carefully. If you can afford the initial investment, owning a system might provide greater long-term savings and financial benefits.
Option 3: Slash Your Tax Burden with New Jersey Solar Exemptions
New Jersey wants to make going solar as affordable as possible, and they offer some excellent tax exemptions to help you do just that. These exemptions can significantly reduce your upfront costs and increase your long-term savings.
Here are the tax breaks you can enjoy when you install solar in the Garden State:
Property Tax Exemption
Increased Home Value, No Extra Taxes: Adding solar panels typically increases your property value. But with this exemption, you won't pay any additional property taxes on that added value.
How it Works: You'll need to apply for a certificate from your local assessor to reduce your property's assessed value to what it would be without the solar system.
Sales Tax Exemption
Escape the 6.625%: New Jersey provides a full exemption from the state's 6.625% sales tax on the purchase of your solar energy system.
Significant Savings: This exemption applies to all major solar equipment, including panels, inverters, and installation costs. On a $20,000 system, that's a savings of $1,325!
Why These Exemptions Matter
- Reduced Upfront Costs: These exemptions make going solar more affordable from the start, putting less strain on your budget.
- Enhanced Investment: By lowering your overall expenses, these tax breaks increase the financial attractiveness of investing in solar energy.
- Faster Payback: The money you save through these exemptions can help you recoup your solar investment more quickly.
Important Notes
- Eligibility: Make sure your solar system meets the requirements to qualify for these exemptions.
- Application: You may need to apply for these exemptions through your local municipality or the New Jersey Division of Taxation.
By taking advantage of these tax exemptions, you can maximize your savings and enjoy the many benefits of solar energy in New Jersey.
Find out if you qualify for New Jersey savings programs!
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How to Get Started with Free Solar Panels in New Jersey
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 recommend 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 solar 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 by 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 panels through any government-sponsored programs, however, there are other avenues to explore free solar panels in NJ.
- "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 Solar 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.
Yes, you can get free solar panels in New Jersey through programs like Power Purchase Agreements (PPAs) or solar leases, where the solar provider installs the panels at no cost, and you pay for the electricity they generate at a lower rate than your utility company.
Why Trust EcoGen?
At EcoGen America, we take pride in the credibility of our information and ensure its accuracy by cross-referencing our data with esteemed institutions such as the U.S. Department of Energy (DOE), the Solar Energy Industries Association (SEIA), and the National Renewable Energy Laboratory (NREL). Our rigorous validation process underscores our commitment to delivering trustworthy and up-to-date solar content with editorial integrity. Our partners do not direct our editorial content. Learn more
How We Gather Our Cost Data
We take a data-driven approach to the collection and analysis of solar costs to provide our readers with the most accurate information. Our methodology incorporates data from a variety of trustworthy sources including:
- Primary Sources: Every year we survey over 100 homeowners with solar panels to analyze pricing data based on direct consumer experience.
- Trusted Resources: We leverage verified datasets and industry reports from authoritative sources including:
- Expert Insights: We regularly consult with dozens of experienced solar professionals across the nation who are familiar with the latest trends, equipment and solar energy pricing in local markets.
Find out if you qualify for New Jersey savings programs!
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