New Jersey Solar Incentives, Tax Credits & Rebates Guide 2024
Updated August 28, 2024 | 12 min read
New Jersey homeowners, are you ready to save big on solar energy? In 2024, a combination of generous tax credits, state rebates, and innovative programs can dramatically reduce the cost of going solar. This comprehensive guide unveils all the New Jersey solar incentives available, helping you maximize your savings and reduce your carbon footprint.
Going solar in 2024 may cost you anything between $15,000 and $30,000, depending on the size of the solar system. New Jersey sweetens the deal with extremely appealing incentives, rebates, and tax credits that reduce the price by 30%. Additionally, the state offers lucrative programs, such as earning $85 or more for every 1,000 kWh of excess energy generated over 15 years.
Explore the following NJ solar panel incentives in 2024 to kickstart earnings from your solar installation:
| New Jersey Solar Incentives | Description | Type | Status |
|---|---|---|---|
| NJ Solar Tax Credit Tax Credit (Green Energy Tax) | Claim up to 30% of your solar installation costs. | Federal | Ongoing |
| NJ Net Metering | Sell renewable solar energy that is sent back to the grid in exchange for utility bill credits. | State | Ongoing |
| NJ Solar Tax Exemptions | Increase the value of your house without paying additional taxes. Benefit from a 7% tax exemption on buying a new solar system. | State | Ongoing |
| SRECs and TRECs | Sell credits (SREC/TREC) received for generating 1,000 kWh | State | Closed for new solar installations |
| SuSI | Earn $85 or more for each 1,000 kWh produced. | State | Ongoing |
The following guide covers everything you need to know about the latest programs financed by the state to help cities become greener.
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The Green Energy Tax Credit
The Green Energy Tax Credit, also known as the Federal Solar Investment Tax Credit (ITC), is a 30% NJ solar tax credit available to homeowners who install solar panels throughout the state.
This tax credit covers up to 30% of the cost of installing a solar energy system, solar batteries, and other installation costs, making it one of the most generous New Jersey solar incentives available.
Fortunately, the Solar ITC was extended in 2022 and is set to expire in 2035 unless Congres extends it again. Here are some details about the Solar ITC benefits:
- Solar systems placed in service between 2020 and 2021 receive a 26% tax credit.
- Solar panels placed in service between 2017-2019 and 2022-2032 receive a 30% tax credit.
- Solar energy equipment placed in service after 2033 receive a 26% tax credit.
Don't lose your chance – talk to a solar expert today to find out exactly how to file this tax credit and save 30% on your taxes!
New Jersey Net Metering: Earn Credits for Excess Solar Energy
Net metering in New Jersey is when the state returns the full retail credit on the utility bill for excess electricity panels generated at the end of each year. When the solar system generates more electricity than a homeowner needs, the utility meter spins backwards. These stored kWhs are paid back yearly.
To benefit from the net metering program, your utility company needs to track how much energy is sent to the house and how much electricity is sent back to the grid.
NJ Solar Rebates
Property Tax & Sales Tax Exemptions: Additional Solar Savings in NJ
Unlike many states, New Jersey provides multiple tax incentives for homeowners who want to convert to solar energy.
- Property Tax Exemption: In NJ, solar panels are exempt from increased property taxes. So, the homeowner assessed at $400,000 who adds $20,000 worth of solar panels to the current value of $420,000 will still only be taxed on $400,000. This means you can enjoy the benefits of a home solar system AND the increased property value without the additional taxes!
- State Sales Tax Exemption: Solar panel systems are also exempt from New Jersey’s 7% sales tax, which immediately makes them more affordable. For example, if the price of your solar system is $15,000, you will save $1,050 through NJ's sales tax exemption.
Be sure to speak with a solar expert to ensure you apply for these tax credits correctly.
NJ Solar Renewable and Transitional Energy Credits
Solar Renewable Energy Certificates (SRECs) and Transitional Renewable Energy Credits (TRECs) are New Jersey solar incentives that are no longer available to newly installed solar systems. Those solar panels that were installed before the programs closed still generate SRECs with a market value of around $210 per certificate.
SRECs allow NJ residents to sell the excess solar energy that is produced by their solar energy system back to New Jersey's shared electrical grid. Homeowners use these credits like cash when it comes time to pay their electricity bill each month.
This is a unique benefit for NJ residents as not all states have ever had anything as generous and successful as an SREC solar program.
TRECs, on the other hand, equal 1,000 kWH of solar energy generated – however, they cannot be traded on the market. Instead, the amount of money a person gets paid depends on the type of system.
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SuSI Program: Earn Cash for Your Solar Energy Production
The SuSI program, launched in 2021, encourages clean energy generation in New Jersey and is available to solar facilities that are connected to the transmission or distribution systems of the state.
Following a successful SREC solar program, SuSI has similar guidelines and requirements to the earlier closed incentive program. What’s more, it may be an even more appealing program, especially for homeowners considering installing solar panels, because each megawatt-hour earns you one SREC-II certificate. For residential buildings, it means compensation of $85 for each 1,000 KWh of solar production for the period of 15 years.
If you install a solar panel system in New Jersey now that will produce 5,000 kWh a year, you could earn an estimated $425 and approximately $6,000 over 15 years. Here is a table so you can estimate what the earnings are on your solar production:
| Size | Annual Production | Year 1 Earnings | 15-Year Earnings |
|---|---|---|---|
| 3.5 kW | 4,000 kWh | $340 | $5,100 |
| 7 kW | 9,000 kWh | $765 | $11,475 |
| 10 kW | 12,000 kWh | $1,020 | $15,300 |
When comparing the initial SREC program to TREC and SusI, the original incentive was the most beneficial and earned three times more than the currently available programs to new installers of solar systems.
| NJ Solar Incentives | Value per kWh | Estimated rebate amount per year |
|---|---|---|
| SRECs | $235 | $1,655 |
| TRECs | $91.20 | $640 |
| SuSI | $85 | $595 |
It’s not too late to profit from solar energy
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The SuSI program is divided into two sub-groups where one is dedicated to residential and community solar projects with 5 MW or less, and the other is to commercial solar projects with over 5 MW in size:
- The Administratively Determined Incentive (ADI)
- The Competitive Solar Incentive (CSI)
ADI vs. CSI: Understanding New Jersey's Solar Incentive Programs
Administratively Determined Incentive (ADI) Program
The ADI program is an incentive dedicated to residential net-metered systems, small non-residential net-metered systems (smaller than 5MW), community solar systems, and solar projects. The incentive value you may qualify to receive depends on the solar panel system and its size. Here is a detailed breakdown of how much you earn from the program:
| Type of the system | Size | SREC-II value |
|---|---|---|
| Net-metered residential | All types and sizes | $85 |
| Small net-metered non-residential (rooftop, carport, canopy, and floating solar) | Smaller than 1MW | $110 |
| Small non-residential net-metered ground mount | Smaller than 1MW | $90 |
| Large non-residential net-metered (rooftop, carport, canopy, and floating solar) | 1MW to 5MW | $100 |
| Large non-residential net-metered ground mount | 1MW to 5MW | $85 |
| Non-low-middle income (LMI) community solar | Up to 5MW | $70 |
| LMI community solar | Up to 5MW | $90 |
NJ Competitive Solar Incentive (CSI) Program
The New Jersey Board of Public Utilities (NJBPU) agreed upon a new initiative called the Competitive Solar Incentive (CSI) Program to encourage solar energy in NJ. This will be an essential part of New Jersey's Successor Solar Incentive initiative (SuSI), significantly growing the NJ Solar Program at a lower cost to residents.
The new CSI program focuses on promoting the installation of at least 300 MW of solar power annually until 2026. Qualifying grid-supply solar installations, non-residential net-metered solar buildings (greater than 5MW), and eligible grid-supply solar installations coupled with energy storage are all eligible for the program.
With this program, New Jersey continues to take the lead in moving America towards a cleaner energy future and promoting NJ Solar Incentives. NJ ranked #8 in 2021 in the National Solar Ranking (via SEIA) and looks to continue to improve in 2023 and 2024. Residents should be proud to be a part of a state making such progressive moves to fight climate change and improve NJ Solar incentives.
Step-by-Step Guide to Applying for New Jersey Solar Incentives
- Determine Eligibility:
- Review the eligibility requirements for each incentive you're interested in, such as the NJ Clean Energy Program and the Database of State Incentives for Renewables & Efficiency (DSIRE), as most programs have specific criteria related to system size, location, and energy usage.
- Choose a Qualified Solar Installer:
- Work with a reputable solar installer who is familiar with New Jersey's incentive programs. They can guide you through the application process and ensure your system meets the necessary standards.
- Apply for the Federal Solar Tax Credit:
- Claim the 30% Federal Solar Investment Tax Credit (ITC) when you file your federal income taxes using IRS Form 5695.
- Enroll in Net Metering:
- Contact your utility company to enroll in their net metering program. They will install a bidirectional meter to track the energy flow between your home and the grid.
- Apply for State Tax Exemptions:
- File the necessary paperwork with the New Jersey Division of Taxation to claim property tax and sales tax exemptions.
- Consider the SuSI Program (If Eligible):
- If your solar system meets the requirements, apply for the SuSI program through the NJ Clean Energy Program to earn SREC-II certificates for your energy production.
- Stay Informed:
- New Jersey's solar incentives are subject to change. Stay up-to-date on the latest programs and requirements through official sources, such as the New Jersey Board of Public Utilities.
Important Note: The specific application process and forms may vary depending on the incentive and your utility provider. Consult with a qualified solar installer and reference official websites for the most accurate and up-to-date information.
Find Out How Much You Can Save With Solar
There is a good reason New Jersey ranked #8 in the National Solar Rankings. The Garden State has taken leaps and strides to help residents convert to solar energy and reduce their electricity costs. But there is still a lot of confusion on exactly how to install solar panels in NJ. That is why EcoGen America has dedicated its business to helping New Jersey residents save money by switching to solar energy.
The solar experts at EcoGen America will take the time to go through your questions and learn about your unique situation and goals. You have many choices when it comes to choosing a solar panel system. Work with NJ Solar experts to ensure you get the best possible solution for you.
To learn everything you need to know about getting free solar panels in New Jersey, be sure to read our comprehensive post!
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