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New Jersey Solar Incentives For 2024

new jersey solar incentives

New Jersey is a leading state in the adoption of clean energy, partly due to ambitious Renewable Portfolio Standards (RPS). In particular, the Garden State is a leader in solar energy adoption, and 7.4% of its electricity comes from solar installations, according to the Solar Energy Industries Association (SEIA). It is in the top 10 solar energy-generating states, with a lot of small-scale solar power generation projects, partially because of New Jersey solar incentives.

It has a strong market for home solar system installations, and numerous incentives make residential and commercial solar energy projects a smart investment.

If you have clients in New Jersey, installing photovoltaic solar panels on their homes or businesses can dramatically reduce their energy bills for decades. As the cost of grid electricity increases, so will the savings from their system. From Atlantic City to Trenton and Newark, New Jersey has a thriving solar energy industry. Let’s explore why New Jersey is such a popular market for solar companies.

Considerations for New Jersey Solar Panel Installations

Many home and business owners want to know if their solar investment will pay off and how much money they will save on their electricity bills. Although New Jersey is a hotbed for solar projects, not all properties are ideal.

Solar Potential Of The Property

Creating accurate projections for their solar energy generation that consider shading and solar orientation is critical for potential customers to make an informed decision. A solar site survey is an excellent opportunity for gathering such information, calculating the sun number for a property, and estimating the payback period for a solar panel system.

In addition, while evaluating the potential of the property, this is a good time to determine if there is a homeowners association your customer needs approval from to install solar panels.

Qualifying For New Jersey Solar Incentives

Although no rebates are available in New Jersey, there are numerous incentives, and it is helpful to determine if potential customers can take advantage of them. For example, some homeowners might not have sufficient tax liability with the IRS to take advantage of the federal solar tax credit. A solar lease or power purchase agreement (PPA) might offer an alternative for financial investment in such cases.

Electricity Rates in New Jersey

Four electric companies serve New Jersey — Atlantic City Electric, Jersey Central Power & Light (JCP&L), Public Service Electric and Gas (PSEG), and Rockland Electric. Utility companies have different service areas. For example, Jersey City and Newark residents are in the PSEG service territory.

The average cost for residential electricity in New Jersey as of January 2024 is 17.9 cents per kilowatt hour (kWh), a bit higher than the average national average of 15.5 cents. However, New Jersey electricity rates can vary between electric companies. The higher the electric rate, the shorter the payback period can be for solar clients when all other factors are the same.

Future Home Energy Needs

Some potential customers know their home energy use will change soon, and it’s a good idea to consider this when sizing a solar system. For example, they may install a heat pump and reduce the use of a gas boiler, increasing their home electricity use. Or maybe a household plans to get an electric vehicle and install a home EV charger, increasing electricity consumption.

Paying The Upfront Solar System Cost in New Jersey

Many homeowners find it challenging to pay the upfront cost of installing solar panels in New Jersey. However, solar financing and loan options are available that can make solar installations more accessible and affordable.

One option is to explore solar loans specifically designed for financing solar projects. Many financial institutions and solar financing companies offer loans with favorable terms and interest rates to help homeowners cover the upfront costs of installing solar panels. These solar loans often have flexible repayment options that align with the energy savings generated by the solar system, allowing homeowners to gradually pay off the loan while reaping the benefits of reduced electricity bills. But, when interest rates are high, solar energy customers will pay more to finance a solar panel system.

New Jersey Solar Incentives

Numerous local and federal New Jersey solar incentives are available to home and business owners.

State Solar Incentives in New Jersey

Your residential and commercial customers may be eligible for several New Jersey solar panel incentives.

New Jersey Net Metering Programs

New Jersey has net metering laws requiring utility companies to compensate solar system owners for excess solar electricity they feed to the grid. If the solar panel installation produces sufficient power, your customers can virtually eliminate their power bills. The state mandates all utilities to comply with net metering rules, which means they must compensate solar owners for excess electricity uploaded to the grid at the one-to-one retail rate.

Solar Renewable Energy Credits (SRECs)

Solar homes in New Jersey can earn SRECs for generating solar power and sell solar renewable energy certificates to utility companies. The number of SRECs that a solar system earns is based on the amount of energy produced over a given amount of time. SRECs operate as a commodity and can be sold to utilities or electricity suppliers that need to buy them to comply with the New Jersey RPS. The price of New Jersey SRECs can vary as they are traded on an open market, so they are supply and demand-sensitive.

Your customers can earn one credit when a solar system produces 1,000 kW. To qualify for payments for this New Jersey solar incentive, they must register their solar system.

New Jersey Solar Tax Incentives

The State of New Jersey has solar incentive programs to help lower or eliminate taxes for residential customers. These New Jersey solar incentives reduce the total lifetime cost of installing and owning a PV system.

Solar Tax Exemption

In New Jersey, there is a solar tax exemption that allows for a 100% exemption on state sales tax for the purchase of solar energy equipment. This exemption applies to all major solar energy equipment purchased for residential use, offering a 7% savings on the total cost. This exemption is available to all taxpayers in New Jersey, making it an accessible incentive for those looking to invest in solar panels.

Renewable Energy Property Tax Exemption

New Jersey offers a property tax exemption for renewable energy systems that can benefit homeowners investing in solar energy. The exemption is effective for the tax year following the year in which the certification is granted. To qualify for the exemption, homeowners need to submit an application for certification of renewable energy systems (CRES) with Form CRES. This exemption provides an additional financial incentive for property owners to install renewable energy systems, contributing to the affordability and appeal of adopting solar technology within New Jersey.

Community Solar In New Jersey

In New Jersey, the Community Solar Energy Program (CSEP) offers opportunities for residents to benefit from solar energy even if they cannot install solar panels on their property. The program allows eligible solar facilities in various site types, such as rooftops, carport canopies, floating solar, contaminated sites, and landfills. Through the program, residents can participate as subscribers and receive solar energy credits on their utility bills based on the power generated by the community solar projects they are subscribed to.

To participate in the program, residents can sign up with community solar subscriber organizations that are registered with the Board. These organizations facilitate the process of connecting subscribers with community solar projects and managing the distribution of credits. By subscribing to a community solar project, residents can support renewable energy, contribute to the reduction of their carbon footprint, and potentially save on their utility bills.

The New Jersey Clean Energy Program website provides information on registered community solar subscriber organizations and sample utility bills for residential subscribers. Interested individuals can also stay updated on community solar and program communications by subscribing to the program's listserv. Governor Phil Murphy has also signed legislation to expand the Community Solar Energy Program, further strengthening access to solar in New Jersey and reducing utility costs for households.

solar new jersey

Federal Incentives For Going Solar

The investment tax credit (ITC) can reduce tax liability when installing a solar PV system by 30%. This includes all solar equipment, such as the cost of solar panels, inverters, and even a solar battery.

However, the system must be installed on a primary or secondary residence, and the homeowner must have sufficient tax liability to take advantage of this solar incentive. New Jersey solar customers will see the tax credit's benefit when they file their taxes for the given tax year.

Frequently Asked Questions About Solar Panels In New Jersey

Let’s explore some of the FAQs potential customers may ask about rooftop solar systems.

Are there barriers to widespread solar adoption in New Jersey?

Because New Jersey is a densely populated state, there is little low-cost land available for solar farms. In particular, Hudson, Essex, Union, Bergen, and Passaic Counties have high population densities. Therefore, rooftop solar arrays are often easier to site.

Although New Jersey doesn’t have the same solar resources as New Mexico or Arizona, it receives sufficient solar radiation for installing solar panels. In addition, PV modules are sometimes covered by snow in the winter, but this doesn’t usually significantly impact total solar energy production.

Are solar panels worth it in New Jersey?

A solar energy system is a wise investment for many homes, but not all. If the property has excessive shading or the roof needs to be replaced, installing solar panels might not be worthwhile.

According to the National Solar Radiation Database by the National Renewable Energy Laboratory, much of New Jersey has a similar solar resource as Connecticut, Rhode Island, West Virginia, Indiana, and Iowa, and properties get an average of about 3.5 to 4 peak sun hours.

What New Jersey solar incentives are available to residents?

The main solar incentives in New Jersey include the federal Investment Tax Credit, the Solar Renewable Energy Certificate program, the Solar Property Tax Exemption, and the Sales Tax Exemption for solar energy equipment. There is no longer a New Jersey solar rebate program.

New Jersey Solar Incentives Make PV Panels More Affordable

The state has an ambitious RPS and is actively working to transition to renewable energy sources. As a result, numerous solar incentives, such as tax exemptions, net metering, and SREC programs, are available to households and businesses. This creates an excellent opportunity for solar companies operating in the Garden State to establish thriving businesses due to strong demand.

GreenLancer is here to help installers nationwide with their residential and commercial solar projects. We offer a variety of solar design and engineering services that have helped more than 7,500 clean energy installers complete successful projects.

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