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29 May 2024

2024 Guide to New Jersey Solar Tax Credits, Incentives and Rebates

New Jersey is an ideal location for installing a residential or commercial solar system with over 200 sunny days a year. It is also one of the few states offering a Solar Renewable Energy Credit (SREC), but also because the state offers generous financial incentives, which allows a quicker return on investment.

By transitioning to solar power, system owners can lock in lower electricity costs, insulate themselves from rising utility prices, and achieve significant long-term savings. Whether you're a homeowner looking to reduce your energy bills, a business aiming to enhance sustainability efforts, or a solar installer seeking the latest on state policies, this guide will equip you with crucial information to maximize a solar investment. 

Let’s take an in-depth look at the various solar tax credits, incentives, and rebates available to residents and businesses in the Garden State. 

Cost of Home Solar Power in New Jersey

While the average national cost for solar panels is $2.85 per watt, New Jersey's is slightly higher at $2.95 per watt. Considering the average New Jersey homeowner uses 691 kilowatt-hours (kWh) of electricity each month, a typical system size would be around 6.5 kW and cost around $19,175 before incentives and rebates. 

New Jersey Incentives & Loans

Successor Solar Incentive (SuSI) Program in New Jersey

New Jersey's Successor Solar Incentive (SuSI) Program offers a streamlined approach to solar energy incentives. Unlike traditional Solar Renewable Energy Credit (SREC) programs, SuSI provides a fixed rate of $85 per tradable Solar Renewable Energy Credit-II (SREC-II) for every 1,000 kWh of electricity generated by your solar panel system. This eliminates the market volatility associated with SRECs and simplifies the earning potential for solar energy producers.

A typical 7 kW solar power system in New Jersey can be expected to generate approximately 8.4 MWh of clean electricity annually, translating to eight SREC-IIs with a combined value of $680. 

This translates to a potential cumulative benefit of $10,200 over the program's 15-year lifespan. While slight degradation in panel efficiency may marginally reduce actual returns, high-quality panels with robust efficiency warranties can help maximize the program's financial advantages. 

New Jersey Solar Sales Tax Exemption in New Jersey

New Jersey sweetens the deal for solar power with a sales tax exemption. This applies to all solar equipment and the installation labor, reducing the upfront cost for homeowners.

Considering an average system price of $23,590 and the state's 6.625% sales tax, homeowners typically save around $1,562. This benefit increases to an average of $2,411 if you include battery storage – a potentially wise investment considering the uncertain future of net metering programs in some states.

Claiming this exemption is hassle-free in New Jersey. There's no paperwork involved; qualified solar installers will exclude sales tax from your system estimate and final price.

Solar Property Tax Exemption in New Jersey

This exemption applies to the increased value of your property due to installing a solar panel system, essentially freezing your tax assessment on that portion.  In other words, you can enjoy the benefits of solar energy without worrying about a jump in property taxes.

To qualify, your system simply needs to be certified by your local enforcement agency. This ensures proper installation and function for clean, renewable energy generation at your home.


New Jersey Net Metering

What is Net Metering

Net metering is a system that allows individuals and businesses generating their own electricity, such as through solar panels, to enter into an agreement with utility companies. Under this arrangement, residential, commercial, and industrial energy producers can send any surplus electricity back to the grid when their generation exceeds consumption. In return, they receive credits on their future electricity bills. 

This means that for every kilowatt-hour (kWh) of excess solar energy produced but not used, the utility company provides a credit, effectively reducing the overall cost of electricity for the consumer.


Net Metering in New Jersey

While net metering specifics can vary by location, New Jersey offers a particularly beneficial setup. In New Jersey, thanks to a mandate by the New Jersey Board of Public Utilities (NJ-BPU), all utility companies are required to offer net metering. This means you'll receive a full retail credit on your electricity bill for every kilowatt-hour (kWh) your solar panels produce.

Federal Rebates

Federal Solar Tax Credit

The Investment Tax Credit (ITC), also known as the federal solar tax credit, is a nationwide incentive enabling individuals to receive a tax credit for expenses incurred from the installation of solar panels. This credit provides owners of solar systems a deduction of 30% off the total cost of their system. For instance, purchasing a 10 kilowatt (kW) system at $33,000 means you are eligible for a tax credit of $9,900.

How US Solar Supplier Can Help You Save on Your Next Project

Let US Solar Supplier guide your solar energy project! Consult with us today to find the perfect system for your needs.

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