New Jersey is the 8th most productive state forsolar energy, with over 4.4 gigawatts installed. This makes considering a switch in the Garden State an easy decision. With a wide range of financial incentives, government regulations, and community support, homeowners can save big on solar panels in New Jersey.
But what exactly are the available opportunities for solar energy? In this article, we break them down one by one. We ll get into net metering, performance payments, and renewable standards below. Let s get started learning about New Jersey s solar programs.
How to Save Money on Solar Panels in New Jersey: Overview
Just considering thecost of solar panels, homeowners in New Jersey already have reason to consider making a switch. With high electricity rates, decent sunlight, and low power needs, residents of the Garden State can save nearly $17,000 throughout their system s lifetime. And with incentives, there s even more financial gain.
Unexpectedly, solar panels in New Jersey have some of the best support in any state. The efforts made to invest in renewable energy have led the Garden State to the 8th leading in the country. As a result, homeowners have available opportunities to save on installation and even earn money over time. Let s break down these opportunities in detail below.
Solar Panels in New Jersey: Federal Incentive
Before getting into state-level programs, residents of New Jersey need to apply for the federal solar tax incentive. This benefit offers a 30% return on any solar purchases, which include labor,equipment, and sales tax. Right off the bat, this cuts as much as $5,000 out of the price of an installation.
The program has a few prerequisites, which include:
- Owning the solar panel system outright
- Purchasing new equipment
- Living at the house where the system is installed
Thefederal solar creditstarts to taper off its incentive in 2033, so while you ve got some time to use the federal return, don t wait too long. The program terminates in 2035 unless it s extended.
New Jersey s State Credits and Rebates
Here s where things get juicy because New Jersey is pushing hard for renewable energy, homeowners can receive a paycheck simply for producing solar power. In the Garden State, these benefits come in the form of net metering and performance payments.
New Jersey has kept a strong stance on their net metering policy. This mandate requires utility companies to purchase a porstion of their power from solar panels. This means that any excess electricity you produce can be sold for a credit off your next month s utility bill. At the end of the year, if you still have any credits left, the power company will write you a check for the wholesale cost.
Additionally, the state of New Jersey presents homeowners with a solar renewable energy credit (SREC) for every megawatt of energy their panels produce each year.
Under the Successor Solar Incentive program, residents of the Garden State can sell their SRECs to the utility at a rate of $90 each. With the average 6kW system producing around 5-6 SRECs a year, this equals about $470 earned annually.
Solar Panels in New Jersey: Government Regulations
The Garden State also has great state-level regulations. Right off the bat, New Jerseyans get to take advantage of sales and property tax exemptions. With no sales tax, homeowners are already saving about 7-9% on the purchase of an installation. And without additional taxes on increased property values, New Jerseyans save thousands more throughout their system s lifetime.
All of these great financial incentives and regulations stem from New Jersey s great renewable portfolio standards (RPS). An RPS is a state s internal goal to promote renewable energy and is a great resource for determining the future of solar in the area.
New Jersey s RPS was just adjusted in 2018, requiring 50% of its power to come from renewable sources by 2030. This suggests a strong push toward solar investment, which we see in an updated net metering policy and a brand-new community solar program.
The Garden State goes one step further with a solar carve-out this is a regulation that requires a specific amount of renewable energy to come from solar energy. In New Jersey, the solar carve-out is about 5.1% (about 3,400GWh) by 2021, decreasing each year until it reaches 1.1% in 2031.
Should New Jerseyans Lease Solar?
In many states, homeowners have the option to lease asolar panel systemif they don t have the capital to purchase one outright. While this disqualifies them from many incentives including the federal solar tax credit and net metering, it s a decent option for reducing their solar footprint. In New Jersey, solar leasing is available, and can even result in decent savings on utilities over time.
However, if you re not interested in lease payments, the Garden State just introduced a new community solar program in February 2023. The Community Solar Energy Pilot Program allows participants to pay a subscription fee to a remote solar garden to access a lower energy bill without having to install panels on their roofs. This is a great option for those without enough money for an array of their own or who don t have control over their roof.
Solar Panels in New Jersey: Incentive Summary
|Federal Tax Incentive||30% credit|
|New Jersey Tax Credits / Rebates||None / none|
|Net Metering||Full retail credit each month, annual check for wholesale rate|
|Renewable Portfolio Standard||50% by 2030, 5.1% solar carve-out by 2021 decreasing to 1.1% by 2031|
|Property Tax Exemption||100%|
|Sales Tax Exemption||100%|
|Performance Payment Program||SRECs at $90 each|