As one of a handful of states to have installed more than one gigawatt of solar capacity, New Jersey is one of the country’s solar powerhouses. In fact, the Garden State has installed enough solar energy to power over a quarter of a million homes.
NJ solar programs
The state’s solar success has been based on two core programs, one that compensates you for the electricity you produce, and one that rewards you for that electricity’s clean characteristics:
New Jersey net metering
This policy allows you to sell excess electricity back to the grid at the retail rate. This is great because the retail rate of NJ net metering is significantly higher than the wholesale rate that large power plants receive for the electricity they sell to the utility. Additionally, the ability to both buy and sell electricity from the grid allows you to balance your consumption and production, instead of letting any excess electricity you produce go to waste.
SREC NJ: Solar Renewable Energy Certificates
When you install your solar energy system, it produces more than just electricity – for every megawatt-hour (MWh) of solar power, your panels also generate one SREC. These SRECs can then be sold on a market to utilities to help them meet the New Jersey Renewable Portfolio Standard (RPS). While the prices for these certificates vary with supply and demand, in March 2016 homeowners could sell each one they produced for $280. That means if you install a 5-kilowatt (kW) system that generates 5 MWh per year, you could make as much as $1,400 each year by selling your SRECs.
Tax credits for solar panels in New Jersey
On top of these revenue streams, New Jersey has also granted residential solar a couple tax breaks to help keep the costs down.
Solar sales tax exemption
When you purchase your home solar system, you will be 100 percent exempt from any sales tax, due to the PV energy sales tax exemption. That means you’ll spend 7 percent less on your solar equipment.
Property tax exemption
Similarly, thanks to the property tax exemption for renewable energy systems, New Jersey resident that invest in a solar energy system will not have to pay any additional property taxes on the value that their solar panels are adding to their homes.
Solar federal tax credit
In addition to the incentives and programs mentioned above, the federal Investment Tax Credit (ITC) reduces the cost of your solar energy system by 30 percent; next time you file your federal income taxes, you’ll save a bundle of money. Keep in mind that the ITC applies only to those who buy their system outright (either with a cash purchase or solar loan), and that you must have enough income for the tax credit to be relevant.