New Jersey solar rebates and tax credits calculator

Solar incentive

Federal ITC 26% (tax credit)

State tax credit: No

Net metering (by utility)

Calculate for your homes location

There can be solar tax credits and incentives available at the federal, state and local levels. The calculator above will show you the value of all incentives your home is eligible for.

Summary of New Jersey solar incentives 2020

The future looks bright for home solar energy in New Jersey, but things are a bit in flux right now with the state’s primary solar incentive offered to homeowners.

The Garden State is transitioning away from its long-term Solar Renewable Energy Certificate (SREC) incentive program. While policymakers choose a successor, new solar projects are eligible for a new kind of Transition Renewable Energy Certificate (TREC). The program design will allow the average homeowner to earn around $800 per year in addition to their savings on electricity.

That's a pretty decent benefit just for owning a solar system, and it's enough to make us recommend you use our solar calculator and get quotes from local installers now before the TREC program is superseded by whatever successor the Board of Public Utilities comes up with.

In other news, The New Jersey board of public utilities also just approved landmark funding for dozens of community solar projects for low income households to make solar much more accessible. That commitment to helping folks go solar is what keeps New Jersey one of the best places in the country to go solar.

On this page, you can:

  1. Learn what solar incentives are available to New Jersey homeowners

  2. See what New Jersey solar incentives you qualify for based on your utility company and city

  3. Find out how much these incentives and/or New Jersey solar tax credits will reduce your cost to go solar and add batteries

Federal solar investment tax credit

The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in New Jersey

This perk is commonly known as the ITC, short for “Investment Tax Credit”. If you install your photovoltaic system in 2020, the federal tax credit is 26% of the cost of your solar panel system. This is 26% off the entire cost of the system including equipment, labor and permitting.

Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 26% = $5,200.

The federal tax credit falls to 22% in 2021. Unless new legislation is introduced in Washington D.C., this program will be gone in 2022.

Net energy metering in New Jersey

With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.

Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus.

New Jersey’s net metering rules ensure the utility company tracks your excess power generation and credits it to your next bill at the full retail rate. If you run a surplus for an entire year, the utility will cut you a check for the surplus at the company's avoided-cost (wholesale) rate. All investor owned utilities and certain competitive municipal utilities and electric cooperatives are required to provide net metering. 

This is a huge boon to you as a solar owner in New Jersey, and a strong policy we’d like to see in more states across the country. 

New Jersey solar rebates

New Jersey's renewable energy program does offer rebates for some clean energy types. Unfortunately legislators made the decision to back solar power exclusively with the SREC/TREC market. That means the cost of solar panels in NJ may be a bit higher at the outset, but those tremendous long-term payments still more than make up for it.

But, there is a way to get some rebates if you're building a new home and using renewable energy to power it. New Jersey has a program called "The NJ Clean Energy Residential New Construction Program," which offers rebates to incentivize the construction of new homes that meet the New Jersey ENERGY STAR standards.

Do some reading at the link above, and you'll see that it's possible to get thousands back if you build a home that meets or exceeds those standards.

The New Jersey TREC program

New Jersey is a state that has placed strict requirements on utility companies to include renewable energy and specifically home solar in their energy mix. Part of the way the state has achieved such strong results in transitioning to clean energy has been through issuance and sale of renewable energy certificates (RECs). Clean energy generators like home solar owners own these credits and can sell them to the utilities so they can meet their renewable energy targets.  

Previously, New Jersey had allowed the free market to set rates for solar renewable energy certificates, which at times sold for up to $600 apiece. This provided homeowners near $5,000 in annual rewards, just for owning solar systems. The market for SRECs became unstable however, and the New Jersey Board of Public Utilities (BPU) have issued guidance on a transitional program. 

Transitional renewable energy credits (TRECs) are now offered to New Jersey solar owners instead, and they are set at about $92 apiece for every megawatt-hour (MWh) of solar produced over 15 years. For an average sized 7.2kW home solar system, that amounts to 9MWh per year, or $830 annually. Over 15 years, that amounts to over $12,000!

Learn more: New Jersey’s transition to the TREC program

Sales and property tax exemptions for solar in New Jersey

When the property tax assessor comes a knockin’ at your front door, by law, they are not allowed to charge you any more property taxes in New Jersey because you’ve got a new valuable solar system on your roof. At the same time, your home WILL be worth significantly more when you sell, because, hey, what home buyer doesn't like free electricity?

Also, unlike other home upgrades like new kitchen appliances or bathroom fixtures, with solar panels in NJ, you will not have to pay any sales taxes on your system. That's 7% you're saving right upfront, even without any statewide solar power rebates.

Low income solar programs

In 2019, New Jersey began a 3 year community solar pilot program that is aimed partly at low- and moderate-income folks.

The program allocates points to project proposals including both low-medium income communities and environmental justice communities. At least 51% of approved projects for advantageous financing need to include these groups. The New Jersey community solar program has seen a huge demand, and is on pace to install over 75 MW of solar annually by 2022.

Cost of solar panels in your part of New Jersey after all applicable solar incentives

Showing data for:

Prices based on a 9.6kW system, after 26% federal tax credit

Solar prices near you

Cost range of local prices

$16,793-$20,524

Payback period

3.2-3.9 years

Net profit (savings less system cost)

$89,800-$109,756

Average size system installed in NJ in 2020

9.6kW

Solar panel cost calculator

Best 10 solar companies in New Jersey

62 solar companies in New Jersey provide pricing on SolarReviews. Here are the best rated companies near you.

Solar guides for your New Jersey city

For more information about going solar near where you live, check out the following resources:

Find local city information

 

Useful links

PSE&G Solar Loan Program - Covers 30-50% of your system with on bill repayment or payment from TRECs

Solar Energy Industries Association (SEIA)

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