Solar incentives in NJ
Homeowners in New Jersey considering solar have access to some of the best solar incentives in the country. In fact, New Jersey has one of the lowest payback periods in the United States.
A home solar panel system is one way to reduce your electricity costs by generating your electricity with clean solar power. Solar panel systems in New Jersey are now more affordable than ever before, thanks to rebates, tax credits, and other financial incentives offered.
Homeowners who qualify for these savings programs could see immediate payback on their investment through lower monthly utility bills and increased property value!
New Jersey solar incentives have several benefits, including exemption from tax liabilities, saving money on electric bills, and even selling extra energy back into the grid. We’ll discuss how you can take advantage of these benefits in this blog post!
Federal Solar Investment Tax Credit (ITC)
An Investment Tax Credit(ITC) is a 26% reduction in the cost of residential and commercial solar systems. The ITC can be claimed against the tax liability of residential and commercial investors, and there is no cap on the amount you can claim.
For example, if your system has a total cost of $30,000, you’d receive a federal solar tax credit of 26%, which would reduce the cost of the solar PV system to $22,200 – A saving of $7800!
As a homeowner with solar, you can apply the ITC to your income taxes under Section 25D – residential energy efficient property.
Though the federal solar tax credit saves you 26% right now, it will be reduced to 22% after December 31st, 2022. Also, some important things you should keep in mind are that you’ll need a sufficient amount of income to take full advantage of the tax credit.
You may either buy your system outright or finance it with cash or a loan. If you have a solar lease, you will not qualify for the solar tax credit because you do not own the solar system.
Solar Successor Incentive Program (SuSI)
The Solar Successor Incentive (SuSI) is a new solar program designed by the New Jersey Public Board of Utilities (NJBPU) for solar panel systems already installed, activated, and interconnected to the electricity grid.
This New Jersey solar incentive results from the Clean Energy Act of 2018, which sets a Renewable Portfolio Standard for 50% of the state’s energy to be derived from qualifying energy sources.
The SuSI program is similar to its predecessors: the Solar Renewable Energy (SREC) and Transition Renewable Energy (TREC) certification programs.
You will receive one SREC-II for every kilowatt-hour of electricity your solar panel system generates. As the owner of the solar panels, you will receive $90 per SREC-II generated.
Solar Property Tax Exemption
Property tax exemption for solar is an incentive program in New Jersey that exempts property owners who install solar PV from property taxes.
To apply, you should submit an initial certification application to your local assessor. Once accepted, the exemption will reduce your property’s value down to what it would be without the solar energy system.
Solar Panel System Sales Tax Exemption
Helping to reduce the upfront costs of a solar installation, the Sales Tax incentives provide an exemption from the state’s Sales and Use Tax to purchase a solar energy system.
As of January 1st, 2018, the New Jersey Sales and Use Tax Rate is 6.625%.
Net Metering in New Jersey
Net metering is an electric supply option available to the owners of solar projects. You will receive credits for any extra power your solar energy system produces and sends to the utility grid. This solar incentive is available to homeowners in New Jersey, and it will help to bring their electric bill down to a few dollars per month.
As you produce clean solar power during the day, your appliances will use what they need, and any excess is sent to the grid for a credit. During moments of low solar output, such as at night or when cloudy, your home will draw electricity from the grid to compensate for the deficit.
Net metering works well because you can sell to the grid at the rate rather than wholesale pricing. The most common utility companies in New Jersey that offer net metering are the following:
Summary: Solar incentives in NJ
To save on your electricity bill, NJ offers a few solar incentives. The Renewable Portfolio Standard for New Jersey is helping to make solar power more accessible and affordable to homeowner’s throughout the state. In short, it requires that 50% of the state’s energy must come from renewable sources, one of which being solar energy production.
NJBPU designed the Solar Successor Incentive Program for people who have already installed solar panels. If you qualify for this New Jersey solar incentive, you will receive $90 per SREC-II generated. Another solar incentive in New Jersey is the Federal Tax Credit which reduces the total cost of your solar panel installation by 26%.
Without incentives like these New Jersey solar programs, solar installations wouldn’t be as affordable for everyone. To receive solar incentives in New Jersey, get a quote for a solar energy system from us.