The complete list of New Jersey solar incentives and tax credits for 2023, plus how to take advantage.
Table of Contents
New Jersey has higher than average electricity costs and a decent amount of sun, so it’s no surprise homeowners in the Garden State are popping arrays on roofs at breakneck speeds. There are more than 200 solar installers and developers in New Jersey, according to the Solar Energy Industry Association (SEIA). This alone demonstrates the high demand for solar and the enthusiasm that’s kept New Jersey as a top 10 state for solar many years in a row.
What’s driving all this demand, other than the sun and high energy prices? New Jersey residents can enjoy a state sales tax exemption on solar installations, generous net metering from utilities, and the ability to sell renewable energy credits for hundreds of dollars each year.
New Jersey State Solar Incentives
|SRECs in New Jersey||New Jersey residents who install solar may be able to sell their solar renewable energy certificates (SRECs) for around $90 each|
|State sales tax exemption||Solar energy systems are fully exempt from state sales tax in New Jersey|
|Net metering||Net metering is mandated by law in New Jersey and most utilities carry credits month to month and offer a payout at avoided cost rate annually|
SRECs in New Jersey
In 1999, New Jersey adopted one of the most ambitious Renewable Portfolio Standards (RPS) in the U.S. as part of the Electric Discount and Energy Competition Act (January 1999). The RPS has been modified several times since then and currently calls for electric utilities to procure 35% the electricity they sell in New Jersey from qualified renewable energy resources by 2025. This requirement increases to 50% by 2030.
The RPS includes a solar carve-out, meaning that by 2028 at least 4.1% of the electricity sold by a utility must come from solar. These requirements provide a huge boost to the solar industry in New Jersey as it incentivizes the development of utility-scale solar and allows utilities to purchase solar renewable energy certificates (SRECs) from homeowners and other small-scale solar energy producers.
Per the updated guidelines of the Administratively Determined Incentive (June 1, 2022), residents of New Jersey who generate solar power are eligible to receive $90 per SREC-II. To sign up for the program, homeowners need to submit various bits of paperwork. Some solar installers will help with this, though such extras are built into the costs associated with installation. To go it alone, you’ll need to submit an ADI Initial Registration packet with all required documents through the ADI online registration portal.
State sales tax exemptions in New Jersey
New Jersey offers a full exemption on state sales tax for all solar energy equipment. To claim the exemption, residents have to fill out Form ST-4 (Exempt Use Certificate) and submit this to the solar installer or seller instead of paying sales tax.
State sales tax in New Jersey is 6.625%, meaning the exemption helps cut the upfront cost of going solar by a good chunk right off the bat.
Net metering in New Jersey
Net metering is mandated by law in New Jersey and the regulations are some of the most generous in the U.S. The regulations also helped to standardize the interconnection process with utilities, making things far easier for homeowners looking to sign up for net metering.
The four main utilities all offer programs: Atlantic City Electric, JCP&L, PSE&G, and Rockland Electric (which offers an annual payment for excess credit based on avoided cost).
PSE&G also provides a one-time option to move the date of your Anniversary True Up. This is because the utility acknowledges that the best date for true-up is not always the anniversary of installation. Instead, most homeowners will want to switch this date to the month before you begin to accumulate the most electricity credits. That way, you can be sure to use up as much credit as possible each year during the less productive months.
Final thoughts on state solar incentives in New Jersey
New Jersey is currently 8th in the U.S. for solar, with nearly 4,000 megawatts of installed capacity. In 2021 alone, New Jersey residents installed more than 100 MW of home solar, according to SEIA. Community solar also has a bonanza year in 2021, with around 30 MW of new installations, thanks to state policies and programs helping to incentivize these kinds of projects.
However you want to go solar in New Jersey, be it through a rooftop array, a community solar subscription, or by buying green power from your utility, you can! The Garden State offers plenty of good incentives for home solar though, including net metering, a sales tax exemption, and the potential to earn hundreds of dollars each year from SRECs.