New Jersey

New Jersey’s Property Tax Exemption for renewable energy systems allows homeowners to avoid paying additional property taxes on the value that solar panels add to their home. When you install a solar system, your property value typically increases, but under this incentive, you won’t be taxed on that added value. This means your property tax bill stays the same as it would be without the solar installation.

The financial benefit is straightforward: if your home is valued at $400,000 without solar and $420,000 with a new solar system, you’ll only pay property taxes on the original $400,000 value. This exemption applies annually for as long as the system remains in use, potentially saving thousands of dollars over the lifetime of your solar installation.

To qualify, your renewable energy system must be certified by your local enforcing agency as meeting the state’s technical standards. You’ll need to submit a written application under oath using a form prescribed by the Director of the Division of Taxation. The exemption becomes effective for the tax year following the year in which certification is granted.

There is no expiration date for this program, but your exemption could be revoked if the system is no longer used primarily for renewable energy generation, if the application contained misrepresentations, or if the system has been significantly altered from its certified design. If you’re considering solar for your home, this incentive provides a valuable long-term financial benefit that helps maximize your investment in clean energy.

New Jersey’s Solar Sales Tax Exemption offers significant financial benefits to homeowners investing in solar energy systems. This state tax incentive exempts the purchase of solar energy equipment from New Jersey’s 6.625% sales tax, providing immediate savings on your solar installation costs. For example, on a $20,000 solar system, this exemption would save you approximately $1,325 in sales tax.

All residential solar energy systems qualify for this exemption, including solar panels, inverters, mounting equipment, and battery storage systems when purchased as part of a solar installation. The exemption is applied at the point of purchase—your solar installer will typically handle the paperwork by providing the seller with the appropriate exemption certificate (Form ST-4). There is no expiration date for this incentive, as it is a permanent part of New Jersey’s tax code, making it a reliable benefit for homeowners considering solar now or in the future.

The Successor Solar Incentive (SuSI) Program is New Jersey’s solar incentive program designed to expand solar capacity while keeping costs reasonable for ratepayers. Launched on August 28, 2021, this state program offers financial incentives for installing solar systems through a certificate-based system. The program aims to add 3,750 megawatts of new solar generation by 2026, effectively doubling the state’s solar capacity.

For residential homeowners, the program provides $90 per SREC-II (Solar Renewable Energy Certificate-II) generated, with each certificate representing one megawatt-hour of solar electricity produced. These incentives are guaranteed for 15 years, providing long-term financial benefits. The program includes two components: the Administratively Determined Incentive (ADI) for residential and smaller projects up to 5 MW, and the Competitive Solar Incentive (CSI) for larger projects. Public entities receive an additional $20/MWh bonus, and there are temporary incentives for projects built on contaminated lands.

Net Metering in New Jersey is a valuable program that allows solar homeowners to receive full credit for the excess electricity their systems generate. Under this 1:1 net metering arrangement, when your solar panels produce more electricity than you’re using, that excess power flows back to the grid, and you receive credits on your utility bill at the same retail rate you would normally pay for electricity. This essentially allows your electric meter to run backward, offsetting the cost of power you draw from the grid when your system isn’t producing enough energy.

All major New Jersey utilities—PSE&G, Atlantic City Electric, Jersey Central Power & Light, and Orange & Rockland (Rockland Electric)—offer identical net metering benefits. Any unused credits carry over from month to month, allowing you to build up credits during sunny periods to use during less productive times. At your annual anniversary date (typically your permission-to-operate date), any remaining credits are ‘trued-up’ and paid out at the avoided cost rate (approximately 3-5 cents per kilowatt-hour), and your balance resets to zero. Importantly, you can change your anniversary month once by contacting your utility, which might be beneficial for maximizing your credit value based on your production and consumption patterns throughout the year.