Elizabeth, NJ Solar Panels

New Jersey’s Property Tax Exemption removes the added value of your solar energy system from your property tax assessment. When you install solar panels or other qualifying renewable energy equipment on your home, your property value typically increases. This exemption ensures you won’t pay higher property taxes because of that increase. The exemption applies to the difference between your property’s assessed value with the solar system and its value without it, meaning you’re only taxed as if the solar equipment wasn’t there.

To qualify, your renewable energy system must be certified by your local enforcing agency (the municipal office that handles building codes). You’ll need to submit a written application on an official form, and the agency will verify that your system was designed primarily to produce renewable energy for your building’s electrical, heating, cooling, or general energy needs. Eligible systems include solar photovoltaic, solar thermal, wind, geothermal, and certain other renewable technologies. The exemption becomes effective for the tax year following certification and continues as long as the system remains in use for its primary renewable energy purpose.

There are no application deadlines, but you must apply after installation to receive the exemption. The local agency may inspect your property and can request updated documentation to verify continued eligibility. Your certification can be revoked if the system stops being used primarily for renewable energy or if you obtained certification through misrepresentation. If you disagree with any decision made by the local agency or tax assessor, you have the right to appeal through the appropriate board or State Tax Court.

New Jersey’s Sales Tax Exemption allows homeowners and businesses to purchase solar energy equipment without paying the state’s sales tax. When you buy solar panels, inverters, batteries, and other qualifying solar equipment in New Jersey, you won’t pay the standard 6.625% sales tax that normally applies to most purchases. This exemption applies at the point of sale, meaning you see the savings immediately when you make your purchase.

To claim this exemption, you’ll need to provide your solar equipment supplier with a properly completed exemption certificate at the time of purchase. The specific form required depends on your situation—businesses registered in New Jersey typically use Form ST-3 (Resale Certificate) or Form ST-4 (Exempt Use Certificate), while individuals may need to provide alternative documentation such as a driver’s license number. Your solar installer or equipment supplier can guide you through which form applies to your purchase and help ensure it’s completed correctly.

It’s important to obtain and submit the exemption certificate within 90 days of your purchase date to ensure the exemption is properly applied. Keep copies of all exemption certificates and purchase documentation for at least four years, as these records may be needed for verification purposes. The exemption applies specifically to the equipment itself—installation labor and other services may be subject to different tax treatment, so discuss the complete tax implications with your solar provider before finalizing your purchase.

The Successor Solar Incentive (SuSI) Program is New Jersey’s current solar incentive program that provides long-term financial payments to homeowners who install solar panels. When your solar system produces electricity, you earn one Solar Renewable Energy Certificate-II (SREC-II) for every 1,000 kilowatt-hours (one megawatt-hour) generated. The state then pays you a fixed amount for each SREC-II over a 15-year period, providing steady income that helps offset your solar investment.

For residential homeowners, the program pays $90 per SREC-II. To put this in perspective, a typical home solar system producing 10,000 kilowatt-hours annually would earn 10 SREC-IIs per year, resulting in $900 in annual incentive payments for 15 years—totaling $13,500 over the program term. This payment comes in addition to the savings you’ll see on your monthly electric bills. The program is available to all residential solar installations in New Jersey, regardless of size, as long as your system is connected to the grid (net metered) and 5 megawatts or smaller.

The SuSI Program launched on August 28, 2021, and is designed to support 3,750 megawatts of new solar capacity through 2026. There’s no application deadline, but incentive levels may be adjusted as the program reaches certain capacity milestones. Your incentive rate is locked in for the full 15-year term once your system is registered, providing long-term financial certainty. If you’re considering solar, it’s worth noting that these incentive payments are separate from your electricity bill savings and provide a reliable income stream throughout the program period.

Net metering in New Jersey allows you to receive full retail credit for the excess solar energy your system sends back to the electric grid. When your solar panels produce more electricity than your home uses, that surplus energy flows to the grid, and your utility meter essentially runs backward. You receive a 1:1 credit, meaning every kilowatt-hour (kWh) you export is worth the same as what you’d normally pay to buy that electricity from your utility company.

These credits accumulate on your account and can be carried forward month to month throughout the year, helping offset your electric bills during months when your solar system produces less energy (like winter). Once per year, during your anniversary month—which typically defaults to the date your system was given permission to operate—any remaining excess credits are settled at the utility’s avoided cost rate, which is approximately 3-5 cents per kWh. After this annual true-up, your credit balance resets to zero. You have the option to change your anniversary month one time by contacting your utility company.

Net metering is available to residential solar customers across all major New Jersey utilities, including PSE&G, Jersey Central Power & Light, Atlantic City Electric, and Orange & Rockland (Rockland Electric). There are no application deadlines, as this is an ongoing program established by state law. To maximize the value of your credits, it’s helpful to understand when your anniversary month occurs, as any unused credits beyond that point will be compensated at the lower avoided cost rate rather than the full retail rate.