Newark, NJ Solar Panels

New Jersey’s Property Tax Exemption for renewable energy systems allows homeowners to add solar panels or other qualifying renewable energy equipment to their property without increasing their property tax bill. When you install a solar energy system, your home’s value typically increases, which would normally result in higher property taxes. This state exemption protects you from that tax increase by exempting the added value of your renewable energy system from your property’s assessed value.

The financial benefit is straightforward: you pay property taxes only on what your home would be worth without the solar system, not on the higher value that includes it. For example, if your solar installation adds $30,000 to your property’s assessed value, that $30,000 remains exempt from property taxation for as long as the system is in place and functioning. The actual tax savings will depend on your local property tax rate, but this can amount to hundreds of dollars in savings each year.

To qualify, your renewable energy system must be certified by your local enforcing agency (your municipal construction code office). You’ll need to submit a written application on a form provided by your local agency. The system must be designed primarily to produce renewable energy for your building’s electrical, heating, cooling, or general energy needs. Eligible technologies include solar photovoltaic, solar thermal, wind, geothermal, and fuel cells, among others. The exemption becomes effective for the tax year following the year your system receives certification and continues as long as the system remains in use for its intended purpose.

There are no application deadlines, but you should apply for certification promptly after installation to maximize your tax savings. Keep in mind that your local agency may inspect your property and can revoke the exemption if the system stops being used primarily for renewable energy purposes or if you obtained certification through misrepresentation. This exemption applies to residential, commercial, industrial, and mixed-use properties throughout New Jersey.

New Jersey’s Sales Tax Exemption allows homeowners 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, your solar installer or equipment supplier will typically handle the paperwork by providing the appropriate exemption certificate to their suppliers. The equipment must be used for solar energy generation at your property. There are no income requirements or application deadlines—this exemption is available to all New Jersey residents purchasing qualifying solar equipment. Your installer should be familiar with this process and can ensure the exemption is properly applied to your purchase, reducing your overall system cost by eliminating sales tax on equipment purchases.

The Successor Solar Incentive (SuSI) Program is New Jersey’s current solar incentive program that provides long-term payments to homeowners who install solar panels. For every megawatt-hour (MWh) of solar electricity your system produces, you’ll receive a payment called an NJ SREC-II (Solar Renewable Energy Certificate). Residential homeowners receive $90 per SREC-II, guaranteed for 15 years. A typical home solar system produces about 10-15 MWh per year, which translates to approximately $900-$1,350 in annual incentive payments on top of your electricity bill savings.

The program launched on August 28, 2021, and aims to add 3,750 megawatts of new solar capacity by 2026. All residential solar systems qualify for the program, regardless of size. The incentive is paid through the Administratively Determined Incentive (ADI) structure, which means your payment rate is fixed and predictable—you don’t need to compete or bid for the incentive. This provides financial certainty and makes it easier to calculate your solar investment’s return.

To participate, your solar system must be net metered (connected to the grid) and registered with the New Jersey Clean Energy Program. The 15-year payment term begins when your system starts producing electricity. While the program was designed to support 3,750 MW of solar development through 2026, there’s no specific end date announced yet. However, incentive levels could be adjusted in the future based on market conditions, so installing sooner rather than later locks in the current $90 per SREC-II rate for your full 15-year term.

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 send to the grid offsets a kWh you would otherwise purchase at the full retail rate. This applies to all major utilities in New Jersey, including PSE&G, Jersey Central Power & Light, Atlantic City Electric, and Orange & Rockland (Rockland Electric).

Any excess credits you accumulate during sunny months can be carried forward month to month throughout the year, helping offset your usage during winter months when your panels may produce less energy. Once per year, on your account’s anniversary month (typically the date your system received Permission to Operate), your utility will reconcile any remaining excess credits. At that time, leftover credits are paid out at the avoided cost rate, which is approximately 3-5 cents per kWh—significantly lower than the retail rate. Your account then resets to zero. You can contact your utility one time to change your anniversary month if a different timing would better match your household’s energy patterns.