Solar Guide

New Jersey’s Property Tax Exemption for renewable energy systems allows homeowners to avoid paying property taxes on the added value that solar panels and other renewable energy equipment bring to their home. When you install a solar system, it typically increases your property’s assessed value, but this exemption ensures you won’t pay additional property taxes on that increase. The exemption covers the difference between your home’s assessed value with the renewable energy system and its assessed value without the system.

To qualify for this exemption, your renewable energy system must be certified by your local enforcing agency (typically your municipal building department). You’ll need to submit a written application under oath using a form prescribed by the state. The system must be designed primarily to produce renewable energy for your building’s electrical, heating, cooling, or general energy needs. The exemption becomes effective for the tax year following certification and continues as long as the system is used primarily for renewable energy purposes.

It’s important to note that the local enforcing agency can inspect your system and may revoke the certification if the system stops being used primarily for renewable energy or if you significantly change the certified equipment. The agency can also require you to file new applications or provide additional proof to maintain your exemption status over time.

New Jersey’s Sales Tax Exemption allows homeowners to purchase solar energy equipment without paying the state’s 6.625% sales tax. This exemption applies to solar panels, inverters, batteries, and other qualifying solar equipment when purchased for residential use. The financial benefit varies based on your system size – for example, on a $20,000 solar system, you would save approximately $1,325 in sales tax.

To qualify for this exemption, you must be purchasing solar equipment for installation on your New Jersey home. The exemption is automatically applied at the point of purchase when you work with registered solar installers who handle the proper exemption certificates. There are no income limits or application deadlines, but the exemption must be claimed at the time of purchase – you cannot apply for a refund later. Your solar installer will typically handle the paperwork by providing the appropriate exemption certificate (Form ST-4 or ST-SST) to equipment suppliers, ensuring you don’t pay sales tax on your solar investment.

The Successor Solar Incentive (SuSI) Program is New Jersey’s current solar incentive system that replaced the previous SREC program in August 2021. This state program provides guaranteed payments to homeowners and businesses for the solar electricity they generate over a 15-year period. The program aims to double New Jersey’s solar capacity by adding 3,750 megawatts of new solar generation by 2026.

For residential homeowners, the program offers $90 for every megawatt-hour (MWh) of solar electricity your system produces through New Jersey Solar Renewable Energy Certificate-II (NJ SREC-II) payments. These payments are guaranteed for 15 years and are separate from any savings you get on your electric bill. Commercial properties receive different rates ranging from $70-$120 per SREC-II depending on system size and installation type, with public entities like schools receiving an additional $20 bonus.

The program is available to all net-metered solar installations of 5 MW or less, which includes virtually all residential systems. There are no specific application deadlines, but the program has capacity limits and incentive values may change as the market develops. Homeowners should know that this program provides long-term income certainty compared to previous programs, though the payment rates are lower than the old SREC system to keep costs reasonable for all ratepayers.

Net metering in New Jersey allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the power grid. When your solar system produces more energy than your home uses, the extra power flows to the grid and you receive credits on your electric bill at a 1:1 rate – meaning you get full retail value for every kilowatt-hour (kWh) you contribute.

The financial benefit works like a banking system for your solar energy. Excess credits roll over from month to month throughout the year, helping offset your electric bills during times when your solar panels produce less energy (like winter months or cloudy periods). However, during your anniversary month (typically when your system first connected to the grid), any remaining excess credits are paid out at the utility’s avoided cost rate of approximately 3-5 cents per kWh, and your account resets to zero.

This program is available to customers of all major New Jersey utilities including PSE&G, Jersey Central Power & Light, Atlantic City Electric, and Orange & Rockland. While there are no specific deadlines mentioned, homeowners should note that they can change their anniversary month one time by contacting their utility company. This timing flexibility allows you to potentially maximize the value of your excess credits by choosing when the annual true-up occurs.