Toms River, 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 exemption ensures that the added value from your renewable energy system is excluded from your property’s assessed value for tax purposes.

The financial benefit is straightforward: you won’t pay any additional property taxes on the value that your solar system adds to your home. For example, if your solar installation increases your home’s value by $30,000, that amount will be exempt from property taxation, saving you money every year for as long as the system remains in place. The actual annual savings will depend on your local property tax rate and the assessed value of your solar system.

To qualify, your renewable energy system must be certified by your local enforcing agency (the municipal office responsible for construction code enforcement). You’ll need to submit a written application on an official form to receive certification. The system must be designed primarily to produce renewable energy—such as solar, wind, geothermal, or fuel cells—to provide all or part of your building’s electrical, heating, cooling, or general energy needs. The exemption applies to residential, commercial, industrial, or mixed-use buildings and becomes effective for the tax year following the year your certification is granted.

There are no specific deadlines mentioned in the law, and the exemption continues annually as long as your system remains certified and in use for its primary renewable energy purpose. Keep in mind that your local enforcing agency has the right to inspect your system and may revoke certification if the system is no longer being used primarily for renewable energy purposes or if you obtained certification through misrepresentation. If you disagree with any decision made by your local agency or tax assessor, you have the right to appeal through the appropriate channels.

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 intended for generating solar energy for your home. There are no income requirements or application deadlines—this exemption is available to all New Jersey residents purchasing qualifying solar equipment. Your solar installer should be familiar with this process and will ensure the exemption is properly applied to your purchase, reducing your overall system cost by eliminating sales tax on the equipment.

The Successor Solar Incentive (SuSI) Program is New Jersey’s current solar incentive program that provides long-term financial support for homeowners and businesses who install solar panels. The program pays you for the clean energy your solar system produces over a 15-year period. For every megawatt-hour (MWh) of solar electricity your system generates, you’ll receive a payment called an NJ SREC-II (New Jersey Solar Renewable Energy Certificate-II).

For residential homeowners, the program pays $90 for each SREC-II your system produces. To put this in perspective, a typical home solar system generates about 10-15 SREC-IIs per year, which translates to $900-$1,350 in annual incentive payments for 15 years. The incentive amount varies for commercial properties based on system size and installation type, ranging from $70 to $120 per SREC-II. Rooftop, carport, and canopy installations generally receive higher incentive rates than ground-mounted systems.

The program is available to net metered solar projects of 5 MW or less, which includes virtually all residential installations and most commercial systems. Your solar system must be installed after August 28, 2021, when the program took effect. There’s no application deadline, as this is an ongoing program designed to support up to 3,750 MW of new solar development through 2026 and beyond. The incentive payments are guaranteed for the full 15-year term once your system is approved and operational.

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 extra power 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 one kWh you might use later when your panels aren’t producing enough power, such as at night or on cloudy days.

This program is available to solar customers across all major New Jersey utilities, including PSE&G, Jersey Central Power & Light, Atlantic City Electric, and Orange & Rockland (Rockland Electric). Any excess credits you accumulate during a month automatically roll over to the next month, helping you offset your electricity costs throughout the year. Once per year, on your anniversary month (typically the date your system was approved to operate), any remaining excess credits are paid out 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 contact your utility one time to change your anniversary month if a different timing would work better for your household energy patterns.