New Jersey 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 taxes. 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, meaning you won’t pay additional property taxes on your solar investment.

The financial benefit varies based on your system’s value and local tax rates, but it can result in significant savings over time. For example, if your solar system adds $30,000 to your home’s value and your local property tax rate is 2%, you would save approximately $600 per year in property taxes. This exemption continues for as long as the system remains in place and is primarily used to generate renewable energy for your home.

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, and the system must be designed primarily to produce renewable energy—including solar, wind, geothermal, or other qualifying technologies—to meet all or part of your home’s electrical, heating, cooling, or general energy needs. The system must be installed as an accessory to a residential, commercial, industrial, or mixed-use building. The exemption becomes effective for the tax year following the year your system receives certification. There are no specific application deadlines, but you should apply promptly after installation to maximize your savings. The local agency may periodically review your system to ensure it continues to meet requirements, and the exemption can be revoked if the system is no longer primarily used for renewable energy purposes.

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 on these purchases. This exemption applies at the point of sale, meaning you see the savings immediately rather than claiming them later through a rebate or tax filing.

To claim this exemption, you’ll need to provide your solar installer or equipment seller with a properly completed exemption certificate (typically Form ST-4, the Exempt Use Certificate). The seller must receive this fully completed certificate within 90 days of the sale to process your purchase tax-free. Your solar installer can guide you through this straightforward paperwork process. The exemption has no expiration date and applies to all qualifying solar energy system purchases in New Jersey, making it a reliable way to reduce your upfront costs when going solar.

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 megawatt-hour (MWh) of clean energy generated. The state then purchases these certificates from you at a fixed rate for 15 years, creating a steady income stream in addition to your electricity bill savings.

For residential homeowners, the program pays $90 for each SREC-II your system produces. A typical home solar system generates about 10-15 SREC-IIs per year, which means you could earn $900-$1,350 annually on top of your energy savings. This guaranteed payment continues for 15 years, providing long-term financial certainty. The program launched on August 28, 2021, and aims to support 3,750 megawatts of new solar capacity by 2026.

All residential solar installations in New Jersey are eligible for this program, regardless of system size. Your system must be net metered (connected to the grid) and registered with the state to receive payments. There’s no application deadline—the program remains open as long as capacity is available. The SuSI Program replaced New Jersey’s previous SREC program, offering more predictable incentives while keeping solar affordable for homeowners and helping the state reach its clean energy goals.

Net metering in New Jersey allows you to receive full 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 you receive a 1:1 credit on your electric bill. This means every kilowatt-hour (kWh) you send to the grid offsets one kWh you might use later, effectively running your meter backwards and reducing your monthly electricity costs.

These credits accumulate month to month throughout the year, giving you flexibility to use them when your solar production is lower, such as during winter months. 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. Your account then resets to zero. You can change your anniversary month one time by contacting your utility if needed.

Net metering 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). All utilities in the state follow the same net metering structure, ensuring consistent benefits regardless of your service provider. This program makes solar energy more valuable by ensuring you receive credit for every bit of clean energy your system produces.