New Jersey Solar Incentives & Rebates (2025): Complete Guide
New Jersey homeowners can save $18,000-28,000+ on solar installations through the SREC II program, federal tax credits, property and sales tax exemptions, and utility rebates. Here's everything you need to know about NJ solar incentives in 2025.
New Jersey Solar Incentives at a Glance
1.Federal Solar Tax Credit (30% ITC)
The federal Investment Tax Credit (ITC) is the largest solar incentive available to New Jersey homeowners, allowing you to deduct 30% of your total solar system cost from your federal taxes.
How Much Can You Save?
- •$20,000 system = $6,000 federal tax credit
- •$30,000 system = $9,000 federal tax credit
- •$40,000 system = $12,000 federal tax credit
Important: Tax Credit vs. Rebate
The ITC is a tax credit, not a refund. You need to owe at least that much in federal taxes to benefit fully. The credit can be carried forward to future tax years if you don't owe enough in one year.
Eligibility Requirements:
- ✓System must be installed between 2022-2032
- ✓Property must be your primary or secondary residence in NJ
- ✓You must own the solar system (not leased)
- ✓System must be new or being used for the first time
[VERIFY] The 30% ITC rate is locked in through 2032, then drops to 26% in 2033 and 22% in 2034 before expiring entirely.
2.New Jersey SREC II Program
New Jersey's Solar Renewable Energy Certificate (SREC II) program is one of the most lucrative state solar incentives in the country. For every 1,000 kWh (1 MWh) your system generates, you earn one SREC that you can sell for passive income.
2025 SREC II Rates
Rates vary by solar class and installation year
Earn SRECs for 15 years from system installation
Example Earnings Calculation:
How to Enroll:
- Install your solar system with a certified NJ installer
- Register with the [VERIFY] New Jersey Clean Energy Program within 60 days
- Work with an SREC aggregator or broker to sell your certificates
- Receive quarterly or annual payments for your SRECs
[VERIFY] The SREC II program replaced the original SREC program in 2021 and offers more stable, predictable payments over time.
3.New Jersey Tax Exemptions
Property Tax Exemption
[VERIFY] New Jersey exempts solar energy systems from property tax assessments. Even though solar panels increase your home's value by $15,000-30,000, you won't pay higher property taxes.
Estimated Savings:
- •Annual savings: $300-600/year
- •Over 25 years: $7,500-15,000 total savings
This exemption applies automatically to residential solar installations. No separate application needed.
Sales Tax Exemption
[VERIFY] New Jersey exempts solar energy equipment and installation from the state's 6.625% sales tax. This immediately reduces your upfront costs.
Example Savings:
4.New Jersey Utility Company Rebates
[VERIFY] Several New Jersey utilities offer solar rebates and net metering programs:
PSE&G (Public Service Electric & Gas)
- •Solar Loan Program: Low-interest financing options
- •Net metering: Full retail rate credit for excess solar energy
- •Coverage: Northern & Central NJ
JCP&L (Jersey Central Power & Light)
- •Net metering program for residential solar
- •Streamlined interconnection process
- •Coverage: Northern & Central NJ
Atlantic City Electric (ACE)
- •Net metering at retail electricity rates
- •Solar incentive programs (subject to availability)
- •Coverage: Southern NJ
Note: Utility rebates and programs change frequently. Contact your utility provider for current offerings and net metering rates.
5.Example: Total Savings Breakdown
Here's a real-world example of how these incentives stack for a typical 10 kW solar installation in New Jersey:
Including all federal, state, and long-term incentives
Plus ongoing savings: A 10 kW system in New Jersey typically saves $1,800-2,500/year on electricity bills. Combined with SREC income, your annual benefit is $2,800-3,500/year.
6.How to Claim New Jersey Solar Incentives
Choose a Certified NJ Solar Installer
Select a licensed installer who is registered with the NJ Clean Energy Program. They'll handle permits, installation, and interconnection paperwork.
Register for SREC II Program
Within 60 days of installation, register your system with the NJ Clean Energy Program to start earning SRECs. Your installer can assist with this process.
File for Federal Tax Credit
Complete IRS Form 5695 with your tax return for the year your system was installed. Keep all receipts and documentation. Consult a tax professional for guidance.
Apply for Utility Programs
Contact your utility provider (PSE&G, JCP&L, or ACE) to enroll in net metering and any available rebate programs. This is typically handled during interconnection.
Frequently Asked Questions
Can I combine the federal tax credit with New Jersey incentives?
Yes! All New Jersey solar incentives stack. You can claim the federal ITC, SREC II payments, property tax exemption, and sales tax exemption simultaneously for maximum savings.
How do SREC payments work?
[VERIFY] Your solar system is registered with the NJ Clean Energy Program, which tracks your energy production. SRECs are automatically generated and sold through an aggregator or broker. You receive quarterly or annual payments based on your production and the current SREC rate.
Are solar panels exempt from property taxes forever?
[VERIFY] Yes, New Jersey's property tax exemption for solar is permanent. As long as your solar panels are installed and operational, they remain exempt from property tax assessments.
What happens if I don't owe enough in taxes for the full federal credit?
The federal solar tax credit can be carried forward to future tax years. If you owe $5,000 in taxes but have a $9,000 credit, you can use $5,000 this year and carry forward $4,000 to next year.
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