Long a leader in renewable energy, New Jersey now ranks #5 in the nation for total generation from solar panels. Solar really makes in New Jersey because of the state’s high electricity rates (10th highest in the U.S.) Higher electricity rates mean you will save even more when you generate your own power.
Federal Solar Incentives
The Federal Residential Renewable Energy Tax Credit allows you to claim a credit of 30% of qualified expenses for a solar panel or solar energy system installed at your home. This federal rebate is ensured through the end of 2019, after which it will begin to decrease incrementally. In 2021, the rebate will be locked at 10%. New Jersey does not offer any additional tax credits at the state level at this time.
Earn and Sell “SRECs”
For every megawatt-hour your solar system generates, you earn an SREC (Solar Renewable Energy Certificate). You can sell these on an exchange for hundreds of dollars. The average home solar installation will earn you 5 or 6 SRECs a year. At an average value of $200-230, for an SREC, this means you can sell your SRECS for over $1,000 annually. Click here to see the latest market rates for SRECS on the exchange.
Your home value will increase with the installation of a solar system. The amount is roughly equal to the electricity savings you will recognize over the life of the system (conservatively estimated at 20 years). On average this adds about $22,000 to a home’s value.
Property Tax Exemption
This exemption means that when the tax assessor values your home, they are not allowed to charge you any more property tax for the valuable solar system on your roof. So, while it increases your home value, it will not increase your property tax.
Sales Tax Exemption
Unlike other home improvements, the solar panels and other equipment purchased for your system are not subject to sales tax. That means a 7% savings right off the top.
New Construction Rebate Available
There is a way to get some rebates if you’re building a new home and using renewable energy to power it. New Jersey has a program called “The NJ Clean Energy Residential New Construction Program,” which offers rebates to incentivize the construction of new homes that meet the New Jersey ENERGY STAR standards.