2024 New Jersey Solar Incentives, Tax Credits, Rebates, & Exemptions

Last updated: December2024

New Jersey is one of the best states for home solar. The Garden State’s great solar incentive programs can save homeowners over $18,000, and that doesn’t even include electricity bill savings! 

While these savings are significant, it’s important to understand how the solar incentives work and if you are eligible for them. Our guide explains everything you need to know about New Jersey’s solar incentives and how to apply for them.

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Overview of New Jersey solar incentives and rebates

Incentive	Estimated average annual savings	Eligibility	About
Federal solar tax credit	$6,750	All tax-paying U.S.  citizens	Tax credit equal to 30% of installation costs, applied to federal income taxes
Successor Solar Incentive Program (SREC-IIs)	$765	Homeowners who install solar panels	Earn payments for SREC-IIs generated for 15 years
Property tax exemption	$1,000, varies with system and property value	Homeowners who install solar panels	100% of solar system value is exempt from property tax
Sales tax exemption	Varies	Anyone who installs solar panels	Solar system equipment is exempt from state sales and use tax

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Calculate how much you can save with New Jersey incentives

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Federal solar tax credit

While there is no New Jersey solar tax credit, residents can take advantage of the federal solar tax credit. The solar tax credit, sometimes called the solar investment tax credit or ITC, equals 30% of solar installation costs and reduces your federal income tax liability. 

The average solar panel system in New Jersey will earn a tax credit of about $6,750. The value of the residential clean energy credit credit can vary depending on how many solar panels you install.

System size	Estimated tax credit value
5 kW	$4,500
6 kW	$5,400
7 kW	$6,300
8 kW	$7,200
9 kW	$8,100

Remember that the tax credit doesn’t directly reduce your solar energy system’s upfront cost. You’ll still pay full price for your solar panel installation, but the tax credit will reduce what you owe Uncle Sam when you file your tax return. 

If you financing solar panels with a solar loan, you usually have to pay down your loan by the value of your tax credit before 18 months to keep your monthly payments low.

Successor Solar Incentive Program (SuSI)

New Jersey’s Successor Solar Incentive Program, or SuSI for short, provides homeowners with payments based on the amount of solar electricity their solar system produces over 15 years. 

For every 1,000 kilowatt-hours (or 1 megawatt-hour) of solar energy generated, an SREC-II is created. These solar renewable energy credits represent all of solar energy's positive environmental benefits and are sold to utility companies to help them meet their clean energy goals. 

Through the SuSI program, SREC-IIs generated by home solar systems are worth $85. An average 7.5 kW solar system in New Jersey will generate almost 9 SREC-IIs in one year, earning about $765! Over the course of the 15 year program, that adds up to nearly $11,500 earned from SRECs alone. 

Consult with a tax professional about whether SREC-II earnings count as taxable income and how that will affect your finances. You will not receive SuSI payments if you lease your solar panels or finance them using a solar power purchase agreement (PPA).

You can learn more about the details of the program in our Homeowner’s Guide to New Jersey’s Successor Solar Incentive Program.

Property Tax Exemption for Renewable Energy Systems

Solar panels increase your home value, making some homeowners concerned about their new property tax bill. In New Jersey, solar installations still add value to your home, but they won’t increase your property taxes because the value is 100% exempt. 

According to data from the New Jersey Treasury Office, the average effective property tax rate in New Jersey is about 2.3%. Based on the median value of New Jersey homes and the average value solar panels add, the New Jersey solar property tax exemption can save a typical homeowner about $1,000 on their property taxes. 

When you go solar, apply for a solar panel system certification and contact your local property tax assessor.

Solar Energy Sales Tax Exemption

Solar energy equipment sold in New Jersey is exempt from the state’s sales tax. Eligible equipment includes anything that provides heating, cooling, electrical, or mechanical power through the conversion of solar power.

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New Jersey net metering and solar buyback plans

Net metering is a solar billing plan that allows homeowners to send extra energy their solar panels produce back to the grid. In exchange for that excess solar energy, the utility will provide a bill credit that covers the cost of energy you use from the grid later. 

Here’s how net metering works in New Jersey: each month, your utility will measure how much energy your home uses from the grid and how much solar power you send back to the utility. If you use more energy from the grid than you produced, you’ll be billed for what you used. If you send more power to the utility than you used, you’ll get a credit on your energy bill. 

Net metering credits in New Jersey equal the full retail rate of electricity. Basically, what you pay for power is what you’ll earn when you send excess energy to the grid. This is the best-case scenario for those interested in solar, as it maximizes solar savings and can almost entirely eliminate electricity bills. 

Specific solar buyback rates will vary between utilities, so be sure to check your utility website for more information about the net metering program benefits available to you:

• Atlantic City Electric

• JCP&L

• PSE&G

• Rockland Electric

Solar battery incentives in New Jersey

New Jersey does not offer any statewide solar battery incentives or rebates for homeowners looking to install energy storage. However, solar battery installations qualify for the 30% federal tax credit — even when not paired with rooftop solar panels! 

In general, New Jersey homeowners don’t need a solar battery. The state offers full retail net metering, so a battery can’t provide extra electric bill savings. Also, New Jersey doesn’t experience the same kind of regular prolonged blackouts as states like California, so the backup power benefits of batteries might not be as appealing in the Garden State.

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New Jersey installation costs

The average 7.5 kW solar panel system in New Jersey costs about $22,500 before incentives. Once you consider the federal tax credit, the cost of solar panels drops to about $15,750. You’ll also earn 15 years worth of savings from the SuSI program, bringing the price down to about $4,000! 

Federal tax credit: $22,500 x 30% = $6,750

15-year SuSI savings: 135 SREC-II x $85 = $11,475

Total savings: $6,750 + $11,475 = $18,224

Effective system cost: $22,500 - $18,244 = $4,256

Keep in mind that you won’t earn the SuSI program payments all at once; you earn them when your system produces energy. You’ll also save money on your electricity bills, which will help you pay back your system faster.

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Do incentives make solar worthwhile in New Jersey?

New Jersey is one of the best states in the country to install solar panels, thanks to its excellent incentives and high electricity prices. Despite not being the sunniest state in America, solar panels can pay for themselves in as little as six years in the Garden State! That means you’ll get nearly 20 years of free electricity. 

But, incentives are only one piece of the puzzle when it comes to going solar. You need to find a reliable solar company to make going solar worth it. That’s where SolarReviews can help. We house thousands of reviews of the best solar companies so you can see what real customers are saying about installers in your area.

When you’re ready, we can connect you with prescreened New Jersey solar companies and make your solar journey easier.

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Calculate how much you can save with New Jersey incentives

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New Jersey solar incentives FAQs