1. Solar Incentives (State Rebates)
This is the biggest incentive available to New Jersey homeowners. The Investment Tax Credit (ITC) lets you deduct 30%.
Let's be clear: this is a tax credit, not a deduction. That means it comes straight off the taxes you owe — dollar for dollar.
Here's a quick example: If your solar system costs $20,000, the federal tax credit is $6,000. That brings your net cost down to $14,000 — before any state or local incentives.
- Rate: 30% liability to claim the credit. If you don't owe taxes, you can't use the ITC. Check with a tax professional for your specific situation.
2. New Jersey Net Metering (1:1 Retail Rate Credit)
Net metering is the system that lets you send extra electricity back to the grid and get credited for it.
New Jersey's program is one of the best in the country. When your panels produce more electricity than you use, the excess goes to the grid. Your utility company gives you a bill credit equal to the full retail rate — this means 1:1, dollar for dollar credit value.
Think of it like a savings account for your power. During sunny summer days, you build up credits. Then during winter or cloudy weeks, you use those credits instead of paying for electricity.
- Credited at full retail rate (not wholesale)
- Credits roll over month to month
- Annual "true-up" at the end of your billing year
- Available to all NJ electric utility customers
- Works for systems up to 5 MW (well above residential needs)
3. SREC-II Program — Earn Cash From Your Panels
This is where New Jersey's solar incentives get really unique — and really valuable.
New Jersey runs a program called SREC-II (Solar Renewable Energy Certificate II). Here's how it works in plain English:
For every 1,000 kilowatt-hours (kWh) your solar system produces, you earn 1 SREC. You can then sell that SREC on the open market. Utilities in New Jersey are required to buy SRECs to meet state clean energy goals — and they've been willing to pay $90 to $150 per SREC.
Quick example: A typical 8 kW home solar system in New Jersey produces about 9,000–10,000 kWh per year. That's 9–10 SRECs annually. At $120 per SREC, that's $1,080–$1,200 in SREC income every year — on top of your electric bill savings.
SREC agreements typically sell for 10–15 years, which means years of predictable side income from your solar panels. The SREC-II program replaced the original SREC program (which closed) and provides a streamlined registration and auction process.
- Earn 1 SREC per 1,000 kWh produced
- Current market price: $90–$150 per SREC
- Agreements typically last 10–15 years
- Can be sold through aggregators or on the open market
- Available for new residential solar installations
4. NJ Clean Energy Program Rebates
The New Jersey Clean Energy Program offers direct rebates and discounts for residential solar installations. These programs can reduce your upfront costs even further.
⚠️ Note: NJ Clean Energy Program rebate amounts change regularly based on available funding. Check the NJ Clean Energy website for the latest incentive amounts.
- Residential solar PV rebates are available for new installations
- Must use approved NJCEP contractors — not all installers qualify
- Rebate amounts depend on system size and current funding levels
- Rebates are applied at the time of installation (reduces upfront cost)
- Stackable with federal ITC, SREC-II, and net metering
5. Property & Sales Tax Exemptions
New Jersey offers two major tax exemptions that make going solar even more affordable.
☑️ Property Tax Exemption for Solar
When you add solar panels to your home, it increases your property value. In most states, that means a higher property tax bill. Not in New Jersey.
NJ law says that the added value from a solar installation cannot be used to increase your property taxes. So if solar adds $15,000 to your home's value, your property taxes stay exactly the same.
☑️ Sales Tax Exemption on Solar Equipment
New Jersey doesn't charge sales tax on solar energy equipment. This is a big deal — the state's sales tax is 6.625%. On a $20,000 system, that exemption saves you over $1,300 right off the bat.
- Solar panels, inverters, mounting hardware — all exempt
- Battery storage systems are also exempt
- Applies to both residential and commercial installations
6. NJ Utility Programs
Beyond state-wide programs, your specific electric utility may offer additional rebates and incentives. Here's what the major NJ utilities provide:
⚡ PSE&G (Public Service Electric & Gas)
PSE&G is New Jersey's largest utility. They run the SRECs registration program and offer an on-bill repayment option for solar loans. They also have special time-of-use rates that can make solar even more valuable if you use most of your electricity during peak afternoon hours.
⚡ JCP&L (Jersey Central Power & Light)
JCP&L serves northern and central New Jersey. They offer their own solar rebate program and participate fully in the state's net metering and SREC-II programs. Check with JCP&L for any seasonal rebate promotions.
⚡ Atlantic City Electric
Serving southern New Jersey, Atlantic City Electric offers net metering, participates in SREC-II, and periodically runs residential solar rebate programs. They also offer energy audits and efficiency programs that pair well with solar.
7. How NJ Homeowners Earn Money From Solar
Let's go deeper on SREC income, because it's one of the best reasons to go solar in New Jersey.
When utilities in New Jersey need to prove they are sourcing a portion of their electricity from solar energy, they buy SRECs from homeowners who have solar panels. It's a free market supply and demand system — and solar homeowners benefit from it.
SREC Revenue Example
| Year | SRECs Produced | Price per SREC | Annual Income |
|---|---|---|---|
| Year 1 | 10 | $120 | $1,200 |
| Year 2 | 10 | $120 | $1,200 |
| Year 3 | 10 | $115 | $1,150 |
| Years 4–15 | 10/yr | ~$110 | ~$1,100/yr |
| Estimated 15-Year Total | $16,200+ | ||
* This is a simplified example. Actual SREC prices fluctuate based on market conditions. Prices are illustrative and should be verified with current market data.
- Most homeowners sell through an SREC aggregator — a company that handles the sale and sends you a check
- You don't have to do anything extra — the income is automatic once your system is registered
- SREC income is separate from electric bill savings — it's essentially a second stream of solar benefits
8. Solar Cost & Payback Breakdown
So how much does an actual solar system cost in New Jersey — and how fast does it pay for itself?
The average cost of solar in New Jersey is around $3.00–$3.50 per watt. For an 8 kW residential system, that's a gross cost of about $24,000–$28,000.
Payback Breakdown (8 kW System Example)
| Gross system cost | $26,000 |
| NJ sales tax exemption (already included) | — |
| NJ Clean Energy rebate (example) | –$2,000 |
| Federal tax credit (30% credit?
Yes! New Jersey incentives stack on top of the 30% ITC. You can combine the federal tax credit, NJ Clean Energy rebates, SREC-II income, net metering, property tax exemption, and sales tax exemption — all at the same time. That's why New Jersey is one of the best solar markets in the country. How long does the SREC-II program last in NJ?SREC-II agreements typically run for 10 to 15 years from the date your system is registered. After the agreement term expires, the SREC market will still exist but prices may differ. New Jersey's renewable energy mandates mean demand for SRECs should continue well into the future. Does solar increase my property taxes in NJ?No. New Jersey has a property tax exemption specifically for solar installations. Even though solar panels increase your home's value (studies show about 4%), that added value cannot trigger a property tax increase. So you get the higher home value without the higher tax bill. How do I find a qualified solar installer in New Jersey?New Jersey requires solar installers to be NABCEP-certified or licensed electrical contractors. For NJ Clean Energy rebate programs, you must use an NJCEP-approved contractor listed on the NJ Clean Energy website. We recommend getting at least three quotes from different installers and comparing prices, warranties, and equipment. Ready to See Exactly What NJ Incentives You Qualify For?Our free calculator personalizes results to your zip code — federal credits, state programs, and utility rebates all in one place. Enter Your Zip Code — Free →Frequently Asked QuestionsDoes New Jersey offer a solar tax credit?Residents in New Jersey qualify for the 30%, New Jersey offers additional incentives including net metering programs, solar renewable energy credits (SRECs), and local utility rebates. Is solar power worth it in New Jersey?Yes. Solar in New Jersey typically pays for itself within 6-9 years due to the combination of high electricity rates and available incentives. Find Your New Jersey Solar SavingsEnter your zip code to see your exact utility rebates and all incentives available for your NJ home. Enter Your Zip Code → |