With more than 200 sunny days each year, New Jersey is ideal for harnessing solar energy. The state provides financial incentives such as tax breaks and rebates, enhancing the eco-friendly and economic appeal of solar adoption. Amid the evolving landscape of solar energy, there is increasing confusion regarding the availability of free solar panels in New Jersey. This blog aims to clarify whether this is true or not.
Free Solar Panels in New Jersey
No, solar panels aren’t free in New Jersey. When solar companies offer free panels, it means you can lease or have a power purchase agreement (PPA) without paying upfront. Despite not owning the system, you’ll make payments to the solar company, similar to leasing a car. This arrangement comes with benefits like lower bills through net metering, but the solar company owns the panels and receives incentives such as the 30% federal tax credit and SRECs.
Although there are no free solar panels in New Jersey, there are programs and incentives to reduce the cost of these panels. Let’s learn about them in the New Jersey solar rebate and incentives section.
New Jersey Solar Rebates and Incentives
After learning that there are no free solar panels in New Jersey, let’s go through the solar purchase aids available here. New Jersey solar incentives and rebates are provided to encourage residents to join clean energy initiatives, making the transition to solar power more affordable and attractive.
1. Successor Solar Incentive (SuSI) Program
The Successor Solar Incentive (SuSI) Program is a NJ solar program that encourages the generation of solar energy. It rewards participants with Solar Renewable Energy Certificates (SREC-II).
Here’s how it operates: For every megawatt-hour (MWh) your solar system produces, you get one SREC-II certificate. If you have a home solar setup, you’re assured a payment of about $90 for each SREC-II earned over 15 years.
The NJ solar program consists of two main parts:
- Administratively Determined Incentive (ADI) Program: This is for residential net-metered projects and non-residential projects with a capacity of 5 megawatts (MW) or less.
- Competitive Solar Incentive (CSI) Program: This is open to eligible net-metered projects with a capacity over 5 MW and eligible net-metered projects paired with solar batteries or energy storage systems.
2. Solar Sales Tax Exemption
Solar Sales Tax Exemption is a benefit that completely waives the state’s sales tax for all solar energy equipment purchases. It covers a variety of solar equipment, including those used in passive solar design.
According to the New Jersey Division of Taxation, devices or systems meant to provide heating or cooling using solar-generated energy are exempt. However, this exemption doesn’t apply to the purchase of insulation aimed at reducing heat loss through walls, roofs, slabs, or foundations by a resident who buys a solar energy device.
3. Property Tax Exemption
The Property Tax Exemption, known as the Renewable Energy System Property Tax Exemption, can be a big financial advantage for property owners.
This exemption is based on the change in the property’s assessed value before and after installing the renewable energy system. Simply put, the increase in property value from the system installation doesn’t affect the property tax assessment. This means property owners can set up renewable energy systems without worrying about higher property taxes.
To qualify, the renewable energy system needs certification from the local enforcement agency. This ensures the system is correctly installed and works as intended, providing clean, renewable energy for the property.
Also See: Can You Claim Solar Tax Credit Twice?
4. Federal Solar Tax Credit
The federal solar tax credit covers various expenses related to solar systems, including solar panels, inverters, batteries, electric vehicle chargers, mounting equipment, and even sales taxes on eligible expenses.
New Jersey residents can benefit from the federal solar credit program, now known as the Residential Clean Energy Credit, which changed in 2022. Importantly, the federal solar tax credit isn’t a cash payment; eligible homeowners get a tax credit to lower or eliminate their federal tax liability for the year. If homeowners owe little to no taxes, they can carry any remaining credit to the next tax year.
Originally called the Solar Investment Tax Credit (ITC), the program offered a 26% tax credit for homeowners who installed solar systems in 2020 and 2021. In August 2022, Congress extended and enhanced the program, increasing the tax credit to 30% for systems installed between 2022 and 2032.
However, it’s crucial to know that the Residential Clean Energy Credit will gradually decrease. By 2033, it will drop to 26%, and by 2034, it will further decrease to 22%. Without Congressional renewal, the tax credit will expire from 2035 onward.
5. New Jersey Net Metering
Net metering helps you maximize your solar energy use. With net metering, you receive credits for any extra renewable energy you send back to the grid. While the program varies in different places, in New Jersey, at the end of each year, customers get a credit on their utility bill for the surplus energy their panels produced.
You can also check out our comparison blog – Net Billing Vs Net Metering
The New Jersey Board of Public Utilities (NJ-BPU) mandates net metering for all utility companies. Customers with this arrangement receive full retail credits for every kilowatt-hour (kWh) their panels generate. This sums up all about New Jersey solar incentives and rebates.
In summary, choosing solar power in New Jersey is a wise investment due to state and federal incentives, long-term energy bill savings, and environmental benefits. The state’s commitment to renewable energy, along with financial incentives, makes solar a compelling option. While solar panels aren’t free here, they are worth giving a shot.
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