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New Jersey has emerged as a strong player in the solar energy landscape, offering a range of incentives to encourage the adoption of solar power. The state’s commitment to renewable energy is reflected in its various programs designed to make solar installations more affordable and accessible. This breakdown of New Jersey’s key solar incentives provides an overview of the available tax credits, rebates, and net metering policies. Understanding these incentives is crucial for homeowners and businesses looking to harness the benefits of solar energy and contribute to New Jersey’s clean energy goals.
The Residential Clean Energy Credit
The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.
To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.
Property Tax Exemption
The Renewable Energy System Property Tax Exemption offers a substantial financial advantage to property owners. This exemption is determined by comparing the total assessed value of the property before and after the installation of the renewable energy system. The increase in property value resulting from the installation of the renewable energy system is not taken into account when calculating property taxes. As a result, property owners can confidently install renewable energy systems without the concern of higher property taxes.
In order to be eligible for this exemption, the renewable energy system must be certified by the local enforcement agency. This certification process ensures that the system is correctly installed and operating as intended, generating clean and renewable energy for the property.
Net Metering
Net metering enables customers to maximize the utilization of their solar energy. By participating in net metering, customers are given recognition for any surplus renewable energy they feed back into the power grid. Although the specifics of this program may vary across different regions, in New Jersey, customers are entitled to receive a credit on their utility bill after each year for any additional energy their solar panels have produced.
The New Jersey Board of Public Utilities (NJ-BPU) mandates that all utility companies implement net metering. As a result, customers are granted complete retail credits for every kilowatt-hour (kWh) of electricity generated by their solar panels.
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Solar for All
- The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development.
- New Jersey, through its Board of Public Utilities (NJBPU), has established the Solar for All (NJ SFA) program to address the significant barriers hindering solar energy adoption among low-income and disadvantaged households. This initiative, resulting from extensive cross-agency collaboration, focuses on four primary pillars for federal funding: residential solar, multi-family housing solar and storage, residential-serving community solar, and technical assistance and workforce development. The state plans to use these funds to benefit tens of thousands of households in underserved communities. With NJBPU’s proven track record in managing successful solar programs and the state’s high demand for solar energy, New Jersey is confident that the NJ SFA program will effectively advance the clean energy transition in these communities.
- Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings, and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification.
The SuSI Program
The Successor Solar Incentive (SuSI) program provides an incentive of $90 for every megawatt-hour (MWh) of electricity your solar array generates. This program works similarly to Solar Renewable Energy Certificates (SRECs).
While SuSI resembles net metering, there’s a key difference: with net metering, you only sell surplus energy. With SuSI, you receive $90 for every MWh your system generates, whether or not you use the energy yourself. For reference, 1 MWh is equal to 1,000 kilowatt-hours (kWh).
The average household in New Jersey uses approximately 1,281 kWh of electricity per month. If your solar array meets this average monthly usage, you could earn around $1,383.48 annually through SuSI.
Participation is limited, so it’s essential to apply quickly. You can register through an ADI (Administratively Determined Incentive) or CSI (Competitive Solar Incentive) program portal:
- ADI is for systems under 5 megawatts (MW).
- CSI applies to systems over 5 MW.
Registration is required before beginning construction. After installation, you’ll need to submit a post-construction packet. Once approved, you’ll receive a certification number, allowing you to register with GATS (Generation Attribute Tracking System) through PJM-EIS.
Competitive Solar Incentive (CSI) Program
The Competitive Solar Incentive (CSI) Program in New Jersey is designed to encourage the development of large-scale solar projects that contribute to the state’s clean energy goals. This program is part of New Jersey’s Successor Solar Incentive (SuSI) framework, which was established to replace the older Solar Renewable Energy Certificates (SREC) program. Here’s an overview of how the CSI Program works and its key benefits:
Overview of the CSI Program
Purpose and Scope
The CSI Program specifically targets larger solar projects, typically those generating more than 5 megawatts (MW). This includes both grid-supply solar projects and large net-metered projects on commercial or industrial buildings. The focus is to expand New Jersey’s renewable energy capacity through high-impact installations.
Competitive Bidding Process
Unlike the Administratively Determined Incentive (ADI) for smaller systems, the CSI uses a competitive bidding system to determine incentive rates. Solar developers submit bids to build projects, and incentives are awarded based on these bids, promoting cost-effective development.
Incentive Payments
Successful bidders receive incentives based on the amount of electricity their systems produce, measured in megawatt-hours (MWh). This approach aligns incentives with the actual generation of clean energy, encouraging projects that will produce consistent and reliable power.
Long-Term Contracts
The CSI Program offers long-term incentives, typically over a 15-year period, providing developers with financial stability and a predictable return on investment. This helps attract larger, institutional investors to New Jersey’s solar market.
Key Benefits of the CSI Program
- Cost-Effectiveness: By using a competitive bidding process, the program aims to reduce the overall costs of solar incentives, passing savings on to ratepayers and ensuring efficient use of public funds.
- Scaling Renewable Energy: The CSI Program supports New Jersey’s commitment to reaching 100% clean energy by 2050 by fostering the development of large-scale projects that can generate substantial renewable energy.
- Enhanced Grid Stability: Large solar installations developed under the CSI Program can contribute to grid reliability by producing significant amounts of clean energy, especially during peak demand periods.
Dual-Use Solar Pilot Program
The Agrivoltaics Pilot Program in New Jersey promotes dual-use solar facilities that combine solar energy generation with active agricultural use on the same land. This initiative supports the state’s agricultural heritage while advancing solar technology.
Launched on October 23, 2024, the program, developed with Rutgers Agrivoltaics Program and NJ agricultural and environmental experts, amends current solar rules to add incentives specifically for agrivoltaics, enhancing the existing SuSI (Successor Solar Incentive) Program.
The program will begin with a Notice of Incentive Availability (NOIA) in January, inviting pre-qualification for projects. It aims to support up to 200 megawatts of solar energy over the next three years.
Disclaimer
The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.
