New Jersey ranks in the top 10 states nationally for solar adoption. And it's easy to see why. Between the federal solar tax credit, the state's SREC-II program, net metering at full retail rate, and property tax exemptions — New Jersey homeowners have some of the best solar incentives in the country.
If you're thinking about going solar in NJ, this guide breaks down every incentive, rebate, and program you should know about. We'll also show you how New Jersey homeowners can actually earn money from their solar panels through the SREC-II market.
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This is the biggest incentive available to New Jersey homeowners. The Investment Tax Credit (ITC) lets you deduct 30% of your total solar installation cost from your federal taxes.
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% of total installed cost
Covers: equipment, labor, permits, and installation
Available through 2032 (under current law)
No maximum dollar limit
Can be rolled over to next tax year if not fully used
Important: You need a federal tax 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%)
–$7,200
Net cost after upfront incentives
$16,800
+15 years SREC income (est.)
+$16,200
Effective cost after SRECs
$600
* These are illustrative estimates. Actual costs depend on system size, installer, roof type, and current incentive levels. SREC prices fluctuate. Always get multiple quotes.
The bottom line: After incentives and SREC income, the real cost of going solar in New Jersey can be extremely low. Add in the electric bill savings of $1,000–$1,500+ per year, and most NJ homeowners break even in 6–8 years. After that, it's essentially free electricity for the remaining 15–17 years of the system's life (and beyond).
9. Frequently Asked Questions
How much can I save with solar in New Jersey?
New Jersey homeowners typically save $1,000–$1,500+ per year on electricity bills from net metering, plus $900–$1,200+ annually from SREC-II income. Over 25 years, total savings can exceed $50,000–$75,000. Your exact savings depend on your system size, electricity usage, and current SREC prices.
Can I stack NJ solar incentives with the federal tax credit?
Yes! New Jersey incentives stack on top of the 30% federal 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.
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