New Jersey - Energy tax credit, solar rebates and incentives
New Jersey Solar and Renewable Energy Incentives
New Jersey's renewable energy incentives, including those for solar power, wind energy and energy efficiency, have made it one of the fastest growing states for clean energy. A variety of energy tax credits, energy rebates, grants and state and local incentives are available:
New Jersey is a Solar Champion
New Jersey has been a leading state in the national solar power initiative for years. Favorable laws, rebates and performance payments make going solar in New Jersey a wise economic decision. Keep in mind that the Federal Government currently offers a 30% tax credit for the whole installed cost of your system That's a huge benefit available to you no matter where you live in the US!
New Jersey Renewable Portfolio Standards
New Jersey has a very strong RPS (Renewable Portfolio Standards). This is a regulation that requires utilities to increase their production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal by a certain date. Utilities must meet the standards by either producing their own renewable energy or by purchasing it from customers. They must pay high fees if the standards are not met. Rather than paying high fees, utilities in strong RPS state offer solar incentives to homeowners. New Jersey's RPS mandate that 22.5% of all energy must come from renewable sources by 2021.
New Jersey RPS Solar Carve Out
Solar carve outs require a certain percentage of the Renewable Portfolio Standards to be met with solar energy. New Jersey's solar carve out of 4.1% by may 2028.
New Jersey State Electric Rates
New Jersey's electric rates rank 10th out of fifty states. A state's electric rates are one of the key factors in predicting whether an investment in solar panels makes sense. The reason for this is simple: solar power is in direct contention with electric rates. Low electric rates make it hard for you to achieve significant payback from your solar power investment. Higher electric rates make an investment in solar energy much more feasible. New Jersey's high electric rates make investing in solar power more attractive.
New Jersey Net Metering
New Jersey offers net metering. Net metering is a system in which solar panels or other renewable energy generators are connected to a public-utility power grid and surplus power is transferred into the grid, allowing customers to offset the cost of power drawn from the utility. When you generate electricity from your solar array for your home or business, it reduces the amount of energy you purchase from your electric utility. it also lowers your monthly electricity bills. If your system produces more energy than you need, the excess power is sold back to the grid. That amount of energy is deducted from your monthly bill or credited toward a future bill.
New Jersey Interconnection Standards
Interconnection standards are requirements for connecting solar and other electrical generation systems to the grid. These rules apply to both electricity customers and utilities. New Jersey has strong, clear statewide interconnection standards which makes the interconnection process less complex and expensive. Small solar power installations (less than 10kW) qualify for simplified procedures with no application costs. This can be a definite benefit when trying to bring a solar energy system online and makes it easier for a solar power system to make financial sense.
New Jersey Energy Rebates
Solar power rebates are incentives federal or state governments offer to reduce the cost of going solar. You can get a lump sum payment or your installer will take the amount off the final installed price. Rebates require paperwork to be filed. Many times installers will handle the paperwork. The NJ Clean Energy Residential New Construction Program offers the possibility of thousands in rebates if you build a new home that meets the standards. Talk with an expert solar installer to see if you qualify. And don't forget, the Federal rebate for installed solar systems is 30%.
New Jersey State Energy Tax Credits
New Jersey does not offer state solar tax credits. As a credit, you take the amount directly off your tax payment, rather than as a deduction from your taxable income. You can claim the credit for your primary residence, vacation home, and for either an existing structure or new construction.
New Jersey Solar Power Performance Payments (Performance-Based Incentives)
New Jersey offers Solar Power Performance Payments, also know as production incentives. New Jersey ranks 3rd in the nation for SRECs! Solar Power Performance Payments provide small cash payments based on the number of kilowatt-hours (kWh) or BTUs generated by a renewable energy system. Payments based on a system's actual performance are much more effective than payments based on a system's rated capacity. Electricity produced is credited as Solar Renewable Energy Credits (SRECs). SRECs are a great way to help your Solar PV system pay for itself.
New Jersey Property Tax Exemptions for Energy
New Jersey offers property tax exemptions for installed solar systems. Property tax exemptions allow businesses and homeowners to exclude the added value of a system from the valuation of their property for taxation purposes. A Solar PV system can increase the value of your home by a multiple of 20 times your annual electricity savings (a 5kW system increases the value of your home close to $17,000). A property tax exemption makes it more economically feasible for a taxpayer to install a solar system on a residential or commercial property.
New Jersey Sales Tax Exemption for Energy
New Jersey offers sales tax exemptions. A sales tax exemption means that homeowners and businesses would not have to pay any state sales tax on their solar panel system. That is a 7% savings for New Jersey home and business owners. Combine New Jersey's high electric rates, property tax exemptions, sales tax exemptions and the 30% Federal tax rebate and you have extremely compelling reasons to go solar in New Jersey!