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Clear info on home solar power rebates, tax credits, and other benefits

2017 Policy Grade

A

Avg. Yearly Savings

$140

Congratulations! You've found the ultimate guide to going solar in New Jersey

2017 Policy Grade

A

Avg. Savings/year

$140

Welcome to the 2017 New Jersey solar power incentive and rebate information page

Note: The numbers above are just estimates for a 5-kW solar system, and your home is unique. The best way to know exactly how much money solar power can save you is to connect with one of our partners nearby. A friendly solar expert we trust will give you a buzz and help you craft a personal plan to get the absolute most out of a solar power system for your home. It's 100% free (yes, that’s right, 100% free) and you aren't obligated to buy anything.

We've been singing the praises of New Jersey solar power for some time now. Go ahead, search for "New Jersey" on our site. You'll see plenty of our writings all about how states from all over the union could learn from what the The Garden State's legislature here has been able to accomplish.

Over the past several years, New Jersey has done such a good job promoting solar power that the Environment America Research & Policy Center hailed it as the fifth best state in the nation for solar. In fact, New Jersey residents have swarmed to solar so much that some of the performance-based solar incentives have become a little less juicy.

How much less? Well, even though your solar power system will still pay for itself quickly and return you handsome profits, it isn't quite at the fire-setting pace as it was before. Keep reading to find out how fast, and how much.

New Jersey has many different solar programs, and not all of the state's utility companies offer each one. The page you're on now is a good overview of policy and incentives in the state, but to get the clearest picture of the possibilities for solar in your area, check out our city-specific pages for the following areas:

Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the New Jersey solar incentives you see below.

Your guide to going solar in New Jersey

We've designed this page to be a complete guide to the complicated and sometimes confusing process of installing solar panels on a home in New Jersey. Since there's a lot of important information to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!

The Solar Strategy section is all about the various financial options you have in New Jersey. We've created a tool that asks you a few questions about what you hope to get out of a solar purchase and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we give you a detailed picture of how each could work for you.

The Policy Information section contains all of our latest research on the rules set by the state legislature and public utilities commission that determines how easy it is to go solar in New Jersey. These policies and rules govern everything from renewable energy mandates to whether you get paid retail or wholesale rates for the extra energy your system produces, and can have a huge effect on the viability of solar.

Finally, the Solar Incentives section lists all of the available financial benefits available to homeowners who go solar. This section includes information about money-back rebates and grants, tax credits, and tax exemptions. If you're looking for what New Jersey is doing to make solar more affordable for its citizens, you'll find it here.

Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.

Your Solar Strategy in New Jersey

Figuring out the best way to go solar in New Jersey can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.

We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:

Compare the Return of Different Solar Investments in New Jersey

The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or lease. One thing it's important to note is: solar makes you a lot of money in New Jersey. Yes, we said "makes!" You see, New Jersey has a special financial incentive for encouraging homeowners to go solar, and it means thousands of dollars in your pocket for the next 20 years.

The incentive is called the Solar Renewable Energy Credit, or SREC. One SREC represents one megawatt of electricity generated from solar, and in New Jersey, you get about 6 per year. Now, the Garden State requires its utility companies to produce certain amounts of electricity from solar, and buying SRECs from solar generators helps them meet those goals. On average, a homeowner makes about $170 from the sale of an SREC (though prices vary throughout the year), so those 6 SRECs you get equal about $1,000 in your pocket, every year until 2030.

That's huge! We hope your interest is piqued, so now let's discuss that chart above. We've examined three scenarios for going solar in New Jersey, including a solar Power-Purchase Agreement (PPA), buying solar with a home loan, or paying for solar with cash. As you can see, the cash purchase option leads to the highest dollar-amount returns over time, but look a little closer. Taking a solar loan or Home Equity Loan or Line of Credit (HELOC—the orange bars) and paying for the system over time means you'll actually spend zero dollars of your own money over time, while reaping a big financial benefit in year 1.

That's because you'll be paying over time for the system, but you still get all the benefits of paying up front. In New Jersey, that means a 30% federal tax credit, energy savings, and SREC sales. With those huge incentives, you'll actually make money in the first year. And even though you'll be making loan payments for 15 years, the cost will be obliterated by the money from SRECs and electricity savings, making this investment essentially free money for having a roof and some home equity.

Lastly, take a look at the blue bars. They represent a solar Power-Purchase Agreement (PPA), which are also called third-party ownership. With a PPA, the solar installation company puts panels on your roof at no cost to you, and you make monthly payments for the energy they produce. It saves you you only about $12 per month to start, but it gets bigger over time, because the PPA payments will rise by less than the electric company's annual rate hikes. Third-party ownership is an excellent option if you don't have any equity or cash to put down, and it still saves you money!

Read more below about each of three very good options for solar in New Jersey.

Net Present Value of Solar in New Jersey

“Net Present What?!” Don’t panic, this isn’t an economics test. NPV is just a tool used to compare investments. Basically, it asks, “if you had X dollars to invest, which investment would get you the best return?” It relies on the idea that getting a return on your investment sooner is better than later, because you can reinvest your early profits and keep the gain train going.

We compare an investment in solar to a “what-if” investment in a Standard & Poor’s (S&P) 500 stock index fund, which has seen growth of about 7% per year over the past 25 years. We use the cost of solar in New Jersey and ask “how much better or worse (in 2017 dollars) is an investment in solar than stocks?” Here's what we found for the three different ways of going solar in New Jersey:

Look at all that green! When they tell you solar is a good deal in New Jersey, this is what they're talking about. A solar investment in New Jersey should provide a better return than the stock market whether you choose a PPA, a loan, or pay up front. Here's some more about how we got these numbers:

Solar PPA NPV: $2,239

Saving money without having to put anything down is always going to have a positive NPV. In New Jersey, A PPA will save you a little bit each month, adding up to $4,707 over 20 years. That's like having an extra $2,239 to invest today, but it can't even come close to the return of a solar loan. Read more about PPAs in New Jersey below.

Solar Loan NPV: $14,478

As we’re fond of saying, taking a loan for solar is a no-brainer, because it’s like agreeing to pay over time for something that is also making you money. In New Jersey, the money you make comes from electricity savings, SREC sales, and a huge federal tax credit equal to 30% of the cost of your solar installation at tax time next year. All that helps push the NPV of a solar loan to $14,478 better than a similar investment in the stock market. That's a mind-boggling return for any investment, and it's insane for something that requires no money down. Read more about solar loans below

Solar Purchase NPV: $11,365

If you're paying for solar up front, you're gonna need a few thousand dollars to do it. But when all is said and done, the NPV of an outright solar purchase in New Jersey is outrageous. The two biggest reasons a solar purchase in New Jersey has a positive NPV are the 30% federal tax credit and SREC sales. On top of that, the money you save on electricity is also available for future investment. But you can see above what happens to NPV if you choose a solar loan instead. Unless you need to put cash into an asset, a loan is a much smarter way to pay for solar panels. Read more about solar purchases below.

  Solar Power-Purchase Agreements in New Jersey

A PPA is a great way to go solar if you haven't got stacks of cash or oodles of equity in your home. It's possible to get solar panels for $0-down and see big savings over 20 years!

As for leases in New Jersey: the electricity costs here are pretty high— 20% higher than the national average. That means a PPA saves you money starting on day 1! For now, the payments on the energy produced by a 5-kW solar system should be around $796 per year, but the energy you're not buying from the utility company would have cost $936—a savings of $140, just for saying yes to solar!

That might not sound like a huge amount of money right now, but as the utility company raises rates, you will start to see greater annual savings. Over 20 years, our estimate shows a total savings of $4,707. And the best part is the panels will be owned and maintained by the installation company, so all you have to do is brag to the Joneses down the street about your green habits!

Here's a little more about how a New Jersey solar PPA works:

Example savings in New Jersey

Annual Electric Bill Before Solar

$1,286

Annual Electric Bill After Solar

$350

Est. Annual Solar Payments

$796

Average Annual Savings

$140

Power-Purchase Agreements (PPAs) are the most popular form of what's called "third-party solar." A PPA just means your solar company owns the panels on your roof, and you pay for the electricity they produce. The numbers above show the savings with a solar PPA for an average home in New Jersey. The typical electric bill before solar power is super expensive, but with a PPA, your monthly expenses will be lower. You'll be saving money and saving the planet all at the same time!

Here's an estimate of the monthly savings for a solar PPA in New Jersey:

With a PPA, your solar company essentially becomes a second utility provider, only the solar electricity is sold to you at a lower rate than the fossil fuel electricity you've been buying from the electric company! Note: your PPA won't eliminate your power bill from your regular electric provider, because you'll still need energy from the grid when the sun isn't shining. But it will save you money!

The less-popular cousin of the third-party solar family is the solar lease. It's basically like renting your panels for a set monthly payment, and getting all the energy they produce—however much it is. Don't get spooked by that language, though. A typical solar lease comes with energy production guarantees that will make sure you're getting what you paid for. In fact, if you're not offered a production guarantee with a solar lease, walk away.

Here's the best part of third-party solar: whether you end up with a lease or a PPA, the installation company owns the panels and will do all the maintenance for you. Usually that means just a good cleaning every year, but if any part of that system fails, you're off the hook! That can be a great benefit to homeowners who are risk averse.

Keep in mind, the numbers above are based on an average home in New Jersey. If you're ready for a custom quote for a solar lease or PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Home Solar Power: PPA vs. Purchasing

To PPA, or not to PPA? Willsolar Shakespanels would be proud we're discussing this. Here's the basic deal. If you choose to lease your panels, you benefit from no out of pocket costs and an immediately reduced total electricity payment. Because of this, many regard this option as a no-brainer, since there isn't any downside to think of. The only hiccup you'll start to experience is when you consider the long term financial benefit of owning the solar panel system yourself.

In many situations, if you can afford the outlay or can easily secure financing, the cost of the install becomes an investment with a return outpacing even the strongest performing mutual funds. In addition, there's significantly less principal risk, since the energy credits you will be producing are tied to the sun coming up in the morning instead of our financial markets!

Additionally, if you go the PPA route, you must forfeit all the credits and performance payments you would receive by owning the system yourself to the solar PPA company (after all, that's how they can afford to give you such a no-brainer proposition in the first place).

 Solar Loans in New Jersey

You don't need $16,000 sitting around to pay for solar. As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.

That’s because, in New Jersey, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you a tax break. You'll come out thousands ahead this year, and you'll still see a spectacular profit over the 25-year life of your system. The reason this works so well is that you're paying over time, but reaping all the benefits now. You'll get tax breaks, SRECs, and energy savings to offset the loan payments, which sounds a lot like it's too good to be true... so let's take a look at the numbers.

A solar purchase like this will make sense for you if the following is true about you and your current situation:

  • You can qulaify for a solar loan or home-equity line of credit (HELOC) for $16,250, with a fixed rate of 4% or lower and a 15-year repayment period. Don't be put off if you're offered a higher rate. It just means a tiny bit less of the thousands of dollars you'll make with solar.
  • You love making money without much risk.

Here’s how the numbers pencil out for a New Jersey homeowner who makes a solar purchase with a loan:

  • Installing a typical 5-kW solar system should start at about $16,250. That's how big your loan will need to be to cover it.
  • The electricity you'll save in the first year of operation would have cost $936, but your annual loan payments will be $1,442, meaning you would spend $506 on solar this year, but...
  • You'll also get to sell your SRECs for about $1,164, putting you $1,670 ahead for the year! But then...
  • You'll also see a huge Federal tax breaks! Uncle Sam will give you 30% of the cost of your system back as an income tax credit, which in this case means $4,875 you won't be paying the government this year.
  • All those incentives mean you'll come out $5,532 ahead after year 1, and it's clear skies from them on out. You'll continue to net over $600 per year after your loan payments, making home solar in the Garden State a $0 investment that pays from day 1.
  • By the time you've paid off your loan in 2031, you'll see yearly savings of over $1,200. After 25 years, your total profit will be $29,367!
  • On top of the green that will stay in your pocket, your system will mean green for the environment, too—97 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in New Jersey. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

 Buying Solar in New Jersey

An outright purchase used to be the only way to get solar, and it's still the option that provides the "biggest" financial returns. The reason we put "biggest" in quotes here is because it's technically true—with rebates and tax credits, solar costs less than ever before, and the SREC market and electricity savings in New Jersey are so good that a solar installation pays itself off in just a few short years. But if you're interested in solar as an investment, taking a loan to pay for the system is a better option.

With a loan, you can make monthly payments instead of putting $16,000 down on a solar system, which means you save money on electricity as you pay down the cost of your panels. If you have equity in your home or can get a large loan with an interest rate of 4% or less, a loan is the option to go with. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans below.

If you've got cash and you prefer to pay up front, you'll have to plunk down $16,250, but tax breaks and energy savings will erase a bunch of that after just 1 year. Over 25 years, your system will have produced about $35,000 in income, after your system cost is paid back. The reason this works is that solar offsets your electricity costs—enough to save you $936 in year 1—and it just goes up from there. As the electric company raises rates, you save more and more, and more...

Here’s how the numbers work for a 5-kW rooftop solar system in New Jersey:

  • Installing a typical 5-kW solar system should start at about $16,250. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
  • The Federal government offers a great income tax credit of 30% of system costs. That's $4,875 you won't be paying to Uncle Sam this year, and it brings your first-year investment down to $11,375.
  • After the tax credit we subtract your first year’s energy savings, which we estimate to be $936. That reduces your cost after the first year to only $10,439.
  • But wait, New Jersey has that excellent SREC market we talked about above. The sale of your SRECs will net you $1,164 this year, bringing our final first-year estimate to just $9,275. That's 40% off the starting cost, just in year 1! And here's more good news: those SREC sales will continue for 15 years, which means lots of income through 2030!
  • Those electricity savings and SREC sales will quickly make your money back, and your system will pay for itself in just 6 years. You'll see a total net profit of $34,753 by the end of your panels' 25-year warranty. The internal rate of return for this investment is an amazing 18.3%. That's basically twice the return the stock market's traditional return, and it's more reliable, too!
  • And here's a nice bonus to consider: your home's value just increased by just about $22,000, too (your expected electricity savings over 20 years).
  • In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 97 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in New Jersey. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

New Jersey Solar Policy Information

Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.

State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Florida—are doing so poorly.

Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in New Jersey:

RPS

22.5% by 2021

Grade: B

A Renewables Portfolio Standard (“RPS”) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels.

New Jersey used to have one of the strongest RPS goals in the nation, mandating that 22.5% of all energy must come from renewable sources by 2021. That number is looking very attainable, and, truth be told, it’s in the middle of the pack now compared to the best solar states. The one thing the RPS has going for it is a huge solar-specific target of 4.1% of all electricity, meaning that solar is vital to the state meeting its goals (more about the carve-out just below).

New Jersey’s RPS is critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding your transition to lower electric bills and offering you incentives to put solar on your roof is because the state forces them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the state.

What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.

An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.

RPS solar carve out

4.1% by 2028

Grade: A

The New Jersey RPS now includes a solar specific carve-out of 4.1% by May 2028. That means for every 100 kilowatts of electricity generated in the state, 4 have to come from the sun by 2028. That may not sound like much, but trust us, that's huge!

The result of setting the bar so high is NJ's solar panel rebate and SREC (Solar Renewable Energy Certificate) programs, which offer homeowners and businesses terrific incentives to get solar panels.

What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.

Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.

For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!

New Jersey Electricity Prices

$0.16/kwh

Grade: A

As a homeowners in New Jersey, we pay about 16 cents per kilowatt-hour of electricity we use. That's solidly above the national average of 13 cents/kWh. Paying upwards of 20% more for electricity than many other people in the country is painful.

But while you see larger bills now, you could be seeing bigger savings in the future with solar power! Higher electricity prices means greater opportunity to save money by producing your own clean, earth-friendly power with solar panels. And electricity prices will likely continue to rise in the future with new regulations on carbon pollution and decreased supplies of fossil fuels. People who switch to solar now will be patting themselves on the back in short order.

Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.

The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.

New Jersey Net Metering

A

Grade: A

Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus.

New Jersey’s net metering rules ensure the utility company tracks your excess power generation and credit it to your next bill at the full retail rate. If you run a surplus for an entire year, the utility will cut you a check for the surplus at the company's avoided-cost (wholesale) rate. All investor owned utilities and certain competitive municipal utilities and electric cooperatives are required to provide net metering.

What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.

The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.

New Jersey Interconnection Rules

B

Interconnection standards are strong here as well. Regulations have created a three-tiered system for interconnection procedures, depending on the size of the energy system. Your residential system of less than 10 kW qualifies for simplified procedures with no application fees. The law actually prevents the utilities from charging small systems like yours any additional fees whatsoever to get hooked up to the grid. Nor may the utility require you to install a redundant external disconnect switch, or to purchase any additional liability insurance. There is a bit of room for improvement on standard procedures for larger generators (hence the "B" grade), but everything should be smooth sailing for your residential solar power systems.

Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.

Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.

Solar Incentives in New Jersey

New Jersey Solar Power Rebates

Varies, New Construction Only

Grade: C

New Jersey's renewable energy program does offer rebates for some clean energy types. Unfortunately legislators made the decision to back solar power exclusively with the SREC market. That means the cost of solar panels in NJ may be a bit higher at the outset, but those tremendous long-term payments still more than make up for it.

BUT... there is a way to get some rebates if you're building a new home and using renewable energy to power it. New Jersey has a program called "The NJ Clean Energy Residential New Construction Program," which offers rebates to incentivize the construction of new homes that meet the New Jersey ENERGY STAR standards.

Do some reading at the link above, and you'll see that it's possible to get thousands back if you build a home that meets or exceeds those standards. Connect with our solar experts in New Jersey to find out more about this exciting program!

How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.

The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.

New Jersey Solar Power Tax Credits

None

Grade: F

New Jersey also lacks any personal tax credits for solar panels. NJ's pending reduction in SREC prices means a statewide solar power rebate or tax credit (with rollover, if necessary) would be an excellent way to keep solar growth humming here. With SREC prices still providing substantial payments, even a small rebate or tax credit would be a significant boon to homeowners like you, without costing the state all that much.

About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.

(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)

The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.

Solar Power Performance Payments

SREC Market- Varies

Grade: A

The heart of NJ's solar panel push can be summed up in four words: “Solar Renewable Energy Certificates” ("SRECs"). Let's talk a little more about SRECs, from the top.

Think of SRECs as proof for the New Jersey’s utilities that they are complying with the law to produce their share of clean power. If they’re not producing that power through their own solar farms or wind farms, then they have to “buy” that power from someone else—you, Mr and Mrs. Homeowner. That means extra moolah for you!

How do you get New Jersey SRECs?

Each time your panels generate 1,000 kilowatt-hours (kWh) of electricity, you get an SREC which you can sell for cash! For NJ solar panels, the ratio of SRECs produced per year to system size in kilowatts is about 1.15 to 1. So if you've got a 5-kW solar system (a solid average for a single-family home), you will generate a little less than 6 SRECs a year.

How much are SRECs worth, and how do you get money for them?

SRECs are traded on an open exchange, so their value will vary from year to year. However, in New Jersey, their value is strongly correlated to the Solar Alternative Compliance Payment (SACP) the utility would incur for not meeting their requirement to source some of their electricity from the sun.

As of 2017, the SACP has dropped to $315, leaving SREC prices hovering between $180 and $240. The SACP will be slowly decreasing to $239 by 2028. Recent SREC market prices can be found at the New Jersey Clean Energy website.

This is a whole lot of money, paid straight to you every year! SREC prices should continue to track the ACF, meaning you figure to bank nearly $1,000 a year.

To get money for your SRECs, you can sign up with an SREC broker, such as SRECtrade. These guys handle the paperwork, aggregate a lot of homeowner SRECs together, handle the trading with the utility companies and take a commission for their trouble. Their efforts are worth the hassle, since it isn't cost effective for the utilities to connect with thousands of homeowners to negotiate a small number of SREC purchases each month from each homeowner.

For more information on how all this pencils out for you, connect with one of our friendly New Jersey solar experts.

Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!

Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.

Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.

If you don’t know what an SREC is, or how they work, check out this great SREC video

Property Tax Exemption

100%

Grade: A

When the property tax assessor comes a knockin’ at your front door, by law, they are not allowed to charge you any more property taxes because you’ve got a new valuable solar system on your roof. At the same time, your home WILL be worth significantly more when you sell, because, hey, what home buyer doesn't like free electricity?

About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Many argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing. Leasing still has a positive impact on the ability to sell your home though, in our opinion).

For many average-sized solar power systems on a house, that can mean $20,000 to your home value. (Edit April, 2014: Some companies, like Solar Mosaic, are starting to offer traditional style equity-based home loans for such a thing). An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!

The availability of a property tax exemption for solar energy was also sourced from the Database of State Incentives for Renewables and Energy Efficiency. The stronger the tax exemption, the higher the grade.

Sales Tax Exemption

100%

Grade: A

Contrary to other home improvements like a new kitchen or bathroom, with solar panels in NJ, you will not have to pay any sales taxes on your system. That's 7% you're saving right upfront, even without any statewide solar power rebates.

What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).

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The consensus on New Jersey solar power rebates and incentives

New Jersey’s Office of Clean Energy is charged with the success of the state’s aggressive Renewable Portfolio Standard, which depends in part on installing “sufficient solar capacity to meet the RPS requirements, at the lowest cost to ratepayers, taking into account other policy goals – fairness and equity to all ratepayer classes, job growth, improved reliability/security and improved environmental quality.”

They have a big job facing them, but we applaud the New Jersey government and business leadership for putting their shoulders to the task. We’d like to see a statewide rebate back in place to bring down the initial out of pocket investment, but even without that initial discount, the cost after year 1 remains low, and the expected payback time frame is one of the fastest in the nation. That’s enough to earn highest marks with us.

Again, if you are confused about how these numbers work and would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!

103 thoughts on “New Jersey Solar Power for your house – rebates, tax credits, savings

  1. Danny says:

    The pop up on your mobile site makes it impossible to use FYI

  2. Robert Spiegel says:

    I am looking for an off the grid system and have a farm with plenty of roof space in NJ. Can you help me?

  3. Anonymous says:

    after getting a solar systm 11.13 kwh. i’m doing the geothermal which is up to a 75% savings more on my bill and much more money coming in.not everyone can do this but my daughter will be happy knowing she has n’t any bills to worry about in the future

  4. Anonymous says:

    Does NJ allow me to install my own Solar System. I’m looking at a PlugNPlay system or Kit from a number of venders.

  5. Anonymous says:

    What is the maximum amount of average usage that a residence can obtain from solar expressed as a % of normal electricity usage?

  6. Anonymous says:

    Tax Assessment fee coupon Home prices are falling everywhere, but homeowners hoping for lower property taxes may find themselves disappointed when the bill arrives. If you think your home’s assessed value is too high, you can appeal the tax assessor’s verdict — We will handle the grievance process for you. Most homeowners simply don’t have the time to appeal, or they become intimidated by all the paperwork involved. We will help in the appeal process typically charge a small fixed amount. If the appeal is successful, the homeowner can save hundreds of dollars in taxes. To get discount on appeal process fee, checkout here: http://www.coupontax.com

  7. New Jersey offers some good incentives it seems, we have similar sort of deals in the UK for solar panels and green energy.

  8. Allen G says:

    @ Best way to handle that is climbing up on your roof once a year with a leaf blower and blowing around and under the panels. http://greenpowerdevelopers.com/

  9. dmbstitch says:

    I noticed a buildup of leaves and other debris under the solar panels on my roof. Any suggestions on how to clean it out so as not to have mold buildup on the roof?

  10. Modi says:

    Does solar panel installation require roof re-done if roof is two layered, 45 years old and second layer done 20 years back? If so is there any rebate on roof as it is pre-requisite for solar panel installation?

    1. Dave Llorens says:

      Probably, no reroofing is not going to be helped by any solar rebates, but you’re going to reroof when you need to re-roof regardless. Solar is somewhat independent. You’d like to time it, but if not, it’s not much more than a grand to pop off, reroof, and put back on. So, get a quote today :-) https://solarpowerrocks.com/free-solar-estimates/

  11. James says:

    if you install solar panel in my roof next month can i still get solar power rebate , tax credits, & insentives ?

    1. Dave Llorens says:

      Hey James, in NJ? Yes. Please fill this out and someone will help you. https://solarpowerrocks.com/free-solar-estimates/

  12. Dan Tonkery says:

    I am researching solar power and my house has a full house generator. Can the two systems work together?

  13. Brian says:

    I am in the middle of researching solar power in NJ. One question: I was told by someone that if there is a blackout, that even homes with solar will not have power. That somehow, because the power company doesn’t want the lines to be backfed by the electricity that I am generating that my house will still be without power even if I have solar. Is that true? Is there a way to set it up, via battery for instance, that my house continues with power in case of a blackout?

  14. Solar says:

    Hey Carol! You can check out http://www.greenappleenergyusa.com for some info on what you’re looking for. we should definitely have it.

    -Sharone Tal

  15. Carol says:

    Hello, I am doing a report on an analysis of the waste that is generated through used-up solar panels, and storage batteries that have reached their life-time capacity. However, I am really having a hard time finding this information. Can anyone suggest an article, website, or can explain? Thank You, Carol

  16. Paul Vegvari says:

    Hello,when will you update this site things have changed a lot since 2010 and are you aware SRECs are trading for under 200 bucks per right now. There is no longer any state rebate for solar either. When will Christie sign the bill into law that will move us into the energy year 2014 so solar can move forward in this state. We are flatlining right now and solar will not rock until the SREC market can get readjusted. Update your site and get out of your cave so you can properly inform people.

  17. Mike says:

    CAn you tell me if the tax credits are refundable tax credits.

  18. Tj says:

    How many panels does it require to handle a house that has 200amp service?
    Space would be the issue.
    Definitely interested, just need to understand more.

    1. Dave Llorens says:

      As always, depends depends depends depends (wish that was not the case). Good news is that with a 200A service unless you are using CRAZy juice, you likely will not need an (expensive) electrical service upgrade. Sign up here for a quote

      https://solarpowerrocks.com/free-solar-estimates/

  19. B says:

    I have a question about the credit pse&g is giving me for my monthly solar generation. If I generate 400 kwh of energy, and use 800 kwh, shouldn’t I only be paying for 400 kwh? My bill just came in and I generated 452 kwh based on my solar meter. According to pse&g, I used about 800, and they reduced that by 200 kwh, not 452. Anyone know why that would be? It seems consistent every month, in that I generate much more than they reduce my usage by. .??? Help!

    1. Dave Llorens says:

      The first sentence is correct in theory, sounds like you need to talk to the people who installed your system.

  20. Al Krisgonski says:

    I recently got 10KWH system installed on my Shed roof as did not want any thing on my house. It is about 100 ft away from my house and in open with south side facing slanted roof about 10 ft high from the ground. Its cost was little high. My installers and company I bought the system bundled all the cost into one. All I did was refinanced my house @no cost financing with my lender atul.rastogi@gmacm.com. Great thing is along with all the credits and SREC’s the interest on the investment is also now tax deductible. Since, it is an equipment I can claim the depreciation too. If my calculations are right I will be even in 3 years with all the savings, credit, interests and cost of electricity. With changes in technology there is a big improvement in system every 5-6 years and lower cost. I would be very comfortable in upgrading my system in 5-6 years and selling current panels back into the market for 20C on a dollar. Extra cash. My new system would be almost free and more efficient.

  21. patricia says:

    mobile home? Is it possible for me to have it. Does it make sense?

    1. Dave Llorens says:

      Mobile homes are …. tough to do. They really need to be owned, and on an owned plot and immobile, which, well, means they’re not mobile homes. Sorry wish I could be more help. You can still sign up and take a shot: https://solarpowerrocks.com/free-solar-estimates/

      Cheers,
      Dave

  22. John says:

    can this be done on a commercial site? I have an old garage–flat roof with no trees-near an open field–a small strip mall next store want to install on garage and sell to them–is this possible??

  23. gloria says:

    I live in Jersey City. I have a flat roof and no trees around my house that are tall enough to block the use of solar. I am sick of oil cost. Can someone let me know the cost of instillation and how you go about getting it.

    1. Dan Hahn says:

      Hi Gloria,

      Fill out the form here, and that will get the ball rolling. The installation cost depends on your electricity usage and/or budget. At the least, you’ll get a free quote:

      https://solarpowerrocks.com/free-solar-estimates/

  24. Sally says:

    About how much house value is increased with solar panels?

    1. Dan Hahn says:

      Hi Sally, home value is increased 20x your annual electricity savings with solar panels!

  25. Susan says:

    I have a slate roof can solar panels be put on a slate roof?

    1. Dan Hahn says:

      Susan, Indeed solar can be installed on a slate roof!

    2. Dave Llorens says:

      Yes, but it’s hard. It can be broken and will cost extra, and you will need to find an installer who will do it, but that is more than half of them.

      Signup here and hopefully you can get sorted out: https://solarpowerrocks.com/2009/04/cheap-loans-feds/

  26. Doug G. says:

    Are there seminars available to show private owners how to sell SRECs themselves? As I understand it we can I would like to learn more.

  27. Jude says:

    Does anyone know if Solatube (solar skylights) are eligible for a rebate or credit from NJ?

  28. Mel C. says:

    Curious about buying a house in NJ with solar system (5 yrs old) on roof, seller wants to take SRECs with him/her, but they are moving out of state. Can they retain SRECs when no longer NJ state residents? Also, what are the risks to a buyer of house with solar if seller retains SRECS. Any assistance is appreciated.

  29. Doug G says:

    Dan I haven’t looked at my bill. Do you know if PSE&G has such an accounting with thier bills? I did call them directly and it was installed about about 3 days however I did not get any info on how to read the meter? They are supposed to send out some sort of paperwork….

  30. Doug says:

    Thanks Dan H for your help however if I already submitted paperwork with PSE&G do you know if I can cancel it at anytime? My installer is setting this all up and am wondering… also PES&G is to install a digital meter which shows the amout of energy they are getting and once an SRECs it obtained I guess they send me a check. It’s been about a month now and they haven’t installed the meter. We already lost a 1/2 an SREC… does anyone know how long it takes for them to come out? Asking my installer and not sure if I’m getting a real answer.

    Doug

    1. Dan Hahn says:

      Hi Doug,

      While the special meter will be nice, you don’t need it to claim your SREC and you haven’t lost anything. What’s important to keep is your electric bill, where hopefully there is an accounting of how much power you are sending back to the grid from your panels and how much you are consuming. If there is not, you definitely need to hound them to get the meter in because there’s no accounting of how much power you’ve created. With any sort of accounting on your bill, you will be able to prove you are generating your SRECs and can sell them. I’m surprised PSE&G has taken this long to get back to you. I’d recommend contacting them directly for the status of their meter installation.

  31. Joe says:

    Hi everyone.. I’ve been reading about solar energy in NJ and would like to have one installed on my home. Can someone help me with some questions that I have about the system cost and how to pay for the system.

    Thank you

    Joe in Mechantville

    1. Dan Hahn says:

      Hi Joe (and anyone else curious in New Jersey),

      I am available any time for a phone consultation and can help you answer any questions you might have about financing, incentives, and NJ rebates. I can also get you a quote. Send me your phone number at dan@solarpowerrocks.com, the best time to reach you and I’ll give you a buzz!

      – Dan

  32. Aileen says:

    Hi
    I’d like to know the rebate policy for NJ in 2011,Thanks ,If you can ,please give s sample case of PV to let me know the finance issues of the PV project.
    Thanks a lot.

  33. Doug says:

    We just had a 3.8 KW system installed on our roof in Collingswood, NJ. We are waiting for PSE&G to switch out our meter so we can start accumulating SERCs. We were told we would get 6-7 SERCs per year with this system but finding this website it looks like we will only get 3-4 based on the system we have? Am I reading this correctly?

    My wife was speaking to the building inspector who also has solar, he said he brokerages his SERCs himself and does not go through PES&G thus selling to the highest bidder. How do I go about doing this and if I set up to start with PSE&G can I change and do this myself? Any help would be appreciated.

    1. Dan Hahn says:

      Hi Doug,

      First off, congratulations on installing your new solar power system. Indeed, we estimate from our experience you will probably be generating between 3 and 4 SRECs per year in New Jersey. If you are actually getting more than that, please let us know.

      In terms of selling your SRECs, it is difficult to sell small quantities directly to PSE&G because you are relatively small potatoes – even though they are interested to get their hands on all the SRECs they can.

      Therefore, we recommend using SRECtrade. They aggregate all the small potatoes together to comprise bigger SREC lots, which then get more easily gobbled up by the utilities. There are forms on the site to register, and you can always contact them for personalized help.

      Warm regards,

      – Dan @ Solar Power Rocks!

  34. Jack Jennings says:

    In 2009 I constructed a new hay barn on my farm in Sicklerville New Jersey and decided to install a 10kW photoelectric system on the roof. I used panels that are self adhering to the standing seam metal roofing installed on the South facing side of the roof. Since the solar panels were installed on the roofing before it was put in place, the roof became part of the solar system and I claimed a federal tax credit on the difference in cost between the regular barn roofing and the Standing seam. The total cost amounted to $75,377.26, which was higher than expected because all the wiring had to be explosion proof. (Example, a 200 amp electrical panel that could be picked up for $175 normally cost $850 in a dust tight version). For the first time in my life my timing was right on. The 30% Federal tax credit of $22,613 reduced the cost to $52,764.24 and the $1.75 per watt NJ rebate of $17,500 knocked it down to $35,264.26. Starting in July of 2010 I have sold 19 SRECs which has reduced the cost to $23,025 and will be selling an additional one this month for another $651. The system has reduced my power consumption by 22,291 kWh as of today which has saved me an additional $3500. I haven’t projected the pay-off date yet, but as you can see, it’s going in the right direction. I’m happy with the system. The panels produce considerable power even at lower light intensities. It was cloudy today but the were still kicking out 4000 watts when I read the production stats off the inverters at 4 PM this afternoon.

  35. Ben says:

    Jim NJ, can you post the name of your installer for me? I am in Little Silver in Monmouth County NJ. Thanks, Ben.

  36. Sylvia says:

    Has anyone installed solar panels on their townhome roof in NJ?

  37. Chris Gernat says:

    I have a similiar situation as the above person commented. I just submitted for a C variance that I will need to construct ground mounted solar panels. I believe my neighbors are planning to plant trees along the southerly property line to intentionally shade the proposed panels. There are 13 circles along the property line, on their property opposite to where the panels are proposed. They know where the panels are going because I notified them as part of the variance requirement and they saw the plan.

    Are there any laws in New Jersey to prevent shading of the panels. I know California has a law about this, or can anyone offer any suggestions.

  38. Philip says:

    How does one handle the problem of a tree blocking sunlight from hitting a solar panel that one wants to install on a roof in NJ? Does NJ have a law similar to California’s 1978 “Solar Shade Control Act”? That is, can a tree be legally cut down in NJ to facilitate solar energy production? If so, let me know at Jajosky@GMail.com

  39. Paul P maxcy says:

    I think the solar systems are are about the greatest thing i’ve seen in my life time so far. I am a 20 year liscensed (self employed Electrician ) looking to do solar exclusively. My problem is I need a partner to wear “the tie” and do the enormus amounts of paper work as well as some design. Solar rocks and i will keep trying….Thank you

  40. HykyrJoe says:

    Hey Beth,

    I wholeheartedly agree with the insane idea of solar on the side of the home. Who will see it? Will it be visible from inside the home? If no other roof location is suitable, then I would look at a ground installation given the right sun exposure, and barring that, solar Pv panels can be engineered to mount virtually anywhere the sun shines.. and once that meter starts turning in your favor, the monthly bill will look better than the side of the house until you realize WHY that bill looks better each month. Then , perhaps that side mount solar PV array won’t look so bad in the final review. Go for it!

  41. Beth says:

    Hi,
    My husband is in the process of getting a solar system for a home unfortunately our house is not is the right location and the panels will need to be installed on the side of our house. I think this will look terrible. He wants to do this and is going forward witht project. Home depot has a company that does installs with a company they use panels from BP. Has anyone had any contact or used this system. Please let me know your thoughts.
    Thanks

  42. HykyrJoe says:

    The reason I believe SREC’s are not taxable is because they are not income but return on capital investment(ROI). The solar industry is a non taxable industry at the current time. There will be no 1099 forms coming from your aggregator for now. We went with a 5.29kWh Trina/PvPowered system to offset 6500kWh or our 12000 kWh yearly use. So far we’ve done good thru the winter averaging 16 kWh even through a gloomy December where some days we couldn’t get 2! Really wish we had more roof space!Will look at a ground system to possible get some more going.

  43. lkesten says:

    To Jim of NJ, who was your installer? I spoke to two and they did vary in product, type of installation and cost.

  44. NS says:

    Is there a disadvantage to have ground mount system vs. roof mount? I have large backyard and plan to install 11KWH system.

    1. Dan Hahn says:

      Hi NS,

      Ground mounted systems typically will cost you a little more since they require a racking system underneath the panels. Also, depending on how far away you place them from your home will determine more cost, especially if additional trenching is required. You’ll probably be interested to check out these other adders to system cost. And, as always since you’re in New Jersey you should definitely check out the group pricing discounts available to you.

  45. Stan says:

    Jim.NJ
    Who was your installer?

  46. Tom says:

    I think this just a temporary situation with the credits we have run into this same problem in Arizona.

  47. Jim.NJ says:

    I finished my 10K system in June and … did my research. I went with the highest efficency panels (Sunpower). The panel over produce there 10K rating. I also took advantage of the state rebate which for my system was $13,500. (that rebate has since been reduced) I expect to pay little or nothing for electric ever again. From $260 a month to zero. I did professional air sealing and had an expert evaluate my energy usage. The items which were not efficient Fridg/Old central air unit etc. were replaced. So I generated a lot of my electricty and now use less. I will get back about $20,000. on my fed. Tax. I borrowed this amount at zero interest thru my installer. I produced 4K in power in my first 3 months. Yes thats 4 X 650.00 so far. My electric bill this summer was all zeros. My system will pay for its self in approximately 3 years. Leaving me 12 more years to collect SRECs (15 year program) and pay nothing for electric. I highly recommend my solar installer and more importantly starting the process by interviewing 4 or 5 installers in your home. Its a 6 month to a 1 year process, but if your willing to put in the time its well worth it.

  48. James says:

    From my calculations and my bill I need 1530KWH as monthly average. I would like to go at 125% to take advantage of reverse metering and have room for heated pool and others later……
    I have a cleared 1 acre lot beside the house so instead of roof mounts as it is a Tudor home with cedar shingles I was thinking of stand mounts on the extra acre – Any thought and pricing adjustments I would need to makes

  49. Jim says:

    Hi, Interested in installing solar panels on my Bergen County Home. Can anyone recommend a installer . What would I expect the cost to be for a 5 to 7 killorwatt system ? Does NJ still offer any rebates , sale tax other incentives ?

    1. Dave Llorens says:

      The economics in NJ are possibly the best in the Country. Each home is different, I would need much more information. Fill this out and One Block Off the Grid can make you a quote using satellite photos, all over the phone, no need to come over to your home unless you decide to do it. https://solarpowerrocks.com/free-solar-estimates/

      Cheers,
      Dave

  50. mdancicco says:

    I want a free estamate and free install

    1. Dave Llorens says:

      Well, we can do the free estimate part! https://solarpowerrocks.com/free-solar-estimates/

      :-)

  51. hillary says:

    Can anyone recommend a company/bank willing to finance a commercial 174KW commercial install?

  52. Hillary says:

    I am looking for a company willing to finance a commercial install in NJ for a 174KW system. Does anyone know which banks or any private entities that may help the owners finance this project?

  53. ritewinger says:

    SF, hopefully that will indeed be true, because I think there is an order that NJ electric companies must produce 20% of their total energy via clean energy by 2020. I’m starting a solar panel installation business and would hate to see the rebates disappear, UNLESS panel pricing would drop by a significant amount to make the rebate system unnecessary. I think the rebates hurt the industry in that people think of solar as a “gimmick” industry and a fad, as opposed to a long term solution. Can you imagine if 20, 30, 50% of Americans installed panels on their property??? AMAZING!!!

  54. ritewinger says:

    FYI, Gov. Christie froze all the rebates on NJ Clean Energy last week. So every NJ state rebate is in limbo right now. These rebates are a substantial reduction in the cost of your new solar system, so if they go by-by, then solar in NJ will suffer a MAJOR setback.

    1. Thanks, Ritewinger for the news. Our understanding is these cuts may not apply to these particular NJCE funds, as they were already dedicated. But let’s see how that plays out.

  55. Susan says:

    In response to owning solar panels, we hooked up about a year ago, our electric bill in the summer months is about $3.00. We are able to sell our SREC (each time you accumulate 1000kw it equals 1 SREC, sells for approx $500.00-$670.00. You can make around $8,000.00 a year. Winter months you don’t make as much, understandably. We are quite happy with the system.. HOWEVER… Has anyone determined if we claim the sales? Are we exempt because the money comes from us doing our part to preserve the planet? We still have to pay off the remaining balance of the system, although we were fortunate enough to get a good deal… Any answers???

    1. Susan, I’m sorry, but we’re very limited on our tax advice here, since we’re mainly solar geeks, not tax geeks. My guess is that this would be treated as income but not sure about that. I would check with a tax advisor or your utility….who would be issuing that MISC 1099, I believe. If you haven’t gotten one, then perhaps it is indeed exempt…for now.

  56. glen says:

    i am considering getting solar panels on my roof. The only thing stopping me is that i don’t know anyone who has it. the installation company has told me i can get approx 1 srec credit per month, about a $600.00 value currently. I just would love to hear from someone who has this installed and the results they are getting as far as srec payments.

  57. Hey, Brian. I agree, but many companies do offer some kind of financing. In some states like Hawaii, the state also offers 0% financing for solar hot water. Then there’s the new trend in PACE financing, where you finance solar through a special tax assessment on your property.

    Since every area and utility are different, I urge you to take the time to get a quote and your installer will tell you about the different types of financing available in your area.

    Thanks for commenting.

  58. Brian says:

    All this requires is low cost financing, if an individual has to tap his own resources not everyone has the credit to add 15k to 20k on top of their current credit needs. Guarantee financing at 5% for 10 years and the energy savings makes this an easy choice. Make people figure out their own financing options and it limits the number of people this will be viable.

  59. James, excellent questions for a tax geek. We are solar geeks here, so please don’t take our advice without double checking with your specialist.

    First, the answer to many of your questions will depend on whether you are a business or a residence. If you are a resident, our understanding is that your state rebate is not taxable as income from the Feds or the state.

    The income from RECs, on the other hand, I have no guidance on that. I suspect that it would be income because you have the option to sell them or not to sell them.

    I’m not sure about the depreciation factor in New Jersey. However, I can tell you that solar systems in NJ are exempt from sales tax and any property tax increase.

    Hope that helps. Please double check with your tax expert.

  60. James J Kovalcin says:

    Here is a question I have not seen addressed anywhere on the web!
    What are the tax consequences of the “profits” generated from a solar installation in New Jersey?
    Are the SREC’s taxable at either the federal or state levels?
    If so, can the solar photo voltaic system be depreciated over the lifetime of the installation?
    Is the New Jersey state rebate taxable on the federal level?

  61. dave conifer says:

    My system (9.12 kw) is going to pay itself off in no more than four years, and that is without figuring in any rate increases for electrical power.

    I can’t see how the solar panels would increase (or decrease) the risk of fire. The panels, even at peak sunlight, are no hotter than the shingles already on a roof. It’s not like they generate an open flame or anything.

    It is a serious structural commitment to install the panels, which are bolted through the shingles and plywood right into the support structure of the roof. I’m not worried about it since I re-shingled before the panels went on but someday, somebody might need to do a new roof. It’ll be their problem (to have the panels removed and then reinstalled).

  62. Artstacks says:

    Is there any increased risk of fire when installing a solar or other green energy system?

    1. Dan Hahn says:

      Artstacks,

      I can only speak to solar installations on this. Solar panels will keep your roof slightly more dry, so if you’re depending on a nice wet roof all the time to retard fires in your attic, you’re out of luck. That scenario being very unlikely, no, there is not any increased fire risk since all the conduit is protected and you won’t be seeing any sparks fly out of it. Would be more eye catching if it did spark up though, no?

  63. Kevin says:

    I have a large southern facing field on a 3 acre residential lot in clinton twp. i was thinking of trying to put a large solar system in that exceeds my residential needs but i was told that Nj may limit what I can sell back to the grid. Any resources that i can check out to verify? Thanks

    1. Hey, Kevin,

      Not sure of the fine print, but check out this NJ program website for the “guidebook download.”

      http://www.njcleanenergy.com/renewable-energy/programs/renewable-energy-incentive-program

      I do know that the size of a residential system is limited to 10kW, so can’t go more than that. Net metering rules apparently allow you to go above your annual usage and be compensated for that at the “wholesale’ rate, but I’m not sure if there’s a cap on how much you can exceed.

      There’s some contact info on this site as well to ask more specific questions:

      http://www.dsireusa.org/solar/incentives/incentive.cfm?Incentive_Code=NJ03R&re=1&ee=1

      Hope that helps.

  64. Bill Bugge says:

    I have trouble understanding the sale of SRECs.

    One is generated for every 1000KW of solar electricity your system produces, correct?

    It seems you can sell them for an amount based on the current market (ranging between $100 and $700 over the past few years). I currently am charged about 15 cents per KW by my electric company. That’s $150 per SREC. How can they sell for $650? The law of supply and demand?

    So you not only don’t pay for electricity, you are paid to produce it, sometimes exorbitantly? Doesn’t make economic sense.

    Something else doesn’t make sense. If you are paid to produce electricity, isn’t that an incentive to waste it? If you keep all your appliances on 24 hours, all lights etc, you earn more!

    Correct me where I’m wrong, please.

    Bill

    1. Bill, did you read this post and the comments below?

      https://solarpowerrocks.com/affordable-solar/solar-fred-info-recs-green-tags-oh-my/

      There’s an explanation of the price in the comments.

      As to being paid to waste energy, I think you’re misunderstanding the concept of an SREC. It’s not that you’re paid for the energy you USE, but the energy your solar panels PRODUCE. Your panels produce energy, whether you use it or not. Any excess is sent to the grid, and you get credited through net metering at night.

      So, by buying your SRECS-which you don’t have to sell, by the way– the utility is complying with the law. It’s saying to the NJ legislator, “Hey, see Bill’s solar panels? I just bought his SRECs. You’ve made me buy 20% of my power from green sources, and, well, shoot, we don’t own many green sources right now. But Bill, he’s got 4kW of green solar energy. So if I buy his “SRECs” then you’ll credit me for producing green energy, not coal fired, and you won’t penalize me for not complying with the law to produce so much green energy by a certain time.”

      So an SREC is like a gold star for utilities. They need to pay for them on the open market unless they own their own by building solar or wind farms. The price for an SREC is going to go up or down, depending on how many are for sale, but it’s more complicated on that. Read that post above.

      Hope that helps!

  65. Peter says:

    I am not sure if this is still the case – does anyone know if do-it-yourself installation can get NJ rebate?
    Installing panels on the roof is very simple and all would need do is hire an electician to make nessesary connections to the grid (less then $1000). It looks to me that about 30% of the installation cost is going into someones pocket. If I could get NJ rabate myself that would lower my cost and it would only take 3 years to recuperate costs.

  66. dave says:

    Tom, check out my blog. It’s got lots of information on some contractors and what rebates and grants are available.

    Also check out the New Jersey Clean Energy Program website:

    http://www.njcleanenergy.com

    You’ll have to find a way to put down a chunk of money but you can minimize it by taking the federal tax credit (now completely uncapped), the NJ rebate which goes directly from the state to the contractor (not from your pocket).

    After you’re producing energy you can sell your SRECs. You’ll earn one SREC for every 1,000 KWH you generate (for me that will be about every four weeks). Right now SRECs are selling for about 600 bucks.

    Of course, you’ll also get to watch your meter spin backwards and get credited for all the energy you put out onto the grid if you don’t need it.

  67. dave says:

    “The return on a typical residential system takes about 15-20 years depending on the size and configuration of the system. The system itself has a life or 20-25 years. Do you see the problem here?”

    These numbers just aren’t right. My 9.12 KW system is going to pay itself off in 4-5 years max (federal tax credit, NJ rebate, reduced/eliminated electric bill, SREC sales). The NJ rebate has shrunk since I received mine but I think the payback period in years is still single digits. Heck, I’ll rake in 6 grand a year in SREC sales alone (conservative estimate).

    There’s no reason to think the system will last only 20-25 years. In fact, the manufacturers and installers warranties are usually for that time period which tells me that they they think the system life is longer. It’s really a simple system with no moving parts. Many panels from the seventies are still operating at 80% capacity or better.

  68. garrett says:

    i am looking to start a career in the solar industry i have no experience and would like to join a company to train me in the industry.how do i find the right one?

  69. Tom says:

    I am looking into installing Solar Power System on my home. can anyone point me in the right direction for a grant or low financing?

  70. les says:

    I recently purchased Solar panels for my house i live in NJ and since 1980 there has been a law that exempts these purchases from Sales Tax, but they charged me Sales tax anyway, saying a need some tax exempt status,what forms if any do i need to get a refund from the dealer?

  71. Michael says:

    I have had my system since 2005 and the only time I have noticed it needed cleaning (decreased output) was during pollen season when we had not had rain for some time. A quick spray of the hose took care of washing it off. Unless you live near the shore (salt buildup can be an issue) normal rainfall should be fine. Most systems shouldn’t get leaves on them as trees need to be far enough from your roof to not cast any shadows. We added a squirel guard after installation to protect the wiring from nest builders so you may want to have that done during install.

  72. Janice says:

    I am adding a room to my home and reconstructing the roof to accomodate it. I’m out of money but would like to incorporate solar energy into the construction. Are there grants out there that would give me enough to put it into my new construction without significant extra cost?

  73. Hi d,

    You should try to rinse the panels off about twice a year. If you never rinse them off and let the rain do most of the work, it will not kill your system. Grime is not so awful, the killers are like big maple leaves, bird poop, anything that blocks a large section.

    you can get away with never cleaning them if you have no large debris, if you do, you need to regularly clean that stuff off.

  74. d says:

    can anyone enlighten me on yearly maintenance costs to a grid-tied photovoltaic system on a two-story house? i pressume the panels have to be cleaned of dust and debris?

  75. Regional: Green Buildings Open House, October 4th
    On Saturday, October 4, 2008, from 10:00 a.m. to 4:00 p.m., the Northeast Sustainable Energy Association is welcoming the public to visit local sustainable homes and buildings throughout New Jersey and the Northeast to see clean renewable energy at work. Visitors to these buildings will be able to see how their neighbors and businesses are reducing their carbon footprint and cutting their energy bills through the power of the sun, wind, and smart building design.

    The Green Buildings Open House operates in conjunction with the National Solar Tour. Homeowners and facility managers across all 50 states will be showing visitors the latest in recycling, renewable energy technologies, sustainable building materials, and energy efficient appliances.

    Take a local tour to learn how you, too, can save by going green.

    To find the Green Buildings Open House sites nearest you, visit http://www.nesea.org

    Regional businesses, Basil Bandwagon Natural Market, 908-788-5737 (basilbandwagon.com) and Basil Brook Organic Pharm 908-788-6864, will participate in the open house again this year and provide information on Energy Star rated products, solar electric, Solatubes, Solar Star attic fans, passive solar design, solar pool heating, solar hot water, kickbikes, and an all electric car “charged by the sun.”
    Posted by Michael Shapiro, Editor at 12:30 AM

  76. rich says:

    were can i buy them direct ,the pannels ,?? i am overqualifyied to do the work but i am not aposed to saving money

  77. Quong Lew says:

    With the price of energy going up and with no end in site. I would like to install solar panels, but with the cost and life of the photovotaic cells at 25 years, it doesn’t make any sense at this time.

  78. earthbru says:

    So what is actually available today? The rebates are all used up and are not being renewed and the State legislature does not seem to be able to pass a law regarding the SRECS. Perhaps if they could find a way to use this to enable them to borrow another billion dollars against the taxpayers wishes they would be more inclined to do it.

  79. headshot zod says:

    I must correct myself. I wound up looking into this after I posted. Supposedly in NJ adding solar panels will not give the local municipality the ability to increase your property taxes.

  80. headshot zod says:

    Raising property values in NJ usually leads to higher property taxes so you may never recoup your investment.

  81. B. Killpatrick says:

    Thought I just heard on the news about a special financial incentive program to help farmers / agricultural producers in NJ install solar. Can’t be part of the residential incentive program that was defunded in 2007 … Any idea what this is?

  82. Vincent Nestore says:

    Is there and if so a tax credit for solar heating my pool instead of gas or electric? Thanks

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