New Jersey Has Some of the Best Solar Energy Incentives in the Country ... Which is Just One More Reason to Switch to Solar!
Valuable Federal and State incentives, each worth thousands of dollars, help homeowners offset and recover the cost of having solar installed on their homes. One of the best things about the incentives is that they can be fully utilized regardless of whether the system is owned or leased. When you purchase your solar system, these incentives go directly to you, helping make the investment a great one. When you lease your solar system, the incentives go to the lease company, allowing the lease company to provide you with low monthly payments that save you money immediately.
New Jersey has its own Solar Renewable Energy Credits (TREC) program which incentivizes New Jersey homeowners and businesses to switch to solar energy. For every megawatt (1,000 kWh’s) of solar energy produced by a system, the TREC’s program creates solar certificates on your behalf. These certificates are purchased by electric suppliers to meet New Jersey state regulations for utility companies operating in NJ, and the proceeds are paid to the system owners. The current TREC program has a duration of 15 years, and the value of a TREC for a residential system is $91.20, so each year a typical Ad Energy solar installation will generate hundreds, even thousands of dollars a year. The bottom line is that in addition to generating your own cheaper clean energy, you can actually get paid from the local utilities for producing solar electricity.
The federal government through the Residential Energy Credit program (IRS Form 5695), provides a 22% tax credit for residential solar energy systems that go into operation during the calendar year 2021. This is a “dollar for dollar” tax credit worth 22% of the solar energy system’s cost that eligible homeowners can recover through their tax filings and can often be worth $10,000 or more. The credit is often applied against the cost of a system’s financing and helps to accelerate the break-even time frame, at which point the electricity a system generates is effectively “free”!
Note: The home served by the system does not have to be the taxpayer’s principal residence. This is great news for real estate investors and/or for individuals with more than one residence.
There will be times when the sun is out and you use the electricity from your solar system directly. There will be times when the sun is out but you aren’t at home using that electricity. At those times, the electricity is automatically provided to the utility grid. Through net metering, the utility provides you credit on your bill at retail prices for that electricity you provided to the grid.
When you purchase your home solar system, you will be 100 percent exempt from any New Jersey sales tax, due to the PV energy sales tax exemption. That means you’ll spend 7 percent less on your solar equipment. This exemption is available to all New Jersey taxpayers.
Even though the value of your property increases because of your solar energy system, New Jersey has exempted this improvement from impacting your assessment on your local property taxes - making solar a rare home improvement that does not increase your taxes!
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