The Garden State has one of the most aggressive clean energy goals in the nation: 22.5% of its electricity must be renewable by 2021, and 100% by 2050.
Because of that, it’s not surprising that New Jersey is ranked 7th in the nation (PDF) when it comes to solar power deployments.
That’s good news if you’re a homeowner who is thinking of adding solar panels to their house, because it means that there are several policies that make solar more attractive for New Jersey residents.
Yes! In 2012, the Solar Act was signed into law by Governor Chris Christie1. In 2018, the Clean Energy Act was signed by Governor Phil Murphy2. Together, these laws require the New Jersey Board of Public Utilities (NJBPU) to establish rules about net metering and the interconnection of solar photovoltaic systems by homes and businesses.
Under New Jersey’s net metering, electricity you send into the grid is credited on your next bill at the retail rate. In a year, if you generate more than 100% of your usage, the excess amount is credited to you at the avoided-cost rate. To find out what the current avoided-cost rate is, check with your utility.
These rules cover electric utilities that are regulated by NJBPU. These include:
Also covered are some municipal utilities and electric cooperatives. If you are serviced by one of these, check with them to see if net metering is offered.
Be sure to read our guide to net metering to help you understand the ins-and-outs of this important policy.
Yes. The current cap on net metering is 5.8% of the total kilowatt hours sold in the state, which has not yet been reached. Once the net metering cap has been reached, a utility company is no longer obligated to offer net metering, but will typically instead offer net billing. Learn more about the difference between net metering and net billing.
However, the NJ Board of Public Utilities has the option to continue to allow net metering even if this cap has been exceeded. We’re not sure when the cap might be hit, but it was recently raised from 2.5% by Assembly Bill 3723, which was passed in May 2018.
In addition to the federal solar tax credit, there are three major incentives for home solar energy in the state of New Jersey:
New Jersey offers a full exemption from the state’s sales tax (currently 6.625%) for all solar energy equipment. This covers photovoltaic panels, inverters, and solar heating equipment.
Tax Topic Bulletin S&U-6 states that the exemption covers: “Devices or systems specifically approved by the Board of Public Utilities, Division of Energy and designed to provide heating or cooling or electrical or mechanical power by converting solar energy to some other usable energy source, including devices for storing solar-generated energy. The purchaser is not required to be registered with New Jersey to issue Form ST-4 to purchase solar energy devices.”
Tax Topic Bulletin S&U-6
New Jersey offers has a property tax exemption for renewable energy equipment added to your home, including solar and geothermal. This exemption means that your property tax assessment will not increase because of the value that solar panels add to your home.
There is currently no state level tax incentive or credit in NJ.
Yes. The relevant statue is NJ Rev Stat § 45:22A-48.2 (2013) 1.
If you live under a homeowners association (HOA), you know that an HOA can implement bylaws that limit your choices when it comes to renovations or the appearance of your home. This can include trivial things like the type of landscaping you’re allowed to plant, or more substantial changes such as adding solar panels to your roof.
Fortunately for those of us interested in solar, many states, including New Jersey, have laws that restrict an HOA or local government from preventing a homeowner from installing solar panels on their home. The New Jersey statute states that a homeowner has the right to install solar panels on any roof that is owned by them. This would exclude roofs on buildings that are the common property of a condo association, but covers any roof that is wholly owned by you. However, the statute does grant an HOA some control. The HOA is allowed to specify that the color of the solar equipment has to be in “harmony” with the building or landscaping, or require that the racking and wiring be well-concealed. The HOA may also adopt rules that specify the total size or placement of the solar panels.
However, none of these rules are allowed to increase the cost of the system by more than 10 percent, or “inhibit the solar collectors from functioning at their intended maximum efficiency.” This is an important point because it prevents an HOA from requiring you to hide the solar panels from street view by placing them on a part of your roof that doesn’t get maximum sun. If you are planning to go solar and you live under an HOA, you definitely should contact them before you start, and share your plans with them as you go to protect yourself and prevent any surprises.
1 Text of NJ Rev Stat § 45:22A-48.2 (2013)
It’s coming soon. Assembly Bill 3723 established a three year Community Solar Energy Pilot program in New Jersey. This will allow people to participate in net metering even if the solar panels are not located on your property.
How does this work? This practice is called virtual or remote net metering because you subscribe to a solar project that is located elsewhere in your community. While you’re a subscriber, you get net metering credits for your portion of the power generated, just the same as you would if the solar panels were located on your own roof.
It’s early in the pilot project, and the New Jersey Board of Public Utilities is currently seeking input from the public. See the link below for details. There are currently no projects yet that are available for the public to join. We’ll update this page as soon as there are.
The average price of residential electricity in New Jersey state, over the past ten years, is 15.92 cents per Kilowatt hour. This is 32% more than than the US average price of 12.07 cents per kWh.
Higher electricity prices make home solar a more compelling option by helping you to recoup your investment sooner. Solar will also protect you from future price increases.