Solar Incentives in New Jersey
New Jersey homeowners installing solar in 2026 have access to several active state-level incentives. The state fully exempts qualifying solar energy devices and systems from its 6.625% sales and use tax, requiring purchasers to submit Form ST-4 to the supplier. A separate property tax exemption eliminates any increase in assessed value attributable to a certified renewable energy system, with no stated time limit. Net metering is available through all electric distribution companies and power suppliers, crediting monthly excess generation at a retail-equivalent value and compensating year-end surpluses at a supplier rate — though exact rates vary by utility and should be confirmed with your provider. Residential solar owners may also enroll in the Successor Solar Incentive (SuSI) Program's ADI sub-program, which pays a fixed incentive per megawatt-hour of electricity produced through SREC-II certificates, guaranteed for 15 years. Renters or homeowners without suitable roofs can subscribe to an off-site community solar project through the Community Solar Energy Program, which guarantees bill-credit discounts of at least 15%.
At the federal level, the residential Clean Energy Credit under §25D — commonly called the 30% solar tax credit — expired for systems placed in service after December 31, 2025, under the One Big Beautiful Budget Act (Pub. L. 119-21). New residential installations completed in 2026 do not qualify for that credit. Its absence meaningfully extends payback periods compared to prior years, making the remaining state incentives more central to any financial analysis.
New Jersey's residential electricity rate averaged approximately 23.49 cents per kilowatt-hour as of March 2026, up roughly 3.62 cents year-on-year. That relatively high rate increases the bill-savings value of self-generated solar electricity, which partially offsets the loss of the federal credit when estimating payback timelines.
Figures here are verified as of June 2026 against official sources; programs, rates, and eligibility rules change with each legislative session and utility rate case — the New Jersey Board of Public Utilities (njbpu.nj.gov) and the New Jersey Division of Taxation are the authoritative sources for current program details.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in New Jersey
Solar Energy Devices Sales Tax Exemption
New Jersey exempts solar energy devices and systems from state sales and use tax. The exemption covers devices designed to provide heating, cooling, or electrical or mechanical power by collecting and transferring solar-generated energy, including storage devices. Purchasers issue the supplier a completed Form ST-4 exemption certificate instead of paying sales tax; related items such as building insulation do not qualify.
| Amount | 100% exemption from New Jersey sales and use tax (6.625%) on qualifying solar energy devices |
|---|---|
| Who qualifies | Any purchaser of qualifying solar energy devices or systems, residential or business; claimed with Form ST-4 at time of purchase |
| Administered by | New Jersey Division of Taxation |
Source: N.J.S.A. 54:32B-8.33; Tax Topic Bulletin S&U-6 (Sales Tax Exemption Administration) Official source →
Renewable Energy System Property Tax Exemption
Residential, commercial, or industrial properties with a renewable energy system certified by the local enforcing agency receive a property tax exemption equal to the difference between the property's assessed value with and without the renewable energy system. The owner applies on Form CRES (Application for Certification of Renewable Energy Systems) filed with the municipal tax assessor.
| Amount | 100% exemption of the assessed value attributable to the renewable energy system; no stated time limit |
|---|---|
| Who qualifies | Residential, commercial, or industrial property owners with a renewable energy system certified by the local enforcing agency |
| Administered by | New Jersey Division of Taxation (administered by municipal tax assessors) |
Source: P.L. 2008, c. 90 (N.J.S.A. 54:4-3.113a et seq.); Form CRES Official source →
Net Metering
New Jersey requires all electric distribution companies and power suppliers to offer net metering to customers with Class I renewable energy systems such as solar, on a first-come, first-served basis at non-discriminatory rates. If a customer generates more electricity than they use in a monthly billing period, the excess is credited against the next month's bill, with credits accumulating through an annualized period; any excess remaining at the end of the annual period is paid out at the supplier's avoided cost of wholesale power. Systems are sized so annual generation does not exceed the customer's annual consumption.
| Amount | Monthly bill credits at full retail-equivalent value for excess generation; year-end surplus compensated at the supplier's avoided wholesale cost |
|---|---|
| Who qualifies | Customers of NJ electric distribution companies with Class I renewable generators (solar, wind, etc.) on the customer's side of the meter; customer retains the renewable attributes (SREC-IIs) unless contracted away |
| Administered by | New Jersey Board of Public Utilities |
Source: N.J.S.A. 48:3-87; N.J.A.C. 14:8-4 Official source →
Successor Solar Incentive (SuSI) Program - Administratively Determined Incentive (ADI)
Under the SuSI Program created by the Solar Act of 2021, the ADI sub-program pays a fixed incentive for every megawatt-hour of solar electricity produced, in the form of SREC-II certificates guaranteed for 15 years. It is open to residential projects of all sizes, net-metered non-residential projects of 5 MW or less, and community solar projects. The Board of Public Utilities allocates megawatt capacity blocks to each market segment annually; the program remains active, with the Board reallocating EY2026 capacity by order in April 2026. The 2021 establishing order set residential at $90 per SREC-II, with segment values ranging $70-$120.
| Amount | Fixed payment per SREC-II (1 per MWh generated) for 15 years; established at $90/SREC-II for net-metered residential ($70-$120 across segments, +$20/MWh public-entity adder); values and capacity blocks set by annual BPU order |
|---|---|
| Who qualifies | Residential solar (all sizes), net-metered non-residential solar up to 5 MW, and community solar projects registered with the program |
| Administered by | New Jersey Board of Public Utilities |
Source: Solar Act of 2021 (P.L. 2021, c. 169); N.J.A.C. 14:8-11.1-11.9; BPU Docket QO26020044 (EY26 reallocation order, Apr 22, 2026) Official source →
Community Solar Energy Program (CSEP)
New Jersey's permanent community solar program lets renters, residents without suitable roofs, and others subscribe to off-site solar projects up to 5 MW and receive credits on their electric bills. Projects must guarantee subscribers a bill credit discount of at least 15%, and at least 51% of program capacity is reserved for low- and moderate-income subscribers, who receive at least a 25% discount under the 2026 expansion. In March 2026 the BPU approved a 3,000 MW expansion - the largest state community solar allocation in U.S. history - with project registrations accepted through December 31, 2029; the program has already delivered over $70M in bill credits to more than 37,000 subscribers across 162 operating projects.
| Amount | Guaranteed bill credit discount of at least 15% (at least 25% for LMI subscribers under the 2026 expansion), typically 15-25% savings, for the duration of the subscription |
|---|---|
| Who qualifies | Any electric utility customer in a project's service territory; at least 51% of capacity reserved for low- and moderate-income subscribers |
| Administered by | New Jersey Board of Public Utilities |
Source: P.L. 2023, c. 200 (codified at N.J.S.A. 48:3-87(d)); BPU CSEP orders (permanent program established Aug 16, 2023; 3,000 MW expansion Mar 5, 2026) Official source →
Garden State C-PACE (Commercial Property Assessed Clean Energy)
Garden State C-PACE lets owners of commercial, industrial, agricultural, and certain multifamily residential properties finance renewable energy, energy efficiency, water conservation, and resiliency improvements, repaying through a special assessment added to the property tax bill. The assessment is a non-accelerating senior lien that transfers automatically to a new owner on sale, which supports long loan terms and lower rates; existing mortgage holders must consent. Municipalities join by adopting an opt-in ordinance, and the program has been fully launched since July 30, 2025, with applications open.
| Amount | Financing terms set by private capital providers; loan term typically tied to the expected life of the improvements |
|---|---|
| Who qualifies | Commercial, industrial, agricultural, and certain multifamily residential property owners in municipalities that have opted into the program; mortgage-holder consent required |
| Administered by | New Jersey Economic Development Authority (NJEDA) |
Source: P.L. 2021, c. 201 (program page) Official source →
Compare solar incentives across all states → · Check what applies to you →
Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.