New Jersey incentive programs for commercial solar energy systems 

All businesses, nationwide, can take advantage of accelerated depreciation rules and a 30-percent renewable energy tax credit** when they install solar photovoltaic (PV) panels or a solar water heating (solar thermal) system. On top of this, businesses that get solar in New Jersey enjoy an added boost: the state's solar renewable energy certificates (SRECs) program. (See details below.)

When you're ready to move forward with your project, you may want to consider filling out our solar energy information form. It's free and requires just a few minutes to complete. After learning about your company's electricity needs, we'll work with our solar installation partners serving New Jersey to get you a free site visit and competitive quotes. We're here to provide accurate information and quality service. 

**For solar commercial systems installed in 2009 and 2010, businesses may -- instead of taking the federal tax credit -- receive a solar energy grant equal to 30 percent of installed system costs. The grant option has been made possible by the federal stimulus package that was passed in February 2009. 

Are you a New Jersey homeowner? See our NJ residential solar energy incentives page. 

NJ solar renewable energy certificates (SRECs)

Over the past several years, New Jersey has developed one of the country's most robust markets for the trading of solar renewable energy certificates (SRECs). State regulators have paid special attention to solar energy technologies, with statewide renewable energy standards stipulating that by 2021 at least 2.12% of all NJ electricity come from solar resources.

To this end, the NJ Board of Public Utilities requires that all electricity suppliers trade SRECs in order to meet minimum renewable energy requirements. Trading, which takes place online, roughly adheres to the principles of supply and demand. Pricing depends principally on SREC availability and the price of the Solar Alternative Compliance Payment (SACP), which is essentially a price ceiling determined by regulators. Electricity suppliers can meet requirements either by buying SRECs or SACPs. The arrangement creates an incentive for businesses (and individuals) to install solar PV panels because the electricity generated by such systems may be sold on the SREC market, thereby generating revenue for the system owner. 

Authorities expect SREC prices to be, on average, $100 per megawatt-hour (mWh) cheaper than SACP prices. As of May 2009, NJ Board of Public Utilities offered the followed guidance on future SACP prices (per mWh):

• 2009-10: $693

• 2010-11: $675

• 2011-12: $658

• 2012-13: $641

• 2013-14: $625

• 2014-15: $609

• 2015-16: $594

What does this mean? Participating NJ businesses can reasonably expect to be able to sell the electricity generated by their solar PV system at a rate that's about $100 less per megawatt than the SACP price levels indicated above. For example, in the 2009-10 reporting year, an estimated SREC price would be about $593/mWh ($693 - $100). This translates to $0.53/kWh -- a rate that's well above the retail price of conventionally generated electricity. Hence the incentive to install solar PV panels. 

For more information about trading SRECs, and for instructions for applying to the program, see the NJ Solar Renewable Energy Certificate Program website. 

NJ tax-based solar incentives

The biggest financial incentive for getting solar in New Jersey is provided through the SREC program described above. There are a couple minor tax-related incentives that are worth mentioning, however: 

• Since 2008, New Jersey law has provided a property tax exemption for solar PV panels, solar water heating (solar thermal) and a number of other types of renewable energy systems. In short, 100% of the value added by these systems is exempted from local property taxes. To claim the exemption, the system owner has to apply for a certificate from their local assessor that reduces the tax basis of the property to what it would be without the renewable energy system. Exemptions take effect the year after the certificate is granted. 

• All solar energy equipment is exempted from New Jersey state sales tax. On the books since 1980, the exemption is available to all taxpayers, including corporate entities. 

   

Energy efficiency rebates

Put simply, taking energy efficiency measures -- like replacing inefficient boilers or installing ultra-efficient lighting -- will help boost the performance of your accompanying solar PV system. There are a number of NJ programs that provide rebates to companies that invest in energy-saving technologies. See the Database of State Incentives for Renewables and Efficiency to see what's available. 

[Last updated: 6/29/10] 

New Jersey: Commercial Solar Incentives