Go Solar in New Jersey!
Over the past several years, New Jersey has done such a good job promoting solar power that in 2013 the Environment America Research & Policy Center hailed it as the fifth best state in the nation for solar. That’s impressive for the most densely populated state in the nation. In 2012, New Jersey established that 22.5% of the state’s energy needs to come from renewable sources by May 2021, one of the strongest RPS mandates in the country. Additionally, in 2013, New Jersey invested $693 million in solar installations.
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. New Jersey also offers energy rebates and tax credits for those installing solar in their home or business.
New Jersey Solar Incentives
Net Energy Metering (NEM)
Net Energy Metering or Net Metering allows consumers who generate some or all of their own electricity to access it anytime, not just when that power is being generated. Solar is not an “on demand” resource – you want electricity 24/7, not just when the sun is shining. That’s where net metering policies come in. They regulate how your solar installation connects with your local utility company to access electricity. through their delivery grid. The policies vary by state but most provide solar customers a way to store and access energy based on the kilowatts they generate. Costs vary depending on how much power the consumer generates and uses.
NJ also has a great SREC (solar renewable energy credit) program. The local utility will “purchase” your SREC basically taking credit for the renewable energy generation and helping them to achieve their targets as mandated by the State’s Renewable Energy program. Currently the value for each SREC in NJ is $200/SREC. Based on how big your solar system is and how much energy it produces that will determine how many SRECs your system generates. At the end of the day it is more money in your pocket for generating solar energy.
Federal Investment Tax Credit
All 50 states are eligible for a 30% Federal Investment Tax Credit (ITC) to reduce the cost of the system. This is calculated as 30% of the value of your system after the upfront rebate. If you choose to purchase or finance your system this tax credit goes to you directly through your federal tax return, and if you choose to lease your system will be assigned to your leasing partner which ultimately lowers your cost. Your solar specialist will calculate this for you and can consult with your accountant to fill out Form 5695 to claim your credit.
New Jersey Electricity Prices
New Jersey is tied for the nation’s 10th highest electricity prices
Cost per kwh (cents)
Why are electricity prices important?
The power your solar panels produce reduces your electric bill. The higher the price of power, the more you save by generating your own.
And if electricity prices are low in your state, it might be because your utility company gets most of its energy from cheap coal. That makes solar less economical, but doesn’t take into account the long-term environmental costs of cheap fossil fuels.
Solar Power Performance Payments
SREC Market- Varies
New Jersey has the nation’s 2nd best performance payments
What is a performance payment?
Performance payments reward homeowners for the electricity their panels produce on an ongoing basis.
They are credited either as a per-kWh bonuses or Solar Renewable Energy Certificates (SRECs). Either can fatten your wallet.
The per-kWh bonuses directly reduce your electric bill, whereas SRECs must be sold after they are earned.