Last updated: March 12, 2026
Between fixed SREC-II payments, full retail net metering, two automatic tax exemptions, and one of the highest electricity rates on the East Coast, solar in New Jersey still makes financial sense for most homeowners. This guide covers every active program, what each one is actually worth, and what you need to do to claim it.
What Solar Incentives Are Available in New Jersey in 2026?
New Jersey Solar Incentives Summary Table 2026
| Incentive | Type | Amount | Status | Who Qualifies |
|---|---|---|---|---|
| Federal Solar ITC (Section 25D) | Federal tax credit | $0 — repealed January 1, 2026 | Expired for homeowner purchases | PPA/lease systems may qualify via Section 48E (TPO only, through 2027) |
| SuSI SREC-II Program (ADI) | Solar production payment | $85.00/MWh (EY2025-26), fixed for 15 years; rate subject to 10% auto-decrease when capacity tranche fills | Active — register before construction | Residential net-metered solar owners; must register with NJCEP ADI portal before construction begins |
| Net Metering | Utility bill credit | Full retail rate (~$0.26/kWh) | Active — all 4 NJ utilities by mandate | All NJ residential solar customers with grid-connected systems |
| Sales Tax Exemption | Sales tax exemption | 6.625% of equipment and labor costs | Active — automatic at point of sale | All NJ residential solar purchases; no application required |
| Property Tax Exemption | Property tax exemption | 100% of solar added home value excluded — permanent | Active — Form CRES required | All NJ residential solar installations; must file Form CRES with municipal tax assessor |
| Community Solar Energy Program (CSEP) | Community solar bill credit | At least 20% discount on subscribed share (minimum raised March 2026); LMI adder available | Active — 3,000 MW expansion approved March 2026 | Any NJ electric utility customer — renters and homeowners; 51% of capacity reserved for LMI subscribers |
| Garden State Energy Storage Program (GSESP) — Residential | Battery storage rebate | TBD — Phase 2 not yet open | Coming 2026 — not yet accepting applications | NJ residential battery storage customers; Phase 2 rules not yet published as of March 2026 |
Federal Solar Tax Credit (Section 25D) — EXPIRED
The federal Residential Clean Energy Credit (Section 25D) was repealed by the One Big Beautiful Bill Act, signed July 4, 2025, effective January 1, 2026. It no longer applies to systems purchased with cash or a loan. This was the largest solar incentive available — worth $8,000–$12,000 for most NJ homeowners before repeal.
Solar systems installed through PPAs or leases may still qualify for the Section 48E commercial tax credit — but only if the installer began construction by July 4, 2026 and places the system in service by December 31, 2027. Ask any installer quoting a PPA or lease to confirm Section 48E eligibility in writing before signing.
SuSI SREC-II Program (ADI)
New Jersey pays residential solar owners a fixed $85.00 for every megawatt-hour (1,000 kWh) their system produces (EY2025-26), guaranteed for 15 years from interconnection. Once your system is registered, that rate is locked in for the full term — NJBPU reviews rates periodically and applies a 10% auto-decrease when a capacity tranche fills, but changes only affect new registrations. A typical 9 kW system produces approximately 10,800 kWh per year, generating roughly $918 annually — about $13,770 over the 15-year payment term.
Payments are made quarterly by InClime (the official SREC-II Administrator at solarincentivesnj.com) after you register in PJM GATS. The ADI Program operates on annual MW blocks allocated first-come, first-served — 75 MW was reallocated to the residential block in March 2026.
Net Metering — Full Retail Rate
New Jersey offers true 1:1 net metering — not the reduced net billing that California switched to in 2023. When your panels overproduce, excess electricity flows to the grid and your meter runs backward at the full retail rate (~$0.26/kWh for most NJ customers). Credits roll over month to month throughout your annual billing cycle. At the annual true-up, unused credits are paid at the utility’s avoided-cost (wholesale) rate.
All four major NJ utilities offer net metering by state mandate from NJBPU: PSE&G, JCP&L (Jersey Central Power & Light), Atlantic City Electric, and Rockland Electric. NJ is a deregulated electricity market — net metering applies to your delivery charges regardless of which competitive supplier you choose.
Solar Sales Tax Exemption
All solar energy equipment purchased and installed in New Jersey is 100% exempt from the state’s 6.625% sales and use tax. The exemption covers panels, inverters, racking, wiring, and installation labor. Battery storage installed as part of a solar system is also covered. This exemption is automatic — your installer applies it at the point of sale with no paperwork required from you.
Solar Property Tax Exemption
Under N.J.S.A. 54:4-3.113a (P.L. 2008, c.90), the added assessed value from a solar energy system is permanently excluded from your property tax calculation — for as long as the system remains on the property. There is no expiration date and no 10-year cap. New Jersey has the highest average property taxes in the country (~$9,500/year statewide), making this exemption more valuable here than in most other states.
If solar adds $20,000 to your home’s assessed value, you avoid roughly $460–$690 in extra annual taxes depending on your county rate (Bergen: 2.41%, Essex: 2.73%, Passaic: 3.05%, Ocean: 1.65%). Unlike the sales tax exemption, this one is not automatic — you must file Form CRES (or equivalent documentation) with your local municipal tax assessor after installation. Requirements vary by municipality; contact your assessor’s office to confirm exactly what they need.
Community Solar Energy Program (CSEP)
If you rent, own a condo, or have a shaded or unsuitable roof, New Jersey’s Community Solar Energy Program lets you subscribe to a share of an offsite solar project and receive credits on your electric bill — no panels, no installation. Participants receive a guaranteed minimum 20% discount on the electricity their subscribed share produces, paid as a monthly bill credit. At least 51% of each project’s capacity is reserved for low-to-moderate income (LMI) households, who may qualify for a higher guaranteed discount.
NJBPU approved a historic 3,000 MW expansion of the CSEP on March 5, 2026 — the largest community solar expansion in state history — with project registrations open through December 31, 2029. The program is available to all NJ utility customers across PSE&G, JCP&L, Atlantic City Electric, and Rockland Electric territories. Availability varies by territory — check njcleanenergy.com for current openings.
Garden State Energy Storage Program (GSESP) — Residential Battery
The NJBPU approved the Garden State Energy Storage Program on June 18, 2025. Phase 1 — focused on large transmission-scale storage — awarded 355 MW in March 2026. Phase 2, which will cover residential behind-the-meter battery storage, is expected to launch later in 2026. The federal Section 25D battery credit was repealed January 1, 2026; GSESP Phase 2 is specifically designed to fill that gap for NJ homeowners.
Currently, New Jersey homeowners can stack five active programs.
- SuSI SREC-II Program — fixed $/MWh payment for 15 years (current rate: check njcleanenergy.com)
- Net Metering — full retail rate credit for excess solar production
- Sales Tax Exemption — 100% exempt from NJ’s 6.625% sales tax
- Property Tax Exemption — solar added home value permanently excluded from assessment
- Community Solar (CSEP) — for renters, condo owners, and homeowners who can’t install panels
A sixth program — the Garden State Energy Storage Program (GSESP) residential battery incentive — is approved and in rollout. Check njcleanenergy.com for current Phase 2 status and open enrollment dates.
The federal 30% Residential Clean Energy Credit (Section 25D) was repealed by the One Big Beautiful Bill Act, signed July 4, 2025, effective January 1, 2026. It does not apply to systems purchased with cash or a loan. Third-party owned systems (leases and PPAs) may still access the commercial Section 48E credit through the system owner — homeowners cannot claim it directly.
Why New Jersey Is One of the Best States for Solar — With or Without the Federal Credit
Before getting into the programs, it helps to understand why New Jersey is structurally better positioned for solar than most other states — regardless of what happens at the federal level.
High electricity rates amplify every kilowatt-hour. New Jersey consistently ranks among the highest electricity rate states in the country (EIA data). Every kWh your solar panels produce is worth significantly more here than in a low-rate state like Louisiana or Arkansas. High rates accelerate payback.
SREC-II adds a second income stream. Most states don’t have anything like the SREC-II program. It pays residential solar owners a fixed rate per megawatt-hour produced, for 15 years — on top of electricity bill savings. A typical 9 kW system in New Jersey produces around 10,800 kWh per year. At the current ADI rate, that generates meaningful income annually, independent of the federal credit. Check the current residential rate at njcleanenergy.com or solarincentivesnj.com.
The property tax exemption is unusually large here. New Jersey consistently has the highest average property taxes in the country — around $9,500 per year statewide. If solar adds $20,000 to your home’s assessed value, a permanent exemption saves you $460–$690 per year depending on your county’s rate. That’s $6,900–$10,350 over 15 years, invisible to most payback calculators that focus only on electricity savings.
Stack those together and the loss of the federal credit, while real, doesn’t collapse the financial case the way it does in lower-rate states with no production incentive.
Program 1: SuSI SREC-II — Fixed Payment for 15 Years
The Successor Solar Incentive (SuSI) Program is New Jersey’s core solar incentive. Under the Administratively Determined Incentive (ADI) track, residential net-metered systems earn a fixed dollar amount for every megawatt-hour (1,000 kWh) of electricity they produce, for 15 years from the date of interconnection.
The rate is set by NJBPU and is reviewed periodically. It can also decrease automatically by 10% when a capacity tranche fills — but the key feature is that your rate is locked in at the time of registration for the full 15-year term. Changes only affect new registrations after that point.
Check the current residential ADI rate at: njcleanenergy.com or solarincentivesnj.com (InClime — official SREC-II Administrator)
How the math works on a typical system:
A 9 kW system in New Jersey produces approximately 10,800 kWh per year. At the current ADI rate, multiply that production figure (in MWh) by the current $/MWh rate to get your annual SREC-II income. Payments run for 15 years, making this one of the longest-duration production incentives in the country.
How to register:
Registration must happen through the NJCEP ADI Program portal before construction begins. This is the most commonly missed requirement. If your installer starts work before you receive a conditional registration notice, you may be disqualified from the program.
After your system is installed and receives Permission to Operate (PTO) from your utility, you submit a post-construction packet and receive a NJ Certification Number. That number is used to open a PJM GATS account where SREC-IIs are created monthly based on your meter readings. Payments are made through InClime (solarincentivesnj.com) on a quarterly basis.
Block status: The ADI Program operates on annual MW blocks allocated on a first-come, first-served basis. Check the ADI portal homepage for current remaining residential capacity before planning your installation timeline.
Source: NJCEP ADI Program (njcleanenergy.com); InClime SREC-II Administrator (solarincentivesnj.com)
Program 2: Net Metering — Full Retail Rate Credit
New Jersey offers true net metering — not the reduced net billing that California switched to in 2023. When your solar panels produce more electricity than your home is using, the excess flows to the grid and your meter runs backward, earning a credit equal to the full retail rate you’d otherwise pay.
Because New Jersey consistently has among the highest residential electricity rates in the Northeast, those credits carry more value per kilowatt-hour than in most other states. Credits roll over month to month throughout your annual billing cycle. At your annual true-up, any unused credits are paid out at the utility’s avoided-cost (wholesale) rate — a lower number, so sizing your system to roughly match annual consumption rather than to export aggressively is the smarter approach.
All four major NJ electric utilities offer net metering by state mandate from NJBPU.
- PSE&G — serves approximately 2.3 million customers in central and northern NJ
- JCP&L (Jersey Central Power & Light) — approximately 1.1 million customers, central and northern NJ
- Atlantic City Electric — approximately 550,000 customers, southern NJ
- Rockland Electric (RECO) — small service territory, northern NJ/Bergen County border area
NJ is a deregulated electricity market, meaning you can shop for a competitive supply rate through NJ Power Switch (njpowerswitch.com). Net metering applies to your delivery/distribution charges regardless of which supplier you choose.
Source: NJBPU net metering rules; utility tariff filings (nj.gov/bpu)
Program 3: Sales Tax Exemption — Automatic at Purchase
All solar energy equipment purchased and installed in New Jersey is 100% exempt from the state’s 6.625% sales and use tax. This covers panels, inverters, racking, wiring, and installation labor. Battery storage installed as part of a solar system is also covered.
This exemption is automatic — your installer applies it at the point of sale. You don’t file any paperwork or submit any application. On a $33,000 system, that’s approximately $2,186 saved before installation begins.
Source: NJ Division of Taxation
Program 4: Property Tax Exemption — Permanent, But You Must Apply
Under N.J.S.A. 54:4-3.113a (P.L. 2008, c.90), the added assessed value from a solar energy system is permanently excluded from your property tax calculation for as long as the system remains on the property. There is no sunset date and no 10-year cap — the exemption is indefinite under current law.
This is particularly valuable in New Jersey given the state’s property tax burden. The statewide average effective rate is approximately 2.3%, with wide variation by county.
- Bergen County: ~2.41%
- Essex County: ~2.73%
- Passaic County: ~3.05%
- Ocean County: ~1.65%
If solar adds $20,000 to your home’s value, the exemption saves roughly $460–$690 per year depending on your county. Over the life of the system, that’s a meaningful number that most homeowners overlook when evaluating payback period.
Important: Unlike the sales tax exemption, this one is not automatic. You must file Form CRES (Certification of Renewable Energy System) with your local municipal tax assessor after installation. Your installer typically won’t remind you. Set a calendar reminder to file within 30 days of receiving Permission to Operate. The form is available directly from the NJ Division of Taxation at nj.gov/treasury/taxation.
Source: NJ Division of Taxation (nj.gov/treasury/taxation/lpt/lpt-abatements.shtml); N.J.S.A. 54:4-3.113a
Program 5: Community Solar (CSEP) — No Panels Required
If you rent, own a condo, have a shaded roof, or simply can’t install panels for any reason, New Jersey’s Community Solar Energy Program (CSEP) lets you subscribe to a share of an offsite solar project and receive credits on your electric bill.
Participants receive a guaranteed minimum bill credit discount — at least 20% off the electricity their subscribed share produces, paid as a credit on your monthly utility bill. No equipment purchase, no installation, no roof needed. At least 51% of each project’s capacity is reserved for low-to-moderate income (LMI) households, who may qualify for a higher guaranteed discount.
The CSEP is a permanent program, administered by NJCEP and overseen by NJBPU. Capacity is released in annual blocks and fills on a first-come, first-served basis by utility territory. The program is open to all NJ electric utility customers — renters and homeowners alike — in PSE&G, JCP&L, Atlantic City Electric, and RECO territories.
To enroll, visit njcleanenergy.com and select a project in your utility territory. Check availability before assuming a project has open slots — popular territories fill quickly.
Source: NJBPU; NJCEP CSEP program page (njcleanenergy.com)
Battery Storage Incentive: Garden State Energy Storage Program (GSESP)
The NJBPU approved the Garden State Energy Storage Program (GSESP) on June 18, 2025. The program is structured in phases. Phase 1 covers large transmission-scale battery storage — primarily for grid operators and developers, not homeowners.
Phase 2 covers distributed/residential behind-the-meter battery storage. This is the phase relevant to homeowners adding a battery to a solar installation or as a standalone system. The Board plans to issue an order establishing Phase 2 incentive amounts, eligibility, and application process — check njcleanenergy.com for current status and open enrollment dates.
The program targets 2,000 MW of total energy storage by 2030 under the Clean Energy Act of 2018. Phase 2 incentives are expected to include both a fixed upfront component and a performance-based payment for allowing the battery to support the grid during peak demand events.
The federal Section 25D battery credit was repealed alongside the solar credit. GSESP Phase 2 is specifically designed to fill that gap for NJ homeowners adding battery storage. Do not rely on installer claims about rebate amounts before NJBPU publishes official Phase 2 program rules.
Source: NJBPU Board Order June 18, 2025 (nj.gov/bpu); njcleanenergy.com/renewable-energy
The Federal Tax Credit Is Gone — Here Is What That Actually Means for NJ Homeowners
The 30% Residential Clean Energy Credit (Section 25D) was repealed by the One Big Beautiful Bill Act, signed July 4, 2025, effective January 1, 2026. It no longer applies to solar panels, battery storage, or other home clean energy equipment placed in service on or after January 1, 2026.
If you installed solar before January 1, 2026: You can still claim the 30% credit on the applicable federal tax return using IRS Form 5695. Consult a tax professional to confirm eligibility based on your specific installation and PTO date.
If you’re installing now: No federal tax credit is available for cash or loan purchases. NJ’s state programs — SREC-II, net metering, and both tax exemptions — do not depend on the federal credit and remain fully active.
If you’re considering a lease or PPA: The commercial Section 48E credit may still be available to third-party system owners (the financing company, not you) for qualifying systems. Ask any installer quoting a lease or PPA to confirm Section 48E eligibility in writing — terms and deadlines vary.
The bottom line for NJ homeowners: New Jersey’s incentive stack was never built around the federal credit. SREC-II, net metering, and the two tax exemptions exist entirely under state law. The loss of the federal credit affects NJ homeowners less than those in states with no comparable state programs.
Source: One Big Beautiful Bill Act (signed July 4, 2025); IRS.gov
What Solar Actually Costs in New Jersey — and What You Get Back
Here’s a realistic scenario for a Newark homeowner on PSE&G.
System: 9 kW Estimated installed cost: ~$28,000–$33,000 before incentives (verify current pricing with at least three local quotes — $/watt figures change with equipment costs and installer competition) Annual production: ~10,800 kWh PSE&G rate: Check your current PSE&G rate at pseg.com or eia.gov
Year 1 incentive stack:
| Incentive | Estimated Value |
|---|---|
| Sales tax exemption (6.625%) | ~$1,860–$2,185 saved at purchase |
| SREC-II payments | Current ADI rate × 10.8 MWh/year |
| Electricity bill savings (net metering) | Current utility rate × estimated self-consumption kWh |
| Property tax exemption | ~$460–$690/year (varies by county) |
| Federal tax credit | $0 (repealed January 1, 2026) |
15-year totals (estimated):
| Source | Estimated Total |
|---|---|
| SREC-II income | Current ADI rate × 10.8 MWh × 15 years |
| Electricity bill savings | Varies by rate and consumption |
| Property tax savings | ~$6,900–$10,350 |
| Sales tax savings (one-time) | ~$1,860–$2,185 |
Against a net system cost of roughly $27,000–$31,000 after the sales tax exemption, payback period for a typical NJ homeowner typically lands in the 8–12 year range depending on system size, utility rate, and SREC-II rate at time of registration. Solar panels carry 25-year production warranties, leaving 13–17 years of post-payback production.
These are estimates. Results vary based on roof orientation, shading, utility rate changes, and how much electricity you consume versus export. Verify figures with a licensed installer and consult a tax professional on any financial assumptions.
PSE&G Solar Loan Program
PSE&G offers a Solar Loan Program that helps qualified residential and business customers finance a solar energy system. Listed on njcleanenergy.com as a utility financing option, it’s worth checking directly with PSE&G if you’re in their territory and want to explore financing alternatives to third-party loans.
Contact PSE&G or visit pseg.com for current terms, rates, and eligibility requirements.
5 Steps to Claim Every NJ Solar Incentive Without Missing One
Step 1: Register with the ADI Program before your installer breaks ground. This is the single most commonly missed step. Submit your complete ADI registration package through the NJCEP portal and receive your conditional registration notice before construction begins. If you don’t, you lose 15 years of SREC-II payments.
Step 2: File Form CRES with your local tax assessor after installation. Your installer won’t do this for you. Pull the form from nj.gov/treasury/taxation and file it within 30 days of receiving Permission to Operate. One form, filed once, protects the exemption permanently.
Step 3: Size your system for self-consumption, not maximum export. Net metering pays full retail rate on credits used within your billing year, but remaining credits at annual true-up are paid at the lower avoided-cost (wholesale) rate. A system sized to cover roughly 90–100% of your annual usage gets you the best blended return.
Step 4: Open your InClime account immediately after receiving your NJ Certification Number. SREC-II payments don’t happen automatically. You need to register in PJM GATS and then set up your account at solarincentivesnj.com (InClime) to start receiving payments. Some homeowners miss months of payments because they didn’t know this step existed.
Step 5: Check GSESP Phase 2 status if you’re considering battery storage. Don’t buy a battery based on vague installer claims about a “NJ battery rebate.” Check njcleanenergy.com for the current Phase 2 program rules before making a decision, and verify any rebate figures against the official NJBPU order.
Frequently Asked Questions
Does New Jersey have a state solar tax credit? No. New Jersey does not offer a state income tax credit for solar installations. The financial benefit stack is built around the SREC-II production payments, both tax exemptions, and net metering — not income tax credits.
Is the federal solar tax credit still available in New Jersey? Not for homeowners who purchase solar with cash or a loan in 2026. The Section 25D credit was repealed effective January 1, 2026. If you installed in 2025, you can still claim it on your 2025 return. Lease and PPA customers should ask their installer about Section 48E eligibility.
How much do SREC-IIs pay in New Jersey? Residential net-metered systems earn a fixed rate per MWh produced for 15 years from interconnection. The rate is set by NJBPU and reviewed periodically — it can decrease when a capacity tranche fills, but your rate is locked once your system is registered. Check the current residential ADI rate at njcleanenergy.com or solarincentivesnj.com (InClime — the official SREC-II Administrator) before planning your installation.
Do I have to register for the SREC-II program myself or does my installer do it? Your installer should handle this — but confirm it explicitly before signing any contract. Ask to see the conditional registration notice from the NJCEP ADI portal before construction begins. If they can’t produce it, don’t let them start work.
How long does the NJ property tax exemption last? Permanently, for as long as the system remains on the property. There is no expiration date under current law (N.J.S.A. 54:4-3.113a). You must file Form CRES with your municipal tax assessor to claim it — it is not automatic.
Can renters benefit from New Jersey solar programs? Yes — through the Community Solar Energy Program (CSEP). Renters can subscribe to a share of an offsite solar project and receive bill credits without installing anything. LMI households may qualify for a higher guaranteed discount. Visit njcleanenergy.com/renewable-energy/programs/susi-program/csep to find available projects in your utility territory.
What is the Garden State Energy Storage Program? GSESP is a battery storage incentive program approved by NJBPU in June 2025. Phase 1 covers transmission-scale grid storage. Phase 2 covers residential behind-the-meter battery storage — check njcleanenergy.com for current Phase 2 status, open enrollment dates, and published rebate amounts.
Is New Jersey net metering better than California’s? Yes, significantly. New Jersey offers true 1:1 net metering at the full retail rate, with monthly rollover. California’s NEM 3.0 (Net Billing Tariff) pays export credits at approximately $0.05–$0.08/kWh — roughly 75% less than retail. For NJ homeowners, net metering is a substantially more valuable program.
Before You Sign Anything: What to Confirm With Your Installer
Get multiple installer quotes to compare system sizing, equipment, and how each company handles the ADI registration process. Use EnergySage to compare vetted local installers side by side.
Before you sign anything, confirm:
- ADI registration will be submitted before construction begins (get this in writing)
- The installer will provide your NJ Certification Number after installation
- You understand that Form CRES must be filed separately with your tax assessor
Verify current program status before making any financial decisions:
GSESP battery status: njcleanenergy.com This article is a general overview and does not constitute legal, financial, or tax advice. Incentive programs are subject to change. Verify all figures directly with program administrators and consult a licensed tax professional before making decisions based on financial projections.
SREC-II program and ADI block capacity: njcleanenergy.com
SREC-II current rate and payments: solarincentivesnj.com
Property tax exemption form (CRES): nj.gov/treasury/taxation
Community solar: njcleanenergy.com
This article is a general overview and does not constitute legal, financial, or tax advice. Incentive programs are subject to change. Verify all figures directly with program administrators and consult a licensed tax professional before making decisions based on financial projections.