New Jersey Solar Power Rebates & Incentives for Residential Sites

State Rebate for New Jersey Residential Solar Panel Installation and Renewable Energy Usage

The state of New Jersey provides a grant for residential renewable energy installations.

Residential rebates now require the completion of a Tier 1 and Tier 2 Energy Audit ($1,000 subsidized air sealing) by the Home Performance with ENERGYSTAR® for systems up to 10kw. If this is not completed, the rebate is reduced to $1,550 per kW. A Tier 3 Audit is also required for systems over 10kw.

Federal Tax Credit for New Jersey Residential Solar Panels and Wind Energy

The federal government provides excellent savings on New Jersey solar power and renewable energy installations via a federal tax credit. Eligible renewable energy installations – such as solar photovoltaic, solar hot water heating, and wind turbines - are eligible for a federal tax credit in the amount of 30% of the cost of the project.

Generally speaking, this 30% tax credit would be taken on the net out-of-pocket costs (i.e., the total price of the installation project, minus any subsidized energy financing – such as state grants, below market loans, and tax preferred bonds). However, there may be some opportunities to use the gross cost of the project as the basis for taking the tax credit. Consult your tax professional to understand the best way to utilize the tax credit. (Further information about the ARRA available from Solar Energy Industries Association: Guide to Recovery Act).

Note that a federal tax credit is different than a federal tax deduction. A deduction of $5,000 means that if an individual or business had $60,000 of income, they would only pay taxes on $55,000. A tax credit of $5,000 in the same situation means that the final amount owed in taxes is reduced dollar-for-dollar by $5,000 (e.g. the person would have owed approximately $15,000 but now only owes $10,000). Because federal tax credits are available for New Jersey solar electric and wind power usage – rather than simple deductions – you will enjoy even greater financial incentives for adding renewable energy to your home.

Utility Bill Savings for New Jersey Solar Power and Wind Energy Customers

Naturally, one of the most compelling reasons to convert to renewable energy is the money you can expect to save on every subsequent power bill.

In short, every kilowatt hour that you produce by installing New Jersey solar panels or wind turbines is one less that you need to buy from your utility company. (Note the difference between "kilowatts" and "kilowatt hours." A "kilowatt" - which describes your solar system size - is a unit of rate, denoting the rate at which the sun's energy is converted by solar panels. A "kilowatt hour" refers to an amount of energy; your total savings are based upon this number, as a function of the overall amount you generate.)

Nearly every state has a Net Metering law, by which your electric meter is able to spin forward or backward, depending upon the amount of energy intake or output at any given time. Whenever the power generated by your solar panels or wind turbines exceeds demand, this extra amount is sent back into the power grid and your meter spins backward accordingly.

Therefore, your utility bill savings can be calculated as a product of the total amount of renewable energy you generate in a year in kWh, multiplied by the rate that your local utility charges per kWh. Because these prices steadily rise, the savings you'll see by producing power through renewable sources like solar will increase over time.

Renewable Energy Credits for New Jersey Solar Power

Renewable Energy Credits/Certificates – also known as RECs or SRECs – are tradable environmental commodities in the United States, which represent proof that 1000 kilowatt-hours (kWh) of green electricity were generated from an eligible renewable energy source, such as solar panels or wind turbines. These certificates can be bought, sold, or traded on the open market. By law utility companies (the end purchaser of RECs) must purchase a certain quota of RECs annually, and that quota increases dramatically each year. The purpose of this is for a larger and larger percentage of total power consumed in the state to come from renewable energy sources. The sale of RECs is in essence the sale of the proof of that renewable energy production.

What does this mean to you? You will earn cash from the sale of RECs simply by producing solar power in New Jersey, completely separate from any savings on your power bills. We estimate a sell price of about $700/REC, which is a conservative number given the history and projected growth in the industry.

Hurry! Don't miss this exceptional window of opportunity to let renewable energy work for you. Contact Clean Energy USA toll-free at (866) 974-2904 to find out more about how you can start saving money with New Jersey solar or wind power in your home.