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When a commercial or residential solar PV system is built in New Jersey the owner is able to file for a federal income tax credit. The tax credit for New Jersey is currently 30%.
Commercial solar systems may also take advantage of Accelerated Depreciations (MACRS), which allows a commercial solar project owner to depreciate almost the full value of the cost basis year one.
Learn MoreNew Jersey has a performance based solar incentive system, called Successor Solar Incentives (SuSI). A solar system earns one credit for every 1,000 kilowatts hours (1 Megawatt hour) that the system produces. For most residential systems these certificates are $90 and most commercial solar systems would receive $100.
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New Jersey solar incentives in 2026 still give homeowners real money even though the federal residential tax credit has ended. If you live in PSE&G territory in Passaic County or in JCP&L territory in Monmouth or Ocean County, the same statewide benefits apply: SREC-II income, net metering, a sales-tax exemption, and a property-tax exemption. This guide is a plain-English money breakdown of what each one is worth to you and what to do next.
Does NJ still have solar incentives? Yes. In 2026 you can still earn SREC-II income, use net metering, and skip sales tax and added property tax on the system.
Official sources (last checked: June 16, 2026):
Four incentives still exist in 2026: SREC-II income, net metering, a sales-tax exemption, and a property-tax exemption. None of them depend on the federal credit, so they continue even though the federal Residential Clean Energy Credit has ended for homeowner-owned systems. The table below shows what each one does and who collects it, and the rest of this guide explains how to put a number on each benefit before you decide whether solar is worth it in New Jersey.
| Incentive | What it does | Who gets it | Why it matters |
|---|---|---|---|
| SREC-II | Pays you a set credit for the solar energy your system generates | The system owner (you, if you buy with cash or a loan) | Turns generation into predictable income for 15 years under the ADI Program |
| Net metering | Credits power you export to the grid against power you pull from it | The utility customer (you), via PSE&G or JCP&L | Lets summer surplus offset winter use, lowering your annual bill |
| Sales tax exemption | Removes NJ sales and use tax on qualifying solar equipment | The buyer at the point of purchase | Direct upfront savings on a system that costs tens of thousands of dollars |
| Property tax exemption | Excludes the certified system's added value from taxable value | The homeowner whose system is certified | You keep the home-value gain without a higher property-tax bill from the system |
| Federal credit (Section 25D) | Formerly a residential credit for homeowner-owned systems | Ended — not available for property placed in service after 12/31/2025 | Do not budget for it as a 2026 homeowner-owned benefit (per IRS) |
Claim: New Jersey homeowners still have four meaningful solar incentives in 2026, even after the federal residential credit ended.
Evidence: SREC-II pays homeowners for the solar energy they generate, net metering credits unused power back to the grid, and state law exempts the system from sales tax and from added property tax — four separate benefits an owned system collects at the same time. None of these depend on the federal Section 25D credit, so its expiration does not remove them.
The federal Residential Clean Energy Credit (Section 25D) applied through December 31, 2025 and is not available for homeowner-owned property placed in service after that date, per IRS. That means a 2026 buyer who owns their system should not plan on a federal tax credit to lower the cost. Do not let any quote assume one for an owned system.
There is an important exception for leasing customers. The commercial Investment Tax Credit (ITC) still applies to commercially owned systems, and a leased or PPA system is owned by a commercial provider rather than by you. The provider can claim the ITC and reflect it in pricing, which is one reason lease and PPA offers can still be competitive. For the full breakdown of how each path captures value, see our guide to solar loan vs lease vs PPA in New Jersey.
Claim: The federal credit change does not erase New Jersey's solar economics — and leasing customers can still benefit from a federal credit indirectly.
Evidence: The IRS residential clean energy credit covered qualified property installed through December 31, 2025 and does not apply to homeowner-owned property placed in service afterward, so a 2026 buyer should not budget for it. However, the commercial ITC still applies to commercially owned systems, and because a leased or PPA system is owned by a commercial provider, that provider can claim the ITC and reflect it in pricing.
SREC-II is New Jersey's solar earnings program that pays you a credit for the clean energy your panels produce. Your system creates one SREC-II for every 1,000 kWh it generates, and projects in the ADI Program are eligible to receive SREC-IIs for 15 years, per NJ ADI / NJBPU. In short, it is a long-term income stream tied directly to how much electricity your roof makes.
Unlike the older, market-traded SRECs, SREC-IIs carry a fixed incentive value set by the program rather than a price that swings with supply and demand. That predictability is the point: because the per-unit value is set in advance, you can estimate your income stream from expected generation instead of guessing where a trading market will land. The NJBPU Division of Clean Energy administers the program statewide.
Claim: SREC-II turns the electricity your panels make into predictable annual income for 15 years.
Evidence: Under New Jersey's SREC-II program, a system generates one SREC-II for every 1,000 kWh it produces, and ADI Program projects are eligible to receive SREC-IIs for 15 years. Because the incentive level is set rather than traded on an open market, a homeowner can estimate the income stream in advance based on expected generation, per NJ ADI / NJBPU.
Your SREC-II income equals your generation divided by 1,000 kWh, multiplied by the current incentive level — so larger or sunnier systems earn more. A bigger roof in Marlboro or Jackson with more usable south-facing area will generate more kWh and therefore more SREC-IIs than a smaller, shadier roof. Because the program creates one SREC-II per 1,000 kWh, the math is straightforward once you know your expected annual production.
Two details shape the value. First, ADI Program projects are eligible to receive SREC-IIs for 15 years, so this is a multi-year income window, not a one-time payment. Second, the residential SREC-II incentive level is being reduced from $85/MWh to $77/MWh for registrations received on or after July 27, 2026, per NJ ADI / NJBPU. We avoid promising a total dollar figure because it depends on your system size and sunlight, but your solar system cost and size in New Jersey drive how much you can generate and therefore earn.
Claim: Registering your SREC-II before July 27, 2026 locks in the higher residential incentive level.
Evidence: The residential SREC-II incentive level is being reduced from $85/MWh to $77/MWh for registrations received on or after July 27, 2026, per NJ ADI / NJBPU. Because a registered project keeps its incentive level for the program term, completing registration before the step-down date secures the higher per-MWh value for the life of the eligibility window rather than the lower one.
Net metering credits the excess power your panels send to the grid against the power you pull from it, so you effectively bank summer surplus for winter use. NJBPU requires regulated electric utilities and suppliers to offer net metering to eligible customers with renewable systems, and the system generally cannot exceed the customer's annual electric needs.
This is exactly why solar systems in New Jersey are sized to roughly match your annual usage rather than to massively overproduce — there is no benefit to building far beyond what you consume in a year. In practice, your utility runs net metering: PSE&G in Passaic County and JCP&L in Monmouth and Ocean Counties handle the metering and interconnection that make the credits work.
Claim: Net metering is why a properly sized New Jersey system can wipe out most of your annual electric bill.
Evidence: NJBPU requires regulated electric utilities and suppliers to offer net metering to eligible customers with renewable systems, crediting power exported to the grid against power consumed. Because the system generally cannot exceed the customer's annual electric needs, installers size systems to match yearly usage so summer overproduction offsets winter shortfalls across the billing year.
Yes — New Jersey exempts qualifying solar energy devices and systems from sales and use tax, per the NJ Division of Taxation. On a system that costs tens of thousands of dollars, skipping sales tax is meaningful upfront savings. Just as importantly, it applies at the point of purchase rather than as a rebate you have to wait for and claim later.
Because the savings are built into the installed price, you do not need to file a separate form or float the tax cost while you wait for money back. That makes the sales-tax exemption one of the simplest incentives to capture — it just lowers what you pay at the start.
Claim: You do not pay New Jersey sales tax on a qualifying solar system.
Evidence: New Jersey exempts sales of qualifying solar energy devices and systems from sales and use tax, per the NJ Division of Taxation. Because the exemption applies at purchase rather than as a delayed rebate, the savings show up directly in the installed price instead of requiring a separate claim later.
No — New Jersey law exempts certified renewable energy systems from property taxation, so the added value of your solar system is not taxed. The added assessed value of the system can be excluded from your taxable value when the system is certified. In plain terms, solar can raise your home's market value, but the system itself will not raise your property-tax bill.
There is a certification step involved, so confirm that your installer handles the renewable energy system certification as part of the project. This benefit matters most in towns with larger homes and higher assessments — think Marlboro and Jackson — where any added taxable value would otherwise carry a heavier annual cost.
Claim: Going solar in New Jersey will not raise your property taxes because of the system.
Evidence: New Jersey law exempts certified renewable energy systems from property taxation, allowing the added assessed value of the solar system to be excluded from taxable value. This means a homeowner can gain the value a solar system adds to the property without that added value increasing the annual property-tax assessment tied to the system.
If you own the system (cash or loan), you collect the SREC-II income and the tax benefits yourself; with a lease or PPA, the provider owns the system and keeps the SREC-II. Ownership is the dividing line for who captures incentive value, so it is the single biggest factor in how much of these incentives actually reach you.
When you buy with cash or a loan, you are the system owner. That means the SREC-II income flows to you, and the sales- and property-tax exemptions apply to your purchase and your home. You also control the system long term, which is why owning generally captures the most incentive value.
With a lease or PPA, a commercial provider owns the system and keeps the SREC-II income. That provider can also claim the commercial ITC, which is why lease and PPA pricing is structured around the provider's economics rather than yours. You typically pay for the power or rent the equipment instead of capturing the incentives directly. Our solar loan vs lease vs PPA guide walks through the full comparison.
Claim: Whether you own or lease decides who actually pockets the SREC-II income and tax benefits.
Evidence: SREC-IIs and the state tax exemptions accrue to the system owner. When you buy with cash or a loan, you are the owner and collect that value directly; when you sign a lease or PPA, the provider owns the system, keeps the SREC-II income, and can claim the commercial ITC — which is why lease/PPA pricing is structured around the provider's economics rather than yours.
The same state incentives apply statewide, but your utility — PSE&G in Passaic County, JCP&L in Monmouth and Ocean Counties — handles net metering and interconnection, so timelines and roof realities differ by town. SREC-II and the tax exemptions are set by New Jersey law, while the grid-connection steps depend on whose territory your home sits in.
See all of our New Jersey service areas for where we install. NJBPU sets the incentive framework, so the benefits themselves do not change from one town to the next.
Key takeaway: Your incentives are the same statewide, but your utility — PSE&G in Passaic County or JCP&L in Monmouth and Ocean Counties — shapes how quickly and smoothly you can claim them through net metering and interconnection.
Yes. NJBPU requires regulated electric utilities and suppliers to offer net metering to eligible customers with renewable systems. The system generally cannot exceed the customer's annual electric needs, which is why installers size systems to match yearly usage so summer surplus offsets winter use.
SREC-II is New Jersey's solar earnings program. A system creates one SREC-II per 1,000 kWh generated, and ADI Program projects are eligible to receive SREC-IIs for 15 years, per NJ ADI / NJBPU. It pays the system owner a set incentive for the clean energy the panels produce.
No. New Jersey law exempts certified renewable energy systems from property taxation, so the added assessed value of the solar system can be excluded from taxable value. You keep the home-value gain without a higher property-tax bill from the system itself.
Yes. New Jersey exempts sales of qualifying solar energy devices and systems from sales and use tax, per the NJ Division of Taxation. Because it applies at purchase rather than as a delayed rebate, the savings show up directly in your installed price.
It depends on system size and sunlight: income equals generation divided by 1,000 kWh, times the incentive level, paid for 15 years under the ADI Program. The residential level steps down from $85/MWh to $77/MWh for registrations received on or after July 27, 2026, per NJ ADI / NJBPU, so larger, sunnier, earlier-registered systems earn the most.
To get the most from New Jersey's 2026 solar incentives, register and install before the July 27, 2026 SREC-II step-down to secure the higher $85/MWh residential level, then stack net metering and both tax exemptions on top. Acting earlier locks in the higher per-MWh value for the full eligibility window, and because the other benefits apply on top of SREC-II, an owned system started sooner captures the entire stack at the higher rate.
Three steps put you in position: get a quote, confirm your ownership path (owning keeps the SREC-II and tax benefits with you), and start interconnection with your utility. If you are still weighing the overall math, our guide to whether solar is worth it in New Jersey ties these incentives back to payback, and our New Jersey solar quote decoder helps you check any offer before you sign.
Claim: Acting before July 27, 2026 maximizes what New Jersey's solar incentives are worth to you.
Evidence: The residential SREC-II incentive level drops from $85/MWh to $77/MWh for registrations received on or after July 27, 2026, so completing registration before that date locks in the higher per-MWh value. Because net metering and the sales- and property-tax exemptions apply on top of SREC-II, an owned system started earlier captures the full stack at the higher rate.
Ready to lock in your 2026 incentives? Email Powerlutions for a quote or call 732-987-3939 and we will help you confirm your ownership path, register your SREC-II before the step-down, and start interconnection with PSE&G or JCP&L.
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