The former New Jersey Clean Energy Program rebates on PV equipment have been discontinued. The federal Residential Energy Efficient Property Credit (
income tax credit on IRS Form 5695) for residential PV and solar thermal was extended in December 2015 to remain at 30% of system cost (parts and installation) for systems put into service by the end of 2019, then 26% until the end of 2020, and then 22% until the end of 2021. It applies to a taxpayer's principal and/or second residences, but not to a property that is rented out. There is no maximum cap on the credit, and the credit can be applied toward the
Alternative Minimum Tax, and any excess credit (greater than that year's tax liability) can be rolled into the following year. NJ law provides new solar power installations with exemptions from the 6.625% state
sales tax, and from any increase in property assessment (local
property tax increases), subject to certain registration requirements.
Renewable Portfolio Standard training facility in
Florham Park, New Jersey New Jersey's renewable portfolio standard (RPS) is one of the most aggressive in the United States and requires each electricity supplier/provider to provide 22.5% from
renewable energy sources by 2021 and 50% by 2030. In addition, 2.12% must come from solar electricity, an amount estimated to be 1,500 megawatts (MW).
Solar Renewable Energy Certificates (SRECs) must be purchased by electricity suppliers to meet the state targets or else they face a fine known as a Solar Alternative Compliance Payment (SACP) that was $272/MWh in 2022. As New Jersey was approaching the minimum requirements, the requirements were accelerated on July 23, 2012, changing the shape of the compliance curve from slowly increasing at first to rapidly increasing at first. An SREC program is an alternative to the
feed-in tariff model popular in Europe. The key difference between the two models is the market-based mechanism that drives the value of the SRECs, and therefore the value of the subsidy for solar. In a feed-in tariff model, the government sets the value for the electricity produced by a solar facility. If the level is too high, too much solar power is built and the program is more costly. If the feed-in tariff is set too low, not enough solar power is built and the program is ineffective. The SREC program allows for the creation of a certificate with every megawatt-hour (MWh) of electricity produced. The certificate represents the solar aspect of the electricity that is produced and can be unbundled and sold separately from the electricity itself. Electricity companies, known as
load-serving entities, are required by state RPS laws to procure a certain amount of their electricity from solar. Since it is often more costly for them to build solar farms themselves, the load-serving entities will purchase SRECs from solar generators and use the SRECs to comply with the state laws. With an SREC market, the value of an SREC is determined by supply and demand, subject to certain limitations. If solar is slow to develop, SREC values will remain high, encouraging the development of solar. If too much solar is added, SREC values will decrease, which in turn lowers the attractiveness of the investment. SRECs in New Jersey have traded as high as $680 per MWh. The SREC program closed to new registrations in April 2020. A total of 3,335 MW was installed under the SREC program. As of January 2024, 987 MW of projects have been completed under the TI Program. As of January 2024, 442 MW of projects have been completed under the ADI Program.
Net metering In 2008, New Jersey and Colorado were the only two states to allow unlimited net metering customers, up to 2 megawatts for each customer. In 2010 the limit was removed, and in 2012 connection may be to a 69 kV or lower line voltage, raising the previous requirements. but the cap was raised to 2.9% in August 2015, which was seen as a temporary fix that would cover three years. In 2018, the legislature increased the net metering cap to 5.8% of retail sales. == Landfill solar ==