Policies That Govern The Use Of Solar Systems In New Jersey
The United States is experiencing a fast-paced transition to renewable energy, especially solar. New Jersey is one of the leading states in the U. S. when it comes to the adaptation of policies to increase the use of solar energy. As the 7th ranking state in 2020, according to SEIA, New Jersey has several policies that mobilize the investment in solar power and installation of solar systems by residents. With enough solar power installations to service over half a million homes, New Jersey is definitely doing something right with their solar policies. Here are some highlights of the efficient policies that govern the use of solar systems in New Jersey.
Clean Energy New Construction Program
Installing a rooftop panel to the building of a new house qualifies you for the If you’re building a new home in New Jersey, including rooftop solar panels can help you qualify for the Clean Energy New Construction Program. The government of New Jersey designed this policy as a real estate development and solar incentive avenue for residents who are building new homes.
Net Metering is another form of incentive that promotes the use of solar panels in New Jersey. Most people who have solar panels use a utility grid that manages the power generated by the solar systems. If you use less electricity than is generated, it sends back to the grid and you get retail credit from the utility company. This policy supports utility investments as a lot of residents are opting for solar power, and it remains beneficial to consumers since they get credits that can be reused. In New Jersey, solar panel owners are reimbursed for any unused credits after a 12-month period.
Solar Renewable Energy Certificates
Another interesting policy in New Jersey is the Solar Renewable Energy Certificates (SREC) issued to producers of renewable solar energy like residents and utility companies. For every 1 hour of megawatt generated, you get one SREC and you can sell the SRECs to companies that need it. In 2017, one SREC sold for about $200 so it is a great reward for generating your power through solar panels.
There are two main tax exemptions for New Jersey residents under state taxes. There is the sales tax exemption that exempts you from 100% sales tax when you buy your home solar system. The sales tax, which is 7% of the cost of your solar equipment, will not be added to your tax at all. Secondly, you have the property tax exemption for renewable energy systems. Basically, the property tax exemption helps residents to avoid paying property tax based on the new property value of their home after installing a solar system.
Federal Investment Tax Credit (ITC)
While the state tax exemptions above are great policies from the government of New Jersey, there is the additional benefit of the Federal Investment Tax Credit (ITC). This credit helps to reduce the cost tax on your solar system by 26% so that your federal tax payment doesn’t become a burden.
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