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What is Solar?

Solar power technologies harness the energy from the sun’s light and converts it into electricity.  Solar Photovoltaic panels or PV panels are made up of individual cells made of silicon or another semiconductor. When the sun hits the solar panel the photons from the sunlight are absorbed by the cells, creating an electric field and causing electricity to flow. This Direct Current (DC), must be converted to Alternating Current (AC) by a device called an inverter. AC allows the electricity to power your home and maintain connection to the local utility grid for when the solar system is not producing enough power, such as at night or during cloudy weather.








Net Metering Diagram. Source: Energy Sage

Residential and Non-Residential solar systems are typically net metered, meaning when the solar system produces more power than your facility is using, your electric meter will spin backwards and your account will be credited for the excess power sent back to the local grid. Grid Supply solar systems, often large-scale utility projects, send the electricity directly into the grid; there is no on-site destination for the electricity.


Benefits of Solar

Protect the Environment: Solar power is a renewable energy meaning the source never runs out and unlike fossil fuel, it is emission free. More solar leads to a cleaner power sector, healthier environment and improved public health.

Job Creation: The growth of solar energy in New Jersey has created thousands of jobs in sales, installation, manufacturing and financing.

Saves money: As a homeowner or business owner installing solar can help you reduce your monthly electricity bill and benefit from significant savings over time.


In New Jersey incentives are available to help lower the overall cost, thus making solar more affordable and a viable option. Solar Renewable Energy Credit (SRECs) are purchased, sold and traded by power producers in New Jersey to meet the state's Renewable Portfolio Standard – a requirement that a certain percentage of the power they sell each year comes from renewable energy.  One SREC is generated when a solar system produces 1,000 kilowatt-hours of electricity; solar systems can only earn SRECs in the first 15 years of operation.

Both homeowners and businesses qualify for a federal tax credit, known as the investment tax credit (ITC), which is equal to 30 percent of the cost of their solar panel system minus any cash rebates. The ITC remains at 30% until 2019. It then steps down to 26% in 2020 and 22% in 2021. After 2021, the residential credit will drop to zero while the commercial and utility credit will drop to a permanent 10%.


How to Go Solar
For more information, consumer resources and to learn about the different financing options for solar please visit the Board of Public Utilities webpage or the Department of Energy’s, Energy Sage webpage.




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Last Updated: January 25, 2018