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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.












Collected June 2021

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. Four incentives exist for solar in New Jersey:

  • Solar Renewable Energy Credits, their current version now known at SREC-II, SREC-2 or just SREC.
    • The Board of Public Utilities (BPU) New Jersey’s Clean Energy Program is set up so solar system owners earn a portions of a SREC for every kilowatt-hour (kWh) of solar energy a system generates, either at a fixed rate for smaller systems or competitively awarded rates for larger systems.
    • For more information see the Successor Solar Incentive (SuSI) Program  page.
  • Federal Solar Investment Tax Credit (ITC)
    • Both homeowners and businesses qualify for a federal tax credit, known as the investment tax credit (ITC).
    • Residential and commercial projects are eligible for a tax credit of 26 percent of amount invested in the solar project. The ITC step down is as follows:
      • 26 percent for projects that begin construction in 2021 and 2022
      • 22 percent for projects that begin construction in 2023
      • After 2023, the residential credit drops to zero while the commercial credit drops to a permanent 10 percent
      • There are other details around commercial projects read more at the Solar Energy Industry Association (SEIA) page for more.
  • Solar Investment Property Tax Exemption
    • Renewable energy systems on residential, commercial, or industrial properties certified by the local enforcing agency may receive a limited exemption of the difference between the total assessed value of the property before and after the renewable energy system has been installed.
    • For more information on this exemption, visit the abatements and exemptions page of the New Jersey Department of Treasury and search for ‘renewable energy’.
  • Solar Panel System Sales Tax Exemption
    • Solar “Devices or systems specifically approved by the Board of Public Utilities…designed to provide heating or cooling or electrical or mechanical power by converting solar energy to some other usable energy source, including devices for storing solar-generated energy” qualify for a full exemption from sales tax.  Equipment required regardless of the installation of solar systems is not exempted.
    • For more information on this sales tax exemption, see Tax Topic Bulletin S&U-6 Sales Tax Exemption Administration and search for ‘solar’ in the document.


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, Homeowner’s Guide to Going Solar webpage.




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Last Updated: February 4, 2022