Updated July 2026 with New Jersey’s current SuSI, net metering, and tax-exemption rules for the 2026 incentive year.
As of July 2026, there is no New Jersey solar income tax credit, and the 30 percent federal solar tax credit (Section 25D) ended after December 31, 2025, so a 2026 buyer cannot claim it either. What New Jersey actually gives a homeowner is a four-part stack: SuSI / SREC-II production income, full-retail net metering, a 100 percent sales-tax exemption, and a property-tax exemption.
According to MySolarFY’s analysis (as of July 2026), a typical 7 kW New Jersey system modeled in NREL PVWatts produces about 9,667 kWh a year, which offsets roughly $2,270 of electricity at New Jersey’s 23.49 cents per kWh, earns about $820 a year in SREC-II income under SuSI at the current $85 rate, and skips about $1,325 in sales tax on a $20,000 system. Estimate; your roof, usage, and system price will differ.
- The 30 percent federal solar tax credit ended after December 31, 2025. A homeowner who buys solar in 2026 cannot claim the federal Residential Clean Energy Credit (Section 25D), which the One Big Beautiful Bill Act ended early (IRS, as of January 1, 2026).
- New Jersey has no state solar income tax credit. It never did; the state delivers value through other programs instead (DSIRE New Jersey, as of 2026).
- The SuSI program pays you per megawatt-hour for 15 years. A new residential system earns one SREC-II per 1,000 kWh, at the NJBPU-set net-metered residential rate of $85 each for registrations received before July 27, 2026, dropping to $77 each for registrations received on or after July 27, 2026 under the NJBPU three-year review order of May 21, 2026 (the rate had already stepped from $90 to $85 in March 2023, and a system registered today still earns $85) (NJBPU order, May 21, 2026; NJBPU Solar Factsheet; NJ Clean Energy ADI Program, as of July 2026).
- Net metering credits your exports at the full retail rate. New Jersey requires all three big utilities to net your solar against your usage at retail value (NJ Clean Energy Program, as of 2026).
- No sales tax and no added property tax. Solar equipment is 100 percent exempt from New Jersey’s 6.625 percent sales tax, and a certified system is exempt from added property tax (NJ Division of Taxation, as of 2026).
- New Jersey power is pricey, which is what makes solar pay. New Jersey residential electricity averages about 23.49 cents per kWh (EIA, as of March 2026).
If you are researching the New Jersey solar tax credit for 2026, the most important thing to know is what changed: the 30 percent federal solar tax credit that homeowners used for years ended after December 31, 2025, and New Jersey does not have a state income tax credit to replace it. That sounds like bad news, but New Jersey still has one of the strongest solar programs in the country, just not as a tax credit. This page explains exactly what changed with the federal credit, why New Jersey never had a state solar tax credit, and the incentives a New Jersey homeowner actually gets in 2026, from the SuSI program and net metering to the sales and property tax exemptions. For the statewide overview, start with our New Jersey solar guide.
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Did the 30 percent federal solar tax credit go away?
Yes. The federal residential solar tax credit ended for systems placed in service after December 31, 2025. The 30 percent Residential Clean Energy Credit (Section 25D) was the credit homeowners claimed on their federal taxes for buying a home solar system, and the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended it early, so it no longer applies to property placed in service after December 31, 2025 (IRS, as of January 1, 2026). You will still see guides and installer pages quoting the old 30 percent figure, and even claiming it runs through 2032; for a New Jersey homeowner buying solar in 2026, that is out of date. For the full national picture, see what the federal solar tax credit change means in 2026.
One federal exception exists, and it is not the homeowner’s to claim. A separate commercial credit, Section 48E, is claimed by the business that owns a leased or power purchase agreement (PPA) system, not by the resident (IRS Clean Electricity Investment Credit, as of 2026). So on a lease or PPA you do not file for a federal credit yourself; the company that owns the panels does. The 25D homeowner credit, by contrast, ended after December 31, 2025.
Does New Jersey have its own solar tax credit?
No. New Jersey has no state income tax credit for residential solar, and it never did. Some states offer a state-level credit on top of the federal one; New Jersey is not one of them (DSIRE New Jersey, as of 2026). And the federal residential credit homeowners once stacked on top ended for systems placed in service after December 31, 2025 (IRS, as of January 1, 2026). That is less of a disadvantage than it sounds, because New Jersey channels its support through a per-kWh incentive program and a set of tax exemptions that, together, often add up to more than a one-time credit would. The rest of this page walks through that stack, which is what a New Jersey homeowner should actually budget around in 2026.
What New Jersey homeowners actually get in 2026
New Jersey replaces the idea of a one-time income tax break with an income program plus tax exemptions. The table sorts what applies in 2026 from what does not, so you can plan on facts rather than a credit that no longer exists.
| Program | Applies in New Jersey? | What it does |
|---|---|---|
| SuSI / SREC-II (income program) | Yes | Pays one SREC-II per 1,000 kWh for 15 years, $85 each for a new net-metered residential system registered before July 27, 2026 and $77 each for registrations on or after July 27, 2026 (NJBPU order, May 21, 2026; NJ Clean Energy ADI) |
| Full-retail net metering | Yes | Credits your exports against usage at the retail rate (NJ Clean Energy) |
| Sales tax exemption | Yes | 100 percent off the 6.625 percent sales tax on solar equipment (NJ Division of Taxation) |
| Property tax exemption | Yes (file Form CRES) | The system’s added value is exempt from property tax (NJ Division of Taxation) |
| State solar income tax credit | No | New Jersey has no state-level solar income tax credit (DSIRE) |
| Federal residential credit (Section 25D) | No, it ended | The 30 percent homeowner credit ended for systems placed in service after Dec 31, 2025 (IRS) |
For the statewide rundown, see our New Jersey solar guide, the deep dive on New Jersey net metering and SREC-II, and the resource on the solar incentives that still apply.
How New Jersey’s SuSI program and SREC-II pay you
SuSI is the income engine that does the work a tax credit used to do. Under the New Jersey Board of Public Utilities’ Successor Solar Incentive (SuSI) program, a residential system earns one SREC-II for every 1,000 kWh (one megawatt-hour) it generates, and you sell those certificates for a fixed dollar amount over a 15-year term (NJ Clean Energy ADI Program, as of July 2026). Residential systems fall under the program’s Administratively Determined Incentive (ADI) track, and the board order set the net-metered residential rate at $85 per SREC-II for registrations received before July 27, 2026, with the NJBPU’s May 21, 2026 three-year review order cutting it to $77 per SREC-II for registrations received on or after July 27, 2026 (an $8 reduction that follows the earlier step from $90 to $85 in March 2023, so a system registered today still earns $85) (NJBPU order, May 21, 2026). The trigger is your registration date, not the energy-year boundary, and whatever value applies on that date locks in for your full 15-year term. That rate is set by the BPU and is reset periodically through a public review, so confirm the current figure with the NJ Clean Energy Program before you budget. The 15-year term runs from your system’s permission to operate, not from when you sign up.
A simple way to see the value. A New Jersey system that produces 9,000 kWh in a year earns 9 SREC-II, which is about $765 a year at the $85 rate, on top of the money you save on your bill (NJ Clean Energy ADI Program, as of July 2026). For context, we modeled a 7 kW system in Cherry Hill, New Jersey and NREL’s PVWatts put it near 9,667 kWh a year, but that is an illustration on a stated production figure, not a quote for your home, and your actual output depends on your roof, so estimate yours with NREL’s free PVWatts calculator. The older SREC and TREC certificate programs are closed to new systems, so a 2026 install earns SREC-II under SuSI, and you can weigh the long-run numbers with our guide on whether solar panels are worth it.
The table below works the SREC-II math at the current $85 board-order rate, using your annual production as the input, so you can find the row closest to your own system. These are illustrations at the $85 rate, not a quote, and the NJBPU can reset the rate, so confirm the current figure (NJ Clean Energy ADI Program, as of July 2026).
| Your annual production | SREC-II per year (1 per 1,000 kWh) | SuSI value per year (at $85) | 15-year SuSI total |
|---|---|---|---|
| 6,000 kWh | 6 | $510 | $7,650 |
| 8,000 kWh | 8 | $680 | $10,200 |
| 10,000 kWh | 10 | $850 | $12,750 |
| 12,000 kWh | 12 | $1,020 | $15,300 |
How net metering and your electric bill work in New Jersey
Net metering is the second half of the savings, and New Jersey credits it at full retail. New Jersey requires all three investor-owned utilities, Public Service Electric and Gas (PSE&G), Jersey Central Power and Light (JCP&L), and Atlantic City Electric (ACE), to credit the power your system exports against the power you use at the full retail rate, with extra credits rolling forward month to month (NJ Clean Energy Program, as of 2026). Because New Jersey residential electricity averages about 23.49 cents per kWh (EIA, as of March 2026), each kilowatt-hour you offset is a valuable one. If PSE&G is your utility, see our PSE&G New Jersey solar guide; for the New Jersey specifics of crediting and SREC-II, see our New Jersey net metering and SREC-II guide, or the general mechanics in how net metering credits your solar exports.
One detail to size around: the annual true-up. Within the year, your exports are credited at retail and any surplus rolls forward, but at the end of your 12-month net-metering period, any leftover net surplus is paid out at the utility’s wholesale avoided-cost rate rather than the full retail rate (NJ Clean Energy Program, as of 2026). The practical takeaway is to size your system close to your own annual usage, so most of your production is credited at full retail rather than settled at the lower year-end rate.
The tax breaks New Jersey still gives solar
New Jersey takes two taxes off the table entirely. First, solar energy equipment is 100 percent exempt from New Jersey’s 6.625 percent sales tax, so a qualifying installer should not charge state sales tax on the equipment (NJ Division of Taxation, as of 2026). On a typical $20,000 system, that exemption alone is worth about $1,325 up front. Second, the value a solar system adds to your home is exempt from property tax, so going solar does not raise your assessment.
Note: The property tax exemption is not automatic. To claim it, you file Form CRES (Certification of Renewable Energy System) and the local assessor certifies the system, with the exemption taking effect the following tax year (NJ Division of Taxation Form CRES, as of 2026). Ask your installer whether they handle the CRES filing for you, since many do.
Adding it up: estimated first-year value in New Jersey
Here is how the pieces stack for one typical example. This table pulls the numbers from the sections above into a single view for an illustrative 7 kW system, so you can see the shape of the value in year one. It is an estimate on stated inputs, not a quote for your home.
| Benefit | Estimated value | Notes |
|---|---|---|
| Net-metering bill offset | ~$2,270 / year | 9,667 kWh offset at 23.49 cents per kWh (recurring) |
| SuSI SREC-II income | ~$820 / year | 9.67 SREC-II at the current $85 rate, for 15 years |
| Recurring value, year one | ~$3,090 / year | net-metering offset plus SREC-II income |
| Sales-tax exemption | ~$1,325, one-time | 6.625 percent you never pay; already reflected in your price |
| Property-tax exemption | Varies | your assessment does not rise for the added value |
| Rough simple payback | ~6 to 7 years | a $20,000 system divided by ~$3,090 a year in recurring value |
Estimate. Inputs: the EIA New Jersey residential rate of 23.49 cents per kWh (as of March 2026), a 7 kW system modeled at 9,667 kWh a year in NREL PVWatts for Cherry Hill, the current $85 SREC-II rate, and a $20,000 installed price. Your roof, usage, utility, and installer quote change every line here, so treat this as a starting frame, not a guarantee; the payback figure ignores electricity-price changes and panel wear.
Paying for solar in New Jersey with no up-front cost
How you pay decides who keeps the SREC-II income. If you want the SuSI income and the tax exemptions to be yours, you own the system through a cash purchase or a solar loan. A lease or PPA can mean no up-front cost for eligible homeowners, but it is a long-term agreement with monthly payments, not free solar, and the company that owns the panels keeps the SREC-II income while you get a lower or fixed power price.
| Path | Up-front cost | Who keeps the SREC-II income | Best when |
|---|---|---|---|
| Cash purchase | Full system cost | You, the owner | You want the fastest payback and the most lifetime value |
| Solar loan | Little to none, financed | You, the owner | You want ownership without paying cash up front |
| Lease or PPA | $0-up-front where eligible | The third-party owner | You prefer no up-front cost and a simpler, fixed monthly bill |
How to choose a solar installer in New Jersey
New Jersey has a deep, competitive installer market, which is good for you because it means real competition on price and service. Rather than chasing a “best installer” list, screen any company against objective criteria:
- A valid New Jersey Home Improvement Contractor (HIC) registration and proper electrical licensing.
- NABCEP certification, the industry’s professional standard for PV installers.
- A clear workmanship and equipment warranty in writing.
- Real experience with SuSI / SREC-II registration, net metering, and the Form CRES property-tax filing, so your paperwork and incentive enrollment go smoothly.
- A written production estimate and a transparent quote that does not count the federal credit that ended after December 31, 2025. For a checklist, see the right questions to ask a solar installer.
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Frequently asked questions
Is the 30 percent solar tax credit going away in 2026? It is already gone. The 30 percent federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act, so a homeowner who goes solar in 2026 cannot claim it (IRS, as of January 1, 2026). Some pages still say the credit runs through 2032; that is out of date. The credit was not reduced for 2026, it ended, so plan your New Jersey project around the state’s own programs instead, which were not affected.
Is there a tax credit for solar panels in New Jersey? No, New Jersey has no state income tax credit for solar, and the federal residential credit ended after December 31, 2025 (DSIRE; IRS, as of 2026). What New Jersey offers instead is arguably more valuable over time: the SuSI program pays you per megawatt-hour of production for 15 years, net metering credits your exports at the retail rate, and solar is exempt from both state sales tax and added property tax. Those programs, not a tax credit, are the real New Jersey solar incentives in 2026.
What is a SREC-II worth in New Jersey? Under the SuSI program, a new net-metered residential system earns one SREC-II for every 1,000 kWh it generates. The board-order rate is $85 per SREC-II for registrations received before July 27, 2026, and it drops to $77 per SREC-II for registrations received on or after July 27, 2026 under the NJBPU’s May 21, 2026 three-year review order; whatever value applies on your registration date is fixed for 15 years from your system’s permission to operate (NJBPU order, May 21, 2026; NJ Clean Energy ADI Program, as of July 2026). A system producing 9,000 kWh a year would earn 9 SREC-II, about $765 a year at $85 or about $693 at $77, on top of bill savings. The trigger is the registration date, not the energy-year start, and the NJBPU resets this rate on periodic review, so confirm the current rate with the NJ Clean Energy Program before you budget.
Does New Jersey have net metering? Yes. New Jersey requires all three investor-owned utilities, PSE&G, JCP&L, and Atlantic City Electric, to credit the power your system exports at the full retail rate against the power you use, with credits rolling forward month to month (NJ Clean Energy Program, as of 2026). At the end of your annual net-metering period, any leftover surplus is paid out at the utility’s lower wholesale avoided-cost rate, which is why it is smart to size your system close to your own yearly usage rather than to overproduce.
Do I pay sales tax or higher property tax on solar in New Jersey? No on both. Solar energy equipment is 100 percent exempt from New Jersey’s 6.625 percent sales tax, and the value your system adds to your home is exempt from property tax (NJ Division of Taxation, as of 2026). The property tax exemption is not automatic, though: you file Form CRES and the local assessor certifies the system, with the exemption taking effect the following tax year. Many installers handle the CRES paperwork for you, so ask.
Can I get solar in New Jersey with no up-front cost? Some homeowners can, through a lease or power purchase agreement (PPA) where eligible, which can mean no out-of-pocket cost at installation in exchange for monthly payments. This is not free solar; it is a long-term agreement, often 20 to 25 years, and total payments may exceed the cost of a cash purchase. On a lease or PPA the third-party owner, not you, keeps the SuSI SREC-II income, while your benefit is a lower or fixed power price. If you want to own the system and capture the SREC-II income and tax exemptions yourself, a cash purchase or solar loan keeps them with you. Check what you qualify for before deciding.
Reviewed by the SolarFY Editor (reviewed July 2026). Figures were verified against the linked IRS, NJBPU / NJ Clean Energy Program, NJ Division of Taxation, DSIRE, and EIA sources as of July 2026; the SuSI / SREC-II rate, net-metering true-up terms, and the property-tax exemption process can change, so confirm current terms with the NJ Clean Energy Program, the NJBPU, and your utility before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about our editorial team and how we source and compute our data.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, tax advisor, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase; on a lease or PPA the SuSI SREC-II income and any tax benefit go to the company that owns the system, not the homeowner. Homeowners do not get the federal residential credit (Section 25D) that ended after December 31, 2025. New Jersey does not offer a state solar income tax credit. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.
