Loading NuWatt Energy...
We use your location to provide localized solar offers and incentives.
We serve MA, NH, CT, RI, ME, VT, NJ, PA, and TX
Loading NuWatt Energy...
NuWatt designs, installs, and manages solar, battery, heat pump, and EV charger systems across 9 states. One company, one warranty, one point of contact.
Get a Free Quote
The federal residential solar tax credit (Section 25D) died on December 31, 2025. But New Jersey still has powerful state-level solar incentives that make solar a smart investment. This is the definitive guide to every program that still works, what each one is worth, and how to stack them.
The federal residential solar tax credit (Section 25D) expired December 31, 2025. New Jersey homeowners who buy solar with cash or a loan receive $0 in federal tax credits. However, New Jersey still has 6 active programs that make solar financially compelling:
Bottom line: A 13 kW system at $2.95/W costs $38,350 gross. After the sales tax exemption, your net cost is about $35,809. Over 25 years, total value from all programs exceeds $90,000. Payback: 8-11 years even without any federal credit.
Before we cover what still works, let's be honest about what's gone. Other solar websites still reference these programs. They are wrong.
Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. This was 30% in 2025. Now it is zero.
The $2,000 heat pump tax credit and $1,200 insulation/efficiency credit are both dead. These were separate from the solar ITC and also expired.
The original Solar Renewable Energy Certificate program was replaced by the SuSI (Successor Solar Incentive) program, which includes the ADI and CSI tracks. Existing SREC holders keep their certificates, but no new SRECs are issued.
NJ once offered upfront cash rebates for solar installations through the Clean Energy Program. This program ended years ago and is not coming back. The ADI program is the current replacement mechanism.
The federal credit was the big loss. But every New Jersey state program survived intact. Here is the full comparison.
| Incentive Program | 2025 | 2026 | Status |
|---|---|---|---|
| Federal Tax Credit (25D) | 30% of system cost (~$11,400) | $0 — Expired Dec 31, 2025 | Expired |
| ADI/SREC-II | $85.00/MWh for 15 years | $85.00/MWh | Active |
| Net Metering | 1:1 full retail credit | 1:1 full retail credit | Active |
| Sales Tax Exemption | 6.625% saved | 6.625% saved | Active |
| Property Tax Exemption | 100% exempt | 100% exempt | Active |
| Section 48E (Lease/PPA) | 30%+ for third-party owner | 30%+ through July 4, 2026 | Deadline |
| CSEP Community Solar | 750 MW, 51% LMI | 750 MW, extended through 2028 | Active |
| Original SREC Program | Replaced by ADI years ago | Replaced by ADI | Expired |
| 25C Energy Efficiency | $2,000 heat pump credit | $0 — Expired Dec 31, 2025 | Expired |
The federal 25D credit was worth about $11,400 on a typical 13 kW system. That is a real loss. But the 6 remaining New Jersey programs still generate over $90,000 in lifetime value for the same system. The math still works in your favor — especially given NJ's exceptionally high property taxes, which make the property tax exemption uniquely valuable.
The Administratively Determined Incentive (ADI) is New Jersey's signature solar incentive. Under the SuSI program, residential net-metered systems receive a fixed payment of $85.00 per megawatt-hour (EY2025-26) for every MWh produced, guaranteed for 15 years. Payments are made quarterly by the NJ Board of Public Utilities.
For a typical 13 kW system producing 14,690 kWh/year (14.69 MWh), the ADI pays ~$1,263/year or ~$18,265 over 15 years (accounting for 0.5% annual panel degradation). Payments are quarterly — about $316 deposited into your account every 3 months.
If your system is qualified in Energy Year 2026-27, you lock in the higher rate of $85.00/MWh for 15 years. That boosts the 13 kW example to ~$1,399/year or ~$20,250 over the full term. The ADI rate is increasing — a rare bright spot in a post-ITC world.
Based on 1,130 kWh/kW/year NJ average production. Rate: $85.00/MWh (EY2025-26). Includes 0.5%/yr degradation. 15-year totals.
Net metering is the single largest value driver for New Jersey solar. When your panels produce more than you use, excess electricity flows to the grid and you receive credits on your electric bill at the full retail rate. NJ has no residential cap on system size (up to 5 MW).
New Jersey exempts solar from both sales tax and property tax. The property tax exemption is especially valuable because NJ has the highest property taxes in the United States.
All solar energy equipment and installation labor are exempt from the New Jersey 6.625% sales tax. This is automatic — your installer applies the exemption.
Automatic — applied at the point of sale by your installer.
100% of the added home value from your solar installation is exempt from NJ property taxes. In a state where the average annual property tax is ~$9,500/year, this is one of the most valuable solar exemptions in the country.
Based on ~2.23% average NJ property tax rate. Solar adds $30K-$39K in home value.
New Jersey has the highest property taxes in the entire United States, averaging ~$9,500/year. Without the property tax exemption, a $38,000 solar system could add roughly $850 per year to your already-high property tax bill. The exemption prevents this entirely, saving you $21,000+ over 25 years. No other state's property tax exemption is worth as much in dollar terms.
The federal residential ITC (25D) is dead, but the commercial ITC (Section 48/48E) is still available for projects that begin construction before July 4, 2026. When you lease solar panels or sign a PPA, the third-party financing company that owns the system claims this 30%+ credit. They pass some of the savings to you through lower monthly payments.
Section 48E is available for projects that begin construction before July 4, 2026. If you are considering a lease or PPA, you must have your contract signed and construction started before this date. After July 4, lease/PPA monthly costs will likely increase significantly.
If you rent, own a condo, have a shaded roof, or simply prefer not to install panels, the Community Solar Energy Program lets you subscribe to a local NJ solar farm and receive 10-40% savings on your electric bill. No installation, no upfront cost, and you can cancel anytime.
Here is what all active programs are worth combined for a 13 kW system on PSE&G. Every dollar below is real, bankable value.
No hand-waving. Here are the actual numbers for a typical New Jersey homeowner buying a 13 kW solar system with cash in 2026, without any federal tax credit.
Adjust your system size and utility to see exactly what each New Jersey incentive is worth for your specific situation.
See how New Jersey incentives combine to maximize your savings
First-Year Value
$7,994
savings + ADI income + tax benefits
25-Year Lifetime
$125,737
on a $38,350 system
Payback Period
6.6 years
then pure savings
Estimates based on NJ averages. Actual values depend on system design, shading, utility rate changes, and eligibility. ADI rate shown is EY2025-26 ($85. Federal residential ITC (Section 25D) expired Dec 31, 2025.
Not all financing options access the same incentives. Here is what you qualify for depending on how you pay for solar in 2026.
You own the system
Best for: Maximum long-term ROI
You own the system
Best for: $0 down, keep all incentives
Company owns the system
Best for: $0 down, lower monthly bill
New Jersey has electricity rates well above the national average, which means every kWh your solar panels offset saves you more. Combined with the highest property taxes in America, NJ's tax exemptions deliver outsized dollar value.
New Jersey electricity rates have climbed steadily. Every rate increase makes your solar investment more valuable because net metering credits track the retail rate. Your ADI rate, by contrast, is locked for 15 years — it only gets better relative to rising electricity costs.
New Jersey has 6 active solar incentive programs in 2026: ADI/SREC-II ($85.00/MWh for 15 years), 1:1 net metering (full retail credit with no residential cap), 6.625% sales tax exemption, 100% property tax exemption, Section 48E commercial ITC for lease/PPA systems (30%+ through July 4, 2026), and the Community Solar Energy Program (CSEP) for those who cannot install rooftop solar. The federal residential 25D credit is $0.
No. The federal residential solar tax credit (Section 25D) expired December 31, 2025. Homeowners who buy solar with cash or a loan receive $0 in federal tax credits. However, lease/PPA companies that own the system can still claim Section 48E (30%+) on projects beginning construction before July 4, 2026, passing savings to you via lower monthly payments.
The ADI program pays residential net metering solar systems $85.00 per MWh for Energy Year 2025-26. Payments are locked for 15 years and paid quarterly. A typical 13 kW system produces about 14.7 MWh/year, earning approximately $1,263/year or $18,265 over the full 15-year term.
Most New Jersey homeowners see payback in 8-11 years without the federal ITC. This is driven by ADI/SREC-II income ($1,000+/year), 1:1 net metering credits ($2,400-$3,400/year depending on utility), and the two tax exemptions saving $2,500+ upfront and $650+/year ongoing. After payback, you get 14-17 years of essentially free electricity.
New Jersey offers 1:1 full retail rate net metering for all four utilities (PSE&G, JCP&L, ACE, RECO). Excess generation credits roll over monthly at the full retail rate. At the annual true-up, any remaining excess is paid at the wholesale avoided-cost rate. There is no residential cap on system size (up to 5 MW). Systems installed now are grandfathered under current rules.
Yes. New Jersey exempts all solar energy equipment and installation labor from the 6.625% state sales tax. On a $38,000 system, this saves approximately $2,518 at purchase. The exemption is automatic — your installer applies it on the invoice.
Yes. New Jersey provides a 100% property tax exemption for the added value of solar installations. This is especially valuable because NJ has the highest property taxes in the United States (averaging ~$9,500/year). Without this exemption, a $38,000 solar system could add $850+ per year to your property tax bill. The exemption prevents that entirely.
Indirectly, yes. When you lease or sign a PPA, the third-party company owns the system and claims the Section 48E commercial ITC (30%+ for projects beginning construction before July 4, 2026). They pass savings to you through lower monthly payments. You do not file anything on your tax return.
Yes. New Jersey has strong state-level solar incentives. Between ADI/SREC-II income ($18,000+ over 15 years on a 13 kW system), net metering savings ($2,800+/year), and tax exemptions ($2,500+ upfront, $18,000+ over 25 years in property tax savings), the total value exceeds $60,000 over 25 years for a typical system. Payback is 8-11 years even without the federal credit.
The original SREC program was replaced by the Successor Solar Incentive program (SuSI), which includes the ADI (Administratively Determined Incentive) and the CSI (Competitive Solar Incentive) programs. Existing SREC holders keep their certificates, but all new residential solar installations go through the ADI program at $85.00/MWh (EY2025-26). The ADI pays for 15 years, compared to 10 years for old SRECs.
The Community Solar Energy Program (CSEP) allows NJ residents to subscribe to a local solar farm and receive bill credits without installing panels on their roof. It is ideal for renters, condo owners, or homes with shaded roofs. Savings range from 10-40% on your electric bill. 51% of capacity is reserved for low-to-moderate income households. There is no upfront cost and you can cancel anytime.
New Jersey has one of the strongest state incentive programs in the Northeast. The ADI/SREC-II program is unique — no other state pays a guaranteed per-MWh rate for 15 years. Combined with 1:1 net metering, dual tax exemptions (especially valuable given NJ highest-in-nation property taxes), and 750+ MW of community solar capacity, NJ delivers competitive payback periods even without the federal ITC.
Deep dive into ADI rates, qualification process, and payment timeline.
How 1:1 retail credits work, monthly rollover, and annual true-up.
Complete guide to going solar after the 25D ITC expired.
Sales tax and property tax exemptions with dollar figures.
How financing choice affects your incentives and total ROI.
Subscribe to a local solar farm. 10-40% bill savings, no panels needed.
How the commercial ITC works for lease/PPA customers.
Compare utility rates and how they affect your solar ROI.
Current pricing by city, installer costs, and what drives $/W.
The federal credit is gone, but NJ's 6 active programs still deliver an 8-11 year payback. Get a free, no-pressure estimate showing exactly what each incentive is worth for your home.