New Jersey Solar Incentives, Tax Credits and Rebates (2026)

Last reviewed: June 8, 2026

New Jersey is one of the larger commercial solar markets in the country, with more than 5.5 GW installed across 235,000-plus projects. It ranks 13th nationally by installed capacity and second in solar per square mile, behind only Rhode Island. The state replaced its old, volatile SREC certificate market with fixed-rate payments through the Successor Solar Incentive program in 2021 — a move that made the economics more predictable for commercial owners and developers. For the 2010 to 2015 SREC-era installation cohort now approaching end of life, the incentive structure matters: re-entering the state payment program after decommissioning requires all-new equipment and a system that has never reached permission to operate under the new rules. The three regulated utilities serving most of the state are PSE&G, JCP&L, and Atlantic City Electric, with Rockland Electric covering a small slice of the north. Incentive values are set by the Board of Public Utilities and change by Board order, sometimes mid-year.

Installed capacity

5,500 MW

National rank

#13

RPS target

35% by 2025, 50% by 2030

State incentive programs

Program	Type	For	Value	Source
SuSI — Administratively Determined Incentive (ADI) Net-metered systems up to 5 MW dc. All equipment must be new, including racking. System must not have reached permission to operate (PTO) before acceptance. Systems operating before August 28, 2021 require a separate Board waiver. Must connect to a New Jersey regulated utility. Systems at 1 MW or larger fall under the state Prevailing Wage Act. ADI runs on annual capacity blocks (EY2027: 250 MW residential, 150 MW non-residential up to 5 MW, 50 MW remote net metering) — first-come, first-served until block closes. New Jersey Board of Public Utilities (NJBPU) / NJ Clean Energy Program ADI is the path for most commercial rooftops. Rate on registration date is locked for 15 years. A project straddling two segments must pick one. Repowering an existing system rarely qualifies — once at PTO, a system generally cannot re-enter ADI, and reused equipment fails the all-new requirement.	PBI	Both	Rooftop, carport, canopy, or floating systems under 1 MW: $110/MWh (public entity: $130/MWh). 1–5 MW: $100/MWh ($120/MWh public entity). Ground mount under 1 MW: $90/MWh ($110/MWh…	Source
SuSI — Competitive Solar Incentive (CSI) Grid-supply projects of any size, and net-metered non-residential systems over 5 MW dc. Must connect to a New Jersey regulated utility. New Jersey Board of Public Utilities (NJBPU) CSI runs through periodic competitive solicitations, not open enrollment. Larger commercial and utility-scale projects that don't fit ADI use this path.	PBI	Commercial	No published rate — developers bid a price per MWh. Board awards by competitive solicitation. Current tranches: Basic grid supply 150 MW; Grid supply on built environment 80 MW; Gr…	Source
Net Metering Requires interconnection agreement with your utility. Non-residential net metering capped at 5 MW dc (larger systems use CSI grid-supply path). Governed by N.J.A.C. 14:8-7. PSE&G / JCP&L / Atlantic City Electric / Rockland Electric Net metering and ADI share the 5 MW ceiling for non-residential systems. That threshold is what pushes a larger project into CSI territory.	Other	Both	Full retail credit per kWh sent to the grid. Excess credits carry forward month to month. Year-end true-up settled under utility tariff. Participating utilities: PSE&G, JCP&L, Atla…	Source
Sales Tax Exemption Solar energy equipment and components. Has applied since 1980. New Jersey Division of Taxation Statute: N.J.S.A. 54:32B-8.33. Covers equipment itself — panels, inverters, racking.	Exemption	Both	100% exemption from New Jersey 6.625% sales and use tax on solar equipment and components.	Source
Property Tax Exemption Residential and commercial properties. No stated duration limit in the statute. Local assessors / New Jersey Division of Taxation Statute: N.J.S.A. 54:4-3.113a. Form CRES required — file with local assessor.	Exemption	Both	Added property value from a solar installation is exempt from local property tax. File Form CRES with your local assessor. The rest of the property is taxed normally.	Source
Community Solar Energy Program Facilities up to 5 MW dc. Subscriptions sold to utility customers within the same utility service territory. New Jersey Board of Public Utilities (NJBPU) Rate dropped from $80 to $60/MWh in March 2026. Newer registrations carry mandatory 20% subscriber discount requirement.	PBI	Commercial	SREC-II rate of $60/MWh for registrations on or after March 6, 2026 (was $80/MWh before that date). Subscribers receive a bill-credit discount of at least 20% (required for registr…	Source
Dual-Use Solar Energy Pilot Program Systems between 500 kW and 10 MW dc on unpreserved farmland in active agricultural use. Year 1 applications closed February 2026. Later years planned. New Jersey Board of Public Utilities (NJBPU) Year 1 closed February 2026. Monitor NJBPU for Year 2 opening.	PBI	Commercial	Base ADI or CSI rate plus a project-specific adder. Program capped at 200 MW across three program years.	Source
Garden State Energy Storage Program Battery storage projects. Competitive solicitation — not open enrollment. New Jersey Board of Public Utilities (NJBPU) Second tranche bids due August 7, 2026.	Rebate	Commercial	Fixed incentives by competitive solicitation. Phase 1 targets at least 1,000 MW toward a 2,000 MW statewide goal. Second tranche open as of June 2026, bids due August 7, 2026.	Source

Net metering

New Jersey offers full retail-rate net metering for solar systems connected to any of the four regulated utilities, with excess credits carrying forward month to month and a year-end true-up.

New Jersey net metering reference

Federal tax credit status

Recent development

Court ruling restores 5% Safe Harbor — June 6, 2026

A federal district court vacated IRS Notice 2025-42 on June 6, 2026, restoring the 5% Safe Harbor as a valid pathway for commercial solar projects to establish a construction start before the July 4, 2026 deadline. Projects relying on this ruling face appellate risk — consult tax counsel before relying solely on the 5% Safe Harbor. (Oregon Environmental Council v. IRS, Civil Action No. 2025-4400, U.S. District Court for the District of Columbia.)

Source

Federal commercial solar ITC — construction must begin by July 4, 2026

Section 48E requires construction to begin by July 4, 2026 for projects to maintain full eligibility. Projects that miss this date must be fully placed in service by December 31, 2027 to qualify for any credit. For most commercial installations, that 18-month window is not realistic. Commercial customers currently scoping a solar project should treat this as the primary financial deadline in the deal.

Federal programs

Section 48E — Clean Electricity Investment Tax Credit (Commercial ITC)

Commercial

Value: Base rate: 6%. Full rate: 30% with Prevailing Wage and Apprenticeship (PWA) compliance, or for projects under 1 MW AC output. Domestic content bonus: +10% (to 40%) with PWA. Energy community bonus: +10% with PWA. Low-income community allocation: +10% or +20% depending on category. Maximum combined credit: up to 70% for fully qualified projects.
Eligibility: Construction must begin by July 4, 2026 OR project must be placed in service by December 31, 2027. Projects missing both deadlines receive 0% credit. FEOC rules apply: projects beginning construction in 2026 are ineligible if more than 40% of total direct manufactured product costs come from Prohibited Foreign Entities (China, Russia, Iran, North Korea). Threshold escalates: 45% in 2027, 50% in 2028.
Deadline: July 4, 2026 (construction start) or December 31, 2027 (placed in service)
Notes: Direct Pay (Section 6417) allows tax-exempt entities, nonprofits, tribal governments, and municipalities to receive the credit as a direct cash refund. Transferability (Section 6418) allows for-profit developers to sell credits to third parties for cash. Statute: OBBBA P.L. 119-21.

IRS / U.S. TreasurySource

Section 48E — Energy Storage (Standalone Battery)

Both

Value: Base rate: 6%. Full rate: 30% with PWA compliance. Domestic content and energy community adders available. Standalone storage is expressly excepted from the solar/wind December 31, 2027 cliff. Full credit rate available through applicable year 2032. Phasedown begins 2033.
Eligibility: Standalone battery storage or solar-paired storage. NOT subject to the July 4, 2026 construction start deadline or the December 31, 2027 placed-in-service cliff. FEOC rules apply with a more favorable threshold: 55% PFE-cost ceiling for projects beginning construction in 2026.
Notes: Statutory basis: OBBBA Section 70513(a)(C) expressly excepts energy storage technology from the wind/solar termination rule. Full credit through applicable year 2032 per Section 70512.

IRS / U.S. TreasurySource

Section 45Y — Clean Electricity Production Tax Credit (PTC)

Commercial

Value: Per-kWh credit over a 10-year production period from placed-in-service date. Base rate approximately 0.55 cents/kWh; approximately 2.75 cents/kWh with full PWA compliance. Exact 2026 inflation-adjusted rate pending IRS publication.
Eligibility: Same construction start and placed-in-service deadlines as Section 48E. Same FEOC rules apply. Generally superior to ITC for utility-scale projects with high capacity factors where 10 years of cumulative production exceeds 30% of upfront cost.
Deadline: July 4, 2026 (construction start) or December 31, 2027 (placed in service)

IRS / U.S. TreasurySource

Section 25D — Residential Clean Energy Credit

Residential

Value: Terminated. No credit available for systems installed after December 31, 2025.
Eligibility: Homeowners who installed on or before December 31, 2025 may carry forward unused credits. New purchases in 2026 do not qualify. Third-party owned systems (leases and PPAs) remain eligible via the system owner's Section 48E commercial ITC claim.
Notes: Terminated by OBBBA (P.L. 119-21, signed July 4, 2025) for expenditures after December 31, 2025. Statute: IRC Section 25D.

IRSSource

MACRS Bonus Depreciation

Commercial

Value: 100% bonus depreciation permanently restored for qualifying business property placed in service on or after January 19, 2025. Solar energy property reclassified from 5-year to 20-year MACRS (OBBBA Section 70509), but 100% bonus depreciation makes the class life irrelevant for most projects — full basis expensed in Year 1. ITC basis reduction: depreciable basis reduced by 50% of the claimed ITC percentage.
Eligibility: Commercial solar projects. The 20-year MACRS reclassification applies to property where construction begins after December 31, 2024. Class life matters only for taxpayers who opt out of bonus depreciation or use specific tax equity structures.
Notes: Statutory basis: OBBBA Section 70301 (bonus depreciation) and Section 70509 (MACRS reclassification). Confirmed on Congress.gov primary source.

IRSSource

Direct Pay — Section 6417

Both

Value: Tax-exempt entities receive the full ITC or PTC value as a direct cash refund from the IRS instead of a tax credit offset.
Eligibility: Tax-exempt 501(c) organizations, educational and religious institutions, tribal governments, Alaska Native Corporations, municipal and local governments, public school districts, and rural electric cooperatives. Subject to the same solar construction start and placed-in-service deadlines as Section 48E.
Notes: Preserved by OBBBA. Confirmed on IRS.gov.

IRSSource

Transferability — Section 6418

Commercial

Value: For-profit developers can sell ITC or PTC credits to unrelated third-party taxpayers for cash. Transaction is non-taxable to the seller.
Eligibility: For-profit commercial solar developers. Credits cannot be resold by the purchasing entity. OBBBA extended the audit statute of limitations to 6 years and added penalties for FEOC certification errors.
Notes: Preserved by OBBBA. Confirmed on IRS.gov.

IRSSource

Last reviewed: June 8, 2026

Disclaimer

This page is for informational purposes only and does not constitute legal or tax advice. Federal incentive programs, credit rates, and eligibility rules changed significantly in 2025 and may change further. The court ruling on IRS Notice 2025-42 is subject to appeal. Verify current program status with a qualified tax attorney or solar finance professional before making investment decisions.

For rules on repowering and system replacement, see our federal incentives guide.

Disclaimer

This page is for informational purposes only and does not constitute legal or tax advice. Incentive program values change by Board order and the figures here may not reflect the most recent changes. Verify current rates at cleanenergy.nj.gov or with a qualified solar professional before making financial decisions.

Sources

Planning a solar removal or decommissioning project in New Jersey?

Blue Flag Solar handles removal, certified recycling, and chain-of-custody documentation for residential and commercial projects.

Get a quote Learn how it works