How New Jersey Solar Incentives Work
New Jersey has had one of the more active solar incentive structures in the country. The details matter, and they've changed over time. This article explains how the incentives are structured in plain English — and where to verify the current numbers.
Last updated 2026-08-19
Verify before you rely on anything
The federal tax credit
Under current federal law, the residential Investment Tax Credit (ITC) provides a 30% credit against federal income tax for the cost of an installed residential solar system placed in service in qualifying years. Whether you can use the full credit depends on your federal tax liability. A tax credit is not the same as a rebate — consult a tax professional for how it applies to your filing.
New Jersey's SuSI program (SREC-II)
New Jersey's Successor Solar Incentive (SuSI) program created the SREC-II structure. Under it, qualifying solar systems can earn certificates based on the electricity the system produces. These certificates are purchased by electric suppliers to meet New Jersey's renewable energy requirements, and the proceeds can provide additional annual value to the system owner.
How it works in plain terms:
- Your system generates electricity, measured in megawatt-hours.
- For the qualifying production, the system earns certificates.
- Those certificates can be sold or, in some cases, purchased through a program-administered process at a set rate.
- The proceeds generally flow to the system owner over the applicable program period.
No hard-coded dollar amounts here
How long do NJ incentives continue?
The SREC-II program provides certificates over a defined qualifying period (commonly described as the system's first years of operation). Beyond that window, the system still produces electricity and can still benefit from net metering — but the additional per-certificate incentive ends. The exact length and terms should be confirmed for your specific project.
Ownership considerations
Incentive eligibility and proceeds generally depend on system ownership. An owned system and a leased system can be treated very differently — see Ownership vs Leasing.
Who receives the solar incentives?
This depends on ownership and contract structure. With an owned system, available incentives typically flow to the owner. With a lease or PPA, the leasing company usually retains the incentives because they own the equipment. Read your agreement carefully — it should state clearly who receives the federal credit and any state program value.
NJ solar incentives vs net metering
These are separate concepts. Net metering (see Understanding Net Metering) is about how your extra production is credited against your usage on your utility bill. Incentives like SREC-II are separate payments or certificates based on production, independent of your utility bill. A homeowner can benefit from both — they aren't the same thing.
Not every homeowner qualifies the same way
Common questions
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About Charles Brogden
Charles Brogden works directly with homeowners through AllSeason Solar & Roofing, helping customers understand solar system design, equipment, roofing considerations and available solar options.
Serving homeowners throughout New Jersey and Pennsylvania.