Traditionally, installing solar panels on your home or business required purchasing the system outright. This required a substantial upfront investment that proved to be an obstacle most could not overcome. Today, other options are available that make solar power accessible to a broader base of residential and commercial customers.
- You can still buy the system outright from the installer and receive the tax incentives, SRECs and net metering benefits yourself. Many choose private financing—second mortgage, HELOC, cash or a credit card—to pay the upfront costs.
- Many forgo panel ownership and choose to purchase solar electricity produced by a system installed on their home or business through a third party who installs and maintains the equipment. Since PPA’s require little to no up-front costs to you and the equipment is owned by the third party, they receive all tax incentives and SRECs. You are required to buy the solar electricity per kilowatt-hour from the third party at a reduced rate—versus power from the main grid—over a set number of years.
- A leasing arrangement, similar to a PPA is also available to New Jersey residents and requires little to no up-front costs. Since a third party installs, maintains and retains ownership of the system, they receive the tax incentives and SRECs. The difference between a PPA and a leasing arrangement is you purchase the electricity generated from the panels at a fixed monthly price instead of per kilowatt-hour.
Solar Warranties in New Jersey
Solar panel systems in New Jersey should include a full, five-year warranty on parts and labor in addition to manufacturers’ warranties. You should pay close attention to your installation agreement to verify warranty responsibility, terms and whom to contact in case of a failure. New Jersey’s Clean Energy Program requires submission of a solar technical worksheet the outlines warranty terms and additional information that should be included in the initial registration packet.
Solar Resources in New Jersey
To help reduce the upfront costs of solar panel and/or thermal installation, there are multiple programs available through the federal government and states offering rebates, incentives, tax credits, grants, and loans. Check the websites listed below for programs available in your area:
- Energy Star – offers tax rebates on solar panels (photovoltaic cells) and solar powered water heaters. Restrictions do apply.
- Department of Energy (DSIRE) —search this list for current and/or active programs available in the state of New Jersey.
- Rural America for America Program Renewable Energy Systems and Energy Efficiency Improvement Loans and Grants – these programs are for small businesses and agricultural producers.
Along with the incentives mentioned above and according to CleanEnergy.com, New Jersey residents can benefit from the sales tax exemption—currently 7-percent—on solar heat, thermal or panels and related equipment. There is no maximum limit and the incentive applies to residential, commercial and industrial applications. In addition, New Jersey property owners receive a property tax exemption for 100-percent of the cost of their renewable energy systems and related equipment.