New Jersey BySolar
973.784.4191 Renewable Energy Systems for Businesses & Residences

Financial Incentives

In an effort to promote safe, non-polluting renewable energy, the federal government and State of New Jersey are offering incentives that lower the cost of installing solar photovoltaic (PV) systems in both businesses and homes.

  • Business Energy Investment Tax Credit (ITC)

    Applicable Sectors: Commercial, Industrial, Utility, Agricultural Commercial, Industrial, Utility, Agricultural. The ITC for new solar power installations provides a credit equal to 26% of expenditures. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible.
  • Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation (2008-2012)

    Applicable Sectors: Commercial, Industrial, Agricultural Under MACRS, businesses may recover investments in certain property through depreciation deductions. The 5-year schedule for most types of solar has been in place since 1986. The federal Economic Stimulus Act of 2008 included a 50% first-year bonus depreciation provision for eligible renewable-energy systems acquired and placed in service in 2008. In December 2010, the provision for bonus depreciation was amended and extended yet again by The Tax Relief, Unemployment Insurance Re-authorization, and Job Creation Act of 2010. Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 qualifies for 100% first-year bonus depreciation. For 2012, bonus depreciation is still available, but the allowable deduction reverts from 100% to 50% of the eligible basis.
  • Personal Tax Credit

    Applicable Sectors: Residential A taxpayer may claim a credit of 30% of qualified expenditures for a solar energy system that serves a dwelling unit located in the United States and used as a residence by the taxpayer. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home (which does not have to be the taxpayer's principal residence). If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit may be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then.
  • NJBPU - Transition Renewable Energy Certificates (TRECs)

    Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Governments, State Government, Tribal Government, Federal Government, Agricultural, Institutional TRECs represent the renewable attributes of solar generation, bundled in minimum denominations of one megawatt-hour (or 1,000 kilowatt-hours) of production. New Jersey’s TREC program provides a means for TRECs to be created and verified, and allows electric suppliers to buy and retire these certificates in order to meet their solar renewable portfolio standard (RPS) requirements. Learn more about New Jersey's TREC program