States have typically established clean energy policies independent of federal policy as a means of addressing specific and unique energy needs. Most begin by setting minimum mandates, generally referred to as Renewable Portfolio Standards (RPS). Various grants, additional tax credits, tax exemptions, and clean energy pricing and reimbursement regulations provide additional growth incentives for each market.
To find out more about active policy that impacts your investment today, visit Calculating Solar Savings.
Quick Background on New Jersey Energy Policy
New Jersey has been a leader in clean energy adoption for more than two decades. The state’s RPS was first adopted in 1999 and has been updated several times. Included were New Jersey’s net-metering rules which continue to require state’s investor-owned utilities and energy suppliers (and certain competitive municipal utilities and electric cooperatives) to offer net metering at non-discriminatory rates to residential, commercial and industrial customers.
In May 2018 the state increased the total RPS requirement for electricity sold in New Jersey to be 35% from renewables by 2025 and 50% by 2030 .
Net metering policy has evolved to include the removal of solar energy system size limitations in 2010. The change allowed any capacity of renewable energy system to meet onsite energy needs. In 2018, further legislation authorizes the Board of Public Utilities (BPU) to limit net metering to 5.1% of the total annual kWh sold in the New Jersey by each electric power supplier during a one year period. The BPU may also continue to offer net metering at its discretion.
Lately, there is finally a significantly greater interest from residents and elected officials to combat the ever more worrisome climate change. Renewable energy focused policies and executive actions are on the rise.
Solar Energy Related Policy
The state has focused mostly on building up solar energy and wind energy capacity. Because of its proportionally large coastline, the state increasingly priorities and incentivizes offshore wind energy. Policies impacting solar power are being modified beginning in late 2019. Here is a snapshot of what currently applies to homeowners and businesses in the state:
|Solar Renewable Energy Credits (SRECs)||See our SREC page|
|Sales Tax||0% – solar energy exempted from 7% tax|
|Property Tax||0% – solar energy fully exempted|
|Net Metering||customer-generated power credited at retail price|
|Federal Income Tax||26% – tax credit on full solar system price|
Renewable Energy Activity
In our commitment to advancing solar energy and sustainable living in our region, Exact Solar closely watches legislative activity. On this page we will share information we feel is important to our neighbors in New Jersey, and include call outs where your participation and voice will be helpful.
Like most other states, New Jersey reviews and updates energy policy and regulations in keeping with market changes and with a priority to making progress in addressing climate change.
Currently the state is transitioning away from its long-term SREC incentive program, and in late 2019 announced that a transition program would be in effect. The interim program, appropriately named the Transition Renewable Energy Certificates (TREC), will continue to pay incentives are based on the production of your solar panel system. The transition will happen once the previous defined SREC limit is reached. As currently created, TRECs will differ from SRECs by setting a fixed value and assigning a different value to certain solar energy installations. See our SREC page for full details.
Currently the state Executive maintains the Energy Master Plan, which is updated and published periodically. Like individual executive actions from the Governor, this document establishes goals and targets for the state to provide a reliable and resilient electricity supply while also meeting state environmental and climate action initiatives. Presently, the plan establishes a target to derive 100% carbon-neutral power by 2050.
Local Push for Clean Energy
There are grassroots efforts to push individual communities to adopt plans which move them to a 100% clean energy future. Towns like Elizabeth, NJ are leaders in this effort. Environment New Jersey and the New Jersey Chapter of the Sierra Club make it their mission to keep the pressure high for these local programs.
Environment New Jersey Clean Energy effort provides details and gives you an easy path to providing feedback to the appropriate state agencies.
Stay Current — Related Posts and News
Another way to stay up to date on some of the latest policy news and information is to review our related posts: