New Jersey



The Renewable Energy Incentive Program (REIP) provides rebates that reduce the upfront cost of installing renewable energy systems like solar, wind, and sustainable biomass projects in New Jersey. The REIP program is part of the State’s efforts to reach its Energy Master Plan goals of meeting 30 percent of electricity from renewable sources by 2020.

Find out more about the Customer-Sited Renewable Energy Rebates.

There is no specific size limitation on eligible projects, but incentives are limited to the first 10 kilowatts (kW) for residential systems. However, the program is designed to supplement the existing New Jersey Renewable Energy Incentive Program (REIP) and Solar Renewable Energy Certificate (SREC) program.

Find out more.


Solar Renewable Energy Certificates (SRECs)

Solar Renewable Energy Certificates (SRECs) represent the renewable attributes of solar generation, bundled in minimum denominations of one megawatt-hour (MWh) of production. New Jersey’s SREC program provides a means for SRECs to be created and verified, and allows electric suppliers to buy these certificates in order to meet their solar RPS requirements. All electric suppliers must use the SREC program to demonstrate compliance with the RPS. New Jersey’s on-line marketplace for trading SRECs, launched in June 2004, is the first such operation in the world. The price of SRECs is determined primarily by their market availability and the price of the Solar Alternative Compliance Payment (SACP) for the state RPS. The SACP is effectively a ceiling on the value of SRECs because it is the per MWh payment that electricity suppliers must make if they fail to obtain enough SRECs to cover their RPS obligation.

The initial eight year schedule (June – May reporting year) is as follows:

Find out more about the NJBPU’s SREC program.

SREC-based Financing Programs

In April 2008, Public Service Electric and Gas (PSE&G) received approval from the BPU to offer a loan program to help its customers finance PV systems. The PSE&G Solar Loan Program allows customers to take a loan from the utility for up to 40-60% of the cost of the PV system. Customers may then repay the loan using SRECs produced by their system at a basement price of $475 per SREC. The initial $105 million program is scheduled to last two years.

Click here for further information on this program.


In October 2008, New Jersey enacted legislation exempting renewable energy systems used to meet on-site electricity, heating, cooling, or general energy needs from local property taxes. (There is not a state component to property taxes in New Jersey). Eligible renewable energy systems include solar PV, wind, fuel cells, sustainable biomass, geothermal electric, landfill gas, hydroelectric, resource recovery, wave, and tidal systems that produce electricity. Systems that produce energy from solar thermal energy (e.g., solar hot water) or geothermal energy (e.g., geothermal heat pumps) are also eligible for the exemption. The exemption may be claimed for all qualified systems installed on residential, commercial, industrial, or mixed use buildings as accessory uses.

Click here to access the certification application for renewable energy systems. Contact the New Jersey Department of Treasury for additional information about how the law will be implemented.


New Jersey offers a full exemption from the state’s sales tax (currently 7%) for all solar energy equipment. This exemption is available to all taxpayers. All major types solar energy equipment, including equipment for passive solar design, are considered eligible for the exemption as described by the New Jersey Division of Taxation Publication S&U-6 (Sales Tax Exemption Administration). According to S&U-6, the exemption includes all solar energy “devices or systems specifically approved by the Board of Public Utilities, Division of Energy and designed to provide heating or cooling or electrical or mechanical power by converting solar energy to some other usable energy source, including devices for storing solar-generated energy.” The exemption does not apply to devices that would be required regardless of the energy source being utilized. In order to claim the exemption, the purchaser must fill out and submit Form ST-4 (Exempt Use Certificate) to the seller instead of paying sales tax.


Public Service Electric and Gas (PSE&G) of New Jersey offers loans for “behind the meter” photovoltaic (PV) systems to all customer classes in its electric service territory. The program opened in April 2008 with a goal of installing 30 megawatts (MW) of customer-sited PV through the issuance of loans totaling $105 million. The program will provide loans covering 40-60% of the cost of PV systems with the remainder to be financed separately by the customer. Residential customers are eligible for a loan term of 10 years at a 6.5% interest rate. The actual maximum loan amount is based on how much energy they system is expected to produce over the term of the loan.

Find out more about PSE&G’s Loan Program.


In 2007, New Jersey enacted legislation preventing homeowners associations from prohibiting the installation of solar collectors on certain types of residential properties.

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