About Solar

Government Incentives

Our government understands the many negative impacts associated with the use of traditional energy and the many benefits of solar energy.  While other advanced nations now produce over 50% of their electricity from renewable sources, the United States is far behind.  To catch up and build momentum, our government offers incentives to encourage the development of solar energy.

As solar energy becomes more widely adopted, and especially as prices come down to a point where solar is competitive with traditional energy, the incentives will gradually disappear.

There are different types of incentives, some Federal-based and some State-based.

RPS State Level

A Renewable Portfolio Standard or RPS is how states guarantee the adoption of renewable energy.  New Jersey’s RPS is one of the most aggressive in the United States and requires all electricity providers serving retail customers in the state to include in the electricity it sells 22.5% qualifying renewables by 2021.  It also includes a 2.12% minimum solar carve-out which is estimated to be approximately 1,800 MW.  Solar can also be included in the general 22.5% as well.

Solar Renewable Energy Certificates “SRECs” State Level

Each certificate represents the productionof one megawatt-hour (MWh) of solar renewable energy.  In other words, for every MWh of solar energy produced, one SREC is generated that can then be sold to the energy supplier that needs it in order to meet their solar RPS obligations.  New Jersey’s SREC program provides a means for SRECs to be created and verified.

Investment Tax Credit (ITC) Federal Level

The U.S. Government, in order to encourage both individuals and businesses to make investments in solar energy, has created an Investment Tax Credit of 30% of the cost of a solar installation.  This tax credit was temporarily converted to a Grant in order to further incentivize this nascent industry.  A five-year accelerated depreciation allowance for solar property is also allowed.

Look here for details regarding the various Federal and State incentives