With an abundance of sunshine and generous incentives, New Jersey is one of the best states in the country for going solar. There are a number of compelling incentives for businesses looking to install a solar PV system to meet their electrical power needs including:
30% Federal Solar Investment Tax Credit/Solar Grant (ITC)
Businesses who install solar PV systems are eligible for a 30% federal business energy investment tax credit (ITC) on the total installation, including both parts and labor, with no maximum limit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. The 30% ITC will be available for solar PV systems placed in service on or before December 31, 2016.
The American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009, created a renewable energy grant program that is administered by the U.S. Department of Treasury. This cash grant may be taken in lieu of the ITC. Grants are available to eligible properties placed in service prior to December 31, 2011.
For more information on the Federal ITC, visit the Database of State Incentives for Renewables and Efficiency: [click here]
For additional information on the Federal Solar Grant: [click here]
Modified Accelerated Cost-Recovery System (MACRS) and Bonus Depreciation
Under the federal Modified Accelerated Cost-Recovery System (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 however in December 2010 the provision for bonus depreciation was amended and extended yet again by The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible properties 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.
To learn more about MACRS: [click here]
Renewable Energy Manufacturing Incentives (REMI)
In September 2009 New Jersey opened the Renewable Energy Manufacturing Incentive (REMI) program, which provides rebates for homeowners and businesses that install renewable energy system components manufactured in New Jersey.* At present, the incentives are limited to photovoltaic system components — modules, inverters, and racking systems — but program managers intend to expand the program to cover eligible wind and bio-power equipment in the future. Incentives range from $0.05 – $0.55 per watt DC, depending on sector, system size, and the type(s) of eligible equipment incorporated into a system.
To view incentive amounts: [click here]
Solar Renewable Energy Certificate (SREC) Program
SRECs are tradable certificates that represent the clean energy benefits of electricity generated from solar PV systems and provide another way for businesses and non-profit agencies to recover their investment. Once your solar PV system passes inspection and the interconnectivity agreement is in place with your utility, your solar PV system will begin to earn SRECs.
Each time a system generates 1,000 kWh of electricity during the first 15 years of production, an SREC is earned. While the value of SRECs is set on the free market and varies according to demand, they typically sell for several hundred dollars per credit. Independent Solar will setup an SREC management plan for your businesses needs, either purchasing the credits from you and mailing you a check, or allowing you to manage them on your own.
For current SREC trading statistics: [click here]