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The Ultimate Guide to Renewable Energy in New Jersey

New Jersey is a leader in renewable energy. It has some of the cleanest electricity in the country and gives consumers many ways to take advantage of renewable power. But the state faces challenges keeping up the pace of renewable energy development in the future.
Paramus, New Jersey

New Jersey has its share of not-so-pleasant stereotypes—organized crime, garbage and pollution, traffic jams (okay, that last one’s kind of true). But a lot of things about the Garden State are actually pretty great. It’s got sunny beaches, unspoiled woodlands, family farms, and lots of renewable energy.

Electricity produced in New Jersey is some of the cleanest in the nation. In June 2022, the state got roughly 8% of its power from solar and other renewable sources. The rest came mostly from nuclear power and natural gas. In 2020, only nine other states had a lower CO2 emissions rate than New Jersey. (The CO2 emissions rate is the amount of carbon dioxide emitted for every megawatt-hour (MWh) of electricity generated.)

The history of renewable energy in New Jersey 

New Jersey has long been ahead of the curve on renewable energy. For decades, it has had policies in place to promote clean energy use and combat climate change.

Back in 1999, New Jersey became one of the first states in the country to adopt a Renewable Portfolio Standard. That’s a requirement for the state to get a certain amount of its electricity from renewable sources. This law has since been strengthened and is now one of the strictest in the nation. It requires half of all energy sold in the state to come from qualifying renewable energy sources by 2030.

And New Jersey’s 2020 Energy Master Plan sets a goal to get the state to 100% renewable energy by 2050.

New Jersey’s commitment to renewables doesn’t end there. The state is also part of the Regional Greenhouse Gas Initiative, a “cap and invest” program spanning 11 Eastern states. It requires fossil fuel plants over 25 MW to get an allowance for each ton of CO2 they emit. They can purchase allowances, trade with other power producers for them, or earn them through projects that offset their CO2 emissions.

The money from sales of CO2 allowances goes into programs to fight climate change and promote renewable energy. And in 2018, New Jersey joined the US Climate Alliance. This coalition of states committed to uphold the United Nations’ Paris Climate Accord after the U.S. government withdrew from it.

Several New Jersey state laws promote specific forms of renewable energy. The 2010 Offshore Wind Economic Development Act sets incentives for the creation of offshore wind power facilities. Currently, the state’s goal is to produce 7,500 MW from offshore wind by 2035. And the 2018 Clean Energy Act required 5.1% of the state’s electricity to come from solar power by 2021.

How can New Jersey residents take advantage of renewable energy? 

New Jerseyans who want to use renewable energy in their homes or businesses have several options. They can take advantage of tax credits and other incentives for rooftop solar. They can take part in a New Jersey community solar project. And they can choose a power provider who produces electricity from clean sources.

Net metering in New Jersey 

New Jersey is one of several states that requires electric companies to offer net metering. That means that if your rooftop solar panels produce more power than you use, the utility must give you credit for that excess power on your bill. Moreover, the Garden State requires utilities to pay for this power at the full the retail rate. In many states, you only get partial credit for it.

Tax exemption 

New Jersey offers two tax incentives for solar installation. First, the cost of solar equipment and installation fees are exempt from the state’s 7% sales tax. Second, solar installations get special treatment under property tax law. If adding a solar setup increases the value of your home, it doesn’t increase your property tax bill.

Investment Tax Credit

In addition to the state credits, New Jersey residents qualify for the federal Investment Tax Credit for solar systems. Until 2032, you can take 30% of the cost of your system off your tax bill. This credit drops to 26% in 2033 and 22% in 2034. In 2035 it disappears altogether unless Congress opts to renew it.

Successor Solar Incentive Program

You can also earn money for the solar power you produce through the Successor Solar Incentive (SuSI) Program. For every MWh you produce, you earn a certificate called an SREC-II. Power companies can then buy your SREC-IIs to help them meet the state’s renewable energy requirements. The value of each SREC-II is set at $90 for residential rooftop solar and $100 for commercial rooftop solar. This value is fixed for 15 years.

Community solar

Not everyone has a roof suitable for solar power. One option for those who don’t is community solar. You sign up for membership in a nearby solar farm and earn credits on your electric bill for your share of the power it produces. After a successful 3-year pilot program established in 2019 thanks to the state's Clean Energy Act—now New Jersey has a permanent community solar program for residents and business to save on their energy bills.

Learn more about community solar in New Jersey >


Power Switch

If there isn’t a community solar project near you, there’s one more way to get clean power at home. Under New Jersey’s Power Switch program, you can change your energy supplier. This gives you the option to buy your power from a company that uses renewable energy.

Wind and solar capacity in New Jersey 

In 2020, New Jersey was the nation’s sixth-biggest producer of electricity solar power. It got 6.5% of its energy from solar power, beating the target of 5.1% set by the Clean Energy Act. For small-scale solar power production, such as rooftop solar, New Jersey ranked third in the country. That’s pretty impressive, considering the state’s small size.

This coastal state is also investing heavily in offshore wind production. As of mid-2021, the state’s Board of Public Utilities had approved about 3,700 MW worth of offshore wind projects. That puts the state nearly halfway to its goal of 7,500 MW by 2035.

Wind turbines at sunset

Reducing reliance on natural gas in New Jersey through renewable energy 

One of New Jersey’s biggest clean energy challenges is reducing its dependence on natural gas. Nearly half the state’s electricity came from this fossil fuel in 2020, and it’s heavily used for heating as well.

However, the total amount of gas used for power generation did fall by about 25% in 2020 as many offices shut down due to COVID. Keeping work-from-home arrangements in place could help speed the state’s transition away from natural gas.

Renewable energy sector employment in New Jersey 

As of 2021, New Jersey’s clean energy economy provided jobs for over 50,000 workers. That number will only grow as the Garden State ramps up clean power production to meet its future goals. Every million dollars invested in wind and solar projects generates about 13 jobs, far more than fossil fuel projects. There are also many job opportunities in retrofitting buildings for clean power and energy efficiency.

Recent legislation on energy policy in New Jersey 

In June 2021, Governor Murphy signed a package of four bills related to New Jersey’s clean energy transition. Two of these bills focused on solar power development. One established the current SuSI program as a successor to NJ’s earlier SREC Registration Program and Transition Incentive Program. Another created a pilot program for dual-use solar projects on existing farmland. Dual-use solar allows farms to continue producing food while also producing solar energy.

The other two bills were about charging infrastructure for electric vehicles. One bill required parking facilities to set aside a certain number of spaces, based on their size, to become future EV charging spaces. These “make-ready” spaces don’t need to have charging stations yet, but they must have the electrical infrastructure to support them. The other bill promoted the installation of charging infrastructure in redevelopment projects.

The latest addition to NJ’s clean energy portfolio could be tidal power. A bill making its way through the state Assembly in 2022 would add wave and tidal energy to the state’s clean energy plan. It calls for the state government to conduct a study of the potential energy to be harvested from the ocean. Based on the results, it would authorize businesses to begin setting up wave and tidal energy projects in the state.

The future of New Jersey solar 

The Clean Energy Act required only that New Jersey get 5.1% of its electricity from solar energy by 2021. The state has already blown past that goal, reaching 6.5% by 2020. But the Garden State must do more to meet its overall goal of 100% clean energy by 2050.

The 2019 Master Plan concluded that New Jersey would need a total of 20.64 gigawatts (GW) of solar power by 2035 to stay on track. That would require adding about 1,140 MW of solar power production each year. But unfortunately, solar installation in the Garden State has been declining in recent years. For 2022, the state is expected to add only 280 MW, its lowest total since 2015. This state, which was once #1 in the country for its level of new solar installations, fell to #20 in 2021.

Part of the problem, many solar developers say, is that the new SuSI Program doesn’t provide big enough incentives. The old SREC Registration Program and the temporary Transition Incentive Program were much more generous. Adding to the problem, the cost of solar installation, after falling for decades, has spiked due to supply chain issues from the pandemic.

These two factors have led to many solar projects being abandoned. The cost problem is most likely temporary. But even once it clears up, the incentives provided under SuSI may not be high enough. But the federal incentives from IRA may make up for the state’s reduced incentives. To meet its clean energy goals, New Jersey may need to revise the program yet again to speed up solar production in the state.

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