New Jersey solar panel tax credits. On top of these revenue streams, New Jersey has also granted residential solar a couple tax breaks to help keep the costs down. Solar sales tax exemption. When you purchase your home solar system, you will be 100 percent exempt from any sales tax, due to the PV energy sales tax exemption. That means you’ll. When you deal with Solar Electric NJ, you deal with a life-long Southern New Jersey native with over 5 years solar pv and 35 years residential building and development experience. Our installers have over 350 systems completed in their portfolio.

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Introduction

As with most other durable good or big-ticket purchases, paying cash for a solar electric system is generally the most cost-effective way to obtain the system. However, many homeowners and other types of property owners considering a solar investment cannot, or prefer not to, pay cash. Additionally, the owner of the solar electric system must bear the performance and regulatory risks to investment payback.

Below is a brief explanation of the three most popular ways for homeowners and other types of property owners to obtain a solar system. When making any major purchase or investment decision, we recommend that you solicit different options and attempt to compare the advantages and disadvantages of at least three offers. In the description below, we interchange the use of 'homeowner', 'property owner' and 'site host', since many of the considerations apply both to residential and commercial/industrial properties that potentially become host to a solar electric system.

Make sure your home or building is as energy efficient as possible before installing solar. Benefits include: improved comfort and safety, lower energy bills, less renewable capacity needed, and lower upfront cost to install renewable energy

Much of the information found in this section is attributable to the following resources: Consumer Reports, Clean Energy States Alliance (CESA) under the U.S. Department of Energy Sun Shot Initiative 'A Homeowner's Guide to Solar Financing - Questions to Ask' and 'Solar Information for Customers'; Solar Energy Industry Association (SEIA) 'Residential Consumer Guide to Solar Power.' Links to these documents can be found below.

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Three Popular Solar Financing Options

1) Solar Loan

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A solar loan allow a homeowner to borrow money from a lender or solar developer for the purchase and installation of a solar system. The homeowner owns the solar system, possibly subject to a lien or security interest held by the lender. Lenders for solar loans can be banks, credit unions, state programs, utility companies, solar developers or other solar financing companies.

Advantages	Disadvantages
Homeowner eligible to receive applicable federal and/or state tax and/or other incentives*	Not all homeowners can obtain a loan
Homeowner eligible to receive Solar Renewable Energy Credits (SRECs),** which can be sold	Homeowner responsible for relatively minor costs associated with maintenance and repair of system and possible minor increases in insurance costs
Homeowner owns the solar system and therefore has significant ability to manage it independently	Poor performance or low SREC values may reduce homeowner's ability to repay
In most cases, lower overall cost

2) Solar Lease

A lease allows a homeowner to enter a contract to make monthly, usually fixed but escalating, payments to a solar leasing company/developer in exchange for receiving the electricity produced by the solar system. The specific lease may or may not require the property owner to make an initial down payment at or before installation. Generally, the initial payment amount is often less than the utility charges for generating the same amount of electricity, but the lease payments generally escalate at a fixed rate, which could result in the lease amounts being higher than the utility charges depending on the rate of increases with the utility bills. A typical lease term is 15 to 25 years. The solar leasing company/developer pays for and/or performs the procurement and installation of the system, repairs and maintains the system, and owns the system located on the property. The leasing company generally also owns the SRECs produced by, and the tax incentives related to, the system. There are many variations on the terms and conditions of solar leases and the proposed contracts of each offer should be fully compared.

Advantages	Disadvantages
Little or no upfront cost to homeowner, ownership at the end of the lease term may accrue to the site host	Most leases restrict some property owner activities, for example, new construction that may cast shade on the system, roof replacement, property sale, etc.
Leasing company usually responsible for maintenance and repair of system (most systems require little of either)	Tax incentives may not accrue to the site host

3) Power Purchase Agreement (PPA)

PPAs are relatively similar to leases. With a solar PPA, a solar developer buys, installs and maintains the solar system on the owner's property. The property owner purchases the energy generated by the system on a per kilowatt-hour (kWh) basis through a long-term contract with the developer. Generally, the initial rate (cents/kWh) is often less than the utility's rate for generating the same amount of electricity, but the PPA rate generally escalates at a fixed annual percentage, which could result in the PPA rate being higher than the utility rate depending on the rate of increases with the utility charges. The developer generally owns the SREC's produced by, and the tax incentives related to, the system.

Advantages	Disadvantages
Similar to lease	Similar to lease

What happens if I sell my home? Can I transfer my solar lease or PPA to the new owner for the remainder of the contract?

PPAs and Leases have a variety of different provisions that may apply in the case of the transfer of site host ownership.

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